Sharia-compliant mortgage program in Minnesota ends


Sharia-compliant mortgages will no longer be offered though Minnesota state-supported programs. Image: Flickr / sercasey / CC-BY

In Minnesota, Gov. Tim Pawlenty has ended a loan program intended to increase minority home ownership. The loan program only provided three mortgages between being set up by the Minnesota state housing agency and getting shut down by the governor. Pawlenty shut down the program upon discovering that it offered Sharia-law-compliant mortgages.

Minority mortgages in Minnesota

In early 2010, Minnesota’s state housing agency partnered with the African Development Center to create a loan program targeted toward low- to moderate-income individuals who follow Sharia law. Called “Islamic mortgages” or “Sharia mortgages,” these loans helped the borrower avoid paying interest, which is against their religious law. The state would purchase a home, then turn around and immediately re-sell it to the borrower at a higher rate. The payments are the same as a 30-year fixed rate mortgage, but the payments do not include interest to the bank. This program was a part of a larger program intended to increase home ownership among minority groups in Minnesota.

Governor Pawlenty shuts down Sharia loans

Upon finding out about the details of the Sharia loan program in his state, Gov. Pawlenty ordered it shut down. When asked about this decision, Pawlenty’s spokesperson stated:

“This program was independently set up by the Minnesota state housing agency and did not make any mention of Sharia Law on its face, but was later described as accommodating it,” he wrote in an email. “As soon as Gov. Pawlenty became aware of the issue, he personally ordered it shut it down. The United States should be governed by the U.S. Constitution, not religious laws.”

It is the right of a governor to determine how state tax dollars are used. In this case, the governor has not outlawed all Sharia-compliant financial products in his state. He has, however, disallowed the state-supported program that did so.

The question of Sharia law

In a recent Florida court decision, a judge ruled that Sharia law can be used to adjudicate conflicts between Muslims. This decision has raised concern for many lawmakers. Several states are considering legislation that would ban the use of Sharia law; some commentators are calling the recognition of this religious law tantamount to “silent jihad” against the United States. The reality is, however, that the United States recognizes Christian, Jewish, Sharia and other religious laws as long as the laws do not violate standing state and federal law. Observing religious law, such as Sharia law, is not contrary to Constitutional protections, as long as the religious law is not imposed on those who choose to not participate. As Pawlenty himself once stated, “The Constitution was designed to protect people of faith from government, not to protect government from people of faith.” In the case of the Sharia-compliant mortgages, it appears that Pawlenty does not want his state taxpayer dollars used to offer home ownership to religiously compliant Islamic residents.


Minnesota Public Radio

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