Abstract

http://ssrn.com/abstract=2177255
 


 



Islamic Home Purchase Financing: A Conceptual Overview


Michael J. T. McMillen


Curtis, Mallet-Prevost, Colt & Mosle LLP; University of Pennsylvania Law School

November 17, 2012


Abstract:     
This paper provides a simple, generic introduction to, and survey of, the transactional structures and rudimentary principles applicable to Shari`ah-compliant home purchase financings. The paper summarizes six of the most frequently used home purchase financing structures used by banks and financial institutions that provide Shari`ah-compliant alternatives. They are: (a) the lease (ijara); (b) the diminishing partnership or diminishing musharaka (musharaka mutanaqisa); (c) the cost-plus sale (murabaha and tawarruq); (d) the deferred payment sale (bay' bithaman ajil); and (e) the two-tier construction contract financing (istisna'a - parallel istisna'a).

Number of Pages in PDF File: 22

Keywords: Islamic finance, Shariah, Home Purchase, Financing, Lease, Ijara, Partnership, Musharaka, Murabaha, Tawarruq, Bay Bithaman Ajil, Istisna'a

JEL Classification: K11, K33, K30, L85, N15, N25, O53, P43, R21, F23, F34, F36, G15, G21, G32, H54

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Date posted: November 18, 2012  

Suggested Citation

McMillen, Michael J. T., Islamic Home Purchase Financing: A Conceptual Overview (November 17, 2012). Available at SSRN: http://ssrn.com/abstract=2177255 or http://dx.doi.org/10.2139/ssrn.2177255

Contact Information

Michael J. T. McMillen (Contact Author)
Curtis, Mallet-Prevost, Colt & Mosle LLP ( email )
101 Park Avenue
35th Floor
New York, NY 10178-0016
United States
+1-212-696-6157 (Phone)
University of Pennsylvania Law School ( email )
3400 Chestnut Street
Philadelphia, PA 19104-6204
United States
1-914-722-6374 (Phone)
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