Vets Denied VA Home Loans if They Work with Cannabis

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Morris Denton looks over marijuana plants in a flowering room at Compassionate Cultivation, a licensed medical cannabis cultivator and dispensary, Dec. 14, 2017, in Manchaca, Texas.  (AP Photo/Eric Gay)
Morris Denton looks over marijuana plants in a flowering room at Compassionate Cultivation, a licensed medical cannabis cultivator and dispensary, Dec. 14, 2017, in Manchaca, Texas. (AP Photo/Eric Gay)

The Department of Veterans Affairs is denying home loans to veterans if they work in the cannabis industry, according to a letter sent May 23 to VA Secretary Robert Wilkie from Rep. Katherine Clark, D-Massachusetts, and 20 other members of Congress.

The lawmakers want answers as to why one of Clark's constituents and other veterans were rejected for VA home loans after citing their income sources as marijuana cultivation, sales or related services in states where it is legal.

In an article first reported by Roll Call, Clark said she became aware of an unpublished VA policy that considers work in the industry as not "stable and reliable" enough to be considered as home loan-qualifying income.

In a statement provided to Military.com, Clark said the VA needs to "catch up with the times and recognize the growing role of the cannabis economy that employs over 200,000 Americans."

"Our veterans should not be penalized or denied the benefits they have earned because they are working in a budding industry," she said.

Thirty-four states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands now have some variation of medical marijuana programs, while a dozen other states allow cannabidiol that is low in tetrahydrocannabinol -- or THC, the psychoactive component of pot that makes a user high -- for medicinal purposes.

Under the Servicemen's Readjustment Act of 1944, also known as the GI Bill, eligible veterans can apply for home loans from private lenders with a guarantee from the VA that usually garners more favorable interest rates and terms than can be found on the market.

But according to Clark, the VA denied a veteran's application because "approving it would risk prosecution by U.S. Department of Justice under anti-money laundering statutes."

Marijuana remains a Schedule 1 drug, illegal under federal law.

"The ambiguity under which the cannabis industry operates is unique, and we fully understand the VA's resulting aversion to legal and financial risk," lawmakers wrote in their letter. However, they added, "in recent years, the Department of Justice has substantially narrowed its prosecutorial priorities in this area, and Congress has taken action to prevent federal interference with the implementation of state cannabis laws."

The lawmakers asked the VA to provide details on its loan guarantee programs and include information about policies regarding veterans' eligibility for loans or other benefits if they are employed by the cannabis industry.

They gave the VA a 30-day deadline, with the response due June 22.

"A substantial number of veterans earn their livelihoods in this industry and, in coming years, that number is likely to further rise. The VA must acknowledge this reality and ensure veterans who work in this sector are able to clearly understand and can equitably access the benefits they've earned," the letter states.

Twenty Democrats and one Republican, Rep. Don Young of Alaska, signed the correspondence. Zack Brown, Young's press secretary, said the congressman signed the letter "because of his strong support for veterans as well as his belief that cannabis policy is a states' rights issue."

"No veteran should be denied the benefits they've earned solely based on their participation in their state's legal cannabis programs, and Congressman Young wants details and clarification from the VA on how they plan to move forward," Brown said.

The VA did not respond to a request for policy clarification or comment.

-- Patricia Kime can be reached at Patricia.Kime@Military.com. Follow her on Twitter at @patriciakime.

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