We wish to finance our house via an Islamically acceptable scheme. Here in the U.S. Guidance Residential LLC offers a mortgage plan, which is advertised to be halaal. Do give us your opinion of whether this method of financing is in accordance with the Shari?ah. Please find details of their product on their website www.guidancefinancialgroup.com
We had looked into this scheme some time ago, and according to the information available to us, this scheme involves Riba (usury). It is hence not permissible to finance one’s house through such a scheme.
Note: Before arriving at the above answer, various attempts were made to contact Guidance Financial and get input from their side.
Many months ago, we received a query similar to yours. We requested the brother to obtain all available documentation in regards as to how the scheme operates, and what the terms of the contract were.
After studying the documents, we picked up a number of issues which were clearly non-Shari?ah compliant. We then prepared a questionnaire, which was sent via email to the company on 15 August 2002. This was then followed up by a number of reminders, which did not yield any results.
We then pursued this with a fax dated 17 September 2002. We finally managed to elicit a response. The spokesman of Guidance Financial, Mr. Ahmed Attia, acknowledged receipt of our initial email, and said that the matter was under consideration. He explained that he had forwarded our queries to his Shari?ah Board, and that we could expect a reply by early October 2002.
October came and went, and yet there was no reply. We then followed this up with an email sent on 5 December 2002. In this email we stated that should no answers to our questions be forthcoming within 15 days, we will have to make a decision based on whatever documentation we have available with us. Still too there was no response.
To date (2003-01-24) we have not received a reply to our queries.
Guidance Financial claims to have an independent Shari?ah Board who have researched and approved their scheme. It thus implies that this Board ought to have done its homework well before the scheme was offered to the public. If this was the case, we find it difficult to understand why more than five months are required to give answers to issues that, it would be expected, were deliberated and resolved before the public offering of this financial product was made.
The non-co-operation of the company itself raises questions regarding its integrity.
and Allah Ta’ala Knows Best
Moulana Imraan Vawda
CHECKED AND APPROVED CORRECT: Mufti Ebrahim Desai