Is it permissible to finance the building of a house registered in another person's name with the intention of purchasing it later, while trading the amount in real estate activities and repaying it when it becomes easy?
It is permissible to purchase apartments through real estate financing if the apartments are owned by the bank and the contract is not accompanied by an impermissible condition, such as life insurance. It is also permissible to sell apartments through an Istisna' (manufacturing) contract, provided that their specifications and value are clearly defined in a manner that eliminates any ambiguity. One of the permissible forms is for Islamic banks to purchase a house from a contractor with the same specifications requested by the client, which is known as parallel Istisna'. If real estate financing is conducted according to Sharia guidelines, then purchasing apartments through it is permissible, and there is no objection to trading them thereafter.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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