Entry-level cannabis professionals have the flexibility to make housing choices that they might not expect to be within reach.
Sandora Tiburcio, Senior Mortgage Advisor
Entry-level cannabis professionals must navigate unique challenges when it comes to buying a home. One key obstacle is limited access to traditional home financing options like government loan programs. However, there are alternative pathways to homeownership, and you’re not alone in figuring out when it’s the right time to leave the rental market.
The Government Loan Conundrum
For many Americans, government programs like VA home loans and FHA mortgages provide the most financially attractive way to buy a house. They offer lower down payment requirements and more accessible terms for first-time homebuyers. Unfortunately, due to the ongoing federal prohibition of cannabis, individuals employed in the cannabis industry are deemed ineligible for government loans.
This stark reality eliminates a crucial avenue for homeownership for cannabis industry professionals. And here’s something that’s truly frustrating: Referrals from larger financial institutions and brokerages frequently lead to FHA and VA loan applications, only to be met with rejection because of the cannabis connection. But there is another way to get it done.
Education Is Key
One fundamental solution to the challenges faced by entry-level cannabis professionals when choosing to buy or rent is education. Many individuals in the industry are unaware of the intricacies of the housing market, home loan options, and the potential pitfalls related to their job that they might encounter along the way.
At Salal, we address this information gap by taking the initiative to provide education through our HomeAdvantage® member service. We even offer classes for real estate agents tailored to educate them on how they can best serve the large population of cannabis industry professionals. If the agents understand the unique aspects of cannabis-related transactions in their market, they’ll have the right tools to help cannabis employees effectively navigate housing and rental markets.
Gift Funds: A Key to Unlocking Homeownership
In the absence of lower down payment options from government loans, cannabis industry professionals could use gift funds as an alternative strategy for down payments. Gift funds are contributions provided by family members, friends, or other sources that assist in the purchase of a home. It has proved to be a lifeline for many cannabis professionals seeking to buy a home because it mitigates the burden of saving up for a large down payment.
In order to understand what is allowable and permissible within the realm of gift funds, cannabis industry professionals can connect with a Salal Mortgage Advisor for a free homebuyer planning session to get a clear understanding of the rules and regulations surrounding these funds, and how they can best be applied to their specific situation.
Breaking Down Barriers in Banking
The cannabis industry is still largely a cash-based business, and many industry professionals continue to bank with major financial institutions, unaware that their money is at risk due to the federal restrictions on cannabis.
Big banks often respond by locking accounts when they detect transactions related to cannabis, causing debilitating financial chaos for those involved. Salal, on the other hand, strives to break down these barriers. We offer cannabis businesses and individuals who work in cannabis the same financial services and protections as any other member.
Empowering Future Homeowners
Salal’s approach goes beyond providing essential everyday banking services. We aim to empower cannabis industry professionals to make informed decisions about their financial future. Our Mortgage Advisors engage in proactive conversations with entry-level cannabis employees who might be potential homebuyers to help them assess their current financial standing. They then develop strategies to improve their credit and save for a down payment.
This guidance can start years in advance, so individuals have a clear path to homeownership that fits their financial situation. It may involve referring them to institutions that specialize in credit repair or providing advice on selling non-essential assets (motorcycles, RVs, ATVs, etc.) to generate funds for a down payment.
The housing challenges faced by entry-level cannabis professionals are substantial but not insurmountable—and Salal is here to support you. While government loans might be out of reach, alternative strategies and education can pave the way to homeownership, or lead employees to decide to stay in the rental market for the time being. Here at Salal, if cannabis industry professionals have a dream of owning a home, we work to help them achieve that goal. By addressing these challenges head-on and providing the necessary support and education, we can help cannabis professionals secure their place in the housing market.
Salal extends essential financial resources to its members, regardless of their occupation. Contact us today to explore how our team of financial experts can help you optimize your financial assets and build a stable financial future.
