The Struggles Of LBGTQ+ Borrowers

There are plenty of well-documented evidence and studies that look into lending discrimination against minorities, but researchers have only just begun investigating lending and housing discrimination against the LGBTQ+ community. Here are some highlights:

• There are currently 10.7 million American citizens who identify as LGBTQ+, all of whom are impacted by the homeownership gap, higher rates and fees on their loans, and an increased risk of homelessness.

• Evidence from a UCLA Williams Institute report indicates that LGBT adults are less likely to own homes and more likely to rent than non-LGBT adults.

• According to representative data from 35 states, nearly half (49.8%) of LGBT adults own their homes, compared to 70.1% of non-LGBT adults.

• Homeownership is particularly low among transgender people. In 2019, the first nationally representative sample of transgender adults found that only a quarter (25%) are homeowners, compared to 58% of cisgender adults.

• Additionally, in The American Community Survey (ACS) that took place between 2015 and 2017, among those who owned their homes, same-sex couples were more likely than different-sex couples to be carrying a mortgage (77% vs. 68.2%, respectively).

• According to 2019 HMDA data, same-sex borrowers experienced a 3% to 8% lower approval rate compared to different-sex borrowers of the same profile.

• Among the loans approved, same-sex borrowers were charged higher interest and/or fees, yet there is no evidence to suggest that same-sex borrowers are riskier borrowers than comparable different-sex borrowers. Both sets had similar risk of default and the same-sex borrowers had lower prepayment risk.

• In another study by HUD, researchers tested landlords’ response to gay couple or straight couple rental inquiries. Different-sex couples were favored over male same-sex couples in 15.9% of field tests and favored over female same-sex couples in 15.6% of tests.

> Compiled by Staff Writer Katie Jensen presenting an offer on a home may be met with prejudice still,” he said. “I read a story about a couple in Oregon who refinanced their house and the appraiser verbalized during the visit that they didn’t believe in same-sex marriage. The next week they had the appraisal redone and it was $200,000 more than what had been appraised the week before.”

Denise Lanouette, a mortgage consultant at First World Mortgage, knows firsthand what that feels like.

She says that when she tried to buy her first home with her partner, the loan officer gave the couple two separate applications and didn’t even consider their partnership. “In that case, I chose to step away from working with that LO,” Lanouette explained.

She says that when she entered the industry, she made it a point to approach conversations using gender-neutral terminology, especially when discussing cosigners.

For a long time, Lanouette says that she kept her LGBTQ+ identity separate from her work and worried that it would have a negative effect on her business. But last year, Lanouette was challenged by her local Gay and Lesbian Chamber to allow her identity to spill into her work. “It’s allowed me to connect with LGBTQ+ realtors and combine our networks,” she said. “The chamber told me that being public with my identity may cause me to lose a percentage of people, but it could also help me gain. But since I started being more open, my business has grown twofold. It’s actually helped me to establish a greater rapport and trust with my customers. We sometimes forget that this is a relationship business and it’s important to be open especially when discussing difficult conversations like personal finance.”

Lanouette says that her company’s branch is in Enfield, Conn., and that every year, local businesses have the opportunity to put pride flags outside. This is Lanouette’s first year participating. “I truly believe in fair and equal housing, and that goes for everyone,” she said. “There’s still progress to make, but I am proud and ready to put that flag outside.”

Doing Things Different

Dort says that as soon as a customer walks into Pride Lending, there’s a table full of nametags that ask the customer what their pronouns are. “It’s little details that mean a lot to my customers,” Dort said. “We’re also dealing with legal names here, and maybe for a person that’s transitioning, they may want to be called something different in person as opposed to what’s on a legal document.” However, Dort says that approaching customers in the LGBTQ+ community shouldn’t be that hard or different from any other customer. “The point is to make their homebuying experience as normal as possible without them having to worry about being judged,” he said. “You treat every customer equally. There aren’t many spaces outside of queer spaces that take into account that not every couple is straight or that someone’s legal name isn’t their preferred name.”

Of course, Pride Lending can’t offer any specialty services or programs for LGBTQ+ homebuyers. But, Dort says that they go the extra mile to create a space of inclusivity. “We’re more or less advertising a queer space,” he explained. “We also advertise and sponsor queer events and give back to the queer community. We have a presence at Pride Fest. We make it known that it’s not about any special products for the LGBTQ+ community, but educating them about products that they could take advantage of. We, of course, work with everyone.”

Dort says that there aren’t necessarily any products or programs that he doesn’t also offer to his heterosexual customers. “I really try to push down payment grant programs and even co-owning programs for younger customers to curb the affordability crisis,” he said. “I’ve pushed this for groups of queer people to buy with their friends to get out of the rental market, and they can really share the advantages of homeownership together.”

Gary Boyer, who runs Mortgage Monkey — a DBA of Directors Mortgage — got his start serving the LGBTQ+ community in 1999. Previously, Boyer went to college thinking that he would pursue a job in human resources. Following graduation, he worked for a recruitment company for loan officers and realized how minimal the outreach was for LGBTQ+ buyers and borrowers. “I saw that a lot of people were overwhelmed by the homebuying process, and it became a passion of mine to incorporate some fun and inclusivity into the process,” he said. “There’s a quote on my website that says ‘Years ago I chose to specialize with the Gay, Lesbian, Bi, and Transgender Community.’ I’m extremely proud that many of my clients are Gay/Lesbian — but I don’t discriminate, I’m happy to work with straight clients too! One of my proudest accomplishments is having people from ALL walks of life come and see me because they know I don’t discriminate.”

Boyer says that as a lender specializing in marketing