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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Mar 24, 2021

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Summary

  • FHA, USDA, and VA home loans are regulated by federal fair housing laws that prohibit discrimination based on real or perceived sexual orientation or gender identity.
  • Legally married and unmarried same-sex couples have multiple options in homeownership classifications when seeking a loan.
  • To get the best type of home loan for you, consult with a financial advisor, lender, or attorney prior to applying for financing.

Home loans for same-sex couples are no different than home loans for heterosexual couples — the issue comes into play when you look at the legal classification of the relationship based on state laws.

There are plenty of options in getting an affordable mortgage loan whether you and your partner are legally married or not; however, it’s recommended that you consult with a financial advisor, lender, or attorney prior to applying for financing.

Read our guide to mortgage loans for same-sex couples to find all of the federal and state-level legalities. Enter your ZIP code above to apply for home loans for same-sex couples.

What are the best same-sex couples home loans?

Certain types of loans, specifically FHA, USDA, and VA home loans, are regulated by federal fair housing laws that prohibit discrimination of any person or couple because of their real or perceived sexual orientation or gender identity.

Private lending companies and underwriters not insured or affiliated with the FHA, USDA, or VA may be a different story.

Regardless, if you feel you have been subject to housing discrimination, you can file a complaint with the HUD Office of Fair Housing and Equal Opportunity. You can also contact your local human rights agency to verify state or local laws.

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How do we get a married same-sex couples home loan?

In most states, when married couples buy a home together there are some things that automatically happen that don’t necessarily automatically happen when an unmarried couple buys a home.

If you are a married couple, no matter your sexual orientation, in most states you both are automatically designated as joint owners and both have the right of survivorship; though it does carry a different legal classification called “tenancy by the entirety.”

Having tenancy by the entirety will protect a surviving spouse from creditors and ensures the surviving spouse becomes the sole owner of the home.

It may be in your favor to designate yourselves as a different type of co-ownership rather than relying on the default legally married status.

In some cases, state laws or individual lenders may require that both parties apply for the mortgage so that financial stability is secured and both parties are listed on the deed.

In other cases, especially based on the type of loan you get approved for, it is not required that both parties’ credit histories and incomes are factored in, nor is it required to list both names on the deed.

A financial advisor can direct you to the most beneficial approach to owning a home together.

How do we get an unmarried same-sex couples home loan?

Lenders really don’t care if two applicants are married or not. Even if two friends were to apply for a loan, both of their credit histories and debt-to-income ratios will be considered.

But there are certain types of loans out there that don’t require this. If the financial history of one partner is stronger than the other partner, then even more options exist.

Again, this is why it’s important to consult with a financial advisor, lender, or attorney prior to even looking at houses. Always get your pre-approval prior to house hunting to save some broken hearts.

When you apply for a home loan, gay couples should discuss two different options with their lender or attorney: Joint Tenancy with the Right of Survivorship, or Tenants in Common.

How does Joint Tenancy with the Right of Survivorship work for same-sex couples home loans?

Joint Tenancy with the Right of Survivorship is the status that legally married couples have as a default. However, if you are not married, it may still be worth investigating this option.

However, there are advantages and disadvantages to this option, and it comes along with the two parts in the name of the status.

Right of Survivorship is just as it sounds: if one partner dies, 100 percent of the property is then owned by the living partner.

Joint tenancy means that each person has equal ownership and equal rights to continue ownership of the home or to dispose of the home.

This status is fine and dandy if the couple is together forever and always, but it becomes problematic when a couple decides to part ways. Neither partner can sell their share or leave their share to anyone except the other partner.

Because one-half of a home has no resale value, the couple must either sell the home jointly and split or negotiate the division of earned equity in the home, or one partner can buy out the remaining balance on the mortgage.

This, however, requires the partner staying in the house to requalify for a new mortgage. Now let’s take a look at tenants in common.

How does tenancy in common work for same-sex couple home loans?

Unlike joint tenancy with the Right of Survivorship, tenants in common classification doesn’t automatically grant ownership to the surviving partner.

In fact, with this legal classification, two or more people can hold ownership. In this case, all parties should have a will because the home can be owned in equal or unequal shares.

For example, if two unmarried people wish to buy a home together, this classification allows for a percentage of the value to be different for each person. A case in which this can come in handy is if one person has heirs, or otherwise designated beneficiaries, and the other does not.

Only a will can document equal or unequal shares and who gets the percent of equity when one person dies, the surviving partner or the heirs of the deceased partner.

If an unmarried same-sex couple chooses the designation of tenants in common, and the relationship ends, the property can be bought out by one partner, similar to joint tenancy.

However, a will must mitigate the portion that can be bought out or the portion left to an heir.

What are same-sex couples’ home loan rights?

Though we have come far in human rights movements for the LGBTQ+ community, discrimination still happens, and not always in the form of denied home financing.

According to a recent study by Iowa State University, between 1990 and 2015, approval rates for same-sex couples were 3 to 8 percent lower than heterosexual couples.

In addition to lower approval rates, mortgage loans carried interest rates the study found that interest rates were 0.02 to 0.2 percent more than heterosexual couples. This percentage may seem insignificant, but applied to a 30-year mortgage, it makes a huge difference.

After your gay or lesbian marriage or partnership, sharing a home and building a family is exciting. Be sure you have reviewed your assets, chosen the right lender, and have a will in place regardless of the legal classification that is right for you and your partner.

Owning a home as a same-sex couple, married or not, is a wise investment, but it is also a huge financial responsibility. Enter your ZIP code below to apply for same-sex couples home loans.