Question

Assalamu alaykum wa rahmatullahee wa barakahtuh,

Sheikh, my question is regarding buying a home in the U.S.

My current plan to date has simply been to save up money for the next 10-12 years until I have enough money to buy a house in full amount with cash. This solution is not ideal as it would mean $160k-$180k of wasted income spent in renting throughout those 10-12 years, but it was the only halal option that I was aware of.

Recently, however, I have heard of a couple of Islamic financing options in the U.S. Of the ones I’ve looked at, Guidance Residential especially caught my attention because it has Muhammad Taqi Usmani as the Chairman of the Shariah Board. Knowing he is on there gave me a lot of confidence as I trust him since he is a leading scholar.

However, I have heard some comments from members of AMJA (Assembly of Muslim Jurists of America) regarding their Shariah compliance; specifically, they mention that the base contract is sound but that there are some clauses which are not consistent with the Shariah considering that they are offering a Mushaarakah model, such as the fact that they don’t split the taxes, maintenance, insurance, etc based on ownership.

At this point, I’m not sure what to do. I trust Taqi Usmani, but at the same time I don’t know what my responsibility is to verify the Shariah compliance before using it. As a layman, what is my responsibility in researching/understanding the Shariah compliance of Islamic financing institutions, such as Guidance Residential, before using them? Is it permissible for me to use such services?

Would you please provide advice on this matter?

Jazakallahu khayran

Answer

Islamic finance products are usually quite complex and have various components to them. Scholarly bodies will also have their own criteria through which they approve products. For this reason, it is possible that one group of scholars may approve of a certain contract whilst others may have some reservations. The shari’ah advisory board will play a crucial role in your research. In the case in question, there are highly reputable individuals on the board. The first thing to ascertain is whether or not the product you wish to take out has been approved by the members of the board. If it has, then we do not see any problem with taking out that product whilst placing your trust on the shari’ah advisors. If they have not approved that product then you may want to contact the company and the shari’ah advisory team to determine why they have not approved the product.

If you have questions in relation to a particular aspect of the contract you are more than welcome to contact us again.

Answered by:
Ifta Research Fellow

Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel