Walking back Pawlenty’s Islamic home ownership program

Former Gov. Tim Pawlenty — or at least his spokesman — talked tough today when it was suggested an Islamic-friendly home mortgage program in Minnesota might put him at odds with his conservative base.

“Pawlenty hasn’t shied away from throwing red meat to the conservative base,” Adam Serwer wrote in the progressive journal The American Prospect. “He’s told his share of birther jokes and even argued in favor of reinstating discrimination against gays and lesbians serving in the military. Thus far, he’s avoided indulging in growing conservative enmity toward Muslims, but because of his own perfectly defensible efforts to expand homeownership in Minnesota, he may be vulnerable to such attacks from other candidates. Pawlenty’s shot at the 2012 nomination may hinge in part on his ability to tamp down conservative paranoia on Islam rather than stoking it.”

The program in the Pawlenty administration attempted to assist Muslims who wanted to purchase homes. But Islamic law forbids the paying or charging of interest. The Minnesota Housing Finance Agency worked with the African Development Center, to set it up.

As described in MPR’s original story two years ago:

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.

The political blog, Politico, picked up on the assertion that the program makes Pawlenty look like he was coddling Islam, generating a tougher response from the former governor’s spokesman.

“This program was independently set up by the Minnesota state housing agency and did not make any mention Sharia Law on its face, but was later described as accommodating it,” the spokesman, Alex Conant, said. “As soon as Gov. Pawlenty became aware of the issue, he personally ordered it shut it down. Fortunately, only about three people actually used the program before it was terminated at the Governor’s direction.”

Pawlenty’s objection: “The United States should be governed by the U.S. Constitution, not religious laws,” Conant said.

Is that what really happened? A program was a little too friendly toward Islam and had to be shut down? Not exactly.

“The new markets program was running for about a year and it happened at the same time a credit crunch hit the country,” Megan Ryan, a spokesperson for the Minnesota Housing Finance Agency, told MPR’s Jess Mador today. “The program had only three loans. There was a lot of interest, but many of the borrowers weren’t credit ready. In conversations with the governor’s office at the same time that the program wasn’t being very successful, we did close the pilot program down and shift the funds to other loan programs.”

Ryan said had there been better interest, “we would’ve looked at continuing the program, there was such limited volume, we thought it better to shift to programs that reached more Minnesotans.”

She said the state had put about $8 million into the program. “We try to be one of the more cutting-edge housing finance agencies across the country. We looked at this, we tried it, and when we didn’t see the volume, we put that money back into a different program.”

  • Jamie

    I was never comfortable with that program. For one thing, the state shouldn’t be involved in religion in any way. Also, it was just a trick that meant that Muslims using the program were still essentially paying interest. I don’t know how anyone with integrity could do that if they really believed in the not-paying-interest thing.

    It WAS surprising that Pawlenty was involved in starting the program. It’s NOT surprising that he’s lying now about how it was stopped.

  • Back in NY, Governor Pataki created a halfway house program for female felons about ready to leave prison called “Almost home”.

    Several years later, fighting a rising tide in his own party and a tough reelection fight, he ended the program to “Get tough on crime”

  • Chris N.

    Jamie said: “For one thing, the state shouldn’t be involved in religion in any way.”

    Well, consider this, though: government endorses and provides certain legal privileges for people who are married in a religious ceremony. For couples who are not religious, the government provides civil marriages, which provide the same legal privileges. (Note I don’t mean civil unions, so as to not get into the same-sex marriage debate here)

    So here, the government has decided that it is in the interest of society to provide some benefit to married couples across a variety of religious lines (including those who have no religion, which could be considered a religious preference).

    The government has also decided that it’s in the interest of society to promote home ownership. However, you have a group that by its religious beliefs can’t follow the usual path to home ownership. So is it a case of government getting involved in religion if it crafts a workaround (which is financially identical to a traditional mortgage) to accommodate those people? Personally, I don’t think so. It’s a way to promote home ownership, which is supposed to be a universal good, rather than a promotion of Islam.

  • JackU

    @Chris N: I’m not sure I follow this statement:

    government endorses and provides certain legal privileges for people who are married in a religious ceremony.

    The way I understand it the person who officiates at a religious wedding ceremony needs to be registered with the state and recognized as someone who can sign a marriage license application as the one performing the wedding. I don’t think that makes them any different than the Justice of the Peace who married me, in a legal sense. If the clergy is not recognized by the state I don’t think the marriage is either.

    I don’t have an issue with the point of your last paragraph, I just don’t think the justification based on your marriage example holds up.