Property finance fintech firm, Offa, has announced the launch of its Home Purchase Plan (HPP), the Islamic equivalent of a conventional residential mortgage, with offers being made within an hour depending upon credit rating and risk criteria.
This follows the FCA authorising Offa to provide HPPs for UK customers last year, marking the first new regulated HPP launched in over seven years.
Offa’s HPP includes the first ever Sharia-compliant Family Assist feature, allowing customers to add family members to their finance plan, helping them get more finance than they otherwise could while remaining the sole owner of the property.
Customers can also take advantage of gifted equity, where they can buy a property at an under-value price from family members. Offa then uses the full value for finance purposes, entirely avoiding the need for a deposit.
Offa’s HPP is available with a minimum 5% deposit and up to 7 times income being accepted, subject to affordability and underwriting criteria.
Offa provides a fast application and decision process by using a digital know your customer (KYC) process, digital checks of income and expenses, and an automated valuation model.
Offa’s HPP allows customers to buy a property following Islamic finance ethical principles, where charging or paying interest is forbidden. Instead of using interest, Offa’s HPP involves the Islamic finance principles of co-ownership-with-leasing. Customers acquire the property in partnership with Offa and make monthly payments to increase their share, over time owning it.
Sagheer Malik (pictured), chief commercial officer and managing director of home finance at Offa, said: “We are revolutionising the cumbersome world of Islamic finance – challenging and beating conventional high street banks on speed while also allowing family members to help with payments.
“For too long, Muslims seeking property finance that adheres to their faith have had to suffer slow finance decisions and mountains of paperwork. All that has changed today, because we are providing a truly modern Sharia-compliant product with a paperless application process and ultra-quick decisions. It will also appeal to non-Muslims who favour ethical finance.”
