Minnesota starts state shari’a loan program.
A handful of private banks and lending institutions offer Islamic mortgages in the U.S., but Minnesota Housing is the first state agency to offer such a product. The program is the brainchild of Hussein Samatar, director of the African Development Center in Minneapolis.
“The process is different, but the outcome will look the same,” Samatar said. “We wanted to be as conventional as possible, while respecting the tenets of Islam.”
Samatar, who used to work for Wells Fargo, tried for years to launch Islamic financing. He said the fact that Minnesota Housing has agreed to participate is a nod to the Muslim community’s growing economic power.
Chicago-based Devon Bank is underwriting the loans for the New Markets program. Devon is one of the largest Islamic lenders in the country. Corporate Counsel David Loundy said he expects the demand for Islamic financing to grow as more Muslims make their home in the U.S. Loundy said Muslims tend to be good risks.