Anyone know any halal friendly or sharia hard money lenders?

Specialist · Piscataway, NJ · Member since 2019 · 15 posts · 8 votes

Anyone know any Halal friendly or sharia hard money lenders. If not, any lease to own lenders for income generating buy and hold deals?

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Jason D.

Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes

@Nelressa Faye I don't know if a Hard money lender could be sharia approved, but I do know that the University Bank of Michigan does traditional loans that are sharia approved.

This is a good resource for Islamic funding. They may be able to help as well....

https://ijaracdc.com/

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Mike Carpenter
Virtual Assistant · Keizer, OR · Member since 2015 · 16 posts · 6 votes
7y
NO
0 Reply
Dennis M.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
7y
They are all going to want interest on their money . Something old allah would be most unhappy about ! People charge interest for a reason
3 Reply
Jason D.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
@Nelressa Faye I don't know if a Hard money lender could be sharia approved, but I do know that the University Bank of Michigan does traditional loans that are sharia approved.
This is a good resource for Islamic funding. They may be able to help as well....
https://ijaracdc.com/
7 Reply
Andrew SyriosPro Member
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Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
7y
Doesn't Sharia Law prohibit charging interest?
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Jason D.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
@Andrew Syrios technically, it forbids paying or receiving interest.
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Nelressa Faye
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Specialist · Piscataway, NJ · Member since 2019 · 15 posts · 8 votes
7y
Originally posted by @Jason D.:

@Nelressa Faye I don't know if a Hard money lender could be sharia approved, but I do know that the University Bank of Michigan does traditional loans that are sharia approved.
This is a good resource for Islamic funding. They may be able to help as well....
https://ijaracdc.com/
Thank you for your response I will reach out to this one.
0 Reply
Nelressa Faye
OP
Specialist · Piscataway, NJ · Member since 2019 · 15 posts · 8 votes
7y
Originally posted by @Andrew Syrios:

Doesn't Sharia Law prohibit charging interest?
Yes that's correct. Usually, the lender should charge a flat rate upfront or something like that.
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Nelressa Faye
OP
Specialist · Piscataway, NJ · Member since 2019 · 15 posts · 8 votes
7y
Originally posted by @Dennis M.:

They are all going to want interest on their money . Something old allah would be most unhappy about ! People charge interest for a reason
When I lived in Dubai I received loans and paid them back but I'm not sure how it works here.
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Tiffany Griggs
Investor · Hinesville, GA · Member since 2017 · 16 posts · 4 votes
7y
I currently live in Dubai and I can assure you, banks do charge interest on their loans. It's not very much, but they do.
1 Reply
Benjamin Piecenski
Lender · Columbus, OH · Member since 2019 · 114 posts · 61 votes
7y
For those curious on how Islamic Financing works, here's a great, informative article that I found really interesting. https://www.investopedia.com/articles/07/islamic_investing.asp
4 Reply
Lance Bloggs
Homeowner · Wilmington DE · Member since 2008 · 21 posts · 10 votes
7y
There are definitely lenders out there who are not charging interest in the traditional sense. Islamic lenders specialize in this. The lender does earn a return. More of shared-risk shared-reward structure. It is a niche yet a very large niche.
It might be best to speak with people who are practicing Muslims and otherwise well connected in the community. Much easier to when you start with people who understand the question.
One way a friend does this (not USA based) is to set up joint ventures.
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Nelressa Faye
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Specialist · Piscataway, NJ · Member since 2019 · 15 posts · 8 votes
7y
@Tiffany Griggs I’m sorry you paid interest but luckily I didn’t. (Technically it’s haram ursury for Jews and muslims) Also, I found three here in US and got pre approved, alhumdililah.
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Nelressa Faye
OP
Specialist · Piscataway, NJ · Member since 2019 · 15 posts · 8 votes
7y
There is UFI and Whittier bank in California. Any person can get one no matter the faith or beliefs.

