Homeownership Pathways: An In-depth Guide for the LGBTQ+ Community

The groundbreaking Supreme Court ruling in Obergefell v. Hodges on June 26, 2015, recognized same-sex marriage as a fundamental right and dismantled numerous barriers for the LGBTQ+ community. This, importantly, included the potential for equitable homeownership in states that previously did not acknowledge same-sex marriage. Following this milestone, a significant increase in home purchases among LGBTQ+ individuals was observed. The U.S. adult LGBTQ+ population boasted a combined purchasing power of $917 billion in 2015 alone.

Yet, in spite of this landmark ruling and the increasing acceptance of same-sex marriages, only 49 percent of the LGBTQ+ community are homeowners, contrasted with 64 percent of the overall population. This discrepancy might be attributed to enduring apprehensions within the LGBTQ+ community, among other factors. As the decriminalization of same-sex marriage recedes into history, the percentage of LGBTQ+ homeownership may eventually increase. Until then, the challenges confronting this community can be identified and addressed.

Loan Approval Rates for Same-Sex Couples

A comprehensive study from Iowa State University analyzed national mortgage data spanning 1990 to 2015. The researchers discovered that the loan approval rate for same-sex couples was 3 to 8 percent lower than that of heterosexual couples. They also found that same-sex couples were statistically more likely to be levied higher finance fees. For instance, lenders charged same-sex borrowers between 0.02-0.2 percent more in interest rates than heterosexual borrowers. This translates to an annual excess fee ranging from $8.6 million to $86 million for same-sex homebuyers. Hua Sun and Lei Gao, both finance professors at Iowa State, asserted that studying mortgage lending discrimination against LGBT borrowers is of utmost relevance given the recent strides in human rights equality for this community.

Understanding Your Rights

Despite significant advancements in LGBTQ+ rights in the United States, legislative progress sometimes lags. Knowledge of your rights, including when you are protected from discrimination and when you are not, is crucial.

The Fair Housing Act

HUD, the U.S. Dept. of Housing and Urban Development, is committed to investigating violations of the Fair Housing Act. This Act protects individuals from housing discrimination on the grounds of race, color, national origin, religion, sex, familial status, and disability. This includes any discrimination experienced by LGBTQ+ individuals based on these protected classes. However, the Act does not explicitly cover sexual orientation. Despite this, LGBTQ+ individuals facing discrimination based on their sexual orientation still have potential avenues for protection. For instance:

• Landlords or housing providers cannot discriminate against LGBTQ+ individuals based on their real or perceived gender identity or any other form of sex-based discrimination under the Fair Housing Act.
• The Fair Housing Act and the Americans with Disabilities Act both prohibit landlords or housing providers from denying housing based on a person's HIV/AIDS status.
• Landlords and housing providers who receive HUD or FHA funding are not permitted to discriminate against a tenant based on real or perceived sexual orientation, gender identity, or marital status.

Filing a HUD Complaint

If any LGBTQ+ individuals eligible for HUD-funded or FHA-insured loans face discrimination based on actual or perceived sexual orientation, gender identity, or marital status, they have the right to file a complaint against the offending housing provider or lender. HUD maintains strict regulations to ensure privacy and guard against any illegal retaliation for filing a complaint. The information provided to HUD may be utilized to investigate and handle claims of housing discrimination and other types.

State and Local Laws

Laws vary by state and locality, and not all favor the LGBTQ+ community. However, there exist numerous laws prohibiting housing discrimination that specifically categorize sexual orientation and/or gender identity as protected classes. For more information, begin your research here.

Choosing a Supportive Environment Over Convenience

As an LGBTQ+ homebuyer, prioritize your comfort over convenience when selecting a lender, a real estate agent, and your future neighborhood. Your home buying team should assist in navigating the legal intricacies of your purchase and guide you towards welcoming communities.

Online Resources and Additional Assistance

While there is no legal requirement to collaborate with a real estate agent or lender who shares your worldview, it may enhance your comfort to engage a professional who has experience serving same-sex couples. LGBTQ+ friendly real estate agents can be found through:

• Gay Real Estate
• NAGLREP
• Gay Realty Network

You can explore LGBTQ+ friendly neighborhoods/cities via:

• Nerd Wallet
• Thrillist
• Trulia
• Zillow and MAP partnership

Supportive resources are available through:

• Your local ACLU chapter
• Department of Veteran Affairs' Lesbian, Gay, and Bisexual (LGB) Servicemembers, and Veterans division
• U.S. Department of Housing and Urban Development's LGBTQ resources site
• The Human Rights Campaign

For more details about your loan options or purchasing as an unmarried same-sex couple, reach out to a Mortgage Advisor at CrossCountry Mortgage.