Contact Us

    [recaptcha]
    • Home
    • Products
      • Subprime
    • Guidelines
    • Rates
    • Lenders
    • Blog

    Non Qualified Mortgage

    Non Qualified Mortgage Rates, Guidelines, Lenders and Information

    Federal, State Policy Odds Make Housing Difficult for Cannabis Workers

    October 2, 2017 By Chris Hamler

    Twenty-nine states and the District of Columbia have already legalized medical marijuana yet the federal government remains adamant in keeping the drug’s illegal status. The continued conflict in policies and legalities is now causing an array of conflicts among businesses, and workers, including the housing and mortgage sector.

    No to cash

    Marijuana seems to be boosting local real estate markets where it is legal. Yet, those in the cannabis business are finding it hard to acquire homes with their cannabis income.

    Workers and employees of cannabis companies are getting paid in cash because banks don’t want to establish deposit relationships with an industry that still in the grey areas where legality is concerned. Now, when these workers attempt to acquire financing products with their cash income, lenders double back and raise their eyebrows.

    Under the law, lenders still have to remain compliant to federal rules in originating and underwriting loans. One of these rules is to establish a borrower’s ability to repay the loan. However, with cash incomes, there is no absolute, no guarantee.

    “If [the information] is not verifiable because of the type of business they are in, then that’s not a loan we’re going to be able to transact,” Senior Vice President of Angel Oak Mortgage Services Tom Hutchens said.

    This does not mean, however, that there are no programs that can accommodate these borrowers. In fact, two of the most common federal guarantee programs offer terms that do not specifically block borrowers in the cannabis business.

    Getting the loan you need is just one click away.

    The VA home loan program

    Backed by the US Department of Veterans Affairs, VA mortgages cater to veterans and active military service members and reservists. It offers 100 percent financing without the need for income and asset verification.

    Under the VA mortgage rules, the lenders are only required to ensure that the borrower or loan applicant has a stable and reliable source of income.

    The USDA home loan program

    Designed for borrowers in the rural areas, this loan program aims to help low-to-moderate income borrowers in the rural gain access to affordable housing.

    Just like the VA, it offers total financing with competitive interest rates. There is also no policy regarding loans to people involved in the legal cannabis business.

    One lender, Evergreen Home Mortgage, successfully originated some loans for marijuana workers and sold them to government service enterprises Fannie Mae and Freddie Mac. These said workers didn’t have equity or any ownership interest in the cannabis business. It remains unclear, however, how many of these loans were originated and if additional sources of income were considered during the underwriting process.

    The nonQM alternative

    When it comes to underwriting unconventional loans, or those that typical traverse qualified mortgage boundaries, most people easily think about Non-QM loans. No stable income source? Get a nonqualified loan. Worried about damaged credit? There is always a nonQM option.

    Yet, even these bold lenders are reluctant to deal with borrowers sporting cash incomes. As Hutchens iterated, these lenders still need to establish the ability-repay rule in order to protect their own investments and interests. Cash income is easily a deal breaker even in the NonQM book.

    As long as state and federal regulations remain at odds, there is far hope for resolve when it comes to cannabis and mortgages.

    Click to See the Latest Mortgage Rates»

    Filed Under: Non Qualified Mortgages Tagged With: cannabis income, cannabis workers, cash income, home financing

    Our Experts Seen On:

    More Non Qualified Mortgage Info

    • How the Length of Your Credit History Affects Your Credit Score
    • Best Mortgages for Purchasing Rental Properties
    • What to Look For When Comparing Mortgage Lenders
    • Follow These Tips to Avoid Costly Home Renovation Mistakes
    • What Are The Biggest Challenges Facing First-time Home Buyers?

    Search

    IMPORTANT MORTGAGE DISCLOSURES:

    When inquiring about a mortgage on this site, this is not a mortgage application. Upon the completion of your inquiry, we will work hard to match you with a lender who may assist you with a mortgage application and provide mortgage product eligibility requirements for your individual situation.

    Any mortgage product that a lender may offer you will carry fees or costs including closing costs, origination points, and/or refinancing fees. In many instances, fees or costs can amount to several thousand dollars and can be due upon the origination of the mortgage credit product.

    When applying for a mortgage credit product, lenders will commonly require you to provide a valid social security number and submit to a credit check . Consumers who do not have the minimum acceptable credit required by the lender are unlikely to be approved for mortgage refinancing.

    Minimum credit ratings may vary according to lender and mortgage product. In the event that you do not qualify for a credit rating based on the required minimum credit rating, a lender may or may not introduce you to a credit counseling service or credit improvement company who may or may not be able to assist you with improving your credit for a fee.

    Copyright © Mortgage.info is not a government agency or a lender. Not affiliated with HUD, FHA, VA, FNMA or GNMA. We work hard to match you with local lenders for the mortgage you inquire about. This is not an offer to lend and we are not affiliated with your current mortgage servicer.

    Contact Us | Terms of Use | Privacy Policy | Media | DMCA Policy | Anti-spam Policy | Unsubscribe

    Mortgage.info

    NMLS ID #1237615 | AZMB #0928735

    8123 South Interport Blvd. Suite A, Englewood, CO 80112

    CLICK TO SEE TODAY'S RATES