The Ruling on Purchasing a Government-Built House Through Instalments

Question:

In my country, Djibouti, we have the government building houses and completing them. Thereafter, any native may come forward to buy the house by paying a quarter or half its worth upfront, upon which he collects the key and becomes the homeowner.

He then pays the rest as soon as possible in instalments each month through his monthly salary—not through a bank—which could take close to five years to pay off. What is the ruling on entering the likes of this transaction?

Answer:

“If this is out of compassion for the natives and the poor, then this is a good act of generosity, and this support from the government is praiseworthy.

However, there is something [that needs to be confirmed], which is: if he misses an instalment, will the outstanding amount be increased?

Because if the outstanding amount is increased when he makes a late payment—whether they increase it by a little or a lot—this is not permissible; [it is] ḥarām because it is an interest-based agreement.

Likewise, if the poor person becomes unable to pay the outstanding amount and would like to withdraw, will he be given back the money he put in, or will the government keep it?

If these two factors exist in the contract, then this contract is unlawful, ḥarām, and an unjust consumption of people’s wealth.”

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Answered by: Shaykh Abū Bilāl al-Ḥaḍramī (May Allāh preserve him)

Source : https://t.me/abubilalhami/8993

Translated by: Abū Sufyān Sāmī ibn Daniel al-Ghānī