RI Compassion Center Employee Denied Mortgage Due to “Marijuana Related” Income

Monday, April 02, 2018


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John and Melissa Guardarrama

A Rhode Island medical compassion center employee was recently denied financing for a mortgage -- after initial approval -- because his income was deemed unacceptable by a local mortgage lender for being from a "marijuana-related business," following new federal regulation of marijuana activity under the Trump Administration.

Summit Compassion Center cultivator John Guardarrama and his wife Melissa spoke with GoLocalProv and provided the letter where Home Loan Investment denied his credit application on January 8, 2018, after having given preliminary approval in 2017.

The denial letter came just days after U.S. Attorney General Jeff Sessions announced the Trump Administration would be enforcing federal marijuana laws -- and before Rhode Island Governor Gina Raimondo announced as part of her Fiscal Year 2019 budget proposal she is counting on an additional $5.1 million in revenue from medical marijuana sales by allowing up to twelve new medical marijuana compassion centers to operate in Rhode Island. 

Clash of State, Federal Law

The Guardarramas, who were looking to purchase a home in Pawtucket because it was among the locations eligible for first time homeowner assistance under Rhode Island Housing, said they were devastated by the development. 

"[Home Loan] had all his income information as of last summer, they knew then where he worked," said Melissa Guardarrama of her husband's application, and noted they had been renting in Providence, and have five daughters -- and a granddaughter -- between them. "How do I tell my daughters if you work hard, you can get what you want, and then this happens?"

A spokesperson for Rhode Island Housing said that while the agency couldn't speak to specific loan applications, that the federal guidelines for lending would be in conflict with marijuana compassion center employment. 

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The letter from Home Loan Investment denying Guardarrama financing.

"We can’t speak about any specific individual’s loan applications nor can we answer questions about HLI’s book of business," said Christine Hunsinger, Assistant Deputy Director for Policy and Research
"Regarding compassion center workers, most of our loans are FHA (Federal Housing Administration) loans, which must comply with their underwriting guidelines," said Hunsinger. "FHA will not purchase or invest in a loan where the borrower is employed by or receives compensation related to the marijuana industry."

Home Loan Investment, which is located in Warwick, did not respond to request for comment. 

Finding -- and Losing -- New Home

"Home Loan Investment was referred to me by my supervisor, I was referred to John Casey there," said John Guardarrama, who had worked at the Thomas C. Slater Compassion Center, before his employment at Summit, which are two of Rhode Island's legal medical marijuana compassion centers. Greenleaf is the third.

Melissa Guardarrama explained that they went through the pre-approval process, where her husband got approval -- and were cautiously optimistic about the house they found in Pawtucket. 

"[Casey] gave us the pre-approval letters way back in July," said Guardarrama. "We said if we’re already paying $1400 to rent, why don’t we think buying? [Casey] said fax me [John's] pay stubs, and we had the pre-approval."

"Fast forward to November. I saw the house [in Pawtucket], John looked at it, and we thought it would be perfect.  We were skittish because we had been outbid [at previous properties], but this one looked like it was going to work out.  We paid for the inspection, we paid for the contract. All we had in front of us was the closing," said Guardarrama. 

"The way it works, you get the pre-approval from Home Loan. Then, when you submit everything — when you have the home -- Home Loan submits it to RI Housing. We spent the money on the first time homeowners test online.  We signed the purchase and sales agreement [with Casey]," said Guardarrama. "We were going to close on January 19."

Then, Guardarrama said they got the bad news.

“[Casey} called. He said he had bad news.  He said it was the Home Loan and [RI Housing] underwriters who decided it, because of the income,” said Guardarrama. “Everything went dead for a week or two — then I started calling about the deposit. We did get the $1000 back, but you can’t get back the inspection costs.”

Guardarrama noted that a colleague of her husband’s at Summit informed them he had gotten a loan successfully through Casey, although it is unclear if that occurred before — or after — the Sessions’ announcement in January. 

"We just want people to know [this happened]," said Guardarrama. 


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