Buying a home is usually a tedious and lengthy process, but equally exciting, intimidating and humiliating at the same time. I went through this process a few years ago with my husband, and now, looking back, we were completely unprepared. While we were very passionate about becoming homeowners, we were confident that we could endure any hardship and not care about any hardship that we came across.
Spoiler alert: we ended up taking a lot of care.
In the process of buying a house, we faced two main obstacles:
- I was a full-time freelancer.
- We were two married men who bought a house together.
The first obstacle was surprisingly easy to deal with, especially compared to the second.
Unfortunately for LGBTQ+ couples like us, buying a house comes with a few extra challenges to go through. That is why I wanted to write this article. I’ve put together a list of tips, some based on my personal experience, to help LGBTQ+ homebuyers realize their dream of owning a home.
Check the location carefully
Before you start looking for your dream home on Zillow, I highly recommend that you not only research the area you are thinking of buying in, but also spend some time there. I learned this lesson the hard way. My husband and I found what we envisioned as the perfect home for us. It was an old but recently renovated house, set in a small apple orchard in New England. What didn’t you like?
Unfortunately for us, the place was a bit rural, and like many rural areas in the US, it wasn’t the most welcoming place for LGBTQ+ couples. As we toured the house, it became clear that the neighbors and the seller’s real estate agent weren’t thrilled about our presence, even though we showed up that day ready to propose.
To avoid this situation, do your research ahead of time or have your real estate agent research the demographics of the city or town.
Read more: Top 10 LGBTQ+ Friendly Cities for Millennials and Gen Z
Understand job options in the area you plan to buy
While you may already have a job, whether it’s remote or in the area you’re buying, it may not last forever. If you foresee that you need to find work in your area, you should also make sure that there are employers that you feel comfortable with.
When you’re evaluating a neighborhood or city for acceptance, consider local businesses as well. Would you feel comfortable working in one of them if you needed or wanted to?
Read more: Choose where you want to live, then find a job
Know your rights as a homebuyer
Fortunately, there are laws that protect different communities from housing discrimination, and the LGBTQ+ community is one of them.
The Fair Housing Act prohibits discrimination against individuals based on their gender identity and sexual orientation. While the Fair Housing Act does not explicitly designate LGBTQ+ people as a protected class, more and more states and courts are beginning to include LGBTQ+ people.
In addition, the Equal Credit Opportunity Act also specifically prohibits lenders (including mortgage lenders) from discrimination based on sex and sex. Also, if you are denied, the ECO Law requires creditors to give a written explanation of why.
Learn how to report discrimination
Unfortunately, despite existing laws, housing discrimination occurs frequently. In fact, a study by the National Academy of Sciences found that LGBTQ+ buyers are 73% more likely to turn down their mortgage applications and pay higher mortgage fees and interest if accepted.
If you believe you are a victim of this discrimination because of your sexual orientation or gender identity, please contact HUD’s Fair Housing and Equal Opportunity Office (FHEO) at (800) 669-9777. You can also contact your local FHEO office or file a complaint online.
While filing a complaint with HUD or the FHEO may help you get the justice you deserve, it does not mean you will get the home you were denied. If the seller decides to sell quickly to another buyer, nothing will stop him, as a discrimination claim can take some time.
Work with the right realtor
My husband and I are lucky as my aunt is a real estate agent well versed in the area we wanted to buy. However, most buyers will end up working with a real estate agent they are not entirely familiar with. You will be spending a lot of time with your agent, so make sure they are someone you feel comfortable with.
To find a real estate agent who supports (or is part of) the LGBTQ+ community, you can browse the LGBTQ+ Real Estate Alliance. You can search by location and find complete profiles for every agent you might be interested in working with. From there, set up a few interviews to better understand who will be the best fit for your needs.
Look for help buying a home
While there are no federal home buying programs specifically for LGBTQ+ buyers, there are loan programs that can be especially beneficial. In particular, for new buyers, consider the following programs:
- FHA loans – FHA loans are designed specifically for first time homebuyers and allow you to walk away with a down payment of 3.5%.
- USDA loans – USDA loans are for “rural” areas, but you can find homes in surprisingly urban areas. The best part is that you do not need a down payment to secure such a loan.
- VA loans – Veterans or LGBTQ+ military personnel can get some truly incredible loan options through VA. Some of these loans do not require a down payment or mortgage insurance.
- Credits to Freddie Mac and Fannie Mae “These are government-backed loans that offer low down payment options. You can apply for a mortgage loan with a down payment of only 3%.
Also, do a quick Google search to get an idea of any government programs on offer. You can enter LGBTQ+ Housing Assistance. [your state or city here]”. For example, in San Francisco, the San Francisco LGBT Center offers homebuyers free courses to help them understand the home buying process well. With the certificate you receive upon completion of the program, you can apply for various loan assistance programs or the Below Market Rate program if you have a low to moderate income.
Raise your credit score
LGBTQ+ borrowers are nearly twice as likely as non-LGBTQ+ borrowers to report bad or very bad credit. Women and people of color in the community are even worse off reporting bad credit.
Having a good credit score, or at least an average one, is vital to getting a mortgage. Without it, you’ll get low interest rates that can extend your loan life by tens of thousands of dollars.
To learn how to quickly get a loan before buying a house, check out our article: Want to buy a house? Here’s how to build your credit in the first place.
Be careful how you approach your offer
The housing market is fluctuating, but in the last few years it has become increasingly difficult to buy a house due to skyrocketing prices. To get an edge over other buyers, you can write a personal letter to the seller explaining how much homeownership will mean to you. I’m not saying this is a bad tactic (it really is), but it can be a double-edged sword for members of the LGBTQ+ community.
If the seller prefers to sell to a non-LGBTQ+ couple or individual, your offer may be rejected. While this is discrimination, in a hot housing market, a seller can simply say that they got the best deal. So, when drafting your offer letter, be as honest as you feel comfortable, but consider who your salesperson is.
Read more: Here’s How to Write the Perfect Hot Market Real Estate Offer Letter
Issue a power of attorney
We live in the 21st century, so not all couples who buy houses are married. Although this process can be quite difficult, for same-sex couples, the difficulties can be aggravated. The political climate around LGBTQ+ rights is constantly changing, and not always for the better.
In the event that you and your partner are buying a house while unmarried, you should seriously consider making a Power of Attorney and Last Will and Testament to ensure that the house is left to your partner and children.
It is not known how things will go. Speaking of Roe v. Wade being overturned, many LGBTQ+ people are rightfully concerned that marriage equality will be next. If this happens, things can quickly become confusing. Making as many legal documents as possible will ensure that your loved ones are taken care of.
Buying a home is a difficult process for everyone, but there are a few additional hurdles for members of the LGBTQ+ community. Not only are we, as a group, struggling to earn enough money to buy a house, but raising our credit score to secure better rates is also a major hurdle. Also, when we get to the point of actually looking for a home, we need to reconsider location and lenders.
There are some protections currently in place and we hope to have more over time.
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