Home Financing in Current Times
Ml Yusuf Karaan
3 May 2023
Is it permissible to obtain a Ribā-bearing (interest-bearing) home loan in Dār al-Ḥarb, and what is the definition of Dār al-Ḥarb?
I ask this question because I am curious and, may Allah protect me from falling into it, because where I live in France there are strong Muslim communities with individuals that have taken out Ribā-bearing home loans. Part of the community has the financial means but refrains from buying by this kind of means, and the other part of the community (which is totally versed in this kind of home and vehicle loans) proceed to take out Ribā-bearing loans.
Is it permissible to invoke the principle of need to allow the use of Ribā-bearing loans as financing?
السلام عليكم ورحمة الله وبركاته
Following the collapse of the Ottoman Empire in World War I and the Muslim Diaspora, classical definitions of Dār al-Ḥarb have ceased to be implemented, instead replaced, for all intents and purposes, with that of:
- Dār al-Amān – any country that allows for Muslims to take up residence and openly practice the Shaʿāʾir (شعائر) of Islam (e.g., build masājid, perform janāʾiz, Jumuʿah, ʿĪd etc.) without targeted oppression, e.g., South Africa.; and
- Dār al-Ḥarb – any country where Muslims are not allowed to freely practice Islam, e.g., India or Burma.
With this settled, the Shāfiʿī Madhhab does not permit Ribā under any circumstances, not in Dār al-Amān nor Dār al-Ḥarb, nor between a Muslim and kāfir ḥarbī (a non-Muslim in Dār al-Ḥarb).
قال الإمام النووي في (المجموع):《 لا فرق في تخريمه [أي الربا] بين دار الإسلام و دار الحرب فما كان حراما في دار الإسلام كان حراما في دار الحرب سواء جرى بين مسلمَيْن أو مسلم و حربي سواء دخلها المسلم بأمان أم بغيره 》. (٣٩١/٣)
That being said, here in Cape Town, a fatwā was issued some decades ago allowing for home loans to be taken out despite the interest, using as its basis the principle of ḥājah (need). This fatwā, however, should be understood in light of the time and circumstance under which it was issued: a time when the Cape Muslims were still dealing with the ramifications of the eviction and involuntary relocation from their homes under the Group Areas Act of the segregationalist Apartheid government. Additionally, no Islamic financing alternatives were available at the time, nor was renting a realistic option.
At present, these previously mentioned alternatives are readily available in South Africa, with numerous conventional banks offering Islamic alternatives for home and vehicle finance, home rental being much more plausible, and as such, this fatwā can no longer be implemented, at least not here in South Africa. As for those people who continue to pay off mortgages having relied upon this fatwā, inshā-Allah, they will be excused.
In order to give a definitive answer for those in France, we need to determine the following:
- What level of Islamic home finance alternatives are available, whether by conventional or Islamic banks? (As far as I’m aware, there are no real Islamic consumer banking options available in France, only corporate ones.)
- How accessible is renting?
The presence of these alternatives will quash the feasibility of applying the principle of need.
وﷲ تعالى أعلم
And Allah knows best
DUAI Fatwa Department