How to get a mortgage working in the cannabis industry

If you work for a state-legalized marijuana business, getting a mortgage can be challenging.

Many lenders don't count cannabis income, which leads to mortgage application rejections.

Here's the good news: NewCastle Home Loans counts cannabis income.

Employees of state-legalized marijuana businesses in Illinois and Florida can qualify for conventional home loans. You can get approved with the same low rates and down payments as other borrowers.

In this article, I'll explain how you can secure a mortgage and buy a home confidently while working in the cannabis industry.

Why most lenders don’t count cannabis income

Many banks and mortgage lenders won’t accept cannabis income. That’s because marijuana is still illegal under federal law, even if it’s legal in your state.

This conflict between state and federal laws makes lenders nervous, especially those regulated at the federal level. To avoid risk, they often exclude cannabis-related income from mortgage applications.

When your income isn’t counted, your debt-to-income ratio goes up. That makes it harder to qualify for a loan or borrow enough to buy the home you want.

At NewCastle Home Loans, we do things differently. We count cannabis income. If you work for a licensed cannabis business in Illinois or Florida, we can help you secure a conventional mortgage with a competitive rate and a low down payment, just like any other qualified buyer.

What kind of mortgage can you get with cannabis income?

If you work in the cannabis industry, you can qualify for a conventional mortgage, but it depends on the lender. Some lenders, like NewCastle Home Loans, accept cannabis-related income. Others may not.

Government-backed loans (FHA, VA, USDA) do not allow cannabis income.  These programs follow federal guidelines, and since cannabis is illegal at the federal level, they consider this income ineligible.

Conventional loans, offered by private lenders, tend to be more flexible. Fannie Mae, for example, permits cannabis income if it's legal under state law and properly documented. However, many lenders still avoid it due to concerns about federal regulations and potential legal risks.

At NewCastle Home Loans, we understand the challenges you face. We accept cannabis income for conventional mortgages in Illinois and Florida.  If you're a W-2 employee with no ownership stake in a cannabis business, we can help you get approved with competitive rates and low down payments.

"Helped me out when my other mortgage lender fell through halfway into closing because I work in the marijuana industry."

Caleb Johnson

Find out how much buying a home will cost. Check today's mortgage rates, monthly payments, and closing costs.

Can You Get an FHA, VA, or USDA Loan with Cannabis Income?

If your primary income comes from a state-legalized marijuana business, qualifying for government-backed loans like FHA, VA, or USDA can be challenging.

These programs follow federal guidelines, and since cannabis remains illegal at the federal level, income from the cannabis industry is considered ineligible.

The following government-backed loans don't count cannabis-related earnings:

 FHA Loans → No 

Insured by the Federal Housing Administration, these loans are designed for buyers with lower credit scores or smaller down payments. However, they require income to be legally derived under federal law, excluding cannabis-related earnings.

 VA Loans → No 

Guaranteed by the Department of Veterans Affairs, VA loans are available to eligible veterans and military members. While veterans can obtain a Certificate of Eligibility, using income from the cannabis industry for loan qualification is problematic due to federal restrictions. See "The VA Home Loan and Marijuana-Derived Income."

 USDA Loans → No 

Backed by the U.S. Department of Agriculture, these loans help buyers in rural areas with moderate to low incomes. Like FHA and VA loans, USDA loans require income to be legal under federal law, making cannabis income ineligible.

The federal classification of marijuana as a Schedule I controlled substance creates a barrier for homebuyers relying on cannabis income.  Without access to these government-backed loans, you might need a larger down payment and a higher credit score to qualify for a conventional loan.

Can I Get a Mortgage If I Own Part of a Cannabis Business?

Having any ownership of a state-legal cannabis business makes getting a mortgage more challenging.  

Even if you own a small percentage of the company,  earn a W-2 salary, and don’t take self-employment income, lenders often classify you as self-employed.

Most conventional lenders won’t approve loans using income from cannabis business owners. This is due to federal laws and concerns about legal and financial risks.

Even if your salary alone would qualify you, the ownership stake can disqualify your income from being counted.

What Are Your Options?

If you’re self-employed in the cannabis industry, your mortgage options are limited.

NewCastle Home Loans can help if:

1. You’re buying or refinancing in Illinois or Florida
2. You report income on a W-2 or 1099
3. You have no ownership stake in the cannabis business

If you do have an ownership stake, consider specialized lenders, state banks, or local credit unions familiar with the cannabis industry. Some offer alternative loan programs for self-employed borrowers.

Requirements for a cannabis mortgage at NewCastle Home Loans

If you work in the cannabis industry and are looking to buy a home in Illinois or Florida, NewCastle Home Loans can help. We accept cannabis-related income for conventional mortgages, provided you meet specific criteria.

At NewCastle Home Loans, we understand the unique challenges faced by professionals in the cannabis industry. Our team is here to guide you through the mortgage process, ensuring a smooth and efficient experience.

"Could not rate New Castle high enough! Jim and his team were a dream to work with. "

Elise Yost

Get approved for a cannabis mortgage: step-by-step

At NewCastle Home Loans, we make it easy for cannabis industry professionals in Illinois and Florida to get approved for a mortgage. Our streamlined process ensures you know exactly where you stand before you start house hunting.

 Step 1:   Apply Online

Start by completing our online application. You'll check your credit, upload income documents, and import bank statements. This helps us assess your financial situation accurately. (How a mortgage credit check affects your score)

 Step 2:   Receive Your Pre-Approval Letter

Once we've verified your financial information—often on the same day—we'll send you a verified mortgage pre-approval letter. This letter confirms that you're ready to buy and demonstrates to sellers that you're a serious buyer. (Why a verified mortgage pre-approval is better)

 Step 3:   Close in 2 Weeks

With your pre-approval in hand, make an offer on your desired home. After the seller accepts, we'll work diligently to close your mortgage in as little as two weeks.

Getting pre-approved is the first step toward homeownership. It provides clarity on your budget and strengthens your position when making an offer.

"Newcastle Home Loans is an excellent mortgage lender who provided top-notch professional guidance throughout the entire application process which led to a successful closing."

Carol Crislip

Ready to get started?

What to do if your mortgage is denied because of cannabis income

Being denied a mortgage due to cannabis-related income can be disheartening, but there are steps you can take to move forward:

1. Add a Co-Signer

Consider involving a co-signer with a traditional source of income. A co-signer doesn't have to live in the home, but can strengthen your application by providing additional financial backing. (How a mortgage co-signer can help you buy a home)

2. Explore Different Properties

Reassess your budget and look into more affordable properties. Adjusting your expectations can increase your chances of loan approval and help you find a home that fits your financial situation.

3. Work with a Cannabis-Friendly Lender

Seek out lenders experienced in working with cannabis industry professionals.  

Some lenders, like NewCastle Home Loans, have helped many individuals in the cannabis sector secure mortgages. These lenders understand the nuances of cannabis-related income and are more likely to consider it in your application.

Remember, the legal landscape surrounding cannabis is evolving. Guidelines for government-backed loans and the acceptance of cannabis income may change in the future.

Staying informed and collaborating with knowledgeable professionals can help you navigate these changes effectively.