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Homebuying Hurdles for the LGBTQ+ Community

June 25, 2020 — 5 min read

On June 26, 2015, the Supreme Court ruled on the civil rights case of Obergefell v. Hodges, which guaranteed the fundamental right to marry someone of the same-sex. This landmark case broke down many barriers for the LGBTQ+ community, such as the ability to equally purchase and own a home in states that previously did not recognize gay marriage. Since this court ruling, home sales have increased among LGBTQ+ persons. In 2015 alone, the U.S. adult LGBTQ+ population had $917 billion in combined buying power. However, despite landmark rulings and dramatic changes in approval of same-sex marriage, only 49 percent of the LGBTQ+ community owns a home compared to 64 percent of the general population. This low homeownership percentage could be a result of lingering fear that still resonates with those who identify as LGBTQ+, or several other factors. As time goes on and the decriminalization of gay marriage becomes a distant memory rather than breaking news, perhaps the number of LGBTQ+ homeowners will rise. Until then, we do know what hurdles potentially face this community and how they can overcome them.

Same-sex Couple Loan Approval Rates

In a recent Iowa State University study, researchers analyzed national mortgage data from 1990 to 2015. They found that the approval rate for same-sex couples was 3 to 8 percent lower than different-sex couples. Also, same-sex couples statistically were charged slightly higher finance fees. In interest rates alone, lenders charged same-sex couples between 0.02-0.2 percent more than same-sex borrowers. Looking at these numbers from an annual perspective, same-sex homebuyers may be paying anywhere from $8.6 million to $86 million a year in additional fees. Hua Sun and Lei Gao, both finance professors at Iowa State, said in their findings, "In the wake of human rights equality for the LGBT community in recent decades, the study of mortgage lending discrimination for LGBT borrowers is timely."

Know Your Rights

Legislation doesn't always move as fast as we hope. Though the United States has made leaps and bounds for LGBTQ+ rights, it's essential to know when the law covers discrimination, and when it doesn't.

The Fair Housing Act

According to the U.S. Dept. of Housing and Urban Development, HUD is committed to investigating violations of the Fair Housing Act against all individuals regardless of their sexual orientation or gender identity. However, the Fair Housing Act prohibits housing discrimination only on the basis of race, color, national origin, religion, sex, familial status, and disability. A person who identifies as LGBTQ who has experienced (or is about to experience) discrimination under any of these bases may file a complaint with HUD. Still, this act does not protect sexual orientation. If you have been a victim of discrimination based on sexual orientation, you may still have options that protect you. For example:
  • It is prohibited under the Fair Housing Act for any landlord or housing provider to discriminate against LGBTQ persons because of their real or perceived gender identity or any other reason that constitutes sex-based discrimination.
  • It is illegal for any landlord or housing provider to deny housing because of someone's HIV/AIDS status under the Fair Housing Act and the Americans with Disabilities Act.
  • Landlords and housing providers who receive HUD or FHA funds are prohibited to discriminate against a tenant on the basis of real or perceived sexual orientation, gender identity, or marital status.

File a Complaint with HUD

If any LGBTQ+ persons who qualify for HUD-funded or FHA-insured loans are discriminated against, regardless of a person's actual or perceived sexual orientation, gender identity, or marital status, they may file a complaint against that housing provider or lender. Keep in mind that HUD has specific regulations regarding privacy and illegal retaliation against anyone who files a complaint. The information submitted to HUD may be used to investigate and process claims of housing and other types of discrimination.

State and Local Laws

Not all state and local laws work in favor of the LGBTQ+ community. Although, there are many laws prohibiting housing discrimination that specifically include sexual orientation and/or gender identity as a protected class. For more information about your state, start here.

Choose Comfort Over Convenience

As an LGBTQ+ homebuyer, it's best to pick comfort over convenience, especially when it comes to choosing a lender, a real estate agent, and where you'll be moving to. Your home buying team will help you navigate the legalities of your purchase and educate you on safe neighborhoods.

Websites and Additional Resources

No law says you must work with a real estate agent or lender that thinks exactly like you. On the other hand, you may be more comfortable partnering with a professional who has experience working with same-sex couples. Where to find an LGBTQ+ friendly real estate agent: Where to find an LGBTQ+ friendly neighborhood/city: Where to find supportive resources:

For more information about your loan options or about buying as an unmarried same-sex couple, contact a Mortgage Advisor.

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