HOME BUYING

Al-Ehsaan Housing provides an option to those who want to buy their home without riba by obeying Allah's (SWT) commandment.

Instead of keeping your savings in a bank, you can buy Al-Ehsaan Housing's shares while you wait for your turn. Your shares in Al-Ehsaan Housing will work as an investment and you will earn quarterly dividend until your turn comes.

As a buyer, you will choose the location of your house/ apartment. A buyer must have shares equivalent to at least 25% of the actual price of the desired house.

Buyer will also pay fair and mutually agreed monthly occupancy charges (rent).

In order to be fair with our entire membership and to be transparent with our Home buying process, we have defined and streamlined following process. This process includes a list of members who are waiting to buying a house. Points are allocated to each member in the list. These points are re-calculated after quarter based on point calculation system.

Home Buying Steps:

• -Become Member of Al-Ehsaan Housing by filling the membership application and paying membership fees
• -Join the Active Waiting List (AWL) by filling the “AWL inclusion form” with minimum investment of $20,000. In the form you will to describe:
  • Type of house you will be looking for
  • Estimated price range of house you are intending to buy
  • Amount of down payment you would make at the time of purchase including your investments
  • Complete Pay off period (in years) along with paying monthly rents
• -The Al-Ehsaan Housing Board will review the AWL form and will inform the member of their decision in writing or email with total points and member's position on AWL
• -Wait until you reach the top of waiting list
• -When Al-Ehsaan Housing have sufficient fund available the we will contact the member to deposit his/her "FULL DOWN-PAYMENT", as indicated by the AWL Form
• -The member will be asked to select the house and Al-Ehsaan Housing will buy the house for member

We have devised a point calculation method to assign each member point on joining and then these points are re-calculated every quarter.

For details how points are calculated, please see the Point Calculation Method

1. The member needs to have the minimum shares of $20,000 required to join AWL in his/her Al-Ehsaan Housing account when submitting the AWL Form with appropriate supporting documents and submit it to the Al-Ehsaan Housing Board for review.
2. The Al-Ehsaan Housing Board will review the AWL form and will inform the member of their decision in writing or email.
   When the member's AWL Application is approved, then Point Calculation method will be applied to calculate his/her total points. An email with member's position on AWL and total points will be mailed to the member.
3. After the member's name has been added to the AWL, the member will have to wait to move to top of AWL. When his/her name approaches the #1 position on the AWL, Al-Ehsaan Housing will contact the member to deposit his/her "FULL DOWN-PAYMENT", as indicated by the AWL Form.
4. After the member has deposited his/her FULL required down-payment in to his/her Al-Ehsaan Housing account. Then member will be asked to find a home and Al-Ehsaan Housing will buy the house for member.

In order to be fair and transparent with all of Al-Ehsaan Housing members, following 5 factors will be used to calculate the points for any member to be put on Active Waiting List (AWL) to buy house.

1. Membership period- per quarter gain 1 point
2. Investment - per $10,000 gain 1 point
3. Commitment to have down payment (investment) percentage at time of purchase:
   1 point for 30% - 2 points for 35% - 3 points for 40% - so on 1 point for each additional 5%
4. Complete pay off back time - attach a payback plan and how will you make it.
   1 point for paying off in 5 years
   2 points for paying off in 4 years
   3 points for paying off in 3 years
   4 points for paying off in 2 years
   5 points for paying off in 1 year

Total Points: Sum of above 4 factors

Example: Br Ahmed, an existing member of Al-Ehsaan Housing has applied to be put on Active Waiting List (AWL) for House Buyers. Following are the 2 steps of the process:

Step 1

In order to join the AWL, Ahmed deposits $20,000 along with following documents:

• -Application to join AWL
• -Deposit of $20,000 to join AWL
• -Price range of the house, which he is looking to buy, is around $200,000 to $220,000
• -He commits that he will have a total deposit $80,000 to Al-Ehsaan Housing including his existing investments at the time of purchase, which is 40% of the house price
• -He also commits that he will pay the house in 5 years. And attached the proof of his income and capacity to pay-it off
• -Br Ahmed also deposits an additional $12,000 so his total investment is now $32000.

Step 2

Al-Ehsaan Housing board reviews the application and approves the application to be put on AWL.

• -Br Ahmed will get 1 point for Membership period at the end of his first quarter
• -Br Ahmed will get 3 points for his total investment of $32,000 (1 point per $10,000)
• -Br Ahmed will get 3 points for his Commitment to have down payment of 40%
• -Br Ahmed will get 1 point for his Commitment to pay off completely in 5 years

Total points assigned to Br Ahmed are 8 and these points are reviewed every quarter.

For example, there is one person ahead of Br Ahmed so his number in queue will be second.

Al-Ehsaan Housing board will send a letter to Br Ahmed informing that his application had been approved along with member's position on AWL and total points.

Once the Al-Ehsaan Housing has purchased the housing unit for the benefit of the member, the member will surrender all shares as these will be considered as the down payment for the house and member will not be eligible for any dividends.

An occupancy agreement will be drawn between Al-Ehsaan Housing and the member.

The Al-Ehsaan Housing will establish the "Monthly Rental Value" of the housing unit on the basis of rental/lease rate of a similar house in similar area. Member will also pay $75 administration fee monthly.

To complete the ownership of the occupied housing unit, the member will have to accumulate shares equivalent to the cost of the housing unit. Homebuyer member shall buy shares as it is mentioned in AWL form until members share reaches 100%.

Disposition

If a member after occupying the house unit will have to vacate it, the member will have to inform the Al-Ehsaan Housing at least 90 days before such move. The housing unit will be evaluated by the Al-Ehsaan Housing and made available to eligible members.

If no member is interested in that housing unit, or if no member can take over the housing unit within the stipulated time, the occupant member will be given the permission to arrange a sale of the housing unit to non-members.

Additional Information

Please watch the following video for more information on house buying: (https://www.youtube.com/watch?v=emjxhK5da0c&ab_channel=IslamicVideos)

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