Shariah-Compliant Homeownership: A First-of-Its-Kind Program Led by a Maine Credit Union
Inclusiv member Community Credit Union is breaking new ground with the launch of a Shariah-compliant home financing program—offering a pathway to homeownership for Muslim-American families who follow Islamic financial principles. For nearly a decade, Community Credit Union in Lewiston, Maine collaborated with local Muslim leaders, legal experts and national partners to identify a viable solution that would allow the Muslim-American community to purchase homes without compromising their religious beliefs, which prohibit the payment or receipt of interest (riba).
Rather than develop its own halal mortgage product, Community Credit Union sought out the pioneer in the space—Guidance Residential, LLC, the nation’s largest provider of Shariah-compliant home financing. Through a first-of-its-kind agreement for this program, Community Credit Union now originates and closes the mortgage while Guidance Residential purchases and services the contract, ensuring ongoing compliance with Islamic financial principles.
The partnership is a milestone for Guidance as well—it’s the first time the company has allowed another institution to originate and sell its unique program. As a state-chartered institution, Community Credit Union also took the initiative to work with the Maine legislature in 2023 to pass new laws enabling them to temporarily hold property as part of this financing model. While this step was specific to Community Credit Union’s regulatory framework, Guidance can work with each institution to offer tailored paths forward where applicable.
Building on the success of this partnership, Guidance has developed a national Third-Party Origination (TPO) model designed specifically for Credit Unions. This structure allows institutions to offer an Agency-approved, Shariah-compliant mortgage product to their members—either by becoming a correspondent partner or, in many states, by submitting applications directly to Guidance as a broker.
With over 7,000 Muslim-Americans living in Maine, the program is already helping address long-standing barriers to homeownership for a significant number of families. Applications are being accepted in Maine, and the team hopes to expand the model to mission-driven Credit Unions across the country. According to Community Credit Union’s leadership, it would take two to six months for a new institution to implement the program.
For Credit Unions exploring ways to better serve Muslim-American communities or expand their inclusive home financing practices, this model presents a viable and impactful solution.
Interested Credit Unions can reach out to John Tuma, VP of Strategic Partnerships at TPO@guidanceresidential.com to learn more.
About Community Credit Union
Community Credit Union is a member-owned, full service financial institution that has been serving its members since 1945. The Credit Union now serves those that live, work, worship or go to school in Androscoggin, Franklin, Kennebec and Oxford counties in Maine or have a family member that qualifies. The Credit Union has a low-income designation from NCUA as well as certified as a Community Development Financial Institution (CDFI). Community Credit Union has branches located at 144 Pine Street, Lewiston, 40 Stanley Street, Auburn and 1025 Auburn Road in Turner, Maine serving more than 12,000 members. For more information, log onto www.communitycreditunion.com.
About Guidance Residential
Guidance Residential is the #1 provider of U.S. Islamic home financing, having provided more than $10 billion in financing to more than 40,000 families since 2002.
Its unique Declining Balance Co-ownership Program was created under the guidance of seven globally renowned Islamic scholars and 18 U.S. law firms to ensure it meets strict adherence to legal jurisprudence of the Islamic faith and conforms to U.S. legal and regulatory requirements.
Guidance Residential's Declining Balance Co-ownership Program, which is backed by Freddie Mac and Fannie Mae, is based on a co-ownership model rather than a lender-borrower relationship. Unlike traditional home financing, homebuyers enter an equitable partnership contract and enjoy the benefits of home ownership without compromising values-based principles.