WLF 4.1, LLC, an affiliate of Walton Global, is proud to announce the first closing of a shariah compliant financing facility within its successful U.S. Homebuilder land financing program. This close brings the total amount the company has deployed into its Builder Land Finance program to more than $180M. Walton looks forward to expanding on this pilot launch and in so doing, provide Islamic investors with opportunities in the burgeoning U.S. private credit space that they were hitherto unable to access.  

Walton’s latest Shariah-compliant financing structure enables Islamic investors to access income yielding opportunities via its U.S. homebuilder land financing program while following Islamic prohibitions against interest (riba) and adhering to ethical business practices. This pioneering approach underscores the company’s commitment to fostering financial inclusivity and serving diverse investor communities. 

“The quick take up of this pilot offering demonstrates strong demand in Islamic finance centers for high quality, U.S. dollar denominated private credit opportunities, provided that products are tailored to the needs of the market,” said Bill Doherty, CEO of Walton Global.  

Walton’s core investment strategy consists of acquiring land identified by its homebuilder clients for near term residential development. Prior to acquiring each development site, Walton enters into a contract with the homebuilder that offers a flexible takedown schedule, often combined with deferred payment terms aligned with home sales. As a result, homebuilders are able to free up capital that would otherwise be tied up in land and put it towards more productive uses. In return, investors can benefit from a fixed rate return with regular cashflow and diversification into an asset class that historically offers low correlation to traditional stock market indices.

The strategy is a natural fit for Shariah financing due to the socially responsible business model and strong ethical alignment of all parties through participation in profit. Walton’s Builder Land Finance program has deployed over USD $180 million to date, which includes over 5,300 home sites in 23 projects across 8 US states. The company has access to a near-term pipeline of over US $500M of financing opportunities via its strategic relationship with a major Fortune 500 U.S. homebuilder. 

“We are thrilled to announce the successful completion of this financing round, which represents a major milestone in our offering of Shariah-compliant investment products,” said James Buchanan, Managing Director of South Asia Region at Walton Global. “As far as we are aware this is the first time that a Shariah structure has been applied to this specific use case in the U.S. and we look forward to welcoming more Islamic investors onto the platform over the coming months.” 

Over the past few years, the U.S. housing market has been attracting renewed interest from global investors. The combination of a growing population, strong labor market and huge undersupply in housing inventory is more than offsetting headwinds from elevated interest rates. The largest homebuilders have been able to successfully navigate fluctuating inflation and interest rates thanks to strong balance sheets, low cost of capital and effective use of incentives such as mortgage rate buydowns. With all indications that the Federal Reserve will ease monetary policy over the coming year, markets have pushed many homebuilder stocks to all-time highs over the past few months. Nevertheless, homebuilders cite a shortage of approved, “shovel ready” land supply as one of the key constraints they face in delivering more homes. Walton’s Builder Land Finance program provides homebuilders with an innovative solution to this challenge.