Turkey’s top religious body approves interest in purchasing gov’t-backed agency homes
Turkey’s top religious body has issued a fatwa, an Islamic legal opinion, saying that interest on mortgage loans from the government-backed housing agency are religiously permissible.
The state Religious Affairs Directorate (Diyanet) ruled that interest on loans taken out to buy houses through Turkey’s Public Housing Development Administration (TOKİ) programmes is not a sin, and does not contradict Islamic teachings, which forbid interest, the Birgün newspaper reported.
“Because the state does not allow for another method to purchase real estate with the TOKİ programme, it is religiously permissible to take advantage of this project,” the Diyanet said in response to a question.
TOKİ last year began offering big discounts on apartments following an economic slump that caused a crisis in the housing market.
Property prices are sliding after a currency crisis caused a surge in inflation and interest rates on mortgages. The government has sought to revive the industry with discounts, lower taxes and cheap mortgages provided by state-run banks.
The Diyanet last year ruled that it was not permissible to use interest rates as a way to tackle inflation, Birgün said.
“Interest is absolutely forbidden and banned in the religion of Islam. Making permissible that which has been banned by Islam is not in the authority of anyone,’’ the Diyanet said at the time.