3 Halal Mortgage Options for Muslims in the US

3 Halal Mortgage Options for Muslims in the US

The following article will briefly discuss the best Halal Mortgage Options for American Muslims. However, let’s clarify the difference between Islamic Mortgage and Conventional Mortgage.


Islamic Home Financing vs. a Conventional Mortgage

A loan is not a means of making money. According to Islamic law, lending money to profit from any commercial or investment activity, including the financing of real estate, is not an acceptable method of commerce. To put it another way, riba (or interest) is not permissible. The most obvious reason is that a loan is considered a form of charity in Islam (qard al hasan) – an opportunity for one person to assist another in a difficult situation. The lender should only expect to receive the amount lent.

Besides, it is not acceptable in Islam to purchase or sell something with no intrinsic value. A loan with interest is essentially a way of repaying a loan with more money. Islamic Finance developed a home financing program on an entirely different foundation in response to a mortgage loan arrangement that was clearly impermissible according to Islamic financial guidelines.

Islamic home financing is a moral and equitable way to meet financial needs. It is not for the believers of any particular faith; rather, it appeals to anyone who is into a more transparent and ethical financial system. And Islamic home financing is an excellent option for both Muslim and non-Muslim families looking to purchase a home that reflects their values.

Halal Mortgage Options for Muslims

For Muslims in the US, there are a variety of halal mortgage options:

UIF Corporation

UIF Corporation (UIF) is a Michigan-based financial services corporation. Devout Muslims and individuals who do not want to pay interest on house loans can use the company’s residential and commercial home financing services.

Furthermore, Muslims who want to buy a new house or refinance an existing one can use UIF Corporation’s Islamic home financing solutions. The home blueprints have been completely certified by the Shariah Board and follow Islamic finance guidelines to the letter. Five years in a row, the firm has been selected as the best Islamic financial institution in the United States.

Guidance Residential

Following Islam’s strict ban on riba, Guidance Residential provides Muslims with a transparent, riba-free, consumer-friendly home finance solution. The company’s home financing strategy is built on a co-ownership concept. As co-owners, Guidance Residential and the consumer will own a portion of the home. As the client continues to make monthly payments, their ownership percentage rises.

Furthermore, Guidance Residential provides customers with the benefits of risk-sharing and no prepayment penalty. The corporation shares the risk with the homebuyer in the event of a foreclosure, natural disaster, or eminent domain. As a result, consumers who want to pay ahead of the agreed-upon timetable will not be penalized by the corporation. Above all, the Assembly of the United States has supported the home financing option.


LARIBA is another Islamic mortgage service that provides Muslims in the United States with riba-free Islamic Sharia-compliant mortgages and home finance solutions. The principle of “Declining Participation in Usufruct” (DPU) underpins the company’s home financing business. This entails acquiring the property on the consumer’s behalf.

The client then pays the corporation the property value in monthly payments for over 30 years. The consumer has the option of immediately registering the property in their name. The halal-conscious consumer may plan and repay their house loans over a longer period with LARIBA without worrying about interest.

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