In matters of commerce, Muslims are not restricted in dealing with non-Muslims including conventional banks or investors, such as Freddie Mac, as long as the non-Muslim party is genuine in the offer of an Islamic product or adheres to the relevant Shariah guidelines governing the transaction. In the case of profit-sharing products and processes, these have been reviewed by leading scholars including Sh. Yusuf DeLorenzo, Sh. Nizam Yaquby, and Sh. Ahmed Shleibak. We are intimately involved in consulting with University Bank to assure that the guidelines are followed.
A community bank like University Bank will offer interest-free home financing because it is good business. Banks serving communities with a large number of Muslims are increasingly seeking to offer products like our interest-free home financing programs. Moreover, the mortgage refinance boom has ended, and new home buyers are the focus. Therefore, Muslims who are less likely to be homeowners, but most likely to be qualified, represent an excellent business opportunity.
Our interest-free home financing program is designed to be riba-free. From a faith, or spiritual, perspective you may rest assured that you have chosen a product that does not involve something that is either forbidden or doubtful. As we develop other interest-free products and services, we strive to be competitive and have very little price or cost differential compared to other offerings in the market. More importantly, the interest-free home financing process is designed by community members, investing in the community and bringing the profits back to the community in several different ways.
No! Our programs are meant to provide a financial advantage to any consumer. Some of our products in development will be designed without specific “Islamic” jargon. Nonetheless, our scholarly advisers are committed to Islamic values and Shariah, and believe that these are beneficial to all.
This is an important question. We recommend that you look to the Shariah scholars who have an expertise in financial and commercial transactions. For instance, does your provider of an Islamic service have a fatwa or relevant supporting Islamic certificate? Can your provider point you in the direction of a text or knowledgeable resource person that you may approach in person, by mail or online?
If after reading these answers, you wish to read the primary documents, on an exceptional basis, we are prepared to send a Non-Disclosure Agreement, request your signature and then forward a file to you.* The purpose is that the document is solely for your review and not to be given to third parties, banks, people who might wish to go into this business, competitors, or dealt with in a way that would accidentally allow these types of people to acquire our proprietary material.
*In some cases a non-refundable charge of $50.00 may apply.
You should seek a copy, which will have the names of the approving scholars and their signatures. If they are unknown to you, you should be able to verify their relevant training and capacity to opine on various matters relating to Islam and commerce.
Certain scholars are well known and their certificates or ijazas are publicized. Others may be qualified, but are less well known, ask for their bio-data, ijazas, or other information that will help you to have comfort in their opinions.
Generally, the money comes from one of three sources: the bank’s broad sources of funds; the capital markets (government sponsored investors in mortgages and their alternatives, large international investors including Islamic and western banks serving Muslim clients, and so on); and, in the case of UIF through University Bank, an Islamic profit-sharing deposit program which seeks to invest in the mortgage alternatives.