Using Marijuana Money to Buy a House

Blog post1Several people have asked me if they can get a mortgage using income from the legal sale of marijuana.

One person owns a state licensed shop that sells cannabis and related products. His shop does not have the 24 months required for self-employment, but he owned another business previously, so he can claim self-employment for more than two years.

Anther person is a W2 employee who works tending the marijuana plants. Prior to his current position, he worked for a nursery tending many types of flowers and plants. He says he has a history doing the same type of work, and the company he works for is legal in Washington state.

Can the shop owner and the employee qualify for a mortgage based on their incomes?

To get the answer straight from the source that provides money to banks and mortgage lenders for conventional loans, I spoke directly with Fannie Mae representative Deborah DeGarmo on June 21. (A transcript of our conversation was recorded at Fannie Mae and is available for underwriters who call and request the information, she said.)

The W2 employee who works for a legal business that sells marijuana can qualify for a mortgage just like any other W2 employee.

The business owner of a shop that sells marijuana cannot qualify for a mortgage based on that income, because that type of business is not yet federally recognized as legal.

So there you have it, from Fannie Mae. To qualify for a conventional loan, you need a down payment of at least 3% (which can be from an acceptable down payment assistance program). If you are in WA or CA, I am licensed in those states.


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2 thoughts on “Using Marijuana Money to Buy a House

  1. Carolyn would you mind providi.g the link to where this information is located on Fannie Mae’s website? I’ve been looking and can’t find the information.

    1. I am not aware of a link, but here is the Q and A for mortgage lenders. Notice the last sentence:

      Q: What are the rules for someone with income derived from the marijuana industry?

      A: State law is different than federal law. Federal law still states dispensaries/marijuana is not a legal form of business, while states allow it, the federal government does not. FHA, USDA and VA are federal agencies, and to an extent Freddie and FNMA as well, none of these are run by the state. So any income derived from having any ownership in a company that sells, dispenses, grows marijuana cannot be used. FNMA will allow income from a W2 employee working for a dispensary/marijuana business.

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