Diminishing Musharakah Co-Ownership Partnership: We buy the home together. You gradually buy out our share while living in it. Fair, shared risk.
What it is
Diminishing Musharakah is an equity-sharing model where you and NAHL Homes jointly purchase a property. Over time, you gradually buy out our share, while paying rent on the portion we own. When you’ve purchased our entire share, the property is fully yours.
How It Works:
- You contribute an initial equity (e.g., 30% of property value)
- NAHL Homes contributes the remaining equity (e.g., 70%)
- We co-own the property based on equity contributions
- You occupy the home and pay monthly:
- Rent for our share
- Equity purchase installments to buy out our portion
- As you buy more equity, our share reduces and your rent decreases
- Upon full buyout, ownership transfers to you
Key Features:
- Ownership Structure: Joint ownership with diminishing bank stake
- Customer Contribution: Minimum 20–30% initial equity
- Repayment: Monthly rental payment + periodic equity buyout
- Tenor: Typically 10–20 years
- Risk Sharing: Property risk proportionally shared based on equity stakes
Who Is it For?
- Faith-based customers with partial upfront capital
- Dual-income households aiming for long-term affordability
- Clients in cooperative societies or public-private housing schemes
- Buyers of multi-unit homes with equity contribution capability
Shariah Compliance
Aligns with AAOIFI Standard No. 12 (Musharakah) and Standard No. 9 (Ijarah). Transparent allocation of ownership and rental value. No penalties for late payment; any collected amounts directed to charity.