How Trans and Nonbinary Homebuyers Can Navigate Mortgage Applications

Allies can offer support when deadnaming, misgendering, or outing occurs

male, female, prefer not to answer; married, separated, unmarried

The Balance / Julie Bang

Anyone who has gone through the mortgage application process will tell you that it can be invasive and complex, due to the numerous steps involved. But for trans and nonbinary homebuyers, an already in-depth, emotional process that is largely set up for those who identify as binary gets even more complicated.

Although there are some consumer laws protecting LGBTQ+ homebuyers, there are many unseen issues trans and nonbinary people in particular face. On a state level, 21 states and Washington, D.C., have explicit laws prohibiting housing discrimination based on sexual orientation and gender identity. This community often deals with deadnaming, outing, and misgendering, as well as discrimination when applying for a home loan.

Learn more about these unique challenges, as well as tips on how to find allies to help you get through the mortgage process successfully.

Key Takeaways

  • Housing discrimination is a reality that trans and nonbinary people often have to navigate when buying a home.
  • Deadnaming, misgendering, and outing are just a few of the challenges trans and nonbinary homebuyers face on top of the already invasive home loan application process.
  • On a state level, 21 states and Washington, D.C. have explicit laws prohibiting housing discrimination based on sexual orientation and gender identity.
  • If you suspect discrimination from a lender, you should stop working with that lender and report it immediately.
  • Working with lenders that are allies can help the mortgage process go smoother for members of the LGBTQ+ community.

Deadnaming

Deadnaming is the practice of using the birth name of a trans person that they no longer identify with. In some cases, it can be an honest mistake, but in the worst case, it can be demoralizing, discourteous, and disrespectful, according to Ryan A. H. Weyandt, chief executive officer of the LGBTQ+ Real Estate Alliance.

“It strips basic dignity away from something we all take for granted, and that is our name,” Weyandt said in an email interview with The Balance.

Verifying identity through documentation is a crucial part of the underwriting process of homebuying. When deadnaming occurs, it can be especially difficult. According to Olivia Hunt, policy director of the National Center for Transgender Equality, one of the biggest problems trans people face during the homebuying process is getting all of their identity documents and records in order.

“Given how invasive everything around mortgages can be, if a record turns up that shows a mismatched name or gender marker, well, that gets flagged as an irregularity, and at the very least is going to result in somebody being questioned and additional scrutiny,” said Hunt. “We have a lot of anecdotes of things moving along swimmingly until a credit report gets pulled that happens to have an old name listed as an alias.”

When transgender indivdiauls initiate a name change with their creditors, the credit history under their deadname (their name given at birth) often fails to transfer, according to nonprofit Center for LGBTQ Economic Advancement & Research. This can result in blank credit reports and the inability to generate an accurate credit score under their current name, or even multiple credit reports.

Weyandt has also heard of situations where the name that is used in the official documentation doesn't line up with the name of the individual trying to purchase the property. This can often be a result of jurisdictions unwilling to work with trans and nonbinary folks to provide updated identification.

To further complicate the matter, laws protecting the LGBTQ+ community from housing discrimination vary by state. As of June 2022, 29% of people who identify as LGBTQ+ live in states that do not explicitly prohibit housing descrimination based on sexual orientation or gender identity. “It’s disproportionately intrusive and hateful toward the trans and nonbinary communities,” Weyandt said.

According to data from the National Association of Realtors, about 8% of LGBTQ+ buyers and sellers identify as nonbinary, gender-nonconforming or third gender, and less than 1% indentify as transgender.

How To Deal With Deadnaming

On a practical level, taking the time to update as many of your records as possible in advance can help avoid any red flags, said Hunt. “It might involve making sure that you see the latest version of all three of your big three credit reports, and if any information is available on there that is outing you, whether it's an old name or anything that connects you back to that old name, immediately follow up with each of the credit reporting agencies,” she said. 

It can also mean contacting your state's Revenue Office or Department of Taxation to make sure that your information is being reported correctly on your tax records.

