Now, those in the cannabis industry can get approved for a mortgage. While marijuana is illegal at the Federal level, it is now legal in California and Arizona. But, when you consider that most residential mortgages are backed by the government or government entities (FHA, Fannie Mae, Freddie Mac, VA, USDA), you can see why cannabis dispensary owners and employees couldn’t get a mortgage.
MOST RECENT FUNDED LOAN –
Borrower works for a major United States cannabis company, traded on the Canadian Securites Exchange, as a W2 employee. He wanted to buy a single family investment property and use it as an AirBnB in Sedona, AZ.
Purchase Price – $899,000
20% down payment – $179,800
Loan – $719,200
We were clear to close in 3 weeks from submission. Very easy to do.
So, what has changed and how can you get a mortgage now?
The income that you make can be deemed illegal according to Federal law. Income is one of the MAIN qualifying items to getting a mortgage loan. Our underwriters are now ok with this income. This is NOT a Federally backed loan, this is a portfolio loan, so the underwriting guidelines can be more flexible.
Another main item to qualifying for a mortgage, especially this mortgage, is having a LARGE down payment. You will need a minimum of 15% down depending on your overall credit profile, but aim to have 20% down or more for better interest rate pricing.
You must have a two year job history in the cannabis industry in order to qualify. If you are considered self employed, you will be qualifying on your overall NET income on your Schedule C or your K1, along with any W2 wages you paid yourself.
If you are an employee, you must be a W2 wage earning employee. We will ask for your most recent 30 days of pay stubs along with the most recent two years W2’s and most recent two years of personal tax returns.
As far as qualifying, guidelines are based around a standard conventional or jumbo loan, depending on your loan amount sought. We will also require proof of assets (bank statements), financial records, current P&L’s, and / or other documents depending on your situation.
The easiest way to get started is to email Derek and he will set a time with you to have a fact finding conversation over the phone. Then once he gets an idea of your particular situation, he will know exactly what he needs to request from you.
Getting a new home loan is now an option for you and it is no harder than anyone else looking to get a new mortgage.
Derek and his team are looking forward to answering any questions that you have and are excited to help you become a homeowner!
