Creating New Financial Services for U.S. Islamic Consumers
Given the decades-long investment and management experience of our parent corporation, Capital Guidance, in the United States, this country was one of the first markets that we chose for creating new Islamic Finance investment products. Our research showed that U.S. Muslims faced very limited options for purchasing values-based financial services, which led us to imagine and create Guidance Residential as a new U.S. consumer finance company.
We went from idea to solution in less than two years after the founding of Guidance Financial Group. Today, Guidance Residential is the largest provider of Shariah-compliant home financing in the United States to the more than two million U.S. Muslims. Guidance Residential has operations in 22 states and has funded $2.3 billion of residential financing contracts since its inception.
We faced formidable challenges in launching this company. The U.S. financial services industry is heavily regulated at the federal, state and local levels. In addition, it is the most competitive market in the world. The formation of Guidance Residential required creativity, skill, research, capital and a deep understanding both of the regulatory structures across the country and the needs and desires of U.S. Muslims. We built the company from the bottom up, creating the product and the mortgage structure so that the financing was Shariah-compliant but still allowed the consumer to take advantage of important U.S. mortgage tax deductions and gain the added protections and benefits
that are intrinsic features of Shariah contracts.
We did substantial research and development, working closely with our strategic partner, Freddie Mac, to create mortgage products that would meet the investment requirements of secondary market participants, including Freddie Mac.
We gained considerable experience in our ongoing work with Freddie Mac, a public government sponsored enterprise that promotes home ownership by expanding the secondary market for mortgages. We are now exploring ways of transferring our knowledge to emerging market countries to help them stimulate an expansion in their levels of home ownership.