There are several organisations, which claim to offer Islamic Shariah-Compliant finance in Australia. I am trying to gather information from all of them. I will update this post, Allah willing, with new information as I find it.

A. ICFAL: 

In September 2022, I had a discussion with Ahmed Mosselhy from ICFAL (Islamic Co-operative Finance Australia Limited.) Their product is based on "Musharakah Mutanakesa" (Diminishing Partnership.) Here are the main points in very simple (and not necessarily financially accurate) terms. Please, feel free to contact them directly at https://www.icfal.com.au.

1. Their money comes ONLY from members, who choose to invest with them. They do NOT get money from banks or any other source. 

2. Members can invest with them by depositing as little as $500. The money they get from their members makes up the capital, which ICFAL uses to finance buying homes. 

3. Only members can get finance from them. If a member is interested in getting finance, he/she can apply. If enough capital is available, the finance will be approved. Otherwise, the member must wait until enough capital is available to fund his/her request. 

4. If you want them to finance a home for you, you sign Musharakah (a share agreement) with them. They can own up to 80% of the home value at the purchase date. Obviously, you own the remaining value (starting from 20%.) When you purchase a home, you will be given a spreadsheet, which lists the expected appreciated value of the home over the finance term. So, it would look something like the following. 

5. Throughout the life of the finance term, you increase your share from 20% to 100% by paying as much as you both agree. For example, you can pay $3,000 monthly. 

6. Using the spreadsheet, which is demonstrated above, you have the flexibility of paying more than the agreed-on amount. If you face financial hardship, the figures in the same spreadsheet are used to re-schedule your future payments. 

7. The profit from the finance goes back to you and all other members of ICFAL. 

8. If you want to get finance for a home, they can finance up to 80% of the home price, but only up to $700,000. If you want to buy a home, which costs more than $875K, you would need to start with them by owning more than 20% of its value. Obviously, these numbers might change over time. 

9. No mortgage insurance is required. 

10. Home (property) insurance is required. 

In addition to home finance, they have several investment and finance products, including SMSF (Self-Managed Superannuation Fund.) 

This information above is NOT financial advice. It is simply my understanding of their business model. Obviously, you need to contact them and get professional financial advice before taking any decisions or making commitments. 

In the following 2-part video, Yusuf Tang discusses the allegedly Islamic financial products offered by organisations in Australia. Often, these organisations claim that their products are 100% Islamic-compliant. 

In part 1, Yusuf started by articulating the main points, on which the Fatwa to take non-Islamic Mortgage is based. Then, he explained some essential Islamic principles and fundamental concepts, which differentiate Islamic dealings from non-Islamic ones. Then, he explained the details of the most common allegedly Islamic finance product "Ijarah Muntahyia Beltamaluk" - Rent Ending with Ownership.

https://vimeo.com/317125925 

In part 2, he analysed the 2nd Islamic financial product "Musharakah Motanakesa" - Diminishing Partnership. He explained the details of the current implementation in Australia. Then, he explained how difficult and costly it would be to make this product truly Islamic-compliant. He ended the video with recommendations and suggestions for the future of Islamic financial products.

https://vimeo.com/317127639

If you are looking for a summary, here is what I learned. In Australia, there are no 100% Islamic-compliant financing products. The major problems follow.

1. A fundamental Islamic principle requires the seller to "fully own" whatever they are selling before selling it. This is hard to comply with in the Australian home-buying process. In reality, the bank sells the property to the buyer without owning it at all!
2. To avoid paying stamp duty (a land tax) twice, the property is registered in the buyer's name from day one - with a mortgage holding term. This conflicts with the definition of Ijarah and Musharakah, which are based on "renting" and "partnership." The following points provide more details, which help clarify this issue. 
3. In the Australian home buying process, the buyer finds a home and asks the Islamic finance provider to buy it. The buyer promises to buy it from the bank. This arrangement of 2-contracts in one has serious issues (from an Islamic point of view.)
4. If the agreement was based on Ijarah (renting), the renter is not expected to make any profit (from an Islamic point of view.) However, in reality, if the agreement is finished before the renter buys the house, he/she will end up with a profit from selling the house because, in the eyes of Australian law, they are owners and not renters.
5. For the Musharakah product to be Islamic, both parties (the bank and buyer) should make a profit/loss. However, if the buyer ends the agreement because of whatever reason before he/she owns the property, they assume all of the profit/loss, and the bank is NOT allowed by Australian law to make any profit.

من المواضيع التي تحير المسلمين المقيمين في أستراليا والدول الغربية شراء البيوت عن طريق القروض الربوية.

نظمت لجنة الفتوى بألمانيا محاضرة فقهية عن هذا الموضوع، حاضر فيها فضيلة الدكتور/ خالد حنفي الأمين العام المساعد للمجلس الأوروبي للإفتاء والبحوث ورئيس لجنة الفتوى بألمانيا. 

وفيما يلي تسجيل للمحاضرة: 

https://www.facebook.com/watch/?v=291297585827851

- يعرض الشيخ خالد حنفي التفاصيل في الساعة الأولى من الفيديو، ثم يجيب على أسئلة المستمعين في الساعة الثانية منه.

- يبدأ عرض شروط الجواز عند الدقيقة ٢٨ من الفيديو، وملخصها: 

١. عدم توفر سيولة مادية للشراء، والحاجة للقرض الربوي 

٢. أن يكون البيت لغرض السكن وليس الاستثمار 

٣. عدم وجود بنك إسلامي في بلد المقيم يقدم طريقة شرعية يستطيع المسلم اللجوء له ويقدر على شروطه

يقدم الكتاب التالي دراسة معاصرة رائعة لتقييم المعاملات المالية المعاصرة بميزان الشريعة الإسلامية. ويوضح الأخطاء الجسيمة التي تقع فيها بعض المؤسسات التي تدعي تقديم معاملات موافقة للشريعة الإسلامية.

https://aliftaa.jo/Photos/717cb0f3-8b5f-4938-ac39-11944cbf3515.pdf  

Mashallah.

ICFAL is one the best institutions in Australia for Halal housing finance.

We provide shariah compliant islamic stock screening and adminstration services to our brothers and sisters in the community.

www.starkconsulting.biz.

Jazakallah brother Bilal for your efforts. May Allah reward you.