Housing News

The Fight for Fairness: When Women Were Denied Mortgages

In the not-so-distant past, it was nearly impossible for many women to get credit cards, auto loans, and mortgages in their own names.  

In the 1960s and early 1970s, many women had entered the workforce and begun earning their own money. However, single women often couldn’t get a mortgage on their own, unless they had a male co-signer on the loan (even if it was their retired father.)

When women attempted to buy homes with their husbands, their incomes were often not fully counted. That was especially true for those in their childbearing years.

At the time, many lenders believed that women would just quit their jobs as soon as they got pregnant. That would make it difficult for them to repay their loans. So, lenders commonly discounted a woman’s income by 25%, 50%, or even more—if they counted it at all.

“There was a belief that women’s income, especially if they were child-bearing age, was inherently suspect,” said Chloe Thurston. She is a political science professor at Northwestern University in Evanston, Ill. She is also the author of “At the Boundaries of Homeownership: Credit, Discrimination and the American State.”

“If you think women are more likely to leave the workforce to have kids, that factored into lenders decisions not to lend money to women,” said Thurston.

“Baby letters” to lenders were not unusual

Some lenders required what became known as “baby letters” from female applicants.

Women would promise in writing that if they had children, they would return to work and continue to pay back the loan. They would submit these letters to their lenders along with the rest of their loan paperwork.

There were even documented cases of women providing letters from their doctors stating they were on birth control or had a hysterectomy, said Thurston. This was to prove they wouldn’t get pregnant. 

“Sex discrimination in lending was widespread and practiced overtly,” said Thurston. “It was considered good business practice by some because of the sense that you needed to adjust for the possibility that a woman’s income might stop.

Credit discrimination became illegal in 1974

Women, many of whom had joined the workforce and gone into professional fields, were frustrated when they couldn’t obtain credit. Others learned about the problem through articles in women’s magazines or on the news.

Opposition to these practices began building. And then in 1974, two laws changed everything.  

The Equal Credit Opportunity Act made it illegal to discriminate against borrowers based on their sex or marital status.

The same year, the Fair Housing Act was expanded to outlaw discriminating against someone in housing based on their sex.

As a result of these laws, the idea of a woman’s income not being fully counted or needing a letter from a doctor stating a female applicant is unthinkable today. Many people don’t even realize this sort of discrimination ever existed. 

“[The laws] helped to equalize the playing field in lending to the point where we don’t think about this history anymore,” said Thurston. “People are really unaware that gender discrimination was so flagrant and common and really not that long ago.”