Islamic Co-ops Create Happy Homecomings

November 1, 2006

Author: Carolyn Said

Source: San Francisco Chronicle

It's hard enough to buy a house in the Bay Area. But some devout Muslims face an added obstacle -- they interpret the Quran to prohibit paying interest, which keeps them from taking out a standard mortgage.

That was the situation for Ajaz Khan of Santa Clara, who wanted a home for himself, his wife and three children but was determined to observe the Quranic ban against riba, or usury.

Khan, a native of Pakistan who has been in the United States since 1982, was resigned to being a renter even though his job as a systems engineer at Lockheed gave him the financial wherewithal to become a homeowner -- but not the means to pay cash.

"My wife was worried because she sometimes felt that we would not be able to buy a house ever," he said. "I always felt that, I don't have to own a house, it's not a requirement as long as I have a shelter. But it would be nice to own a house."

Then he discovered a small cooperative in Santa Clara formed expressly to help Muslims purchase homes without paying interest.

Ameen Housing Cooperative, founded in 1986, has helped 22 families buy homes in Silicon Valley and one family buy in Sacramento through a rent-to-own plan that avoids interest but still allows the cooperative to make a profit, in keeping with Quranic law.