Same-Sex Couples Face Harder Time Obtaining Mortgages, Study Shows

April 19, 2019

Lenders have been much less likely to approve same-sex couples for a mortgage than heterosexual couples, according to a new study released by Iowa State University’s Ivy College of Business. Researchers analyzed national mortgage data from 1990 to 2015 and found the approval rate for same-sex couples was 3 to 8 percent lower.

Researchers also factored in details about applicants’ work history and creditworthiness to see if the denial rates still remained higher for same-sex couples. They found that, over the 25-year period, same-sex applicants were 73 percent more likely to be denied a mortgage than heterosexual couples.

Two wedding rings on a wooden table

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The same-sex couples who were approved tended to have to pay more in interest and fees, averaging about 0.5 percent more, the study found.

However, the researchers say they found no evidence that same-sex couples had a higher default risk.

“Lenders can justify higher fees, if there is a greater risk,” says Lei Gao, co-author and assistant professor of finance at Iowa State University. “We found nothing to indicate that’s the case.” Gao says their findings even suggest that same-sex borrowers may perform better.

Mortgage applicants are not required to disclose their sexual orientation. But researchers say perception is “just as damaging in terms of discrimination.” The Fair Housing Act and Equal Credit Opportunity Act prohibit discrimination based on a borrower’s race, gender, marital status, or religion. It does not specifically list sexual orientation.

The researchers said that their findings should raise enough concern to warrant further investigation. The study was recently published in the Proceedings of the National Academy of Sciences.