Turns out that those of Islamic faith cannot get a loan. According to their faith they are not allowed to pay interest. So they could not buy a home. Now it seems there are banks willing to lend under these circumstances. The way they do it is that they own the home like a lease to own for several years. The bank, not the borrower, buys the house. The borrower makes installment payments to the bank for a period of years, at the end of which he or she gets the title to the house.The market has increased by about 15% in the last couple years as large banks like including Citigroup, HSBC, and Deutsche Bank, have developed programs to serve the special needs of Islamic finance.
Sounds about the same deal to me. Except I wonder if the borrower gets any kind of write off.
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