Is the aforementioned financing formula for purchasing a home, which involves an Islamic institution establishing a trust fund to purchase the property through an intermediary, and paying rent to the fund with the possibility of full ownership of the home at the end of the term for an agreed-upon fee, Islamically permissible (halal)?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
The transaction described involves purchasing the home box and leasing it to the customer with a promise of ownership. However, details regarding maintenance, warranty, insurance, the role of the intermediary, and credit are unclear. One of the conditions for the validity of an Muntahia Bittamleek (lease ending in ownership) is that the lease must be genuine and not a disguised sale. The questioner's statement, "I can do anything to the home, renovate/sell/lease," indicates that the lease is a disguised sale, which renders the transaction invalid.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/19892
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 19892
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy