This is an excerpt from NCRC’s 2020 Home Mortgage Report. See the full report for more findings.Â
The Home Mortgage Disclosure Act (HMDA) data that the Consumer Financial Protection Bureau (CFPB) is required by law to gather does not allow borrowers to identify themselves by sexual orientation. However, the co-applicant data can be used to identify loans made to couples of the same gender.
In 2020, NCRC released a report on same-sex mortgage lending using 2018 HMDA data. That report found that same-sex couples were more likely to be Black, Indigenious and people of color (BIPOC) and have lower incomes than different-sex couples. They were also more likely to have their loans denied and generally paid more in closing costs and interest rates when they did get a loan than different-sex couples.
Very little is understood about the way age, gender, sexual orientation and race intersect with the mortgage market. Each of these variables, along with the location of the property, brings a complex history of privilege and exclusion that is deserving of additional research. As HMDA expands to allow a more precise way to collect data on borrowers, we can begin to better understand the impact of structural barriers to home lending. Since 2018, there has been little change in the share of same-sex lending in HMDA across all loan purposes, and less than 2% of loans in the HMDA dataset in 2020 had a same-sex pair of borrowers. As of 2017, 4.5% of Americans identified as LGBTQ+. HMDA data should be improved with the addition of sexual orientation/sexual identity data to allow a more precise analysis of how LGBTQ+ borrowers encounter the mortgage market. Any future research would be greatly improved by the inclusion of optional reporting of sexual orientation as a part of the demographic data collected by the lender. Research topics could include what the potential for discrimination is for LGBTQ+ loan applicants? What is the mechanism by which this discrimination plays out? How can regulators and advocates detect evidence of this kind of discrimination?
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