Seattle mayor proposes Sharia law-compliant home loans
Posted on Tuesday, July 28, 2015 at 5:45:26 PM
The Seattle mayor has offered a proposal to make housing in the city more affordable, including one idea that would make obtaining residential financing easier for some Muslims.
Mayor Ed Murray suggested offering home loans that are compliant with Sharia law, an Islamic legal framework that prohibits Muslims from paying interest on loans. This makes traditional mortgages tough to get for individuals who comply with this set of religious laws.
"Some Muslims are unable to use conventional mortgage products due to religious convictions," Murray explained in the proposal.
An estimated 200 Muslims in Seattle avoid home loans because paying interest is against their religious beliefs, according to the Christian Science Monitor. Countries around the world have developed their own sets of Sharia-compliant laws that allow for financing in a form of Islamic bonds called sukuk.
"Islamic finance in general has benefited from the financial crisis largely because Islamic institutions have done better than the conventional ones," Ibrahim Warde, an Islamic finance expert at Tufts University, told USA Today. "One of the fundamentals of Islamic finance – beyond not just charging interest – is there must be a direct connection in between the financial product and the real economy. That's made it more attractive."
The Seattle mayor's proposal would bring this sort of financing to the Washington city, allowing current and future Sharia-compliant Muslims there to seek residential financing.