The LGBTQ+ community and homeownership in 2024
Lesbian, Gay, Bisexual, Transgender, and Queer (LGBTQ+) Pride Month is currently celebrated each year in June to honor the 1969 Stonewall Uprising in Manhattan. On June 28, 1969, The Stonewall Uprising was an important milestone for the Gay Liberation Movement in the United States. To commemorate this event, the last Sunday in June was initially celebrated as Gay Pride Day. Over time, in many US cities, the day soon grew to a month. Today, celebrations include pride parades, picnics, parties, workshops, symposia, and concerts, and LGBTQ+ Pride Month events attrac t millions of participants worldwide. Memorials are held throughout June for those members of the community who have been lost to hate crimes or HIV/AIDS, and members of the community are recognized for the positive impacts they have had on history locally, nationally, and internationally.
Pride month reminds us that the fight for equality for all traditionally marginalized groups continues, particularly regarding housing discrimination. Mortgage Equity Partners is an ally that provides fair and equitable lending to all eligible potential homeowners.
What are the challenges faced by the LGBTQ+ community when buying a home?
While much progress has been made since the 1969 Stonewall Uprising, there is still work to be done. The homeownership rate for LGBTQ+ individuals is 20 percentage points lower than that of straight and cisgender people. This significant disparity highlights the need for targeted efforts to improve access to homeownership.
Income inequality plays a role in this gap, particularly affecting trans people of color. LGBTQ+ individuals often face economic disparities, making it harder to afford homes. For instance, trans people of color experience more significant financial challenges in homeownership.
Larger cities, which tend to have higher living costs, often offer more LGBTQ+ protections. However, even in these areas, the income needed to afford a typical home can be significantly higher for LGBTQ+ individuals. For example, in LGBTQ+ friendly areas like Washington, D.C., people need to earn around $150,000 to afford a home, nearly 50% higher than in areas without LGBTQ+ protections.
Beyond financial considerations, safety and acceptance are crucial factors. LGBTQ+ individuals consider whether their neighbors will accept them, especially if they plan to have children. Feeling safe and welcomed in a community is an important factor when making homeownership decisions.
Some states with relatively affordable housing may not be safe for LGBTQ+ communities due to discriminatory legislation. For instance, Louisville, Kentucky, has affordable housing, but there are currently 14 anti-LGBTQ+ bills being tracked in the state.
Addressing LGBTQ+ homeownership gaps requires a multifaceted approach that considers income disparities, location, safety, and legal protections. Advocacy, education, and targeted support can help create a more equitable landscape for LGBTQ+ individuals seeking to own homes.
What can be done to improve LGBTQ+ homeownership statistics?
Financial Literacy Programs
Create targeted financial literacy programs for LGBTQ+ individuals. These programs can educate them about budgeting, saving, and credit management, helping them prepare for homeownership.
Affordable Housing Initiatives
Advocate for affordable housing policies that specifically address the needs of LGBTQ+ communities. This includes rent control, down payment assistance, and affordable housing developments.
Anti-Discrimination Laws
Strengthen anti-discrimination laws to protect LGBTQ+ individuals during homebuying. This includes prohibiting discrimination based on sexual orientation, gender identity, and marital status.
Community Support Networks
Establish community support networks where LGBTQ+ homeowners can share experiences, resources, and advice. These networks can provide emotional support and practical guidance.
Cultural Competency Training
Train real estate agents, lenders, and housing professionals in LGBTQ+ cultural competency. This ensures they understand the unique challenges faced by LGBTQ+ buyers and can provide inclusive services.
Safe Spaces
Promote LGBTQ+ friendly neighborhoods and communities where individuals feel safe and accepted. Highlight areas with strong LGBTQ+ protections and resources.
Collaborate with LGBTQ+ Organizations
Partner with LGBTQ+ organizations to raise awareness, provide education, and offer homeownership workshops. These organizations can connect potential buyers with relevant resources.
Remember that improving LGBTQ+ homeownership requires a collective effort from policymakers, real estate and mortgage professionals, and community members.
Preparing for homeownership: A guide for LGBTQ+ homebuyers
The steps to prepare for homeownership do not discriminate. All borrowers must follow the same steps to get the best rate and fastest approval process.
8 Steps to prepare your finances for homeownership.
Having your financial house in order is the first step toward homeownership. Go through the checklist below to ensure you have everything ready when approaching a mortgage lender.
1. Request your credit reports
You can get a copy from all three credit bureaus once per year. Knowing your credit score and current credit profile will identify anything you need to fix before applying for a mortgage.
2. If needed, raise your credit score
A higher credit score may mean you’ll get a lower interest rate on your mortgage, which translates to a lower total cost. If you need to bring up your score,
3. Gather your tax returns
Most lenders will need copies of your tax returns for the two most recent years. Having copies on hand can speed up your pre-approval process.
4. Organize your pay stubs
If you receive a W-2 from your employer, gather your most recent two months’ pay stubs as proof of income.
