Another Minnesota First -- State-sponsored Murabaha Financing

I'm teaching my favorite subject -- usury -- in my consumer law class right now, so this local news item struck me as particularly timely.   Minnesota's state housing agency has apparently become the very first state agency to offer a form of financing that allows Muslims, who are forbidden from charging or paying interest, to buy homes.  It sure sounds a lot like the old time-price doctrine to me.  As explained in the article:

Here's how the mortgage, known as Murabaha financing or "cost plus sale," works:

The state buys a home and resells it to the buyer at a higher price. The down payment and monthly installments are agreed to up front at current mortgage rates.

The deal is identical to a thirty-year fixed-rate loan, except there's no additional interest, because the higher up front price factors in payments that would have been made over the life of a traditional mortgage.