You CAN Buy A House Riba-Free – With No Islamic Bank!

May 10, 2009 by hibahmac

Some time ago, a dear sister-friend called me about Sister Hoda at Know Interest, who – with her husband – is sharing with the world via e-book that it IS possible to buy a house riba free and share exactly how they did it – without an Islamic bank.

My friend was skeptical at first and called and spoke directly with Sister Hoda to clarify the information and intent of the site before buying the e-book. Excited and satisfied with what she saw, she called me pronto to let me know. I contacted Sister Hoda, wanting to share this information with you all. AlhamduliLlah, Sister Hoda was kind enough to be interviewed and I’m happy to finally present it to you in two parts.

********************PART ONE********************

On behalf of Muslimah Money Matters, let me express gratitude that you and your husband chose to share your experience of purchasing a home riba-free in an accessible format for the benefit of all through the e-book It’s Your Money. May Allah ta’ala put barakah in your efforts and reward you immensely, amin.

MuslimahMoneyMatters (M$M): Nowadays, buying a home without riba usually means securing one’s “shari’ah-compliant” mortgage through financial organizations such as LARIBA or Guardian. Did you know about these organizations while you were saving for your home and research them? If so, what do you think of them? Why did you and your husband choose the route you shared in It’s Your Money?

Hoda Elkassem (HK):
We researched many Islamic organizations. We read a lot of opinions on such organizations and we were concerned that some scholars believe that some of them may not be 100% halal. We actually had an application for one of the organizations but when we did our calculations the amount of money we would have paid for the house was ridiculous. So even though it may not have been interest that we were paying, the methods they use do involve paying more for the home in some way or another and we didn’t want to do that. We did not want to pay double for our home, it just didn’t make sense to us even if it was halal.

M$M: The e-book begins after you and your husband had already managed to save a substantial amount of money. A question many readers might have pertains to how were you able to amass a great amount of cash in the first place. How many years did it take you two to save adequate funds?

HK: We were able to save 10,000 for our down payment. AlhumduLilah we were able to live in the basement of my in-laws house and did not have to pay any rent or have any bills of any sort. This helped A LOT. If one is able to do that, I suggest they give it a try because you’ll be able to save much faster.

If however that’s not an option then money needs to be set aside every month that will go towards your down payment. This money should be calculated based on your income, and should be at least 10% of your monthly income. Something that I find helps tremendously when saving money is to take out that money at the beginning of the month, right when you get paid, and put that money away. I remember I used to take out cash every month and then put it in my drawer. It’s amazing how much money you can save that way, when it’s out of sight it truly is out of mind. You almost forget the money’s there and it amazingly starts to accumulate.

Although we had 10,000, as we stated in our e-book there was one homeowner willing to take a $5,000 down payment for a $200,000 home. In the end people are desperate to sell and so you should give it a try with whatever money you are able to save. It’s important to remember that when you do it for the sake of Allah, He will Insha’Allah open doors for you from places you would never imagine.

M$M: Allah subhaanuhu wa ta’ala expands and restricts our rizq as He sees fit, of course. Some might say, well of course they could think about buying a house for cash because they’re so educated and probably make plenty of money to spare. But the reality is that no matter how much the income, good management of this trust is key. What were some of your economizing efforts through the years that helped put your family in the position to buy riba-free?

HK: Although we are both educated we lived on a 1-income salary. I was home with my family and did not work at all. You are right though, it doesn’t matter how much or how little you make, if you do not have good management of money then it’s almost impossible to save. As I stated earlier, taking out money every month as soon as you get paid helps. Also, keeping track of your expenses daily helps a lot. When you actually sit and write down how much you’re spending you realize that you may be over doing it on some things. One thing I like to do is figure out how much I think we need for each week and take out that amount in cash. For some reason you’re more conscious of what you spend when you use cash, perhaps because you can keep track of it better…or maybe because it’s harder to part with the cash as opposed to your debit card.

M$M: One admirable part of It’s Your Money is the discussion of riba itself. Usually, the typical argument is ‘riba is haram because it sucks money from the poor and makes the wealthier more wealthy.’ Or, ‘riba allows those who have to take advantage of those who don’t.’ Yet, It’s Your Money skirts all of these arguments – as true as they are – and speaks on a very practical level that is completely non-offensive or judgmental. When considering the da’wah aspect of It’s Your Money, what were the different arguments you considered? How were you able to craft a piece that non-Muslims could run with as well as Muslims?

HK: Everyone was amazed that we were able to purchase our home interest free. Muslims and non-Muslims approached us all the time asking us exactly how we did. When we explained everyone was always shocked by how easy it was and so when putting together the e-book I kept that in mind. I wanted to e-book to be useful guide for both Muslims and non-Muslims to help them stay away from riba and to save them a lot of money. The saving money part was a big help, because whether you are Muslim or non-Muslim, everyone is looking to save money.

********************Stay Tuned for Part Two********************