This study is the first to empirically demonstrate widespread discrimination across the United States based on perceived sexual orientation, sex, and race in mortgage lending. Our analysis of over five million mortgage applications reveals that any Fair Housing Administration (FHA) loan application filed by same-sex male co-applicants is significantly less likely to be approved compared to the white heterosexual baseline (holding lending risk constant). The most likely explanation for this pattern is sexual orientation–based discrimination—despite the fact that FHA loans are the only type of loan in which discrimination on the basis of sexual orientation is prohibited.

Moreover, we find compelling evidence to support the intersectionality theory. According to this theory, when sex and race unite, a new form of discrimination emerges that cannot be explained by sexism or racism alone. The data unequivocally indicates that the race and sex of same-sex applicants play a role and result in a unique and previously unobserved pattern. This discriminatory pattern plagues every region in the United States, and it transcends party lines (that is, it is present in red, blue, and swing states). Furthermore, upending conventional wisdom, the data reveals that big banks discriminate at the same rate as small banks, and lenders in urban environments are as discriminatory as rural lenders. Prior studies failed to reveal this phenomenon due to data constraints and design flaws. These studies relied on testers posing as applicants, and none could investigate how intersectionality influences lending practices.

Despite the grim results, a silver lining exists. We find that the pattern of discrimination diminishes or disappears in states and localities that pass anti–sexual orientation discrimination laws. These findings have important and timely implications. In 2017, a new bill offering nationwide protection from sexual orientation credit discrimination was introduced. The same year experienced tectonic changes in Title VII jurisprudence. Our study can reinvigorate the debate and help policymakers tailor remedies that would correct the discriminatory pattern this study unravels.