Originally posted by @Benjamin Piecenski:

For those curious on how Islamic Financing works, here's a great, informative article that I found really interesting. https://www.investopedia.com/articles/07/islamic_investing.asp
0 Reply
Nelressa Faye
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Specialist · Piscataway, NJ · Member since 2019 · 15 posts · 8 votes
7y
@Lance BloggsThanks I appreciate it.
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Nelressa Faye
OP
Specialist · Piscataway, NJ · Member since 2019 · 15 posts · 8 votes
7y
@Andrew Syrios Yes, that’s correct
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Faraad Mohamed
Specialist · Houston, TX · Member since 2015 · 55 posts · 21 votes
6y
Hey @Nelressa Faye, I am looking for halal hard money financing as well. I called Bank of Whittier in California and Dallas and they said they don't provide that type of financing. Could you please share the information you were able to come up with? I have several investors down in the Houston area looking as well
1 Reply
David Smith
Member since 2018 · 42 posts · 16 votes
6y
I was looking for a halal mortgage company and went with Guidance Residential. They are trying to be halal but really just selling the loan just like any other bank. At least they are trying. My friend wanted to lend me the money for my investment property at the same interest rate as Guidance and I would pay him a fixed rate monthly and we would both own the property until I pay it off. But when we did the math he would be getting a 2.5% year over year return for 30 years. That's more like a charity. That's not an investment.

Financially, it is simply impossible for a halal lender to compete in the worldwide financial system. A system based on infinite borrowing until some point in the future when the whole system collapses and we switch to a new (and most likely digital) currency backed by precious metals. I guess an Islamic system that would allow halal lending only would be more stable and the little guys don't get screwed (think balloon payments in 2008).
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Rameez Balagamwala
Houston, TX · Member since 2017 · 18 posts · 10 votes
5y
My family and I have gotten over 10 mortgages with University Islamic Finance for home and investment properties. You don't have to be Muslim to use this lender, by the way.
The main difference is that you don't borrow "money ", but instead buy the property from the lender over 360 payments, and the price of the property is marked up - this is the "profit" they charge. You have the rights to sell the property, and the remaining profit will be waived. Mathematically, it is equivalent to traditional financing.
The main difference is: you can never cash-out your equity with this contract. The only way to cash out your equity is to sell the property.
I can't think how hard money can be sharia compliant.. sharia restricts money from being a commodity: any added risk must accompany added value.
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- Sino U.
  Member since 2023 · 38 posts · 28 votes
  1y
  Quote from @Rameez Balagamwala:
  
  My family and I have gotten over 10 mortgages with University Islamic Finance for home and investment properties. You don't have to be Muslim to use this lender, by the way.
  The main difference is that you don't borrow "money ", but instead buy the property from the lender over 360 payments, and the price of the property is marked up - this is the "profit" they charge. You have the rights to sell the property, and the remaining profit will be waived. Mathematically, it is equivalent to traditional financing.
  The main difference is: you can never cash-out your equity with this contract. The only way to cash out your equity is to sell the property.
  I can't think how hard money can be sharia compliant.. sharia restricts money from being a commodity: any added risk must accompany added value.
  
  Salam Alaikum Rameez. Was wondering if there is any limit on how many properties you can buy with them? I have read that its limited to around 4?
  0 Reply
- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  1y
  Quote from @Rameez Balagamwala:
  
  My family and I have gotten over 10 mortgages with University Islamic Finance for home and investment properties. You don't have to be Muslim to use this lender, by the way.
  The main difference is that you don't borrow "money ", but instead buy the property from the lender over 360 payments, and the price of the property is marked up - this is the "profit" they charge. You have the rights to sell the property, and the remaining profit will be waived. Mathematically, it is equivalent to traditional financing.
  The main difference is: you can never cash-out your equity with this contract. The only way to cash out your equity is to sell the property.
  I can't think how hard money can be sharia compliant.. sharia restricts money from being a commodity: any added risk must accompany added value.
  
  i have been doing these for investors for years since the early 80s.. there is an easy way to work these..
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Safiyyah Amina Muhammad
Member since 2024 · 1 post · 0 votes
2y
Quote from @Rameez Balagamwala:

My family and I have gotten over 10 mortgages with University Islamic Finance for home and investment properties. You don't have to be Muslim to use this lender, by the way.
The main difference is that you don't borrow "money ", but instead buy the property from the lender over 360 payments, and the price of the property is marked up - this is the "profit" they charge. You have the rights to sell the property, and the remaining profit will be waived. Mathematically, it is equivalent to traditional financing.
The main difference is: you can never cash-out your equity with this contract. The only way to cash out your equity is to sell the property.
I can't think how hard money can be sharia compliant.. sharia restricts money from being a commodity: any added risk must accompany added value.

Jazakallahu Khair for that helpful information.
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William Stephen Uren
New to Real Estate · Sugar Land, TX · Member since 2024 · 2 posts · 5 votes
1y
Any more recent information related to this query?
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