Weyandt shared that the LGBTQ+ Real Estate Alliance promotes education to help bridge any gap in understanding. “More often than not when this [deadnaming] happens, it comes from a place of ignorance and not malicious intent,” he said. “What we encourage all of our members to do is maintain control of the conversation, but do not allow your emotions, no matter how frustrated you are, to scold or vilify the person committing the act of deadnaming initially.”

However, if you’re not gaining any traction or are being intentionally ignored, you should begin documenting everything that happens from that point forward, as it might be veering into discrimination territory.

The National Center for Transgender Equaility offers a guide for changing your name and gender markers on legal documents.

Outing

Outing is when a person’s sexual orientation or gender identity is revealed without their consent.

“It’s a real concern for anyone in the community, at any time of life, even if you're already out,” Weyandt said. “I know dozens of people right now in 2022 who are not comfortable living their authentic lives because they are afraid that it's going to impact them financially, impact their ability to do their job, impact their ability to be loved, or impact their ability to survive. I would say this is more common than we think with consumers as they go through the real estate purchase process, because the perception of discrimination is very real.”

How To Deal With Outing

Hunt recommended dealing with such situations matter-of-factly. Simply state something along the lines of "Yes, I changed my name through [name of court] on such-and-such date, and have updated my records accordingly." According to Hunt, a mortgage lender will not need any more information than that.

“You can provide them with a copy of the name-change order if they ask for it, but if they're asking for more or they're interrogating you on why you changed your name, that's the point where it's worth working with your Realtor or a real estate attorney who better understands the process to make sure that your rights are being protected,” said Hunt.

Misgendering

Misgendering is when someone refers to another by using a word, especially a pronoun or form of address, that does not correctly reflect the gender with which they identify. This is typically experienced by members of the trans and nonbinary community. Many people in this community don't have the resources to go through a full transition, making misgendering a common occurrence.

Gender-affirming health care includes social and medical processes that allow a person to live authentically, and each form of care can be extremely costly. Changing genitalia, for example, costs an estimated $25,600 for male-to-female patients and about $24,900 for female-to-male, according to The Philadelphia Center for Transgender Surgery.

As a loan officer, Weyandt pointed out one of the inherent flaws in the process: The Home Mortgage Disclosure Act requires lenders to report the ethnicity, race, gender, and gross income of mortgage applicants and borrowers. So if a client declines to answer or identify their gender, the loan officer is required to identify the individual's gender based on visual observation. “It's an antiquated and offensive requirement, frankly,” he said.

How To Deal With Misgendering

An easy way to provide guidance and clear up confusion is through the use of pronouns, said Weyandt. “By putting it out there upfront, we hope that others are receptive to our wishes and abide by the pronouns we are insisting they use with us.”

Hunt noted that everyone’s comfort level is unique, but the important thing is to know in advance how you want to respond. “If you are not comfortable continuing to work with somebody who's misgendered you, you are always within your rights to take your business elsewhere. That's an important thing to remember as consumers—that's one of the only tools that you really have at your disposal,” said Hunt.

Discrimination

Discrimination in mortgage lending is difficult to prove due to the various facets involved, but according to the Federal Trade Commission, you are not required to disclose information that might seem discriminatory, such as race, ethnicity, age, sex, and marital status.

When it does, it is illegal, at least on the federal level, as per the Equal Credit Opportunity Act. In fact, the Consumer Financial Protection Board clarified in March 2021 that “the prohibition against sex discrimination in ECOA and Regulation B encompasses sexual orientation discrimination and gender identity discrimination.”

How To Deal With Discrimination

If you are rejected for a mortgage and you believe it is based on your transgender identity or anything related to your gender or sexual orientation, the best course of action is to immediately contact your Fair Housing Office in your state and file a complaint with the U.S. Department of Housing and Urban Development (HUD), according to Hunt.

“The federal government can't step in and enforce civil rights laws if they don't know that there have been violations. That doesn't guarantee that any individual situation is going to result in specific action, but it's a necessary process to even track the problem and understand just how widespread and pervasive this can be,” Hunt said.

Finding an LGBTQ+ Friendly Lending Partner

To improve the likelihood that you’ll have a positive mortgage experience, do some research into potential lenders regarding their track records with people within the LGBTQ+ community. Below are resources that may be useful to you:

  • Use the LGBTQ+ Real Estate Alliance directory: “We offer an amazing directory that is based on geography so consumers can connect with folks in their area that can help them at any point of the homebuying process, from a real estate agent to a mortgage professional, to a tax professional,” said Weyandt.
  • Research lenders: See if a prospective lender is on the Human Rights Campaign's (HRC) Corporate Equality Index or is certified by the The National LGBT Chamber of Commerce. According to Weyandt, recognition in either of these two organizations' lists is a good sign that the lender will support you throughout the process.
  • Ask around in your community: According to Hunt, word of mouth is a good way to find friendly and respectful real estate agents and mortgage lenders. Ask other LGBTQ+ people whom they've worked with to buy a home and if they can recommend real estate agents or mortgage brokers who are LGBTQ+-friendly, or perhaps LGBTQ+ themselves.
  • Consider a real estate attorney: If you're in a situation where you can afford it, having legal representation on your side can help everyone in the process remain accountable.

LGBTQ+ Friendly Banks

While it’s tough to find specific mortgage-related policies geared toward LGBTQ+ homebuyers, here are some examples of banks that have demonstrated allyship qualities based on independent ratings, nonprofit ties, or internal policies:

  • Amalgamated Bank: This bank has internal LGBTQ+-inclusive policies in place for employees, supports organizations such as Trans United, and received a 100 on the Human Rights Campaign Corporate Equality Index (HRC CEI) in 2021.
  • US Bank: As of 2021, this bank has received a score of 100 on the HRC CEI for 15 consecutive years, indicating there is a set of inclusive employment and nondiscrimination policies, and corporate benefits in place.
  • Citi Bank: In 2020, this bank was among the first to announce that it would allow transgender and nonbinary customers to update to their “True Name” on eligible credit cards without requiring legal name changes.

Frequently Asked Questions (FAQs)

In which states are transgender people protected from housing and employment discrimination?

As of publication time, the following 21 states ban gender identity and sexual orientation housing discrimination: Washington, Oregon, California, New York, New Jersey, Connecticut, Vermont, New Hampshire, Maine, Rhode Island, Massachusetts, Rhode Island, Delaware, Minnesota, Iowa, Illinois, New Mexico, Colorado, Utah, Maryland, and Nevada, as well as Washington, D.C.

What percentage of transgender people experience housing discrimination?

LGBTQ+ housing discrimination statistics are hard to come by since it’s often difficult to recognize or is underreported. That said, the National Center for Transgender Equality estimates that one in five transgender people in the United States has been discriminated against when seeking a home.

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Article Sources

  1. Movement Advancement Project. “Nondiscrimination Laws.”

  2. Center for LGBTQ Economic Advancement & Research. “[FYI] Trans & Nonbinary Folks Can Start Changing Their Names on Credit Reports.”

  3. National Association of Realtors. “2021 Profile of LGBTQ Home Buyers and Sellers,” Page 10.

  4. The Philadelphia Center for Transgender Surgery. “Male to Female Price List.”

  5. The Philadelphia Center for Transgender Surgery. “Female to Male Price List.”

  6. The Federal Reserve. “Home Mortgage Disclosure Act Examination Procedures.”

  7. Federal Trade Commission. “Mortgage Discrimination | Consumer Advice.”

  8. Federal Register, The Daily Journal of the United States Government. “Equal Credit Opportunity (Regulation B); Revocations or Unfavorable Changes to the Terms of Existing Credit Arrangements.”

  9. US Bank. “US Bank Named a 2021 Best Place to Work for LGBTQ Equality | Company Blog.”

  10. Citi Bank. “Citi Launches “True Name” Feature With Mastercard Across the US.”

  11. National Center for Transgender Equality. “Housing & Homelessness.”