I am planning to get sharia compliance loan for buying home from a company here in America. I have to pay 20% downpayment for that and I am going to borrow this (20%) money from my friend and will return it to him ASAP. Can I also pay him back 20% of the market rent of that house since technically he has 20% share in that house although in papers it is in my name. Would that rent be considered interest or just rent. As I pay him back his money, his share will decrease and so will rent.
Answer
(Fatwa: 313/311=M)
In the above case, when you are buying home for yourself and taking 20% of the price as debt from a friend, then you have to pay him only 20%, paying some additional amount as rent will turn in to interest because this profit is drawn upon the debt and every debt which fetches profit is interest, as the Hadith says: کل قرض جر نفعاً فھو ربوا
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband