New Sharia Compliant Mortgages for African Muslims

In late January 2009, the African Development Center in Minneapolis closed its first Sharia compliant residential mortgage. This is the first deal of its kind in the country with a community economic development organization as the lead agency. It allows new homeowner Nawawi Shiekh and his family to finance their home while staying faithful to Muslim law which prohibits charging or paying interest.

For Muslims, one of the biggest barriers to securing a mortgage is Islamic law, or Sharia, which prohibits the charging of interest. They can’t accept interest-based financing. This has been a problem for the growing African Muslim population in the Twin Cities, some of whom are industrious entrepreneurs who want to own homes. The center already provided a Sharia compliant business lending program, but until now, they haven’t offered a similar home mortgage option.

To meet the unique needs of this underserved segment of the housing market, the center worked with Minnesota Housing and Devon Bank of Chicago to secure financing for the mortgage. First-time homebuyer Shiekh also received counseling through the center’s Homestretch program.

Although this mortgage deal took place in the Twin Cities, the African Development Center serves African immigrants throughout the state, and hopes to bring many more happy endings for prospective homeowners through its innovative new mortgage program—building stronger Minnesota communities in the process..