Conventional and Islamic finance of home purchase : Ijarah loan structure in Canada

السؤال

[Question One] : Wa'alaikum Assalamu and Jazakallahu Khairan for your fast response, unfortunately, in Canada there is currently only one Islamic financing program operating (the rest have run out of capital), and that one is extremely unaffordable in terms of down payment. We could never save enough for it. Ijarah Loans (www.ijaraloans.com) is now operating and has a conversion product in our province. Please take a look and let me know what you think. I will also paste some of our exchange with the company : I was hoping to get more information the mortgage conversion program in Canada... ? [Question Two] : Assalamualaikum Br. Monzer, Hope you are doing well In Sha Allah. I got your email from your website. I live in California and I would like to know if "Ijarah Wa Iqtina" contracts are Islamically permissible for home loans ? (I'm sure it depends on the specifics of each contract-but I'm wondering if "Ijarah Wa Iqtina" is permissible in general as a contract to purchase a home) Also, is there a preferred method ? Meaning is for example Musharakah a more preferred method than Ijarah Wa Iqtina from an Islamic perspective ? Thank you very much. Wassalam [Question three] : Jazakallah Khair Dr. Monzer. Below is a summary of two types of financing. Would you say both these ways are equally permissible (even if I am not in hardship-basically I can rent instead of buy if necessary) ? Ijarah Wa Iqtina 1. Buyer selects property 2. Buyer pays the "on-account payment" (down payment) 3. Independent trust holds the title to the property 4. The house is leased to the buyer. The lessee pays monthly rent to the trust. The trust pays the real estate, property taxes on behalf of the property and adds that the monthly rent. 5. At the end of the lease (usually 30yrs) the title is transferred to the lessee for a fee of $1.00 (By the way, is the $1.00 at the end allowed Islamically ?) 6. If the lessee would like to sell the house the trust is informed and an arrangement is made to sell the house (the trust transfers title to the lessee so the house can be sold and the "owner" (in this case the lessee becomes the owner who takes the full gain or loss on the property.). If the house is sold at a profit, the lessee keeps 100 % of the profit. If there is a loss, the lessee bears the first loss. Musharakah type (Declining Ownership)-maybe it is called something different 1. Buyer selects property 2. The buyer and co-owner form a partnership 3. Both buyer and co-owner buy the home together - each having the share they put into the property as the down payment amount 4. The buyer makes monthly payments to the partnership. Part of the payment is a "utility fee" to use the home and rest to increase the buyers share in the partnership 5. Over the course of time the buyer buys the entire share of the property and becomes full owner of the property... ?

جواب الفتوى

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تاريخ النشر

2009-05-05

التخصصات الرئيسية

العلوم المالية و المحاسبية
الدراسات الإسلامية

الموضوعات

• الفقه الإسلامي
• الإسلام
• التأجير
• التمويل
• القروض
• الشراء

عدد الصفحات

4

نوع البيانات

فتاوى

لغة النص

الإنجليزية

رقم السجل

BIM-734890

• APA
• MLA
• AMA