Barakah Mortgage is the halal home financing division of Guaranteed Rate, Inc., the Chicago lender that now trades as Rate and holds NMLS license number 2611. It offers one product, a Murabaha installment credit sale reviewed by a three-scholar Resident Advisory Board, and it is the first US halal home financing program run inside a top-tier conventional mortgage company. This review explains how the contract works, what Barakah publishes and what it does not, where it is licensed, how it compares with Guidance Residential and UIF, and who should choose it. Start with the halal home financing hub if you are new to Islamic mortgages.
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What Barakah Mortgage is and who stands behind it
The legal entity is Guaranteed Rate, Inc. doing business as Barakah Mortgage, headquartered at 3940 North Ravenswood Avenue in Chicago, the same address as Rate itself. The site's About page credits founder Abdihakim Ali, who heads national sales, with building the program after years in conventional mortgages, and lists Junaid Iqbal as Division President. Our Barakah Mortgage provider profile records the launch as October 2025. The site itself does not state a founding date, though several homepage testimonials are dated roughly a year old and refer to the team by an earlier name, Mubarak Mortgage, which suggests the operation predates the Barakah brand.
That corporate backing is the headline difference from every other US halal provider. Guidance Residential and UIF are specialist Islamic finance companies; Barakah is a division of a national lender with its own underwriting, processing and technology. The site describes the arrangement as combining a scholar-guided Murabaha structure with 'the technology and operational support of RATE.' In practice that means your application, disclosures and closing run on Rate's systems.
How the Murabaha contract actually works
Murabaha is a cost-plus sale. Barakah acquires the home from the seller, then sells it to you for the disclosed acquisition cost plus an agreed profit, payable in installments. The site's How Murabaha Works page is specific about sequencing: Barakah must obtain legal and constructive ownership of the property before the Murabaha sale to you is completed, and the acquisition arrangements and the resale are separate contracts. Title transfers to you at closing, subject to a security instrument. There is no ongoing co-ownership and no rent component, which distinguishes it from the diminishing musharakah model used by Guidance and UIF.
The product disclosure that appears on every page names the documents: a Temporary Agency Agreement (the Fatwa page calls it a Wakala Temporary Agency Agreement), a SHAPE Installment Credit Sale Contract (Murabahah), and a Security Instrument, plus all other state and federally required documents. The agency agreement is how Barakah uses you as its agent to arrange the purchase before it buys and resells the property to you. The disclosure also states plainly that 'the buyer makes monthly payments of cost plus profit on an installment loan, but does not pay interest.' For a fuller walk-through of what these documents look like at the closing table, see the halal mortgage contract explainer.
- You identify an eligible property and begin the financing process with Barakah.
- Barakah acquires legal and constructive ownership of the property from the seller.
- Your Murabaha documents disclose Barakah's acquisition cost and the agreed profit, which together set the sale price and payment terms.
- Barakah sells the home to you at the cost-plus-profit price; you receive title at closing and pay the agreed installments.
Who reviewed the structure
Barakah names three scholars on its Resident Advisory Board page. Joe Bradford is an AAOIFI Certified Shariah Adviser and Auditor who also serves as resident scholar at the Islamic Da'wah Center in Houston and as Chief Sharia Officer for NylaBank. Sheikh Hassan Jama holds a BA in Islamic Studies from the Islamic University of Minnesota and is a certified participant of the Assembly of Muslim Jurists of America. Shaykh Abdullah Ashraf holds a Master of Arts in Comparative Fiqh from the Islamic University of Madinah, is a 2026 Certified Shari'ah Adviser and Auditor, and serves as Imam at El Farouq Islamic Center in Houston.
Two fatwa documents are listed. One dated August 1, 2025 reviews the updated SHAPE Installment Credit Sale Contract (Murabahah) and Security Instrument, the standardized documents licensed from the consultancy SHAPE. The second, dated December 10, 2025, is Joe Bradford's review of the full Barakah offering: the Wakala Temporary Agency Agreement, the SHAPE contract, the security instrument and the required state and federal disclosures. Ask your advisor for copies of both before you sign; the site lists them but you should read the actual rulings.
