From MPR: ”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 has launched a new program offering Islamic mortgages … 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. 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. The program is the brainchild of Hussein Samatar, director of the African Development Center in Minneapolis.
Some contend that Islamic mortgages show poor growth, and end up costing the bank more than a traditional mortgage. Some banks have even stopped offering them. Does anyone know more about these? Can anyone get a cost-plus loan? Or just low to middle income Muslims?



Latest comment — noodleman: @baker: Sorry but I went off on a slight tangent after my initial post. My post about "true" cost really had nothing to do with Sharia or cost-plus...