Companies

First Answer:

I have found no adverse reports on this company. They sell a variety of products such as one would typically find in a gift card store.

Big Scam

2-They claim they don't give loans.

They lie. They do give loans, they charge loan fees, they tell you the interest rate upfront, they don't make your payment according to the rent value of the property.

They will send you 1098 statement at the end of the year showing how much interest they charge you on your loan. If they don't charge interests and they don't give loans they can't send you this statement. All lenders who charge interest has to send statements to their clients to inform them of how much int erst charged them on their loan.

3- Note: When the home buyer takes a loan from them on the amount that he didn't bring in, then the home owner is responsible for the whole amount. why call them selves partners after that?

4- Partners place their names on the property Title, Guidance don't

5-Partners cannot enforce on each other on how much money the other partner has to bring in profits. The profits comes in according to how much the business bring is. one day it might bring in 50%, the second day it might bring in, 10% the third day it might lose money. Guidance predetermine their profits on the home buyers ahead of time. This doesn't happen in partnership.

5- partners share their profits according to the income that the property make.

Guidance Residential don't do that. They make their profits according to the interest rate.

when two partners in investment one partner can't enforce the little partner on fixed return for Thirty years. Example. Guidance and others enforce a a certain payment every month with a defined profits as 5 % 6% or any other number for the life of the loan. A Muslim investor can't enforce on his partner a certain and fixed return every years. In investments return can be 20% in one year and it can be loss in the second and it can be 100% in the third. Guidance and others don't share the risk of loosing.

If a borrower defaults on payments guidance take the house and sell it the market with out sharing the losses with the borrower from them. example. a person buys a property for 600k, borrower puts 20% down =120k Guidance puts 80% down. if the borrower defaults. guidance takes the property and sells it. let us assume that eh property get sold for 500k, and closing expenses where 30k. the net for guidance is 470k. Guidance will take the 470k and loose 10k. Nothing will go to the borrower. if it's a partner ship each party should lose proportionally according to their share. on a 130k loses. the 20 % of loses on the buyer should be $ 26000.00 and the partner who has 80% share should loose $104,000.00 Guidance and other financing companies don't do that. They sell he property deduct heir expenses, take all their share of money if any thing left they give to the other if not the losses on the borrower un proportionate.

Please see the facts.

What is Riba (usury) free finance? Riba (usury) free finance is to give loans at zero percent interest. a good example of this a subsidized government student loans. there are administrative fees only for the loan. the government can supply money to the public and bank can charge administration fee on the loans.

Yes. It offers a means for people to buy a house in compliance with Sharia law, but according to some Imams, it breaks Sharia law with "Riba" (usury) or usury.

The scam part is thus that it is not in compliance with Sharia law.

As to the rest, you are in theory buying a home with them as a majority partner, thus saving you the trouble of dealing with a bank and a big loan with big interest. However, it's glossed over that they themselves are classified as a lender, and this is really just an elaborate means of doing just what you could have done at a bank, but for less money.

You will be the minority partner, and slowly buy the majority from them. And pay a fee for your occupancy of the house. In some sense, it is like renting to own.

Understand, that some of these things can potentially be good. They will deal with some people who the banks won't deal with, so you have an opportunity you might not have had. However, given how much they will charge for that opportunity, you'd have been better off just saving your money, cleaning your credit, and then getting a home the usual way.

If you miss payments or default, you "partner" will seize "your" home as quick or quicker than a bank. And with you out of the way, they can "re-sell" it, and collect more fees, down payments and monthly payments from another.

As they are "charitably" dealing with people with financial troubles, it just happens to work out that those people default a lot. A cynic would suggest they are banking on this.

Bottom line, if you choose them, know that they are not Sharia compliant, and have an attorney or CPA look over the contract most carefully. But know you'd be better off with a contract for deed home, or a traditional bank mortgage.

Another viewpoint is this:

No. It offers a means for people to buy a house in compliance with Sharia law, with the board of directors made up of Imams and Muftis.

Because the contract was carefully designed by reputable Imams, including Mufti Taqi Usmani and Nawwar-ul Rahman, it is in compliance with Sharia law.

You will be the minority partner, and slowly buy the majority from them. And pay a fee for your occupancy of the house. In some sense, it is like renting to own. This is a form of Islamic loan called Murabaha.

You can get more information from their website and confirm with your local Imam, if you'd like.

Bottom line, because the Board is made up of Muftis, know that they are Sharia compliant. I have personally financed with them twice, even though my credit score is excellent and I could have gone anywhere. I am very pleased with their competitive rates and am thankful that there is a halal option!