Home » Hanafi Fiqh » Muftionline.co.za » Shariah Compliant Home Financing: A New Option for Muslim Buyers

Shariah Compliant Home Financing: A New Option for Muslim Buyers

Answered as per Hanafi Fiqh by Muftionline.co.za

Q: Our locally accepted Mufti Sahib has developed a plan with a community bank that offers ‘Shariah Compliant’ home financing. The structure is as follows:

1.) The Muslim buyer would select the property and the bank would purchase it with a contact for immediate resale to the Muslim Purchaser for a fixed amount that would include the bank’s profit.

2.) The Muslim buyer would be given a fixed price and will not vary with interest rates.

3.) The Muslim buyer will have to sign a contract to buy the house from the bank before the bank purchases the property from the original seller.

4.) The bank states that they will take a loan on which they pay interest from a secondary source to finance such a purchase.

Based on these terms do you believe it is no longer a Riba contract?


A: This operation is not Shari’ah compliant. Since the bank will have to take an interest bearing loan in order to purchase the house and sell it to the client, it will not be permissible.

And Allah Ta’ala (الله تعالى) knows best.

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from MuftiOnline.co.za, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

Read answers with similar topics: