| Islamic Home Financing Frequently Asked Questions |
1.) Are Muslims permitted to deal with interest based banks when these banks offer Islamic products and services? 1.) Are Muslims permitted to deal with interest based banks when these banks offer Islamic products and services? In matters of commerce, Muslims are not restricted in dealing with non-Muslims including conventional banks or Investors such as Freddie Mac so 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 SHAPE™ products and processes, these are designed by SHAPE™ Financial Corp. and have been reviewed by leading scholars including Sh. Yusuf DeLorenzo, Sh. Nizam Yaquby, and Sh. Ahmed Shleibak. We are intimately involved in consulting with the Bank to assure that the guidelines are followed. back to top 2.) What benefit is the SHAPE™ process to University Bank and UIFC? A community bank like University Bank will offer the SHAPE™ product suite because it is good business. Banks serving communities with a large number of Muslims are increasingly seeking to offer products like the SHAPE™ suite of products. Moreover, the mortgage refinance boom has ended, and new home buyers are the focus. Therefore, Muslims who are less likely to be home owners, but most likely to be qualified represent an excellent business opportunity. back to top 3.) How does this benefit the community? The SHAPE™ processes are designed to be riba free. From a faith, 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 the SHAPE™ family of products and services, and we strive to be competitive and have very little price or cost differential compared to other offerings in the market. More importantly, the SHAPE™ process is designed by community members, investing in the community and bringing the profits back to the community in several different ways. back to top 4.) Are SHAPE™ programs open only to Muslims? No! SHAPE™ 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, SHAPE™ and its scholarly advisors are committed to Islamic values and Shariah, and believe that these are beneficial to all. back to top 5.) Is it ok to simply accept someone’s assertion that a method or contract is Shariah-compliant? This is an important question. We recommend that you look to the Shariah’a 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 knowledgeable resource person or text, or someone or a resource that you may approach in person, by mail or online? back to top 6.) I still have questions. Can either I or my lawyer see your documents in order to be more clear about the system that makes our contract halal? 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. back to top 7.) How can we tell whether a company has a valid fatwa? 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. back to top 8.) How can we know if the scholars providing the fatwa are valid? 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. back to top 9.) Where do banks like University Bank and their affiliate UIFC get their money for these programs? 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 UIFC through University Bank, an Islamic profit sharing deposit program which seeks to invest in the mortgage alternatives. back to top |
