Afghanistan Islamic Mortgage Association

The World Bank estimates that in Kabul alone investment of $2.44 billion will be needed for rehabilitation and new construction. Afghanistan Financial Services, in partnership with Capitos Group, is developing a facility that will act similarly in how MISFA works with microfinance – a high level intermediately fund that partners with retail partners and banks to provide long term capital for affordable wholly Sharia compliant mortgages called Declining Balance Co-ownership Programs. The Afghanistan

Islamic Mortgage Facility provide long term secured credit lines to local partner agencies and banks who will provide application processing and mortgage management. In addition, the facility will partner with Da Afghanistan Bank in developing the framework for all the legal and technical pre-requisites including a Sharia Board, titling, appraisals, credit checks, and so on.

Under the terms of the Declining Balance Co-ownership Program one does not repay an interest-bearing loan. Instead, one becomes a co-owner with an “investor” (local bank), from whom one acquires full ownership through affordable monthly payments. Each payment is made of two elements. The first portion is a charge, or a “Profit Payment,” that gives one the exclusive right to the use of the property. The remaining portion of the monthly payment allows one to acquire an increasing share of ownership in the home until you own it completely. In the case of a home purchase, one’s initial share of ownership in the property is determined by your initial investment. For qualified applicants, this down payment may be as little as 5 percent of the property’s value. In this case, you will start owning 5 percent, and the local bank will own 95 percent. Over $1.5 billion of these Islamic mortgages have been issued in the United States alone, with an incredible result of having only 22 foreclosures to date.