U.S. mortgage lenders are 73% more likely to deny gay borrowers

Gay couples are a lot less likely to be approved for a home loan, and they pay more for the mortgages they do get, according to a new analysis of more than 30 million U.S. home loans from 1990 to 2015.

Gay flag
Demonstrator Carlos McKnight, from Washington, D.C., waves a rainbow flag outside the U.S. Supreme Court in Washington, D.C., U.S., on Friday, June 26, 2015. The high court will decide by the end of the month whether the Constitution gives gays the right to marry. The court's actions until now have suggested that a majority of the nine justices will vote to legalize same-sex weddings nationwide. Photographer: Andrew Harrer/Bloomberg *** Local Caption *** Carlos McKnight
Andrew Harrer/Bloomberg

Same-sex partners were 73% more likely to be denied a loan than male-female couples with the same financial profile, according to the study by Iowa State University's Ivy College of Business.

The higher fees, an average of 0.2 percentage points, are small for individual borrowers but add up to as much as $86 million a year, according to the research, published by the Proceedings of the National Academy of Sciences.

The penalties aren't limited to LGBTQ borrowers. As more same-sex couples seek loans in a neighborhood, rejection rates and fees rise for other borrowers as well.

Although the U.S. has become far more accepting in recent decades, LGBTQ people are not explicitly protected from discrimination in federal lending laws, and a majority of states don't prohibit housing and accommodation discrimination against LGBTQ residents.

Bloomberg News
LGBTQ Housing markets Mortgages
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