Guidance Residential

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Guidance Residential
Private. Wholly Owned Subsidiary of [Guidance Financial Group]
Industry Mortgage, Real Estate
Founded 2002
Key people
Khaled El-Sayed (CEO)[1]
Products Declining Balance Co-Ownership Program (Shariah Compliant, Riba-Free Home Financing, Participatory Financing)
Website [1]

Guidance Residential LLC. is a U.S. based Islamic home financing company headquartered in Reston, Virginia. Guidance Residential is the largest Islamic home financing provider in the United States by total market share in the niche market. The company started operation in 2002 to provide Shariah compliant, riba-free (free of interest or usury) home financing contracts to Muslim American home buyers. Guidance Residential is a wholly owned subsidiary of Guidance Financial Group, which is a subsidiary of the parent company, Capital Guidance. The company has funded over $4.5 billion in Islamic home financing in American Muslim real estate market through its Declining Balance Co-Ownership Program. The Declining Balance Co-Ownership Program is a Shariah-compliant structure of home financing based on "Diminishing Musharakah" or Equity Partnership model which is a non-lending method of home financing and is unique to the Islamic home financing market in the United States.


1999 – 2002

Guidance Financial Group’s founder and Chairman Dr. Mohammad Hammour led a group to form Guidance Residential and embarked upon a multimillion-dollar R&D project to launch a Shariah-compliant home financing program for consumers in the United States. The project engaged 18 law firms and six world-renowned Islamic Finance Scholars to devise an authentic home ownership model compliant with both American and Islamic legal systems. After three years of research and development, Guidance Residential successfully designed their signature Declining Balance Co-ownership Program and launched Shariah-compliant home financing operations in 3 states. Freddie Mac agreed to cooperate with Guidance Residential as an investor to provide liquidity.

2002 – 2007

The company proved its viability by surpassing $1 billion in Islamic home financing in the U.S.

2007 – 2012

Guidance Residential was featured in major media outlets such as The New York Times, The Washington Post, Detroit Free Press, The Wall Street Journal, Associated Press, Houston Chronicle, PBS, Al Jazeera, CNN, and USA Today. In 2009, the company was also nominated as "Best Islamic Home Finance Provider" by Islamic Business and Finance Magazine.

Guidance Residential claims to be the largest corporate sponsor in the American-Muslim community with over $1.5 million in charitable contributions within 10 years of its inception.

2013 – Present

Guidance Residential became the largest Shariah compliant home financing provider with over $4.5 billion in funding Islamic home financing contracts in the U.S. The company currently operates in 26 states: Washington, Oregon, California, Arizona, Texas, Kansas, Minnesota, Wisconsin, Illinois, Ohio, Michigan, Connecticut, Massachusetts, New Jersey, New York, Pennsylvania, Delaware, Rhode Island, Maryland, Virginia, Florida, Georgia, North Carolina, South Carolina, Kentucky, and Tennessee.

Declining Balance Co-Ownership Program[edit]

Guidance Residential utilizes a Declining Balance Co-ownership Program that establishes an equitable co-ownership relationship between the consumer and the co-owner.

In this model, Guidance Residential and the homebuyer engage in a joint ownership venture where each owns a percentage of the home equal to the equity they each contributed. Homebuyers are required to make monthly payments to Guidance Residential over a predetermined period of time in order to completely buy out the equity from Guidance Residential and own the property outright. The monthly payment consists of two portions – one portion allocated for acquisition of the equity, and another portion allocated as rent for use of the portion of the home they do not yet own. The acquisition amount helps buy shares of ownership from Guidance Residential over a predetermined period of time and the rent is the profit Guidance Residential earns from the co-ownership program.

Guidance Residential claims to offer the following benefits through its Declining Balance Co-ownership Program:

• Co-ownership (Non-lending method of home buying)

• Riba Free (No interest / usury involved in the transaction)

• Capped Late Payment Fee

• Risk Sharing (The company shares risk with home buyers in case of eminent domain)

• No prepayment penalty

• Non-recourse commitment

Independent Shariah Supervisory Board[edit]

Guidance Residential’s independent Shariah Supervisory Board is composed of seven scholars of Islamic legal jurisprudence who are also the members of AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions). The role of the independent Shariah board is to scrutinize Guidance Residential's program to ensure authenticity in the product offering according to Islamic law. As part of the role of the board, it audits the company and its business operations to ensure that the products that are developed, delivered and maintained by the company are in compliance with ethical standards as per Islamic legal context.

The board:

  • Chairman: Mufti Taqi Usmani (Pakistan)
  • Member: Dr. Abdul Sattar Abu Ghuddah (Syria)
  • Member: Shaykh Nizam Yaquby (Bahrain)
  • Member: Dr. Mohamed Elgari (Saudi Arabia)
  • Member: Shaykh Yusuf Talal DeLorenzo (USA)
  • Member: Dr. Mohamad Daud Bakar (Malaysia)
  • Member: Dr. Muhammad Imran Usmani (Pakistan)


  1. ^ Egypt TV Interviews Guidance Residential President & CEO. 29 October 2010 – via YouTube. 

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