What is the Islamic ruling on taking a loan from a usurious bank in order to build a modest house?
It is Haram (prohibited) to take a loan from banks or elsewhere with Riba, whether to build something or to spend it on food, clothing, or medical expenses (Part No. 13; Page No. 386) or to start a business and earn more money, or any other purpose, because of the general meaning of the Ayahs (verses) that forbid Riba and the general meaning of the Hadith indicating that it is Haram. Similarly, it is not permissible to deposit money in banks and the like in return for interest.
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.