Islam is based on the founding principle of establishing justice in all matters. In financial transactions, Islamic law mandates that risk must be equally shared so that both parties enjoy the benefit of the transaction without exploitation. This imbalance, or "Riba" is prohibited in Islam, as money created above the amount of a loan such as interest can lead to societal imbalance and perpetuate income inequality. Guidance Residential's Declining Balance Co-ownership program is an ethical and participatory financial transaction where only real assets are purchased and the risks are shared between Guidance and its customers.
The United States Founding Fathers, as well as notable Christian and Islamic financial scholars of the world have all voiced concern about the effects that interest would have on individuals and families. Before Guidance was formed, Muslim Americans who wanted to uphold Sharia law could not participate in the American Dream of owning a home because the pathway to home ownership was "Riba" With the creation of the Declining Balance Co-ownership Program however, Guidance created a modern solution to an ancient problem and Islamic finance could now benefit those who do not want to compromise their faith or principles.
Homeownership is an essential part of the American Dream. Guidance Residential makes this dream a reality for Muslim-Americans by offering a Declining Balance Co-ownership Program that establishes an equitable co-ownership between the customer and Guidance Residential.
The agreement makes the transaction a form of partnership rather than an interest-bearing loan as in the case of a conventional mortgage program. While adhering to the principles of the Muslim-Americans, Guidance Residential is helping all consumers achieve their goal of homeownership and gain protections and competitive benefits that are not available with conventional mortgages.