Guidance Residential and home buyers each own a percentage as co-owners. Home buyers increase their share over a period of time through a monthly payment.
Guidance Residential shares the risk with the home buyer in case of natural disasters, eminent domain or foreclosure.
The Declining Balance Co-ownership Program, does not involve payment of interest. It is 100% riba-free.
There is no pre-payment penalty required by Guidance Residential when a home buyer wants to pay ahead of the agreed schedule.
In case of late payments, Guidance Residential charges only a capped fee equaling $50 or less, exclusively meant to cover the expenses involved in administering a late payment, rather than the standard 5% penalty.
In the event of payment default, Guidance Residential does not pursue any of the home buyer’s other assets.
(Declining Balance Co-ownership Program)
The home buyer and Guidance Residential agree to be co-owners in the property.
The home buyer arranges a loan from a bank or mortgage company according to a fixed or floating interest rate.
The two parties buy the home and the ownership of the property is determined by each party’s down payment.
The home buyer purchases the home.
The home buyer makes monthly payments to Guidance Residential. Part of the payment is a utility fee for full use of the home and the rest is a payment to increase the buyer's ownership in the property.
The home buyer makes monthly payments to repay principal and interest on the loan.
Over the course of the arrangement, the home buyer purchases all of Guidance Residential’s ownership stake and becomes the sole owner of the property.
Over the course of the loan, the home buyer repays the debt in full.