Resolution No.(155)(20/2010) by the Board of Iftaa`, Research and Islamic Studies:
"Ruling on the Loan Conditioned by Making a Fixed Monthly Payment to a Solidarity Fund whose Benefit Goes to the Borrowers"
Date: 26/12/1431 AH, corresponding to 2/12/2010 AD.
All perfect praise be to Allah, The Lord of The Worlds; and may His blessings and peace be upon our Prophet Mohammad and upon all his family and companions.
During its eleventh session held on the above date, the Board reviewed the following question:
I`m a government employee and I have received (22000) JDs as a housing loan. Upon collecting that sum, I found out that I should pay (100) JDs as stamps, and that there was a solidarity fund related to the Employees Housing Fund by which (5) JDs are deducted monthly besides the installment, regardless of the loan`s value, which ranges between (15000) and (30000) JDs. It is worth mentioning that the repayment period is (20) years and this applies to all the employees, regardless of the loan`s value. By conclusion, each employee pays (1200) JDs to the solidarity fund over twenty years, knowing that in case an employee dies, this fund pays off all his unpaid installments, regardless of the amount due to the Housing Fund, whether it was (30000) or one JD, and his heirs aren`t liable for repaying any sum.
After thorough deliberations, the Board decided what follows:
The above loan is permissible because the value of the stamps goes to the public treasury, so there is no harm in paying that amount. Moreover, it isn`t usurious because in usury it is a condition that the loan brings profit to the loaner himself; whereas, the value of the stamps goes to the state, not the loaner.
As regards the payments made to the solidarity fund, they are permissible as well, because it enhances solidarity amongst the borrowers. However, each fund should have its independent account so that payments made to the solidarity fund aren`t re-loaned by the Employees Housing Fund. This way eliminates the suspicion of usury.
It is better that you (questioner) pay the whole amount due to the solidarity fund at the beginning so that nothing gets deducted from the loan or added to it; rather, paying that amount in advance should be a condition for taking the loan. This way, the contract becomes free from the suspicion of usury. We advise participants to pay that amount in advance as a kind of grant or donation. And Allah Knows Best.
Head of the Iftaa` Board, The Grand Mufti of the Hashemite Kingdom of Jordan, His Grace Sheikh Abdulkareem Al-Khasawneh
Vice Head of the Iftaa` Board, Dr. Ahmad Hilayel
Dr. Yahia Al-Botoosh/ Member
His Eminence, Sheikh Sa`ied Hijjawi/ Member
Dr. Mohammad Khair Al-Essa
Judge Sarrie Attieh
Dr. Abdulrahman Ibbdah/ Member
Dr. Mohammad Oklah/ Member
Dr. Abduln`nassir Abu Al Bass`al/ Member
Dr. Mohammad Al-Khalayleh/ Member
Dr. Mohammad Al-Gharaibeh/ Member
Executive Secretary of the Iftaa` Board, Sheikh Mohammad Al-Hunaiti