Mortgage

Mortgage is a long term loan, usually for a person or family topurchase a house over a long period (30 years). This is fairlycommon in Western societies (perhaps the only way onecould afford or buy a house in those societies).

This practice barely exists in Muslim countries, at least for now.

This involves interest (and a lot of it!), and therefore alternativeshave to found to this method.

Over the past few years, some prominent scholars have allowed Muslims living in Western countries to buy homes using mortgage, on the premise that this is the only way available, and that rent is a long term waste of money.

These include, Yusuf Talal DeLorenzo, Yusuf Al Qaradawi, Mustafa Al Zarqa, Mish`al Al Mubarak, and others.

• Yusuf Talal DeLorenzo Sharia Advisor to Dow Jones Islamic Index has a reply on a question about Mortgage
  available on this site.
• Dr. Yusuf Al Qaradawi's Fatwa
  The European Council for Fatwa and Research, chaired by Dr. Yusuf Al Qaradawi, has issued this fatwa as part of its Final Statement on 31 October 1999 for its Fourth Ordinary Session. Scroll down to Resolution 2/4. It is also available (in Arabic) here and here.
  Here are other links where this fatwa is referenced:
  • A transcript, in Arabic of a TV Program Sharia and Life - 9 May 1999 - search on the Arabic word "MANZIL"
  • A transcript, in Arabic of a TV Program Sharia and Life - 11 January 2001 - search on the Arabic word "BAIT"
  • First Reference

  on Islam Online web site.

  • Second Reference

  another reference on Islam Online web site.

  For the sake of completeness, we have to mention that Dr. Qaradawi's opinion has raised some objections from other scholars, such as:

  • objection by Dr. Mahmoud Al Tahan
  • Objection from Jalal Aamer
• Anis Qurqah of European Institure has issued a fatwa permitting mortgage, with an objection from Jalal Aamer.

Of course, this is not allowed in all cases, to all people. There are some restriction to consider. These include that the person engaging in mortgage does not have other assets (such as land or real estate) that could be sold and used to buy a home, that it is his main residence, and not a second mortgage (e.g. investment property), ...etc. Please refer tothe fatwa above for details.

You can read another article on Islamic Halal Finance site on Mortgage.

Some Housing Cooperatives have started (e.g. in Canada, USA) to allowMuslims to buy houses in an interest-free way. Although these offer an alternative, they are still in the early stages, and a lot of learning ishappening. Some even, impose some restrictions on house remodeling, rentinga basement, ...etc.

You can check this list too for other organizations that may offer a mortgage alternative.

Canada

• An-Nur Coop offers home purchase as well as commerical real estate.
• NO INTEREST Investments Inc. in association with W.H. Stuart & Associates and T.Y. Financial Group Inc. By Jaafer Syed (Jeff Gareau)
• Lariba Canada offers RRSPs, house financing and loans.
• UM Financial in Mississauga, Ontario offers a murabhah-based model for home financing as well as RRSPs and RESP.
• Islamic Cooperative Housing Corporation Ltd. (ICHC) based in Mississauga , Ontario, Canada.
• Salam Financial based in Ottawa, Ontario.
• Muslim Investment Group (MIG)
  2446 Cawthra Road
  Block 3 Unit 10
  Mississauga, ON L5A 3K6 Telephone: (905) 275-5250 Fax: (905) 275-0066

U.K.

• Manzil UK
  A home purchase plan for U.K. residents.

• BBC Article on HSBC
  providing Sharia approved home loans.

• Finance Search
  offers resources for UK muslims on home loans.

U.S.A.

• Ameen Housing
  2084 Walsh Ave. Suite B 1
  Santa Clara, CA 95050
  info@ameenhousing.com
• American Finance House 750 E. Green St. Suite 210
  Pasadena, CA 91101
  Email: lariba@msn.com
  Phone: 1 (626) 449-4401 Toll Free: 1(888)LARIBA-1 or 1(888)527-4221
  Fax: 1 (626) 449-5319
• Manzil USA
  126 East 56th Street, Third Floor
  New York, NY 10022
  Toll Free: (888) UBK-BAYT
  Fax: (212) 319-4762
  Email: manzilusa@ubk.net
  Operated by United Bank of Kuwait
• MSI Financial - Home Financing
  MSI Financial Services Corporation
  P.O.Box 771237
  Houston, TX 77215
  Phone: 1-800-USA-MSI1 or 713-785-9099
  E-mail : manager@msifinancial.com
• No Riba Homes