What is Ijarah?
Ijarah is one of the most popular halal mortgage structures in the U.S. It's a lease-to-own arrangement where the lender purchases the property and leases it to you, with a portion of each payment going toward ownership.
How Ijarah Works
In an Ijarah structure, the Islamic finance company buys the home you want and then leases it to you. Your monthly payments include both rent and a portion that gradually transfers ownership to you.
- Lender purchases the property
- You make monthly lease payments
- Each payment includes rent + ownership portion
- Full ownership transfers after all payments
Benefits of Ijarah
- Shariah-compliant structure
- Clear ownership transfer process
- Fixed monthly payments
- No interest (riba) involved