As of late March 2019, ten states and Washington D.C. had legalized recreational use of marijuana and 33 states legalized it medically. Employees of this rapidly growing industry benefit from fair wages, job security, and diverse opportunity but can have trouble securing marijuana industry home loans. Fortunately, the economic outlook of the marijuana industry is positive. As such, loan options for employees and owners are becoming increasingly accessible.
Marijuana Mortgages seeks to spread the word to marijuana industry employees and owners about the various types of funding applicable to their goals and needs. Whether you’re seeking to refinance your existing property or secure funding for a new home, we can connect you with our varied portfolio lenders or explore Bank Statement loan options.
Avenues for Employees and Owners
If you’re a W2 employee in the marijuana industry, you will need to seek out a lender that does not have qualifying restrictions on income from the cannabis industry and that sells its loans to Fannie Mae. If you are an owner with less than a 25% stake in a marijuana related business, you can still qualify for a mortgage loan from one of our portfolio lenders. Even better news: if your credit meets certain criteria and you show a history of documented income, you may qualify for a down payment as low as 10%.
What is a Portfolio Lender?
Often, portfolio lenders are community-owned, private banks that offer flexible, mutable loan options to a variety of borrowers. Since portfolio lenders hold on to your mortgage, they do not have to adhere to stringent underwriting guidelines. Large financing companies usually make money on origination fees, then sell the mortgage to secondary buyers, meaning they are strictly limited by set criteria. Owners who utilize this type of loan are required to put a minimum of 10% down on the prospective home.
What is a Bank Statement Loan?
Another option for marijuana industry home loans is a Bank Statement loan. A lender will opt to review 12-24 months’ worth of bank statements prior to giving you a mortgage loan. They do not require tax returns, but the borrower will need to be consistently self-employed for a minimum of two years.
Marijuana lenders offering Bank Statement loans may also request to see your cash reserves, credit score, and rental history, amongst other pertinent information. They will utilize all of this info to paint a broader picture of your financial health prior to granting the loan.
This program is beneficial to W-2 employees of the marijuana industry. While not specifically geared toward putting cannabis employees into homes, the Fannie Mae HomeReady Program provides a viable pathway to homeownership for those with low to moderate income. A minimum credit score of 620 is required, as well as a 3% down payment. Potential buyers can check their city’s income limit here.
As more and more states continue to legalize marijuana, we are sure to see a broader range of marijuana lenders stepping into the ring to get a piece of the pie. If you’re currently working in the cannabis industry, Marijuana Mortgage can help you realize your home ownership dreams without sacrificing the growing cannabis industry you’re a part of. Contact us today for a no-obligation quote!