VA Says Veterans Who Work In Marijuana Industry Still Eligible For Home Loan Benefits, But May Face Challenges With Lenders

VA Says Veterans Who Work In Marijuana Industry Still Eligible For Home Loan Benefits, But May Face Challenges With Lenders
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The U.S. Department of Veterans Affairs (VA) is clarifying that military veterans can still be certified as eligible to receive home loan benefits even if they derive income from a state-legal marijuana business. However, the department said, some prospective lenders may not want to run the risk of issuing loans to those veterans and then not being paid back due to the instability in the cannabis industry that is caused by ongoing federal prohibition. In a memo posted on Monday, VA also noted that because hemp is federally legal, veterans who work with the non-intoxicating crop shouldn’t face any unique challenges when applying for home loans through its benefits program. Even though marijuana is strictly prohibited as a Schedule I controlled substance under federal statute, the department said a veteran “who receives income from state-legalized marijuana activity is not prohibited from obtaining a Certificate of Eligibility (COE), which is a certificate that confirms the veteran is eligible to apply for a VA-guaranteed loan and shows the amount of home loan guaranty entitlement available, if any, to the veteran.” But because of the ongoing federal ban on cannabis, “it may be difficult for lenders to establish the stability and reliability of Veterans’ income derived from marijuana-related industries,” the memo says. “As such, lenders may find it problematic to rely on such income when underwriting VA-guaranteed loans.” That said, VA further clarified that “income from employment in industries that are not prohibited at the federal level, such as the legal hemp industry, is not problematic for underwriting purposes,” the memo continues, noting specifically that “income derived from the retail sale of legally compliant hemp fabric would not raise the same underwriting difficulties that income derived from the retail sale of marijuana would.” “VA continues to monitor Congressional activity and federal case law…

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Source : VA Says Veterans Who Work In Marijuana Industry Still Eligible For Home Loan Benefits, But May Face Challenges With Lenders

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