Islamic Housing Fulfils US Muslim Dream
26 Jun 2012 12:18 GMT
 

VIRGINIA - Islamic finance companies are making the American dream of home ownership come true for many practicing Muslims, offering them Shari`ah-compliant payment systems to buy their own homes.

“We like the house very mu (more)

VIRGINIA - Islamic finance companies are making the American dream of home ownership come true for many practicing Muslims, offering them Shari`ah-compliant payment systems to buy their own homes.

“We like the house very much,” Khadijah Sahak, 59, told the Voice Of America.

“We are very comfortable here. We are at peace.”

Sahak's family was one of American Muslims who finally managed to buy their own home in Sterling, Virginia.

When her grown son, Nabi, offered to help his parents buy a home, Khadijah and her husband refused to live in a house bought with a traditional mortgage.

As practicing Muslims, they believe demanding or paying interest on money - like the kind paid on a home loan - is prohibited by Islam.

“Everyone in my family was, in one way or another, against the idea of conventional mortgages,” says Nabi.

Afterwards, he heard about the Michigan-based Ijara Loans, one of a handful of Islamic financing companies in the United States.

The company offered Shari`ah-compliant home purchasing contracts which do not include actual interest.

“That day they got really excited, when they learned that they were able to still buy a house and not compromise their religious values,” Nabi says of his parents.

When the Sahak family bought the Sterling townhouse in 2010, they joined about 10,000 other Muslim-Americans who have purchased homes in the past 10 years using Shari`ah-compliant financial transactions.

Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.

Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.

Islam forbids Muslims from usury, receiving or paying interest on loans.

Transactions by Islamic banks must be backed by real assets -- not shady repackaged subprime mortgages.

Growing Business

The new market for Shari`ah-complaint housing have been growing in the United States, gaining the confidence of more and more devout Muslims.

“Relief that it does exist is definitely the feeling among the majority of the people who contact us,” said Hussam Qutub, spokesman of Guidance Residential, the largest company in the US which offers Shari`ah financing.

“We are in a sense impacting the ownership rates of Muslim-Americans in a positive way.”

Qutub says the company has processed $2.3 billion in Islamic home financing transactions since its launch in 2002.

Instead of charging interests on a monetary loan, Islamic finance companies generally offer homebuyers a sale, rent or partnership contract on the home.

“In order to be done right, the bank needs to truly purchase the asset, own it and then transfer this ownership to its customers,” said Georgetown University law professor Babback Sabahi, who lectures widely on Islamic financing.

“And a trade - as opposed to lending in the conventional sense of the word - is what Shari`ah signs off on and approves.”

The homebuyers never feel they are paying interest on money.

“We feel we've only scratched the service here…with this niche market.” says Qutub of Guidance Residential.

“There [are] still plenty of consumers out there of the Muslim faith that don't even know this option is available.”

As for American Muslims, Shari`ah financing in the US was making their dream of home ownership comes true for many practicing Muslims, like the Sahaks.

“If I can live in America and feel that I own a home that is completely in line with my Islamic system,” says Nabi, “then I guess the pleasure of living in that house would be tenfold.”

“We were very happy that we found an Islamic bank,” Khadijah chimes in.“We didn't like the other banks. If we want to buy another house it will be from an Islamic bank and I tell my friends that, too. We are more comfortable like this.”

Reproduced with permission from OnIslam.net



-- OnIslam


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