Freddie Mac to aid in financing for Muslim homes

Real Estate Watch

April 01, 2001

Freddie Mac, the quasi-government corporation that buys and sells mortgages on the secondary market, said it will invest $1 million in home financing contracts from an Islamic financial institution in a move to bolster homeownership among American-Muslim families.

American Finance House-Lariba, based in Pasadena, Calif., developed a home finance model for families who are prohibited by Islamic religious law from paying interest on mortgages or other kinds of debt.

The model allows the prospective homeowner to establish a jointly negotiated maximum monthly payment based on the property's sale price and rental value.

It incorporates standard real estate financing documents that are in accordance with state and local law in 15 states, including Maryland, and the program is pending in six more states.

Freddie Mac said that American Finance House is the first Islamic financial institution to achieve the status of a seller/servicer with the company.

More information is on the Internet at www.lariba.com.

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