Closing On a Dream

May 1, 2009

Author: James Angelos

Source: The New York Times

In 2003, a Bangladeshi Muslim named Zia Hashem took out a loan to buy a condominium apartment in Parkchester, in the Bronx. During the two years he lived there with his wife and young son, he was perpetually uneasy about having borrowed the money.

“There was definitely a guilt,” Mr. Hashem, a 33-year-old systems engineer, said one recent evening after the sunset prayers at Baitul Islam Masjid, a small mosque in University Heights.

Many Muslims believe that paying or receiving interest violates Shariah, or Islamic law. Thus, for Muslims, buying a home in the United States often means violating religious principles.

“The banking system we have here, with the interest, that’s something I don’t believe,” said Mr. Hashem, who that night prayed on the mosque’s green carpet wearing a blue Hawaiian shirt covered with images of palm trees.

Mr. Hashem is now in the market for another house, but this time he plans to use what is called a “Shariah-compliant” system of home financing, an increasingly popular approach that uses various financing methods to sidestep practices Muslims object to.

As the nation’s Muslim population has grown, so has the number of banks and finance companies offering Shariah-compliant home financing options. The practice is less common in New York, due in part to the high cost of housing and the often hefty down payments required. Nevertheless, especially in the boroughs beyond Manhattan, Muslims are increasingly using faith-based financing options to buy houses.