Fannie Mae to Support Islamic Lender Lariba

December 15, 2002

Source: The San Francisco Chronicle

On December 15, 2002 The San Francisco Chronicle reported that "hoping to encourage homeownership among the growing U.S. Muslim population, Fannie Mae recently agreed to purchase $10 million worth of home loans from Lariba, a small lender in Southern California... Lariba lends money for homes and cars based on Islamic religious principles that prohibit the paying or collecting of interest. Fannie Mae, a quasi- governmental entity that purchases mortgages and sometimes repackages them to sell to investors, said it expects to extend the 12-month agreement... Fannie Mae said the Lariba pact is an example of a larger push among lending institutions to recognize different cultures' approach to money. As recently as four years ago, many mortgage lenders' criteria did not account for the fact that certain groups pool money within families rather than setting up bank accounts; others frequently rent out rooms for extra money or work in seasonal jobs."