Thank you for your interest in American Finance House LARIBA, the Oldest Community-

Owned, Riba-Free and Shari'aa Compliant Finance Company Serving the Community in the US

since 1987. The following is a summary of our approach to home financing which is also used

for financing cars and business equipment:

1) The primary differences between us and Riba banks are the following:

a) We do not Rent Money. We approach each transaction as an investment

(using the Declining Musharaka of Usage Model) instead of Lending.

We advise you as to whether the transaction is a good investment or it is

better to rent.

b) We never start from an interest rate to calculate your payment. Your

payment is based on the market rental value of the property you are

seeking to finance. The rental value is determined by mutual agreement

between you and us.

c) We do not sell/transfer the relationships for a quick gain. This allows us

to work with clients in a humane and fair way in times of trouble.

2) Our home financing (and refinancing) is based on the “Declining Participation in Usufruct”

(DPU) (Declining Musharaka) concept. The following is a brief Summary of the LARIBA

Model:

a) LARIBA conceptually purchases the property jointly with the client.

LARIBA would authorize the client to act as its agent (wakeel) to select,

negotiate the price of, and purchase the Property.

b) LARIBA authorizes the client to undertake the purchase of the property

from the vendor and record the title (register it) directly into his or her

name. Client becomes the owner of title to the house or owner of Milkul

Raqabah. LARIBA retains its share of the usufruct - Haqul Manfa’aa.

c) Out of its own free will, the client offers to buy and LARIBA accepts to

sell its share/units immediately at the same price. The value of the sale is

paid in monthly installments over a period of time up to 30 years without

adding any interest. The monthly payment is called REPAYMENT OF

CAPITAL (“RofC” – pronounced rofsee).

d) LARIBA and Client agree to perfect a lien[1]

(implied co-ownership) on

the property in favor of LARIBA. LARIBA agrees with the client to [1]

Please note that some mis-translate the word lien as Rahn (in Arabic it literally means pawn). In a Rahn situation

the ownership and the right of use of the property is arrested completely like in case of pawning a watch for

money. In a lien, the right of use is not arrested and the ability to share the right of use is also allowed.

share in the income realized from the use of the house based on the

actual rental value as measured in the market. With this lien, the client

and LARIBA share the income from the lease of the property

proportionately between them. This income is called Return on Capital

“RonC” -pronounced “ronsee”. As the client pays back his or her “Riba

Free Loan - dayn”, this progressively reduces LARIBA’s share in the

usufruct (Haqul Manfa’aa) as well as increases the client’s share

gradually to reach 100% at the end of the Financing Period.

e) In order to make sure that money is not rented at the interest rate of the

day which is RIBA, we research the actual market fair rental value of the

property in its geographic location. The client and LARIBA officer –

each – research the market to find how much a similar property leases

for in the same market of the property to be financed and present three

documented estimates each (a total of six estimates). Sources of rental

value estimates include leasing agents, real estate brokers, News paper

advertisements and online resources. The goal is to obtain the rental

value, per square foot based on similar properties. The client and

LARIBA compare their findings and agree on a rental value to be used

in our proprietary model.

PLEASE NOTE THAT EACH TRANSACTION IS DONE AS A PURCHASE FINANCING

NOT A LEASE.

3) Other Features of the Program:

a) Our financing allows clients to enjoy the tax advantages of traditional

real estate financing while avoiding the Riba aspects.

b) The repayment terms are structured to fit your cashflow needs with

payback periods of up to 30 years.

c) We can accept down payment as low as 5%. Please note that if down

payment is less than 20%, you will have to purchase Private Mortgage

Insurance ("PMI") until your equity in the property reaches 20%.

d) You can buy back our share at any time by making additional payments.

4) We use the standard legal documentation required by law and we supplement them with the

LARIBA Agreement which documents the process we used to calculate the payment and the

rental value agreed upon. We do not switch the words of interest to rent or profit to make the

transaction appear Riba-free.