FOR IMMEDIATE RELEASE
MARCH 28, 2001
CONTACT: <A HREF="mailto:[log in to unmask]">[log in to unmask]</A>
or (703) 903-3933
>
FREDDIE MAC INVESTING IN ISLAMIC "MORTGAGES" FROM AMERICAN FINANCE HOUSE
-LARIBA
Islamic Home Finance Model To Help More Families Achieve American Dream In As
Many as 21 States
McLean, VA – Freddie Mac announced today it is investing in home financing
contracts that are acceptable under both Islamic and American law, paving the
way for a major expansion in affordable homeownership opportunities for
observant Muslim families in this country. Freddie Mac has invested an
estimated $1 million in contracts from American Finance House -- LARIBA under
an agreement that makes it the nation's first Islamic financial institution
to achieve Freddie Mac Seller/Servicer status.
Observant American-Muslim families require a special housing contract because
Islamic religious law prohibits the payment of interest on mortgages and
other types of debt. American Finance House -- LARIBA is the Pasadena,
Ca.-based institution that developed a Home Finance model for the
American-Muslim community.
"Today's announcement is a milestone. It shows how Freddie Mac and its lender
partners continue to explore new ways to help diverse communities, like the
American-Muslim community, take advantage of homeownership opportunities in
America," said Saber Salam, vice president of customer strategies and
offerings at Freddie Mac. "By supporting Islamic model mortgages, Freddie Mac
is realizing its mission to foster homeownership opportunities in new and
exciting ways."
"Today's news is historic. Many American-Muslim families have stayed out of
the housing market for years because they are not allowed by Islamic
jurisprudence to pay, receive or be charged interest," said Dr. Yahia
Abdul-Rahman, the expert on Islamic Banking and Finance who founded American
Finance House -LARIBA in 1987. "Working with Freddie Mac will provide
American
Finance House - LARIBA with much needed liquidity to meet the growing demand
for Islamic Home Financing in the American-Muslim community. This also will
provide, in the near future, members of the community, who want to invest
their savings according to Islamic law, with proper Islamically- sanctioned
investment instruments."
The Islamic housing finance model uses standard real estate financing
documents, in accordance with state and local law, and is serviced like a
conventional Freddie Mac mortgage. The key to the model is an agreement
between American Finance House - LARIBA and the prospective homeowner that
establishes jointly negotiated maximum monthly payments based on the
property's sale price and fair rental value that mark the property to the
market.
In addition to American Finance House - LARIBA, Freddie Mac is working with
other lenders to meet the need for Islamic home financing in America.
"I want to applaud Freddie Mac and American Finance House- LARIBA for this
important step in making homeownership more available to a rapidly growing
new community in America," said Frank Sharry, executive director of the
National Immigration Forum, a Washington, D.C. -based immigration coalition.
"Becoming a homeowner, perhaps more than any other event, marks the moment
when those who are new to the American community feel that they are truly at
home."
Islamic home financing through >American Finance House - LARIBA</A> is currently
in 15 states Arizona, California, Colorado, Florida, Georgia, Illinois,
Maryland, Massachusetts, Michigan, Minnesota, New Jersey, Oregon, Texas,
Virginia and Washington. Availability is pending in six more states: Alabama,
Connecticut, Nevada, North Carolina, Pennsylvania, and Ohio. (More
information on American Finance House-LARIBA, can be founded at
www.LARIBA.com).
Freddie Mac is a stockholder-owned corporation chartered by Congress in 1970
to create a continuous flow of funds to mortgage lenders. By supplying
lenders with the money to make mortgages and packaging the mortgages into
marketable securities, Freddie Mac sustains a stable mortgage credit system
and reduces the mortgage rates paid by homebuyers. Over the years, Freddie
Mac has opened doors for one in six homebuyers in America.
>>>
Conventional Mortgage Home Price Index
Q4 2000 Release
All Entries Are Percent Changes
New England
Middle Atlantic
South Atlantic
East South Central
West South Central
West North Central
East North Central
Mountain
Pacific
The United States
Quarterly Change
2.95
2.13
2.35
1.99
1.47
1.63
1.30
2.13
2.89
2.03
Q3 2000-Q4 2000
Annualized
12.35
8.78
9.72
8.22
6.01
6.70
5.30
8.81
12.07
8.38
Quarterly Change
Q3 2000-Q4 2000
14.17
9.30
8.13
5.28
6.65
8.19
6.44
8.27
11.97
8.41
Annual Change
Q4 1999-Q4 2000
44.31
28.63
29.23
26.97
26.82
35.82
32.52
30.57
37.92
32.04
5-Year Change
Q4 1995-Q4 2000
Annualized
7.61
5.16
5.26
4.89
4.87
6.31
5.79
5.48
6.64
5.72
5-Year Change
Q4 1995-Q4 2000
Source: Freddie Mac
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© 1997 Freddie Mac, revised 2001
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