Working in the cannabis industry can create a unique challenge when it comes to home loans. Most big banks will not approve a loan for growers, distributors, or sellers of legal weed because the federal government classifies it as a Schedule I substance. Here at A Nightmare on Loan Street Blog, we write about this exact scenario. Can’t get a home loan because you work with ganja? Sounds like a nightmare. There is an alternative though.
Truss Financial Group, LLC is now working with those in the cannabis industry for mortgages. Sounds amazing, right? Let’s review how this works.
What Type of Loan Is It?
This type of loan is open to those in the legal marijuana business. The loan works just like any other mortgage by offering:
- Fixed rate mortgages
- Adjustable rate mortgages
The main difference is that this lender is willing to work with those involved in the sale of legal weed, and the big banks are not. Pretty simple so far. Indicas and sativas have more nuance.
How Does It Work?
The loan itself functions like another common alternative loan called a bank statement loan. The lender will review 12-24 months of the borrower’s bank statements to create an average monthly income. This will help determine how much the borrower can afford and the overall amount of the loan.
Bank statement loans have been around a while, and they help small business owners and the self-employed when it comes to home loans. These borrower’s also have a hard time getting approved for a traditional loan at a big bank because they might not have a regular paycheck, work on commission only, or maximize their legal deductions (causing their W2 to not reflect their true earnings).
Down payments will range from 10-20% with this type of loan. Interest rates will likely be a bit higher as well.
What Types of Homes Can Be Purchased?
Most of the same properties that a conventional loan would cover from a big bank can be purchased with this type of loan, including:
- Single family homes
- Multi-family properties
The property can be a primary residence, secondary residence, or investment property.
If this blog post has totally blown your mind, then join the club. This is really good stuff if you work in the cannabis industry and have been turned down in the past when trying to qualify for a mortgage. There really hasn’t been a good option until now.
So what next? Call the team at Truss Financial Group. They work directly with those in the legal weed business to help them secure this exact type of loan.