Halal Mortgages

Interest-Free Loans Who can join the credit union

Key Features:

  • Riba-Free & Halal
  • 40K+ Satisfied Homeowners
  • Competitive Pricing

A Path to Homeownership Aligned With Your Values


At NorthCountry, we believe that everyone deserves a fair and accessible path to homeownership. That’s why we’re proud to offer Halal mortgages - designed for members who wish to purchase a home in a way that honors their principles.

Our Halal mortgage option avoids traditional interest charges and instead uses the Declining Balance Co-ownership Program, a recognized agreement that was created under the direction of six globally renowned experts on Halal lending. 
 

How It Works

  • No Interest (Riba-Free): Instead of charging interest, we structure the financing around a co-ownership agreement (Musharakah). 
  • Shared Ownership Model: Over time, your share of ownership in the property increases and our portion decreases until the home is fully yours.
  • Transparent and Fair: Your fixed monthly payment includes a portion that increases your equity and a usage fee for exclusive use of the home.  All costs are clearly explained up front, with no hidden fees.


 

"For the first time in Vermont, Guidance Residential is offering its Declining Balance Co-ownership Program — a unique home financing solution that allows you to own your home without compromising your faith.  This historic, values-based initiative reflects our shared commitment to providing ethical and faith-aligned pathways to homeownership." -- ISOVT Board

Frequently Asked Questions 

While our Halal Mortgages are “interest-free” in the traditional sense, we have a unique structure in place based on an equitable co-ownership model where, instead of interest, borrowers are charged a fee or “profit payment” for the use of the property. This ensures that borrowers are still paying an interest-like monthly fee, while remaining compliant within their faith. At the end of the day, borrowers of a Halal mortgage and a traditional mortgage are paying comparable amounts in interest or profit payments. 
Yes, absolutely! Halal mortgages are available to all but was specifically created for Muslim-Americans who are prohibited from paying interest in the context of a traditional borrower-lender relationship
With a traditional mortgage, borrowers make a principal payment, an interest payment, and an escrow/impound payment. With a Halal mortgage, borrowers make an acquisition payment, a profit payment, and an escrow/impound payment. These terms are largely interchangeable, while having slightly different structures to ensure the Halal loans are compliant with the Islamic faith.

Loan terms remain the same, and borrowers can choose from a 15, a 20, or a 30-year term. Closing costs of these uniquely structured loans are also similar to conventional mortgages.  

 
Payments are based on current market interest rates. Just like a conventional mortgage, rates can vary day-to-day, but spread out over the length of a term, the total payment made through a traditional mortgage and a Halal mortgage will be largely the same. 
No. This is a product that has been offered throughout the country for the past 20 years and is supported by both Fannie Mae and Freddie Mac.  It is simply new to Vermont.  
We charge a fee to assist in getting this mortgage started.  Our role simply is to assist with the origination of this mortgage.  It is not our loan and it’s not on our books.  We get fee income and new members - both of which will allow the credit union to grow and prosper.  
NorthCountry has always been committed to helping people that have traditionally not been well served by other financial institutions. For example, we provide bank accounts for youth in foster care who have no guardians, ways for Vermont employers to offer emergency short term loans to their employees and Pathway checking accounts to individuals who have struggled with their previous financial institutions. Our Halal loans are just another way to provide loans to individuals in our community who have struggled to find a traditional borrower-lender relationship. We are always committed to serving our entire community. Ultimately, our goal is to make dreams come true for all by offering creative, personalized financial solutions.