Same-sex borrowers more likely to be rejected for mortgages: study

Same-sex borrowers more likely to be rejected for mortgages: study
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Same-sex partners are almost 75 percent more likely to be denied a loan than heterosexual couples with similar finances, according to a new study.

Researchers from Iowa State University’s Ivy College of Business analyzed more than 30 million U.S. home loans between 1990 and 2015 and found that same-sex partners were 73 percent more likely to be denied a mortgage.

For those who received a home loan, fees averaged 0.2 percentage points more than other mortgages, totaling about $86 million a year, according to the study published in the Proceedings of the National Academies of Sciences.


The financial penalties didn't just affect the couples themselves, researchers said: Rejection rates and fees rose for other borrows when more same-sex couples applied for loans in a neighborhood.

“Lenders can justify higher fees, if there is greater risk,” study co-author Lei Gao, an assistant professor of finance at the university, said in a statement. “We found nothing to indicate that’s the case. In fact, our findings weakly suggest same-sex borrowers may perform better.”

The findings indicate sexual orientation should be a protected class as a method of limiting potential discrimination, according to co-author Hua Sun, an associate professor of finance.

“Policymakers need to guarantee same-sex couples have equal access to credit,” he said. “Using our framework, credit monitoring agencies also can take steps to investigate unfair lending practices.”