Why Do Lenders Deny Mortgages to People Working in the Legal Cannabis Industry?

The legal cannabis industry continues to boom, yet workers in this sector face significant challenges when it comes to getting a mortgage. From frontline dispensary staff to cannabis entrepreneurs, many find themselves denied home loans despite stable, verifiable income. Why? Let's explore the systemic challenges and the solutions that Cannabis industry workers can do to achieve their dream of homeownership.

The Banking Stigma of Cannabis Income: Despite its legality in many states, cannabis remains federally illegal. As a result, most traditional banks avoid lending to workers with cannabis-related income. Mortgage lenders often label such earnings as "high-risk," regardless of the industry's legal status in a given state.

Let's meet Sarah, a budtender with three years of steady employment and a solid credit score. She was shocked when her mortgage application was denied. "They said my income was too risky," she explained. "I provide for my family just like anyone else, but they treated me like a criminal."

________________________________

Solutions for Cannabis Industry Workers:

Follow these steps when you're applying for a mortgage:  

• Find Cannabis-Friendly Lenders: Specialized lenders, like us, understand the nuances of cannabis industry income. 

• Be Transparent About Your Employment: When applying for a mortgage, disclose upfront that you work in the cannabis or hemp industry. Don’t assume your lender will recognize the nature of your employment from the business name alone. For example, "Dreamy Green Farms" may not obviously indicate a cannabis-related employer.
  Many lenders do not screen for cannabis income until later in the process, and a last-minute loan denial after you've entered a purchase contract can be both heartbreaking and costly.
• Document Everything: Workers should meticulously track their pay stubs, tax returns, and deposits to demonstrate consistent earnings.
• Consider Non-Traditional Loan Programs: Portfolio loans and other flexible financing options can help bypass the restrictions of conventional lending.

________________________________

Conclusion:

While the challenges are real, solutions exist. With the right lender and solid documentation, legal cannabis workers can secure a mortgage and achieve homeownership.

________________________________

You can also drop us a line HERE »

Yours in successful homeownership,

Derek Bissen
Loan Originator
NMLS#365627
Unconventional Lending Program Director

Derek Bissen is a licensed Mortgage Loan Originator with over 25 years of experience in the industry. Derek is a self-employed lending expert who is known for his ability to work with borrowers who have substantial wealth and non-traditional lending needs. He is a creative loan structurer and specializes in portfolio lending, asset-based lending, bank statement lending, as well as traditional loans such as Conventional, FHA, VA, and first-time homebuyers. Derek's expertise in the mortgage industry is unparalleled. He is a trusted advisor to his clients, providing them with customized loan solutions that meet their unique financial goals and needs. His vast experience and knowledge make him a valuable asset to anyone looking to purchase a home or refinance their existing mortgage. As a highly-experienced loan originator and author, Derek is committed to sharing his knowledge with others. He regularly provides valuable insights and advice to readers looking to navigate the complex world of mortgage lending. His articles are informative, engaging, and backed by years of hands-on experience. With his wealth of knowledge and dedication to his clients, he is the go-to source for all your mortgage lending needs. If you're looking for a reliable and trustworthy mortgage expert, contact Derek today to learn more about how he can help you achieve your financial goal