Interest is forbidden in Islam, locking some religious Canadians out of mortgages and banks. A new Albertan financing group is helping Muslims buy homes while adhering to their faith.
A new Albertan financing group is helping Muslims buy homes while adhering to their faith.
Interest is forbidden in Islam, locking some religious Canadians out of mortgages and banks. That means many faithful have been stuck renting as they try to save up enough money to buy a home outright.
Edmonton-based Canadian Halal Financial Corporation, created last December, works as a partner in home buying while charging fees to maintain profitability.
“Having the ability to be able to fulfil our faith and also invest in a home for the families is great,” said Blanca Lima, who deals with applications as part of the Al Rashid Mosque’s monitoring of the program.
She hopes to one day access the program herself.
“Inshallah, in the future, I would love to use this service for me and my family.”
The arrangement was created in consultation with scholars and lawyers to ensure compliance with both Islamic practice and Canadian law, according to Imam Mahmoud Omar of Al Rashid.
“Everyone was working for the past two years around the clock to finally bring a product that is Islamic compliant and at the same time that protects the investor and our Muslim clients.”
Each transaction is reviewed by the Al Rashid Fatwa committee before funding occurs.
Omar said similar programs exist in other parts of Canada but within Alberta they have not had the same approvals and strict oversight from Muslim leaders.
“I’ve been renting for as far as I remember,” Omar said. “Finally, I can breathe and I can enjoy and I can say, ‘You know what? Now I can own my own house, keep my faith, and I do not have to get involved with riba, with interest.'”
Years in the making
The program is only operating within Alberta for the time being but has already processed hundreds of applications.
Al Rashid has been working for years to find away the financing obstacle that has prevented Muslims from buying a home.
Lukaszuk, a former MLA and deputy premier, and Stainton, a lawyer, are the principal executives at the financing corporation.
“We finally have families who are not renters for their entire life. They can now will out the house to their children and have the sense of pride of owning their own house,” Lukaszuk said.
Unlike an agreement with a bank where repeated failed payments would lead to foreclosure, he said the enterprise has a mediation process through spiritual leaders to resolve issues.
“Our biggest challenge right now is not processing and financing but actually clients are having a hard time finding houses on the market because there’s a shortage,” said Lukaszuk.