Using Cannabis Income to Get a Mortgage: Is It Possible?

Using Cannabis Income to Get a Mortgage: Is It Possible?

The legal cannabis industry is generating millions of sales and tax revenues and has turned out to be quite advantageous for employees working under the aforesaid business. Although only a few people get wealthier under this business as you’d anticipate, the salaries are far better than those positions in usual business sectors.

Though cannabis is legal in some countries, there are still places struggling for their position in the industry. Despite its positive claims, the government isn’t convinced of its capability in producing products for the betterment of the society; hence, it’s still categorized as illegal.

As a result of this negative feedback, the cannabis industry is struggling to gain access in banks and other financial services. With these services currently inaccessible, the aforementioned industry is facing bank crisis which affects the employees’ financial status.

Marijuana Research

Two compounds have been discovered in the cannabis plant: tetrahydrocannabinol (THC) and cannabidiol (CBD). It has been claimed that THC is the primary psychoactive cannabinoid, while CBD serves as a natural remedy in the body. CBD oil, a component extracted from CBD, is mixed with other carrier oils such as coconut oil, palm oil, etc. in making products intended for people to use.

In spite of the benefits of cannabis in the health and wellness world, some individuals are still dubious about the said plant. That’s why until now, the society is divided when it comes to this discussion.

Marijuana Business: Is It Qualified for Loans and Mortgages?

The concern being raised as the cannabis business fights its way in the business industry is its qualification for loans and mortgages. For years, cannabis workers have been talking about their loan denials. The primary reason as to why they’ve been denied to file for a loan is because of marijuana business being illegal at the federal level.

It’s no question that the marijuana business is qualified for loan or mortgage in terms of financial support since they’re capable of generating huge and stable sales; yet as of now, their options are only limited. In order to apply for these services, you need to present the necessary documents to prove that you’re capable of repaying the loan. This includes present proofs from a legal source, which the said industry is still urging to acquire until now.

Which Bank Will Accept You?

Choosing a large bank may be ideal, but working under the marijuana industry may hinder you from getting approval from them. All banks are subject to federal law, regardless if they’re state-chartered or national. Banks under federal law declare cannabis as an illegal Schedule I drug. Therefore, cannabis employees can’t apply for a loan or mortgage from large banks despite their pleasing income.

Meanwhile, other credit unions allow lending money to employees working for the cannabis-generating business. They generally don’t give commercial loans to the cannabis business, but they’ll lend to qualified applicants with stable W-2 income from the said industry.

Mortgage Lenders

Several mortgage loan originators underwrite a new loan and deal it to an investor in order to emancipate the capital to make another loan for the next consumer. Lenders who want to sell their loans to investors should follow the guidelines set by certain investors. In their guidelines, cannabis is not a valid option for investors due to its illegality in federal law.

Portfolio lenders keep some of their loans instead of selling it to investors. However, they have to be more cautious to choose cannabis income to qualify borrowers. These portfolio lenders give an adjustable rate, which though not ideal, is acceptable than not having any loan at all.

Conclusion

Certain research have been conducted about the health benefits of marijuana. As a result, the marijuana business is gradually booming alongside other industries. The marijuana industry may be generating higher sales and tax revenues, but some countries still declare the business as illegal; therefore, consumers working in the cannabis industry have limited options when applying for loans and mortgages.

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