Closing on a Dream
By JAMES ANGELOS

IN 2003, a Bangladeshi Muslim named Zia Hashem took out a loan to buy a condominium apartment in Parkchester, in the Bronx. During the two years he lived there with his wife and young son, he was perpetually uneasy about having borrowed the money.

Kamal Ahmed, a city bus driver from Bangladesh, is using a faith-based financing option to buy a house in Parkchester, in the Bronx.

"There was definitely a guilt," Mr. Hashem, a 33-year-old systems engineer, said one recent evening after the sunset prayers at Baitul Islam Masjid, a small mosque in University Heights.

Many Muslims believe that paying or receiving interest violates Shariah, or Islamic law. Thus, for Muslims, buying a home in the United States often means violating religious principles.

"The banking system we have here, with the interest, that's something I don't believe," said Mr. Hashem, who that night prayed on the mosque's green carpet wearing a blue Hawaiian shirt covered with images of palm trees. Mr. Hashem is now in the market for another house, but this time he plans to use what is called a "Shariah-compliant" system of home financing, an increasingly popular approach that uses various financing methods to sidestep practices Muslims object to.

As the nation's Muslim population has grown, so has the number of banks and finance companies offering Shariah-compliant home financing options. The practice is less common in New York, due in part to the high cost of housing and the often hefty down payments required. Nevertheless, especially in the boroughs beyond Manhattan, Muslims are increasingly using faith-based financing options to buy houses.

A company called Guidance Residential began to offer these options in New York in 2003 and has served 200 customers in the city. Despite the sluggish housing market, the number of new clients in New York continues to grow, according to Hussam Qutub, a company spokesman.

In one commonly used method for Shariah-compliant financing, a company like Guidance Residential takes an ownership stake in the home, along with the customer. The customer then pays a rental fee to the company while making payments to buy the bank's portion of the house. "The end result is the same," Mr. Qutub said. "You're just getting there differently."

Advertisements for various Shariah-compliant financing offers can be found in magazines distributed in the city's mosques. One recent ad, touting a "cash-out mortgage conversion," featured the image of a smiling couple in a lush green garden, the wife wearing a maroon headscarf.

"It was our dream to perform hajj for our anniversary," reads the ad. That dream came true, says the couple, without their having to resort to an interest-based loan to finance their pilgrimage to Mecca, in Saudi Arabia. Such approaches are popular in University Heights, a West Bronx neighborhood that is home to both the Baitul Islam mosque and a growing number of Bangladeshi immigrants.

A few members of the mosque used Shariah-compliant financing to buy the three-story brick building where the mosque now occupies the ground floor.

Using a similar approach, Kamal Ahmed, a city bus driver who emigrated from Bangladesh in 1995, plans to soon close on a red-brick, two-family home in Parkchester, where he would live with his wife and three children.

And last year a 26-year-old member of the congregation named Abdullah al Mamun, and members of his extended family, used this method to purchase a three-family house a few doors from the mosque, where he now lives with his wife and year-and-a-half-old son.

"Muslims are exactly like other Americans," Mr. Mamun said. "We have that American dream of owning our own house and practicing our beliefs."