Housing Financing in Islamic Law A Study of some products for Housing Financing and applicable to Islamic Law

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Housing Financing in Islamic LawA Study of some
products for Housing Financing and applicable to
Islamic Law

• Dr. Salah Fahd Al-ShalhoobAssistant
  ProfessorDepartment of Islamic and Arabic
  Studies King Fahd University of Petroleum and
  Minerals writer in Aleqtisadia Newspaper
  E-mail sshalhoob_at_hotmail.com

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Introduction

• The aim of study
• Importance of the study
• The concept of housing finance

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The aim of study

• To overview the forms of housing finance which
  are offered the financial institutions as forms
  which applicable to the principles of Islamic law

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Importance of the study

• The Muslims needs of a place to live
• Many people today can not afford buying houses by
  cash
• Find out a way to finance Muslims without being
  involved in a conventional mortgage

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The concept of housing finance

• Housing finance is considered as contracts
  provided by the financial institutions for the
  purpose of personal finance to buy properties.
  There are many contracts have been discussed
  under the concepts of Islamic finance, such as
  mark up (al-murabaha), partnership
  (al-musharaka), al-istisna and leasing
  (al-ijara). And we can derive from the contracts
  some products to finance people to get properties
  under the concept of Islamic law.

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Forms of housing finance

• Deferred Sales (bay al-muajal)
• Mark-up (al-murabaha)
• Diminution partnership (al-musharaka
  al-mutanaqisa)
• Commission to manufacturing (al-istisna)
• Leasing ending with ownership (al-ijar al-muntahi
  bi al-tamlik)

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Deferred Sales (bay al-muajal)

• Sales divisions in terms of time of payment
• Ordinary
• Forward
• Deferred
• Ruling of deferred sales
• Scholars views in increasing the price due to
  deferment

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Sales divisions in terms of time of payment

• Ordinary sales
• Forward sales
• Deferred sales

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Ordinary sales
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Forward sales
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Deferred sales
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Ruling of deferred sales

• The general permission of sales
• The prophet practiced it

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Scholars views in increasing the price due to
deferment

• The majority say it is permissible
• The minority say it is prohibited

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Mark-up (al-murabaha)

• Definition of mark-up
• Simple form of mark-up
• Mark-up the orderer of the purchase

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Diminution partnership (al-musharaka
al-mutanaqisa)
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Commission to manufacturing (al-istisna)

• The concept of commission to manufacturing
  (al-istisna)
• al-istisna wa al-istisna al-muwazi

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The concept of commission to manufacturing
(al-istisna)
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al-istisna wa al-istisna al-muwazi
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Leasing ending with ownership (al-ijar al-muntahi
bi al-tamlik)

• Concept of Leasing ending with ownership (al-ijar
  al-muntahi bi al-tamlik)
• Categories of Leasing ending with ownership
  (al-ijar al-muntahi bi al-tamlik)
• Ruling leasing ending with ownership (al-ijar
  al-muntahi bi al-tamlik)

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Categories of Leasing ending with ownership

• leasing ending with ownership by way of gift
  (hiba)
• leasing ending with ownership through transfer of
  title at the end of the lease for a token
  consideration or at a nominal price
• leasing ending with the ownership through sale
  prior the end of the lease term for a price that
  is equivalent to the remaining leasing (al-ijara)
  instalment

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Ruling leasing ending with ownership

• The contract under the concept of two
  transactions combined in one.
• The difference between al-muntahi bi al-tamlik
  and al-wad bi- al-tamlik.
• Scholars view in leasing ending with ownership.

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Thanks for you for Al-eqtisadia Newspaper for
the sponsorship

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• Dr. Salah Al-Shalhoob
• sshalhoob_at_hotmail.com