While I don't approve of the goverment involving itself in schemes tailored to meet the needs of a particular religious group, this financing arrangement is definitely not cheaper than the regular interest-bearing loans the rest of us buy houses with. In fact it's almost certainly a bit more expensive, due the extra transactions built in. It avoids the Muslim prohibition on paying "interest", but this is only semantic. The interest is getting paid, but by an intermediary, from whom the Muslim enters into a "lease with option to buy". You can be sure the intermediary is making a few bucks on each deal.
If this arrangement saved a penny, everybody would be taking advantage of it, since it is most certainly not actually restricted to Muslims. Anybody can do it; it's just that the rest of us don't want to.
"... the Muslim enters into a "lease with option to buy". You can be sure the intermediary is making a few bucks on each deal."
Yup. You'd have to be crazy to enter into a Rent-to-Own contract. Sort of like buying one of those tv's or Washer/Dryer units for people who can't get a credit card.
Someone who can't qualify for a mortgage or get a loan...can they get this, I wonder?
The US Government usually creates things that fall into The Law Of Unintended Consequences.
RE: Anybody can do it; it's just that the rest of us don't want to.
Are you quite sure of that? I think that it is limited to "practicing Muslims" in point of fact. I believe that is one of the rules.