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Fifty-one years after the Fair Housing Act was enacted in the United States, the lesbian, gay, bisexual, transgender and questioning (LGBTQ) community is making some strides in homeownership.

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 for 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 guide aims to help members of the LGBTQ community recognize and protect themselves from housing discrimination during the homebuying 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 them 67 percent were married, according to a report by Statista.

Housing discrimination based on sexual orientation persists

Organizations like 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.

“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 is married to Tom, but if he were married to Sally then it would be OK. That is discrimination based on sex because 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.
  • You might be turned away from certain rental properties even when there’s a vacancy.

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, which you can find 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.

Some states have housing protection laws in place for the LGBTQ community, and others only have NAGLREP chapters or no protection at all. Check out this map to determine the housing laws and resources available in your state:

In the longer term, advocates and supporters of the LGBTQ community back the proposed Equality Act. This bill, introduced to Congress in May 2017, would amend the Civil Rights Act of 1964 to ban discrimination on the basis of sexual orientation, sex and gender identity in credit and housing as well as employment, public accommodations, public education, federal funding 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 percent stated that their clients will buy a second home while 48 percent stated that LGBTQ homeowners will make major renovations to their existing home. The right renovations can increase the value of your home.

To estimate the value of specific home projects, the Cost vs. Value report 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.

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