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Same-Sex Couples 73% More Likely to Be Denied Mortgages, Study Finds

Same-Sex Couples 73% More Likely to Be Denied Mortgages, Study Finds

Gay couples denied mortgage

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Modern communities are more diverse than ever, but a new study brings another reminder that housing discrimination is not yet dead.

Same-sex couples were 73.12% more likely to be denied a mortgage than straight couples with similar profiles, according to a recent Iowa State University study. The report looked at more than 30 million U.S. mortgages taken out from 1990 to 2015.

Adding insult to injury, same-sex couples were also charged 0.02% to 0.2% more in interest rates, upfront fees, or both on their loans. While this may not seem like much, it can add up to hundreds or even thousands of dollars over a 30-year mortgage.

“What we found is consistent with [discriminatory] behavior,” says Hua Sun, one of the authors of the report and a finance professor at Iowa State University. The researchers analyzed data from Home Mortgage Disclosure Act, Boston Federal Reserve, and Fannie Mae Loan Performance to come up with their findings. They focused on two groups of mortgage applicants: same-gender pairs and male-female pairs.

Despite the national legalization of same-sex marriage in 2015, sexual orientation and gender identity are not protected under the federal Fair Housing Act. The law bans discrimination only on the basis of race, color, religion, national origin, sex, disability, and familial status. However, some states and cities have made it illegal for housing providers and lenders to discriminate based on someone’s sexuality.

So it’s not surprising that nearly half of LGBT renters, 46%, are worried about discrimination in their future efforts to buy a home, according to a report from Freddie Mac and the National Association of Gay & Lesbian Real Estate Professionals (NAGLREP).

“It’s very sad to see that even in this day and age there’s still discrimination in the mortgage process after all the strides we’ve made,” says Tim Hur, last year’s diversity chair of the National Association of Realtors®. He’s also a real estate broker at Atlanta-area Point Honors and Associates, Realtors. “Everyone should have the same opportunity to own a home. It doesn’t matter if you’re gay, lesbian, Asian, black, or Hispanic.”

Same-sex couples did have slightly lower credit scores than their straight peers, the study found: an average credit score of 750, compared with 754 for straight couples.

But they made slightly more money, with an average household income of $104,000 versus $97,000 for male-female couples. These credit scores and incomes were averages from 1990 to 2015.

And same-sex couples weren’t any more likely to default on their loans, according to the study.

The findings are “extremely concerning,” says Jeff Berger, NAGLREP’s founder and CEO. He’s also a Realtor with Coldwell Banker in Jupiter, FL. “We had a feeling there was some discrimination in the mortgage place, but had hoped that it wasn’t this widespread.”

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