How Ijara Works
Our IjaraTM Home Financing Program was created by a Board of Internationally recognized Shariah Scholars and has been available since 1996. The program complies with Islamic Finance Guidelines and is free of both types of Riba and also Gharar.
The program is called “Lease to Purchase” (Ijara wa Iqtina). The Lease to Purchase or Lease to Own contract blends many of the concepts used by traditional lending institutions. The architects of the Ijara Contract used here were guided by three basic principles:
To create interest/riba-free financing.
To retain the income tax deductibility benefits of the traditional home mortgage.
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For devout Muslims, Sharia law prohibits mortgages because of the prohibitions on interest and unequally shared risk. The Ijara-wa-Iqtina (lease and ownership) process allows Muslims to create a rent-to-own agreement in which the home’s inhabitant becomes a renter, thus abiding by Sharia principles.
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The Sharia contract “Lease to Purchase” is owned and copyrighted by Samad-Ijara Home Financing, LLC, which is also the master licensee for the US. Ijara Marketing, LLC may license the program to other financial organizations that might be interested in meeting the needs of the Muslim market in the United States. www.Ijaraloans.com, www.ijaracdc.com, and www.ijaracdc.com are owned and operated by Ijara Community Development Corporation, a Michigan Non-Profit Corporation. A complete history is available on our site.