Non-Traditional Financing Expands Access in New Markets
Some people are not able to finance the purchase of a home because their religious practices forbid them from paying interest. These include:
- Orthodox Jews who cannot pay interest to, or take interest from, other Jews
- Members of the Hmong community originally from Southeast Asia
- Some Muslim borrowers who cannot pay interest under any circumstances
However, some lenders are finding ways to help them purchase a home without paying interest. This article describes how two financial institutions address the challenge for Muslim homebuyers in ways that could also be used to help other groups.
Managing the Cultural Divide
Stephen Ranzini, president of Michigan-based University Bank, found some Muslim clients didn’t feel that they could use a traditional bank but were still interested in buying a home.