An interesting article on an alternative home financing organization:
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.
A key distinction with Ameen’s form of finance is that, unlike a traditional mortgage company, the cooperative shares risk with the homeowner. If a home’s value increases, they both profit. But if the home loses value, they both take a loss.
And while Ameen addresses interest payments versus affordability, we can’t help but wonder if a similarly structured program wouldn’t make more sense, and be more efficient, than the city’s current “Below Market Rate” (BMR) program.
∙ Islamic co-ops create happy homecomings [SFGate]
∙ BMR Guidelines (San Francisco) [SFGov.org]