Fifty-one years after enacting the Fair Housing Act in the United States, the lesbian, gay, bisexual, transgender, and questioning (LGBTQ) community is making some strides in homeownership. In the LGBTQ community, it is important to know your rights as a borrower
Part of the reason for the gradual uptick in LGBTQ homebuyers can be traced to Marriage Equality, which is an outcrop of the civil rights movement that ushered in the Fair Housing Act, says Jeff Berger, founder of the National Association of Gay & Lesbian Real Estate Professionals, or NAGLREP.
However, housing discrimination in this community still exists. Lenders are less likely to approve same-sex couples, according to a recent study from Iowa State University’s College of Business. In fact, the same-sex couples that were approved paid more in interest and fees.
This information is to help members of the LGBTQ community recognize and protect themselves from housing discrimination during the home buying process.
Marriage Equality fuels home sales
Berger cites the enormous buying power of the LGBTQ community as one reason they’re significantly contributing to the real estate industry. In 2015, the U.S. adult LGBTQ population had $917 billion in combined buying power, according to an analysis by Witeck Communications.
“This is a huge number and it’s important that people realize the power this community has,” Berger says.
“From a real estate perspective, the LGBTQ community is a viable part of home sales. And we’re seeing that in the data. According to our recent survey, 49 percent of respondents reported that more married LGBTQ couples bought a house this year, a 2 percent increase from last year’s survey,” Berger says, citing a 2018 survey.
Furthermore, 62 percent of NAGLREP members reported that there are more LGBTQ homebuyers with children, which they believe is partly a result of Marriage Equality.
In 2017, more than half of all homeowners were married across all age groups. The group with the highest percentage of married couples were people ages 38 to 52; of those, 67 percent were married, according to a report by Statista.
Housing discrimination based on sexual orientation persists organizations like the National Association of Realtors have aligned with the LGBTQ community and prohibited its members from discriminating on the basis of sexual orientation as a matter of policy. Although the real estate industry as a whole has been supportive of the LGBTQ community, discrimination based on sexual orientation still exists, says Camilla Taylor, director of constitutional litigation for Lambda Legal; a civil rights organization dedicated to the LGBTQ communities.
Same-sex partners were 73 percent more likely to be denied a loan than heterosexual couples with the same financial profile, according to the Iowa State study. The research found no evidence that same-sex couples had a higher default risk.
What does this all mean?
“First of all, there are still no explicit protections from discrimination on the basis of sexual orientation on a federal level with respect to credit,” Taylor says.
This means mortgage lenders can deny same-sex couples a home loan based on their sexual orientation with little to no legal recourse. In the meantime, the LGBTQ community can use the Fair Housing Act prohibiting discrimination based on sex as a way to protect themselves. The act doesn’t mention sexual orientation, but LGBTQ advocates argue that discrimination against a same-sex married couple constitutes discrimination on the basis of sex.
“A lender can deny applicants if John marries Tom, but if he marries Sally then it would be OK. That is discrimination based on sex. It’s the sex of Sally or Tom that makes all the difference,” Taylor says. “We’ve won a few court rulings at the lower-court level. Holding that the Fair Housing Act should be interpreted that way. But the law is still relatively unsettled.”
How to recognize housing discrimination
There are several ways you can pinpoint housing discrimination through both buying and renting.
- Lenders may not be upfront about mortgage rates, so be aware of what mortgage rates actually are.
- Real estate agents might refuse to represent you.
- A seller might suddenly say a house is off the market.
- You and your partner might have to work harder to get financing compared with male/female couples.
- Certain rental properties even when there’s a vacancy may turn you away.
How to protect yourself from housing discrimination
One of the most important steps to protecting yourself from housing discrimination is to find an LGBTQ-friendly agent. You can find an agent on the list of the National Association of Gay and Lesbian Real Estate Professionals (NAGLREP). Get referrals from family and friends and friends for the best agents in your area.
Shop around for a lender who you can be sure won’t discriminate against you. Consult your local Fair Housing Authority for more information. Discrimination may still be in violation of the Act or other state or local regulations.
- Speak with an attorney.
- Email HUD at LGBTFairhousing@hud.gov.
- File a complaint with the Consumer Financial Protection Bureau.
- Call the Lambda Legal help desk.
- Contact your local American Civil Liberties Union office.
Some states have housing protection laws in place for the LGBTQ community. Other states only have NAGLREP chapters or no protection at all.
In the longer term, advocates and supporters of the LGBTQ community back the proposed Equality Act. This 2017 Act would alter the 1964 Civil Rights Act to ban sexual orientation, sex, and gender identity discrimination in credit, housing, employment, public accommodations, public education, federal financing, and the jury system.
Alternative options to improve your buying power
The LGBTQ population is not only buying more houses, they’re scaling up. Some 41 percent of NAGLREP respondents believe their clients will upsize rather than downsize when they buy their next home.
Additionally, 27% said their clients would buy a second house, and 48% said LGBTQ homeowners would renovate their current home. The right renovations can increase the value of your home.
Using the Cost vs Value report you can to estimate the value of specific home projects. This compares the average cost of remodeling projects with the value those projects retain at resale in particular U.S. markets.
These renovations and purchases can improve your selling power (and buying power) in gayborhoods throughout America. Notably the Castro in San Francisco, Chelsea in New York, West Hollywood in Los Angeles, South Beach in Miami and East Lakeview in Chicago. This list covers just five out of dozens of predominant gayborhoods throughout the U.S., among the many where LGBTQ families make their homes.
Reverse Your Thinking® Mortgage is a member of the Los Angeles LGBTQ Chamber of Commerce
-Article Thanks to NATALIE CAMPISI @NATALIEMCAMPISI
Originally apparead 1/19/2019