FAQs

How is the Co-ownership Program different from a conventional mortgage?

Is Co-ownership a more expensive way of purchasing a home?

How does Guidance decide who is eligible for the Co-ownership Program?

How long will it take for me to be approved for the Co-ownership Program?

How does Guidance decide how many payments should be made and for how much?

Can I, at some future time, make more payments than originally agreed upon?

What if I want to make improvements to the property?

What happens if I don’t make payments on time?

Are my payments to the Co-ownership Program tax-deductible?

Can I sell my house any time I want?

What factors determine the price?

Is the profit just another way to manipulate the traditional mortgage calculation?

How are the profit rate and monthly payments determined?

How is the Co-ownership Program different from a conventional mortgage?
A conventional mortgage is a debt whereby the borrower is bound to pay interest on the money owed, while the Guidance Declining Balance Co-ownership Program is a shared investment in real estate. This program is not a loan; it is a partnership.

In the unfortunate event of nonpayment, a conventional mortgage lender may take your personal assets to satisfy the debt. However, the Guidance Residential Declining Balance Co-ownership Program is a non-recourse agreement. This means that your other assets are not at risk.

Is Co-ownership a more expensive way of purchasing a home?
No. The cost of Co-ownership is competitive with other forms of home financing.

How does Guidance decide who is eligible for the Co-ownership Program?
Eligibility is determined by your overall financial profile, including your income, savings, and payment history. These factors also affect the amount of financing for which you can qualify. To find out more about the Co-ownership Program, fill out our apply online form.

How long will it take for me to be approved for the Co-ownership Program?
Upon receiving your complete application we can provide a conditional commitment within 48 hours. Generally, the entire process from application to closing can be completed within two weeks. To begin this process today, fill out our apply online form.

How does Guidance decide how many payments should be made and for how much?
The amount of your monthly payment depends on the amount of the contract, the term of the contract and the investors’ participation profit. We offer contracts for terms of 15, 20, or 30 years.

Can I, at some future time, make more payments than originally agreed upon?
Yes. If you make advance payments, your ownership stake will increase more rapidly and you will shorten the remaining term of the contract. There are no pre-payment penalties involved.

What if I want to make improvements to the property?
As the owner-occupant of the property, you are entitled to make improvements and profit from the increased value. However, you must obtain permission for improvements costing over $5,000, as they may affect the Co-owner’s investment. Such permission will not be unreasonably withheld.

What happens if I don’t make payments on time?
It is forbidden to make a profit off of late charges. However, if you fail to make payments on time, you will be charged an administrative fee to cover the additional cost of sending you reminder notices and processing your late payment. If you stop making payments, you may lose ownership of your property.

Are my payments to the Co-ownership Program tax-deductible?
Generally, the IRS considers a portion of the monthly payments and other costs in home acquisition financing to be tax-deductible. Please consult an independent tax advisor about your individual situation.

Can I sell my house any time I want?
Yes. However, you must simply inform Guidance Residential that you wish to sell and obtain permission to do so. Such permission will not be unreasonably withheld.

What factors determine the price?
There are several factors that determine the price; such as the term of the contract and the market rate of return on investment required by the investors who purchase the Co-Owner’s obligation.

Is the profit just another way to manipulate the traditional mortgage calculation?
No. The Guidance Residential Declining Balance Partnership Program utilizes a Co-Ownership Agreement to establish a unique relationship between the Consumer and the Co-owner. This agreement makes the transaction a business investment and not an interest bearing loan. We do not change the math; we change the way we do business.

How are the profit rate and monthly payments determined?
The profit rate is determined by analyzing a current market rate of return on real estate transactions as well as how the market values the utilization of the Co-owner’s portion of the property by the Consumer who eventually lives in the home.

The monthly payment is comprised of:

1. an acquisition portion;
2. a profit portion;
3. other portions that includes property taxes and hazard insurance payable by the consumer.

Where We Do Business/Licensing

Our Co-ownership Program is offered by Guidance Residential, LLC, a wholly owned subsidiary of the Guidance Financial Group, LLC.