In Colorado, the cannabis business is a legitimate industry. Folks often forget that in many states marijuana has yet to be legalized. Cannabis industry employees are just as successful, reliable, and hardworking as people in other fields, but can have a harder time securing financing for a home purchase.
While it’s widely known that the Federal Government still classifies marijuana as illegal, many people don’t consider the ramifications for the industry’s employees and owners. Cannabis employees and owners often struggle to find marijuana industry home loans to help them secure their dream house. Why won’t most banks make home loans to people in the cannabis business? Let’s take a look.
The Federal Government Sites Your Job as ‘Illegal’
Marijuana is classified as a Schedule I controlled substance. Therefore, the manufacturing and sale of the substance do not constitute legitimate employment from the Fed’s perspective. People who earn money from the sale of cannabis often can’t reference that source on loan applications for fear of getting in trouble. These banks are run by federally-sponsored agencies who have yet to adopt policies for lending to members of cannabis-related businesses.
Even more inconveniently, there are certain cannabis industry mortgage lenders that will work with marijuana employees, but they don’t advertise it and many charge astronomical additional fees. The Justice Department could decide to come down on lenders who loan to marijuana-businesses and its employees, charging them with money laundering.
Lacking Proof of Pay or Revenue
Many self-employed workers and owners in the cannabis industry utilize various personal accounts for business purposes, which makes it all the more difficult to show business revenue and consistent deposits. A majority of large lending companies require a two-year history of tax returns or 12-month bank statements to average bank deposits. As a marijuana business owner, it can be hard to show how successful your business is when cash deposits are made into a personal bank account, instead of a business one.
Options Increase as Cannabis Industry Grows
Securing marijuana industry home loans can be a daunting task. While some lenders offer marijuana industry home loans, they often set lofty requirements and charge additional fees. Some cannabis mortgage lenders even require the borrower to sign an NDA.
We strive to help marijuana industry employees secure financing to fund their home-buying dreams without making them jump through hoops to get there. Contrary to popular belief, cannabis business owners, self-employed marijuana industry workers, and W2 borrowers have loan options. As the cannabis economy continues to grow and marijuana gains legitimacy, lenders will continue to get on board — they can’t afford not to.
Contact us for a no-obligation consultation and we’ll discuss the best mortgage option for your home buying aspirations. We recognize the success and legitimacy of the cannabis industry and believe those working in it deserve fair consideration and a chance to pursue their dreams.