For 75 years, veterans purchasing a home have been able to count on help with their home loans from the U.S. Department of Veterans Affairs – home loans backed by the VA are one of the core benefits included in the 1944 GI Bill.
But a little-known rule — one the VA has never issued any policies or guidance on — makes those loans inaccessible to veterans who work in the cannabis industry, according to a group of about two dozen lawmakers.
Rep. Katherine Clark first became aware of the off-the-books policy when a veteran wrote her office after his application for help with a home loan was rejected.
The VA wrote that it considered working in cannabis to be insufficiently “stable and reliable” — even though pot sales are legal in the state for both medicinal and recreational use.
“The VA needs to catch up with the times and recognize the growing role of the cannabis economy that employs over 200,000 Americans,” Clark said in a statement. “Our veterans shouldn’t be penalized or denied the benefits they have earned because they are working in a budding industry.”
A spokesman for the VA did not reply to requests for comment on the department’s unstated policy.
The veteran asked Clark’s office not to be named because he is concerned about job security.
In a letter shared with Roll Call, roughly two dozen lawmakers acknowledge that marijuana businesses already employ nearly a quarter-million people, and the number of veterans working in the industry is likely to rise.
The letter is dated May 13; the lawmakers requested a reply clarifying the VA’s policy within 30 days.
The VA underwrites part of a mortgage loan application for eligible veterans. If the veteran defaults, the government guarantees the lender a portion of what she owes. That makes veterans and servicemembers attractive to lenders.
Veterans don’t have to make a downpayment and avoid mortgage insurance fees.
In the years following the GI Bill, zero downpayment loans programs helped drive a boom in homeownership, some economists say.
According to Clark’s office, the VA denied her constituent’s loan application because approving it would risk prosecution by U.S. Department of Justice under anti-money laundering statutes.
But the lawmakers point out that the DOJ has narrowed its prosecutions of state-sanctioned pot sales in recent years. A bill introduced in the House in March with bipartisan support would remove the legal barriers blocking some marijuana growers and dispensaries from accessing the financial system.
“The ambiguity under which the cannabis industry operates is unique, and we fully understand the VA’s aversion to legal and financial risk,” the lawmakers’ letter reads. “Denying veterans the benefits they’ve earned, however, is contrary to the intent Congress separately demonstrated in its creation of VA benefit programs.”
Democrats comprise 20 of the 21 members who signed onto the letter. They were joined by sole Republican, Alaska’s Rep. Don Young.
Jim Saksa contributed reporting.