New Islamic mortgages now available in Minnesota

[Chris_]

New Islamic mortgages now available in Minnesota

For many Minnesota Muslims, it's been virtually impossible to buy a home, because Islamic law forbids the paying or charging of interest. To help close the home ownership gap among Muslim immigrants, the state's housing agency is launching a new program offering Islamic mortgages.

Minneapolis, Minn. — Islamic law does make exceptions to the ban on interest, if one's family is at stake. But the exceptions are open to interpretation and for many observant Muslims, conventional mortgages are strictly taboo.

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The program is targeted at low-to-moderate income families. Qualified applicants have to complete first-time home buyer education classes. The goal is to help Muslim home buyers build wealth and reap the benefits of home ownership.

Here's how the mortgage, known as Murabaha financing or "cost plus sale," works:

The state buys a home and resells it to the buyer at a higher price. The down payment and monthly installments are agreed to up front at current mortgage rates.

The deal is identical to a thirty-year fixed-rate loan, except there's no additional interest, because the higher up front price factors in payments that would have been made over the life of a traditional mortgage.

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A handful of private banks and lending institutions offer Islamic mortgages in the U.S., but Minnesota Housing is the first state agency to offer such a product...

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Government endorsement of a religioin?  Where's the ACLU???   

[docstew]

If there was a large demand for this service, the banks would offer it already.

and I agree, where's the ACLU?

[Thor]

And this is one of the many reasons why I have little respect for Tim Pawlenty (R) [or should I say RINO]