The Minnesota Housing Finance Agency spent $8 million developing and marketing Sharia-compliant mortgages -- special home loans that don't charge interest but instead have higher up-front monthly payments to account for what the bank would have otherwise earned.
The program abruptly ended one year later and only processed three home loans.
"There was a lot of interest, but many of the borrowers weren't credit ready," Megan Ryan, a spokeswoman for the Minnesota Housing Finance Agency, said in a statement explaining why the program came to an end.
"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."
But Pawlenty spokesman Alex Conant suggested it was a concern over Sharia that led to its termination.
"The United States should be governed by the U.S. Constitution, not religious laws," Conant said of Pawlenty's objection.
Qalinle said Pawlenty's rationale for canceling the program is still unclear, since the Sharia friendly mortgages were neither legally mandated nor the only option available for home buyers. Conant did not offer further clarification.
"These Sharia-compliant mortgages are personal decisions by people who want take out a loan, but on their preferred specifications," said Qalinle.
"If a business wants to model a product to suit a particular customer, according to their wishes, it's a business decision," he said. "It's not as if Sharia is creeping into the American financial system or creeping into the American legal system, as is being portrayed now by many conservatives, especially those running for the presidency."