Mortgage Lenders Opening Doors to Borrowers Using Cannabis-Related Income
Southern California brokerage opens doors to borrowers using income from marijuana sales
In a groundbreaking move, a wholesale mortgage lender in Encinitas, California, has announced that it will now accept borrowers who use income from cannabis-related businesses to qualify for home loans. This decision marks a significant shift in the mortgage industry, as lenders have traditionally been hesitant to work with individuals in the legal marijuana industry.
The terms of the loans offered by this brokerage are generous, requiring a middle FICO score of 720 or better and just a 10% down payment on a $2 million mortgage. The rates may not be as low as traditional mortgages, starting at 4.6% for a primary residence, but the ease of qualification using 12 months of bank statement deposits makes it an attractive option for many self-employed individuals in the cannabis industry.
The legal marijuana industry in California is booming, with taxable sales for the second quarter of 2021 exceeding $1.3 billion. With over 12,000 licensed cannabis businesses in the state, the demand for financial services tailored to this industry is only expected to grow.
Despite the federal classification of marijuana as a Schedule I drug, many states have legalized its use for medical or recreational purposes. This has created a gray area for financial institutions, who are still required to file suspicious activity reports for any marijuana-related businesses they work with.
While the mortgage industry has been slow to adapt to the changing landscape of the legal marijuana industry, this recent announcement signals a shift towards more inclusive lending practices. As more states legalize marijuana and federal laws evolve to match state sentiments, it is likely that marijuana mortgages will become more common in the future.
For now, borrowers in California can take advantage of this new opportunity to secure home loans using their income from legal cannabis businesses. It’s a step in the right direction towards providing financial services to a growing industry that has long been overlooked by traditional lenders.