Mortgage Financing for Muslim Americans

Abstract

Islamic economics is a rapidly growing discipline seeking to redirect
econmomic behavior under the umbrella of Islam. This field combines
malleable modem economic concepts with immutable moral principles in
its attempt to address the economic climate of a given society. The most
significant differences between Islmaic economics and the world’s more
prevalent economic systems are the Islamic ban on rihl (usury) and the
Islamic institution of zakah. The ban on usury is based on the verse:
0 you who believe, fear Allah and give up what remains due to
you of usury if you are indeed Believes. And if you do not, then
be warned of war (against you) by Allah and his messenger,
while if you repent you shall have your capital. Do not wmng
and you shall not be wronged (wan 2:278-9).
This paper addresses mortgage firiancing problems on real property
that Muslims face as a result of Islam’s ban on interest. The United States
has a unique tax system designed to enmurage investment in real property.
Congtess allows property owners to deduct all mortgage interest,
along with operating expenses and depreciation writeoffs, from income
taxes. This is an indirect form of government subsidy ...