Frequently Asked Questions
Home Financing FAQ
A conventional transaction is a loan of money to you for the purchase of a home on which you pay interest. An installment sale transaction is a sale of a home with a a marked up installment payment plan.
UIF’s goal is to provide its customers the lowest cost pricing structure in the Islamic finance industry. With that said our profit rate is determined by market conditions and the amount of profit our investors are looking to make on the transaction. We also track the mortgage industry pricing so that we stay competitive in the market. Please feel free to contact us and learn more about our pricing and payment programs
There are two types of costs when you purchase or refinance a house. 1- Financing Company charges and third party fees. Generally, third party fees comprise of property appraisal fees, credit report fees, recording fees, title insurance and other settlement costs. These fees vary depending on the State and County you are purchasing the property in. One of our experienced Sales consultants can advise you on what your closing costs will be based on where you are financing the property
With our installment sale program, you can put down as low as 3% of the purchase price. However, if you put down less than 20%, there will be an added cost, also known as PMI. This is charged to compensate UIF for the added risk of financing low down payment properties. The added cost is based on many factors, including the amount of down payment, credit score, term…etc. Your financing consultant can answer more questions on this topic and calculate this cost for you. UIF specializes in financing low down payment customers. Contact us and review your options before considering FHA (government) backed conventional loans.
Our installment sale contract does not have any pre-payment penalties. You can pay off the remaining acquisition balance at any time you wish. Profit portion is prorated, and UIF agrees to accept a lesser profit should you choose to pay off the contract early.
If you are putting a down payment of 20% or more (10% for CA residents) you have the option to pay taxes and insurances yourself and a fee may apply. If you are putting down less than 20% you have to Escrow with us. UIF collects taxes and insurance on a monthly basis and pays the appropriate parties on your behalf. This insures that you are never in default due to a failure to pay taxes or maintain required property insurance.
Minimum down payment for our Murabaha program is 3%. In some cases the down payment may be higher based on credit score and the location of where you are purchasing the property.
The Installment Contract is a contract signed by two parties that reflects the nature of the installment sale, which is the sale of property. The Note reflects the nature of a conventional mortgage, which is a loan of money with interest.
Your installment payment stays the same until the contract is paid off in full. If you make a large additional payment you will end up paying the contract sooner than the original term. Making extra payments towards your outstanding balance assures that you pay less profit to UIF over the contract term.
Yes! Since UIF sold the house to you, UIF no longer owns the property and thus does not share in the profits with you. You can sell your house whenever you wish and pay back the remaining installment balance at closing to UIF. With our program, the title is in your name from day one.
NO. Your UIF financial consultant will coordinate all paperwork with realtors, title companies, and sellers. Since this is not a conventional mortgage, we have separate and different documents that need to be signed before and at closing. Rest assured — we will guide you throughout the process and close your file in a timely fashion.
Yes. You can do either one of these at any time you wish. Terms and Conditions apply please speak to one of our Sales Consultants.
Simple answer is YES. Federal law requires that we mail you a 1098-INT form that shows how much profit you paid us during the prior year. You can deduct this profit on your Income taxes. Please consult your accountant as there may be limitation on this deduction.
Yes, this can be taken care of by our sister company, Midwest Loan Services, who services all our transactions.
Yes, this information can be viewed online here.
UIF works very closely with its customers in hardship situations. Our goal is to keep you in the house and work out a potential solution. However, if you cannot make payments and there is no resolution to this matter, UIF has the right to foreclose and take possession of the property.
There is a flat fee of $50 that is used to compensate for the cost of third party collection. We do not charge you an arbitrary percentage of your monthly payment as others may. This is paid to a third party company that makes collections on our behalf at the same cost to you.
No. You own the home and can sell it at any time you wish.
Yes, you may use our Installment Sale program to purchase investment properties of 1-4 units.
No, we have the same qualification process, no more or less stringent.
Currently UIF offers home financing in the states of California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Washington. Our home financing products are only available to finance properties in these states.
Commercial Financing FAQ
We use a lease to own structure or marked up installment contract. You do not sign a note for money and you do not sign a mortgage. Our programs have been reviewed by our board of scholars and the Fatwa that can be found here, www.myuif.com/fatawa/.
UIF, through our parent University Bank, is the only place in the country that offers FDIC insured, Faith Based bank accounts. As our commercial Lease to Own clients make their monthly lease payments, a profit is created. We share that profit with our depositors who have provided funds for our Lease to Own transactions.
We are limited to real estate only and do not finance construction, development, gas stations or hotels/motels. We welcome the opportunity to finance professional offices, shopping centers, warehouses and Community Centers.
We have provided commercial financing in many states across the United States, but not all. Give us a call to find out if we can finance in your state and your particular property.
UIF’s maximum financing transaction is $1.3 million. However with exceptional transactions we may be able to finance as much as $2.6 million.
We will review your personal credit, cash flow from your business, a proven secondary source of repayment and an initial deposit. Depending on the type and location of the property, the amount of the initial deposit will generally be between 30% and 40% of purchase price or appraised value of the real estate, whichever is less.
You will need to provide a personal financial statement, 3 years complete federal tax returns including all K-1’s and W-2’s and a legible valid driver’s license or passport. For each business in which you have more than 15% ownership you will need to provide the articles of incorporation and by-laws or partnership agreement and operating agreement along with 3 years of federal tax returns, 2 end-of-year financial statements including balance sheet and income statement and the most recent monthly or quarter financial statement and for the same period of the previous year.
In about sixty days from receipt of all of the initial documents and the deposit for the appraisal and property survey ($6,500).
Closing costs depend upon the state and the complexity of the transaction. Within the closing costs there are three kinds of fees, those charged by UIF (1% of the amount financed with a $2,500 minimum), third party fees (amounts charged by other parties) and escrows.
Typical Third Party Fees Include:
- Attorney: $5,000 – $10,000
- Commercial Appraisals: $1,500 – $3,500
- Commercial Survey: $1,500 – $3,500
- Credit Reports (each): $20
- Michigan LLC Formation: $50 – $150
Yes we do financing for properties that a non-profit is looking to acquire. Please contact us to find out if the property will qualify
From each board member we require the documents below:
- Current drivers license or passport
- Social security number
- Position in organization
- Resume or brief professional biography
- List of all non-profit organizations in which you are a board member or officer
From the community organization:
- Three end of year financial statements including income sheet and balance statement
- Three 990 federal tax return, if filed
- Name and address and amount of contributions for all donors who exceeded $3,000 annually
- 501(c)3 Organization
- 40% equity either in real estate or cash
- Two years of financials including balance sheet and income and expense statement
- Minimum of three qualified personal guarantors