LARIBA — American Finance House
4.4
(189 reviews)America's oldest Islamic finance institution, founded in 1987. LARIBA pioneered interest-free financing in the US using its unique Declining Balance Cost of Funds (DBCOF) model.
Reviewed by Fair Meridian: January 2026
Profit Rate
7% – 8.5%
Min Down
20%
States Served
All 50 States
Overall Rating
4.4/5
About LARIBA — American Finance House
LARIBA (which means "no riba" — no interest in Arabic) is the oldest Islamic finance institution in the United States. Founded in 1987 in Whittier, California by Dr. Yahia Abdul-Rahman, LARIBA has been offering interest-free financing for nearly four decades — predating every other Islamic mortgage provider in the US by over a decade.
LARIBA uses a proprietary model called the Declining Balance Cost of Funds (DBCOF), which is distinct from the Musharakah and Ijara models used by most other US providers. In the DBCOF model, LARIBA and the buyer jointly evaluate the property as an income-producing asset. The financing cost is calculated based on the property's market rental value rather than an interest rate — ensuring the transaction is grounded in real economic activity rather than money-lending.
LARIBA has an in-house Sharia supervisory board that has continuously overseen its operations since 1987. While LARIBA is not certified by AAOIFI or ISNA, its four-decade track record, its scholarly Sharia governance, and its unique model have earned it a respected position in the US Islamic finance community.
LARIBA is licensed nationally and has financed properties in all 50 US states. It is particularly strong in California, where it is headquartered and has the deepest relationships with local real estate professionals.
Founded1987 (39 years in business)
Sharia CertificationInternal Sharia Board
Certified Since1987
HeadquartersWhittier, CA
NMLS License#140751 — Verify on NMLS ↗
Fair Meridian Analysis
LARIBA's nearly 40-year history makes it the most historically significant Islamic finance institution in the United States — it essentially created the US Islamic mortgage market.
The DBCOF model difference: LARIBA's Declining Balance Cost of Funds model is philosophically distinct from Musharakah and Ijara. Rather than calculating profit as a percentage of the loan amount, DBCOF calculates the financing cost based on the property's rental value in the local market. This grounds the transaction in real economic utility — the property's ability to generate rental income — which many Islamic scholars regard as the purest form of asset-backed Islamic finance.
Who is LARIBA best for? LARIBA is the best choice for buyers who want the most historically established Islamic finance institution in the US, buyers in California where LARIBA has the deepest market relationships, buyers who are interested in the DBCOF model as an alternative to Musharakah, and buyers who have already researched Islamic finance extensively and specifically seek LARIBA's unique approach.
Who might prefer a different provider? Buyers who want AAOIFI or ISNA certification specifically should consider Guidance Residential or UIF. Buyers who want a simpler, more standardized Musharakah structure may find Guidance or UIF easier to understand and compare.
Analysis updated: January 2026
Products & Financing Structures
mortgage
Declining Balance Cost of Funds (DBCOF) Home Finance
Unique DBCOF model: financing cost calculated on property's market rental value, not a loan balance. Eliminates riba through rental-value-based profit calculation. The original US Islamic mortgage model.
Profit Rate: 7%–8.5%Min Down: 20%Terms: 10, 15, 20, 30 years
Sharia Compliance: All products are structured to avoid Riba (interest), Gharar (excessive uncertainty), and Maysir (speculation) in accordance with Islamic jurisprudence.
Serves All 50 US States
LARIBA — American Finance House is licensed in all 50 US states. See local provider options and state-specific regulations for the most active Islamic finance markets:
Independent Rating Breakdown
Overall Score
4.4
Sharia Compliance
4.8
Transparency
4.5
Customer Service
4.3
Rate Competitiveness
4.1
👍 Recommended
LARIBA — American Finance House scores highly on Sharia compliance verification and product transparency. Independently verified by the Fair Meridian team.
Ratings based on Fair Meridian's independent review process. Not influenced by advertising or provider payments.
Expert Verdict
LARIBA is our recommendation for buyers who value historical precedent and LARIBA's unique DBCOF financing model. Its nearly 40-year track record is unmatched in the US Islamic finance market. Particularly recommended for California buyers and for buyers who have done extensive research and specifically seek LARIBA's philosophical approach to interest-free finance.
Verdict issued: January 2026
Sharia Advisory Board
Dr. Yahia Abdul-Rahman
Founder & Chief Sharia Officer
PhD; pioneer of US Islamic finance; author of 'The Art of RF (Riba-Free) Islamic Banking and Finance'; 39+ years Islamic finance leadership
Frequently Asked Questions — LARIBA — American Finance House
LARIBA was founded in 1987 in Whittier, California, making it the oldest Islamic finance institution in the United States. It predates every other US Islamic mortgage provider by over a decade and has been offering interest-free home financing for nearly 40 years. Founder Dr. Yahia Abdul-Rahman is considered a pioneer of the US Islamic finance market.
LARIBA uses its proprietary Declining Balance Cost of Funds (DBCOF) model rather than the Musharakah co-ownership model. In DBCOF, the financing cost is calculated based on the property's market rental value in its local area — grounding the transaction in real economic utility. In Musharakah, the profit is calculated as a percentage of the financing amount. Both eliminate interest, but DBCOF's foundation in rental value gives it a distinct philosophical basis that many Islamic scholars regard as particularly rigorous.
LARIBA is not certified by AAOIFI or ISNA. It maintains its own in-house Sharia supervisory board, led by founder Dr. Yahia Abdul-Rahman, which has provided continuous oversight since 1987. Some buyers prefer third-party certification (AAOIFI or ISNA) — if this is important to you, consider Guidance Residential (AAOIFI) or UIF/Devon Bank (ISNA) instead.
LARIBA is licensed nationally and has financed properties in all 50 US states. It is particularly strong in California, where it has been operating since 1987, but serves the full continental US. California buyers benefit most from LARIBA's four decades of relationships with California real estate professionals.
LARIBA requires a minimum 20% down payment for its home financing products, similar to other major Islamic mortgage providers. The minimum financing amount is $50,000 and the maximum is $2,000,000. Contact LARIBA directly for a quote based on your specific property and financial situation.
Customer Reviews
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