5. Locate your financial account statements
These include bank accounts, investment accounts, and retirement accounts. Your lender will need proof of your assets.
6. Figure out your homebuying budget
Knowing how much you’re comfortable spending each month on your mortgage is the first step to figuring out your price range. It can help you explore what you’re comfortable paying.
7. Determine your down payment
While there are mortgages that require less, some conventional mortgages will require a 20 percent down payment. Having an idea about your down payment can help you determine how long you’ll need to save before starting to shop for a home.
8. Building your LGBTQ+ friendly homebuying team
You’ll want an LGBTQ+ affirming homebuying team to smooth your path toward homeownership. We would be honored to help you in your homebuying process, reach out to one of our trusted loan officers.
“Having a real estate agent and a mortgage lender that you trust is a simple but significant way to feel confident and protected as you go into what is one of the most important financial decisions you’ll make,” says John Cabral, National Director of Sales at Mortgage Equity Partners. “This can be stressful, but having a team that understands you and is working on your behalf will improve the experience.”
How to find an LGBTQ+ friendly real estate agent
You can begin your search for an agent by contacting your network. If you’re moving to a new area where you don’t yet have a support network, investigate local organizations that could help. You can seek out chapters of the National Gay and Lesbian Chamber of Commerce (NGLCC), The National Association of Gay and Lesbian Real Estate Professionals (NAGLREP), or the LGBTQ+ Real Estate Alliance to find a real estate agent.
As you speak to potential agents, don’t be shy about asking each about their experience in the market and how they typically work with clients. Some agents are more hands-off and will only show you the listings you send them. In contrast, others will help you tour potential neighborhoods and add an extra layer to your home search, including recommending nearby queer-owned businesses and LGBTQIA+ events in the area.
How to find an LGBTQ+ friendly mortgage lender
Gay couples are 73 percent more likely to be denied a mortgage than heterosexual couples with the same creditworthiness, according to an Iowa State University analysis of national mortgage data. That’s one reason why finding a lender who is LGBTQ+ affirming is important.
As you consider different mortgage lenders, keep in mind that your loan type, term, and interest rate are only part of your total mortgage equation. Be sure to ask about estimated closing costs, documentation requirements, and time to close; 30 days from an accepted offer is standard.
“Homeownership is a long-term strategy for accumulating wealth for the LGBTQ+ community. With the right financing team by your side, you’ll be off to a strong start on what’s hopefully a lifetime of financial prosperity,” said Cabral.
Mortgage Equity Partners prides itself on being an Equal Housing Lender, strong supporter of the Fair and Equal Housing act, and an ally to the community. If you are still searching for a mortgage lender, please feel free to reach out to one of our experienced loan officers!
What is housing discrimination?
Housing discrimination is the act of treating or acting differently towards residential buyers, renters, or homeowners solely because of physical or biological features, including their race, color, religion, national origin, sex, family status, or disability. It became illegal under the Fair Housing Act (the Civil Rights Act of 1968). Simply put, discrimination is prejudicial treatment or behavior. Refusing to extend a mortgage or charging more for one, refusing to sell or rent a home, or evicting someone for no reason other than the characteristics described above are all examples of housing discrimination.
While the Department of Housing and Urban Development (HUD) works to enforce the Fair Housing Act and address cases of discrimination, it’s up to homebuyers and renters to call out unfair practices. There are several clear signals of discrimination to watch for:
1. A mortgage lender who isn’t upfront about mortgage rates
2. A real estate agent who refuses to represent you.
3. A seller or real estate agent who refuses to consider your bid, or who suddenly declares the house off the market.
4. If you and your partner must work harder to get financing, or pay more for it, compared with heterosexual couples.
5. If you are turned away from certain rental properties, even when there’s a vacancy.
According to NAGLREP, the LGBTQ+ homeownership rate is 49 percent. The national average homeownership rate as of Q4 2023 is 66.7 percent. While it seems that homeownership rates are improving overall, allies and supporters of the LGBTQ+ community need to back the proposed Fair and Equal Housing Act, which would amend current civil rights law to ban discrimination on the basis of sexual orientation, sex, and gender identity in credit and housing — specifically by adding “sexual orientation” and “gender identity” as protected characteristics under the Fair Housing Act. The bill was reintroduced in the House of Representatives in June 2023. This bill has not yet been reintroduced in the Senate (June 2024).
While we have come a long way from the 1969 Stonewall Uprising, there is still work to do. Addressing disparities in income and homeownership rates of marginalized groups and supporting legislation that will protect the rights of all citizens will help ensure the basic right of homeownership is available to all. At Mortgage Equity Partners, we believe home is for everyone, and we support the Fair and Equal Housing Act.
Resources:
Library of Congress
National Association of Gay and Lesbian Real Estate Professionals
Real Estate Alliance
Williams Institute of Law, Exployment Discrimination and its Effect on LGBT People
Fair and Equal Housing Act
