3. HDB Housing Loan
Well, this is where things get a little tricky. Loans are
interest-based. Hence it is Haram, right? Well yes, and most foreign scholars
and Syariah will agree. But how is Singapore different? Well, here’s the thing.
Singapore’s Syariah says you can. Because there is no choice. You have to take
a loan or be homeless forever. And that’s where the foreign Muslim population
do not understand. Try it. Go and tell Muslims in other countries that you can
take an HDB loan in Singapore. They will scream at your face at the top of
their lungs, “HARAAAAAAAAAAAM”. Then they will tell you to rent the house and
slowly save your money to buy the house. All foreign Islamic scholars will tell
you that, trust me. But what they don’t understand is that, yes, we can do
that. But we will die of old age before we have enough money to buy the house.
If that’s the case, no Muslim will own properties in Singapore. It takes a
lifetime to afford a house in Singapore probably 2 lifetimes to add the monthly
rent. And that is why Singapore’s Syariah allows HDB loans. There are Halal
Housing Loans by the way. But somehow, talks between the CPF Board and Maybank
fell apart which is why the Loan can only be used to finance a housing
investment in Malaysia. It is still useful though, and I will cover investments
more in-depth in a later part.
Next Chapter...
Next Chapter...
Thank you for writing up on this. Although, I knew that there were only two ways to buy hdb, CF loan or Bank loan, I emailed MUIS asking on the halal options to buy home and they replied to me saying that we can take an hdb loan (preferably cpf loan), only if it is a necessity, hence the question remained ambiguous. So here, we need to define what is necessity. A home is necessary for everyone, but does it mean an own home is considered necessary? If you can afford to pay rent for a small house, is an own home considered a necessity? You are right, all foreign scholars will say its haraam, even though you spend more than 70% of your salary for your home. They say this because "Riba is equivalent to fighting with Allah" and they say that for every penny paid in rent, there is barakah (reward) for the hereafter. And if anyone prays in the house for which you pay riba, then the prayers are at stake. You have mentioned about halal housing loans in your article. Are these available for Singapore? In other countries, there are schemes like crowd funding, islamic banks. What does it take to implement a crowd funding system in Singapore, so that all Muslims can be benefited? Or are there any new options that can be implemented in the community?
ReplyDeleteAt this moment, there are no Syariah-compliant housing loans in the Singaporean markets. Crowdfunding seems like the most achievable solution. However, there may be many roadblocks preventing us from doing so.
DeleteFirstly, the finance sector in Singapore is highly regulated. If you noticed, the P2P lending market in Singapore is restricted to only the SME sector. On a P2P platform, individuals can crowdfund and pool together resources to provide loans to SMEs. From my understanding, we aren't allowed to lend to individual consumers. Such activities are restricted to large regulated financial institutions like banks.
It may still be possible however, but it would involve us setting up some sort of Credit Union to provide shariah-compliant housing loans. But then again, if a major bank like Maybank fails to convince CPF to allow shariah-compliant loans, I am sure the issues are more complex than what it seems on the surface.
I once raised this suggestion in a WhatsApp group discussing Islamic Finance in Singapore. I questioned the possibility of forming a Credit Union with wealthy Muslims depositing funds in the Union to be used for providing shariah compliant loans to Muslim households in Singapore. I was quickly turned down by a more experienced person who told me to instead hope and pray for the existing Islamic banking windows in Singapore to come up with a solution instead.
Maybe I was naive in thinking crowdfunding could solve this issues. Maybe the roadblocks are too complex for me to comprehend. I ended that conversation a little disappointed and very much frustrated.
If you could think of a workable solution do share with the rest of us. We need motivated Muslims in Singapore to work together and find a solution to our current predicament. In shaa Allah.
This means buying a condo with bank loan is haram yeah? Since HDB loan is the only one that is halal as per our syariah law?
ReplyDeleteAs with all things, the answer is.. maybe? I think it would be very hard to justify our "needs" for darurah to be considered. Established speakers on this matter would say a non-shariah compliant loan becomes permissible if it fulfils a true "need". Shelter for ourselves and our family is definitely a legitimate need. But there's HDB to fill that need.
DeleteBuying a SGD 2 million valuation condo is a whole other ball game. Does it fall under the darurah principle? My opinion is that it does not. But I'm not a scholar, you might want to take my opinion with a huge grain of salt.