What is published about pricing, fees and down payment
Very little, and that is the main weakness of the offering as of October 2026. The homepage promises 'market competitive rates' and 'transparent cost-plus pricing designed to stay in step with the market.' The FAQ says the profit rate 'is influenced by current market conditions, the selected financing option and the applicant's financial and property profile' and that the profit, purchase price and payment terms are disclosed before closing. No profit rate, origination fee, processing fee or rate sheet is published anywhere on the site. The footer carries a standard disclaimer that savings vary and tells you to contact Barakah for current rates.
Down payment and credit score are both described as varying by program and applicant, with no minimums stated. Eligible properties may include single-family homes, townhouses, condominiums and properties with up to four residential units. Refinancing is allowed as a new contract that pays off the old one, and early payoff 'may be available according to the terms of the financing agreement,' with a payoff statement to be requested first. Because none of this is published, treat Barakah as quote-only and use our guide to comparing halal mortgage quotes to request the same numbers from two other providers on the same day.
Where Barakah Mortgage is available
The States We Serve page says state-by-state pages are 'coming soon' and asks you to submit your state so an advisor can call. The footer states the site is not authorized by the New York State Department of Financial Services and that no applications for New York properties will be accepted through it. The same footer lists state-specific license lines for Guaranteed Rate in Arizona, California, Colorado, Georgia, Massachusetts, New Hampshire, Ohio, Oregon, Pennsylvania, Rhode Island and Washington, but that is the parent company's standard disclosure, not a list of where Murabaha is offered. Before relying on availability in your state, search NMLS Consumer Access for license 2611 and ask the advisor in writing whether the Murabaha product is live there. The halal mortgage states hub tracks which providers operate where.
How the Rate relationship works, and what is not disclosed
Rate supplies the infrastructure: the online application, document upload, underwriting and closing operations. The SMS consent language on the contact form is Rate's own, including an arbitration clause, which tells you that the customer agreement is with Guaranteed Rate, Inc. Three things a careful buyer would want to know are not addressed anywhere on the site: who services the contract after closing, whether Barakah sells or securitizes Murabaha contracts to investors, and whether the contracts are eligible for purchase by Freddie Mac or Fannie Mae the way Guidance Residential's are. The absence of those answers is not a Shariah problem in itself, but it affects what happens to your payments and who you call if something goes wrong. Ask directly and get the answer in writing.
Barakah vs Guidance Residential vs UIF
The two established providers it will be measured against both use a diminishing musharakah (co-ownership) structure rather than a sale. Guidance Residential is the largest US halal provider, and University Islamic Financial is an AAOIFI institutional member. The table draws on each company's own site.
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| Feature | Barakah Mortgage | Guidance Residential | UIF |
|---|---|---|---|
| Structure | Murabaha installment credit sale; title to buyer at closing | Declining balance co-ownership (diminishing musharakah) | Diminishing musharakah partnership program |
| Parent | Guaranteed Rate, Inc. (Rate), NMLS 2611 | Independent specialist, Reston, Virginia | Independent specialist, Southfield, Michigan |
| Shariah oversight named on site | Resident Advisory Board of three scholars; fatwas dated August and December 2025 | Shariah Supervisory Board chaired by Mufti Taqi Usmani | AAOIFI institutional member; Shariah board listed on site |
| States | Not published; New York excluded; check NMLS 2611 | 35 or more states listed on site | 30 or more states listed on site |
| Minimum down payment published | No | Yes: as low as 3% to 5% on a primary residence, 20% on investment property | Program-dependent; confirm with UIF |
| Published pricing | No; quote-only | Rates on request; late fee capped at $50 per its site | Quote-only; no monthly LLC fee |
| Track record | Division launched 2025; parent lender long established | Over $10 billion funded for 40,000-plus families per its site | Decades of operation; AAOIFI member |
The structural difference matters to some buyers more than others. In a co-ownership model, the provider holds a share of the home and you buy it out over time while paying a usage charge on the provider's share. In Barakah's Murabaha, the price is fixed at closing and you simply owe installments; there is no rent and no shared ownership, which some scholars prefer and some buyers find simpler to understand. Our Guidance Residential review is the detailed benchmark, and the halal mortgage versus conventional comparison explains how both structures differ from an interest-bearing loan.
