The following question was put to the marja`:
The European Council for Fatwa and Research has declared it permissible to purchase a house using an interest-based loan in non-Islamic countries based on the juristic principle that necessities permit forbidden matters  and based on the statement of the Ḥanafis that it is permissible to deal in interest in Dar ul-Harb, and according to the Ḥanafis Dar ul-Harb is non-Islamic countries, as is mentioned in the fatwa.
It is worth mentioning that many Muslims act upon this fatwa, especially in America and in European countries. Thus, to what extent is this fatwa, which has been agreed upon by some scholars who are well-known in the Muslim world, valid and who bears the sin: the one who acts upon the fatwa or the scholars from this Ummah who issued it?
The marja`, Imam Muhammad Sa`id Ramadan Al-Bouti, may Allah have mercy upon him, answered with what follows:
This fatwa that has circulated and been attributed to the Ḥanafi madhab is a lie and an act of oppression against them, for the Ḥanafis do not say that every land of unbelief is Dar ul-Harb.
If that were the case then it would be obligatory upon the Muslims to fight all of them, and may a Muslim be far from saying such a thing. Dar al-Harb refers to a country that the Imam of the Muslims has declared war against, and thus whatever of their wealth that reaches us during that time is war booty for us and whatever reaches them of our wealth is war booty for them.
Therefore, dealing in interest is impermissible for a Muslim in every time and in every place. When you find yourself in Dar al-Ḥarb you fight the combatants who fight you. Every event has a discussion and every problem has a solution.
This was taken from Al-Hajj Mahdi Lock via the original personal website of the Imam that is no longer active.
 (tn): even though buying a house is not necessary for preventing death and destruction