Homeownership is the dream for many Americans. Purchasing a property is seen by most people as an avenue to build wealth and create stability, according to a 2026 survey of homeowners and renters by Bank of America.
However, only 53% of LGBTQ+ adults own a home, according to research published in 2024 by the American Economic Association. Compare that with nearly 73% of non-LGBTQ+ adults. A 2024 report from the Urban Institute uncovered a similar gap.
That gap doesn’t seem to be due to a lack of interest in homeownership. Fannie Mae surveyed LGBT consumers in 2023 and 83% reported they would like to buy a home or continue to own a home.
A variety of factors seem to drive down LGBTQ+ homeownership, and recent changes to the mortgage landscape have some wondering whether things will get better or worse for homebuyers in this community. The federal government is narrowing how discrimination is identified under the Equal Credit Opportunity Act at the same time that some mortgage lenders are embracing AI as part of their mortgage underwriting process.
Could these two shifts affect LGBTQ+ homebuyers? Experts say it’s hard to tell.
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The Gap in Homeownership
There’s no one single factor that accounts for the 20-percentage-point gap in homeownership between LGBTQ+ and non-LGBTQ+ adults, according to Alex Cruz, executive director of the LGBTQ+ Real Estate Alliance. Instead, he says it is attributable to things such as employment discrimination and loss of family support, which have helped create “wealth gaps over decades.” Combined with today’s high housing prices, homeownership is out of reach for many in the LGBTQ+ community.
“Sexual orientation is not something that’s ever addressed on an application,” says Taylor Tassone, a mortgage broker and owner of Tayton Capital, a mortgage company operating in Colorado and Florida. While a person’s LGBTQ+ status is not spelled out on an application, there are indirect factors that can influence whether a person receives a mortgage. Those include income, savings and credit scores.
Age accounts for more than half the homeownership gap, the Urban Institute says. It notes that LGBTQ+ community members tend to be younger, which means they typically do not yet have the savings or credit scores needed to buy a home. LGBTQ+ people also tend to be concentrated in areas with a higher cost of living, the institute notes.
More than half — 57% — of LGBTQ+ people surveyed near the start of 2023 had a household income less than $50,000, according to the LGBTQI+ Economic and Financial Survey. Conducted by the Center for LGBTQ Economic Advancement & Research and Movement Advancement Project, the survey found most respondents had less than $5,000 in savings, and 11% said they had faced discrimination in banking and financial services.
Not every LGBTQ+ buyer has a low income or limited assets, though. “(My LGBTQ+ clients) have always seemed to be very well-qualified,” Tassone says. “Every client I’ve had in that community has been approved.”
Legal Changes to Identifying Bias
Whether more people could experience discrimination in the banking and financial industry is a question some are asking in light of changes to the Equal Credit Opportunity Act, known as the ECOA.
The law dates back to 1974 and was enacted to prohibit discrimination in lending decisions. Earlier this year, the Consumer Financial Protection Bureau amended rules related to the ECOA to do the following:
— Eliminate disparate impact provisions. This does away with the “effects test,” which prohibited policies and procedures that disproportionately affected certain groups, even if the policy or procedure appeared neutral. Now, there needs to be proof of intentional discrimination.
— Narrow the discouragement standard. Under the ECOA, it is illegal to discourage people from submitting an application for credit or a financial service. Under the new rules, only oral or written statements directed at potential applicants are prohibited. The rules don’t apply to business decisions such as where to advertise and place branches.
— Limit special purpose credit programs. Special purpose credit programs, known as SPCPs, that are offered by for-profit businesses can no longer limit program eligibility to members of protected classes. The CFPB said allowing SPCPs to limit eligibility in this manner would mean they are discriminating against people who aren’t part of the protected class.
How these changes, which go into effect on July 21, 2026, will affect LGBTQ+ homebuyers remains to be seen.
Many mortgage applications go through an automated underwriting process, but 14% are referred to a human underwriter for further analysis, writes Matt Schwartz, mortgage broker at VA Loan Network, in an email. “That is the point at which ECOA protection for disparate treatment (would) matter the most.”
[See: Best Mortgage Lenders for First-Time Homebuyers]
Could AI Affect LGBTQ+ Homebuyers?
The use of AI is another innovation that could affect LGBTQ+ homebuyers. Taking the human element out of lending decisions would seem to guarantee unbiased decisions, but that may not be the case.
“I think it can be potentially beneficial but also concerning since AI is only as good as the data put into it,” Cruz says.
It could be a problem if AI systems are trained on historical data. Research out of Iowa State University in 2019 found same-sex couples had a lower approval rate for mortgages than heterosexual couples, and when approved, they paid more in fees. Researchers, who looked at data from 1990 to 2015, found no evidence that same-sex couples had higher rates of default on their loans.
“If historical data contains patterns of unequal access to credit or homeownership, those patterns can unintentionally influence future outcomes,” Tassone says.
Married couples with W-2 income may appear to be less of a credit risk to an AI underwriter than nonmarried co-applicants, according to Schwartz. “(That’s) because machine underwriter algorithms were trained on several decades of data in which the married filing joint scenario was the more conventional application structure.”
It could mean unmarried couples are more likely to be denied, but with the elimination of the ECOA’s effects test, it may not be a problem that lenders will be legally required to fix.
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Addressing the Issue of LGBTQ+ Homeownership
Several resources are available to help LGBTQ+ households achieve the dream of homeownership.
Cruz points to Pride Lending as an example of a company that specializes in working with LGBTQ+ homebuyers and other underserved communities. Working with a real estate professional who is a member of the LGBTQ+ Real Estate Alliance can also help eliminate the need for “coded conversations” as part of the homebuying process.
The ECOA changes mean some SPCPs that offered assistance programs specifically for LGBTQ+ buyers may no longer be offered, but there are other options available. A prime resource, Tassone says, is a state’s down payment assistance program. For instance, the Colorado Housing and Finance Authority offers up to $25,000 in down payment assistance to qualified homebuyers.
With the help of these programs and real estate and lending professionals, LGBTQ+ homebuyers may be able to receive the guidance they need to get to closing.
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Could AI, Recent Policy Rollbacks Widen the LGBTQ+ Homeownership Gap? originally appeared on usnews.com
