Celebrating Homeownership Month
The Halal Path to Owning a Home in America
This June, we’re celebrating National Homeownership Month!
A home is more than a building and more than an investment.
It’s where life unfolds — a sanctuary for your family. It’s where little ones play and values are passed along. It’s where traditions and memories are made. It’s where grown children will bring their own babies to visit someday. It’s financial independence and security for generations to come.
For many, especially within the Muslim community, a home is also a foundation for spiritual and financial growth — a place that must be earned ethically and owned with integrity.
For many American Muslims, homeownership is not just about bricks and mortar—it’s about honoring values, faith, and ethical financial choices. That’s where halal mortgages and Islamic financing come in.
At Guidance Residential, we believe that the journey to homeownership should reflect your faith. That’s why we offer faith-based, Shariah-compliant financing solutions that help you build not just a house — but a home rooted in your values.
Because a true home gives more than shelter.
At Guidance Residential, we’ve made it our mission to provide a halal path to homeownership. With more than two decades of experience and tens of thousands of satisfied homeowners across the country, we’re proud to offer an ethical alternative to conventional home loans.
How Islamic Financing Supports Community Growth
Islamic financing is about more than just buying a home—it’s about empowering communities.
According to the International Housing Association and Habitat for Humanity, homeownership is good for families in many ways:
- They move less often
- Parents are less likely to divorce
- Kids are healthier
- They do better in school
- They’re more likely to graduate
- Teen pregnancy rates drop
- Children of homeowners become homeowners themselves 25% earlier – which also means they have more time to accumulate equity and wealth themselves and for their future children as well
It’s also good for communities:
- Properties and neighborhoods are better maintained, and therefore safer
- Homeowners are more likely to vote and attend their house of worship
- They’re more active in local organizations
According to Habitat for Humanity, it’s especially impactful for families who are not already wealthy:
- Low-income homeowners accumulate more wealth than comparable renters
- Low-income homeowners earn higher financial returns than high-income homeowners when considering costs and benefits (including potential rental value of the home they own)
Homeownership reduces reliance on debt and supports financial freedom and a wealth of positive outcomes.
With Guidance, your journey to homeownership also contributes to a larger mission of integrity and shared responsibility.
What is a Halal Mortgage?
A halal mortgage is a home financing solution that aligns with Islamic principles. Unlike conventional loans that involve paying interest (riba), halal mortgages use a co-ownership model based on partnership, not a lender-borrower relationship.
At the heart of halal or Islamic financing is Shariah compliance, ensuring that financial transactions avoid interest, excessive uncertainty, and unethical gains. The most suitable model — the model that Guidance Residential uses — is diminishing musharakah. In this arrangement, you and the financing company co-own the home, and you gradually buy out the company’s share.
The homeowner enjoys full ownership rights from the day they receive the key. Guidance Residential shares some of the risks of homeownership, but when the owner decides to sell, the profit from the sale is theirs alone. It’s a win-win for the home buyer.
How It’s Different:
- No interest (riba) charged or paid
- Based on real asset ownership, not debt
- Financier shares risk instead of transferring risk to home buyer
- Backed by Shariah supervisory boards to ensure compliance
Islamic Financing vs. Conventional Loans
Guidance Residential’s authentic Islamic home financing is built on an entirely different foundation from a conventional home loan. It’s built on co-ownership rather than borrowing money at interest.
| Feature | Islamic Financing | Conventional Mortgage |
| Equity Building | ✅ Yes | ✅ Yes |
| Free of Riba/Interest | ✅ Yes | ❌ No |
| Complies With Islamic Financial Principles | ✅ Yes | ❌ No |
| Risk Sharing | ✅ Yes | ❌ No |
| Oversight by Shariah Supervisory Board | ✅ Yes | ❌ No |
The Halal Way to Buy a House in the USA
How do you buy a home in the United States the halal way?
In a co-ownership arrangement, the financier and the home buyer purchase the home together, owning the home in proportion to the percent of the investment made by each. Each month, instead of paying interest, they pay a usage fee to use the portion still owned by the company. By the end of the contract term, they own the home in full.
Here are the steps:
- Get Prequalified
- Search for Your Home
- Enter a Co-Ownership Agreement
- Move In & Start Monthly Payments
- Buy Out the Company’s Share Gradually until you own 100%
Benefits Over Conventional Loans:
- Aligns with your Islamic values
- Full ownership rights from the beginning
- Shared risk
- Transparent and ethical
Am I Eligible?
Eligibility is based on factors such as income, debts and creditworthiness— similar in this sense to traditional mortgages.
When you apply for home financing, the financier will request and thoroughly review documents that demonstrate your credit, income, assets, and debt to income ratio. If approved, they will extend an offer for the amount of financing they are willing to offer you and the profit rate you qualify for as well.
Our team can guide you through everything you need to get started.
Read more: What to Expect During the Home Financing Process
Why Choose Guidance Residential for Islamic Financing?
At Guidance Residential, we don’t just offer a product—we offer a principled way to own your home in accordance with your values.
Here are a few of the reasons our customers choose us:
- Faith-Based Model: Built from the ground up on Islamic finance principles.
- Shariah Supervisory Board: Internationally recognized scholars provide oversight.
- Nationwide Reach: Available in more than 30 states with 40,000+ families served.
- Trusted Partner: Backed by financial integrity, transparency, and community commitment.
First-Time Homebuyers: What You Need to Know
Buying your first home can be overwhelming—but you don’t have to go it alone. Guidance Residential is here to help.
First, check out our educational resources online. There you can find the following:
- Videos explaining topics such as Guidance Is Not a Bank: Why an LLC Makes All the Difference
- Article such as First Time Home Buying 101
- White papers in greater depth
When you’re ready to take the next step, there’s a lot you can do online:
- You can try out our estimation calculators to estimate what you can afford and whether it makes more sense to rent or buy.
- You can apply for pre-qualification (a quick estimate) or pre-approval (the full process resulting in an approval letter) online at your convenience.
And when you want to talk with someone, your Account Executive is also happy to answer your questions and assist you.
We’re here for you every step of the way.
Do I Have to Be Muslim to Apply for an Islamic Mortgage?
No. Islamic home financing is open to anyone seeking an interest-free, ethical alternative to traditional loans.
Read more: A Comprehensive Guide to Buying Your First Home: 8 Things to Know
Ready to Take the Next Step?
A home purchase is one of the most important decisions you will make. The team at Guidance Residential is here for you, from the first step of pre-qualification or pre-approval, on through to finding the right real estate professional for you and your family — or refinancing a home you already own. We invite you to explore the home buying process with Guidance Residential today. You can also instantly calculate an estimate specific to your personal situation with our finance calculators online.
Guidance Residential remains the #1 U.S. Islamic home financing provider, with more than 40,000 families assisted over more than 20 years. Learn more about our co-ownership model of Islamic home financing, and get started on your home finance journey today.
*Your Guidance Residential Account Executive is here to help with any questions. Looking to refinance or purchase?*Have a friend or family member who is looking for a home? Call 1.866.Guidance, or start an application today.