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Early track record caveats
Barakah is new. Its Shariah documentation dates from 2025, its state pages are unbuilt, and there is no multi-year public complaint record for the division. The homepage testimonials are positive and name specific loan officers, several of whom are also named in reviews that predate the rebrand, but they are curated by the company. If you want independent signals, search the CFPB consumer complaint database for Guaranteed Rate and read the mortgage origination complaints, keeping in mind that they cover the whole company and not the Murabaha program. Also ask whether the loan officer you are assigned has closed Murabaha files personally; the contract sequence is different from a conventional loan and a first-time Murabaha officer can delay a closing.
Questions to ask a Barakah advisor before you apply
- What is the profit rate, the total Murabaha sale price and the monthly installment for my scenario, in writing, with a Loan Estimate?
- Which fees are charged at closing and which are built into the profit?
- Is the Murabaha product live in my state today, and under which license?
- Who services the contract after closing, and does Barakah sell or securitize contracts?
- Can I see the August 2025 and December 2025 fatwas and the full SHAPE contract before I commit?
- What happens on early payoff, and is any part of the undisclosed future profit rebated?
- How many Murabaha closings has my assigned advisor completed?
Verdict: who should choose Barakah Mortgage
Choose Barakah if you want a fixed-price Murabaha sale rather than a co-ownership arrangement, you value the processing speed and systems of a national lender, and you are prepared to obtain a written quote because nothing is published. The scholar board is credible and the contract documents are named clearly, which is more than many new entrants offer. Choose Guidance Residential instead if you want published down payment minimums, a long public track record and the widest state coverage, and UIF if AAOIFI membership and the partnership structure matter more to you than brand. Whichever you pick, get quotes from at least two providers on the same day and compare total cost over the term, not the headline rate. Facts checked against barakahmortgage.com, guidanceresidential.com and uif.com on September 9, 2026.
Frequently asked questions
Is Barakah Mortgage halal?
Barakah's Murabaha product is structured as a cost-plus sale rather than an interest-bearing loan, and it is reviewed by a three-scholar Resident Advisory Board including AAOIFI-certified adviser Joe Bradford, with fatwas dated August 1 and December 10, 2025. Most scholars accept Murabaha home financing when the financier genuinely acquires the property before reselling it, which Barakah's documents describe. Read the fatwas yourself and confirm the sequence in your own contract.
Who owns Barakah Mortgage?
Barakah Mortgage is a trade name of Guaranteed Rate, Inc., the Chicago-based national lender that now brands itself as Rate and operates under NMLS license number 2611. Barakah shares Rate's headquarters address at 3940 North Ravenswood Avenue. The division was founded by Abdihakim Ali and is led by Division President Junaid Iqbal. Your application, disclosures and closing run on Rate's systems.
What is Barakah Mortgage's profit rate?
Barakah does not publish profit rates, fees or a rate sheet. Its FAQ says the profit rate depends on market conditions, the financing option and your financial and property profile, and that the full price and payment terms are disclosed before closing. Treat it as quote-only: request a written Loan Estimate for your scenario and compare it the same day against Guidance Residential and UIF quotes.
Which states does Barakah Mortgage serve?
Barakah has not published a state list; its States We Serve page says state pages are coming soon. The site states it is not authorized in New York and will not accept applications for New York properties. Guaranteed Rate itself is licensed nationally, but that does not mean the Murabaha product is offered in every state. Check NMLS Consumer Access for license 2611 and ask an advisor in writing whether Murabaha is live where you are buying.
How is Barakah different from Guidance Residential?
Barakah uses a Murabaha sale: it buys the home, resells it to you at cost plus a fixed profit, and you receive title at closing with no shared ownership. Guidance Residential uses declining balance co-ownership, where it holds a share of the home that you buy out over time while paying for the use of its share. Guidance publishes down payment minimums and operates in 35 or more states; Barakah publishes neither pricing nor a state list.
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Can I refinance or pay off a Barakah Murabaha early?
Yes to both, with conditions. Barakah's FAQ says you can refinance by paying the existing contract in full and starting a new one, and that early payoff may be available according to the terms of your financing agreement, with an official payoff statement requested first. Because the sale price includes the full profit over the term, ask in writing how the payoff amount is calculated and whether any unearned profit is rebated.
