University Islamic Financial Corp. is pleased to reveal that we now offer two Shariah-compliant home acquisition or replacement programs. You can purchase your home with an installment sale (Murabaha) or a redeemable lease (Ijara) that is fully compliant with Islamic Guidelines (Shariah) and, therefore, free of interest (riba) and doubtful practices (gharar). Murabaha and Ijara are two of the common methods of home financing that are Islamically acceptable.
We currently offer Shariah compliant home financing in the following states: California, Connecticut, Illinois, Indiana, Maryland, Michigan, Missouri, New Jersey, Ohio, Pennsylvania, Texas, Washington and Virginia.
Murabaha (Installment Sale)
The program is based on Murabaha, an installment sale, or a marked up sale. You select the property, University Islamic Financial Corp.-acting as agent for University Bank-will purchase it for you and sell it to you at a marked up price. At the closing, you make your down payment toward the acquisition price. This is your initial down payment, which may be as low as 10% in certain cases, or as high as suits your circumstances.
Your down payment represents your initial investment in the property. Your monthly payments include profit from the mark up and a payment toward your investment, thereby increasing your investment in your home. You acquire full title to the property at the time of closing, when your initial down payment is made.
University Islamic Financial Corp. accepts Murabaha applications up to $417,000 with a minimum initial down payment of 10% (financing amounts may be higher in certain designated high cost areas). Final approval will take place once University Islamic Financial Corp. receives your completed application package and supporting documentation. A deposit is required at application which will cover the cost of the credit report.
Ijara (Redeemable Lease)
The program is based on Ijara wa Iqtina, or a lease followed by an acquisition. You select the property and an independent Trust acquires it and rents it to you. At closing, you make your down payment towards the acquisition price. This is your initial payment on-account, which may be as low as 30% or as high as suits your circumstances.
Your payment on-account represents your beneficial rights in the property. Your monthly payments include rent and a further payment on-account, thereby increasing your beneficial rights. You can acquire full title to the property when the sum of your payments on-account equals the original purchase price. The original purchase price is the goal toward which you are always working; we do not adjust it over the life of the lease. This eliminates gharar.
University Islamic Financial Corp. accepts applications up to $1,300,000 with a minimum initial payment on account of 30%. Final approval will take place once University Islamic Financial Corp. receives your completed application package and supporting documentation. A deposit is required at application which will cover the cost of the credit report.