Is the transaction that took place to purchase a house by borrowing from a friend, on the condition that the friend benefits from the house until a certain date, and then the house becomes my property after that date, Islamically permissible?

This transaction is impermissible because, in essence, the friend has given a loan that yields a benefit, and this benefit is his utilization of the property through its rental for the duration of the loan repayment. Every loan that yields a benefit is usury (riba). Imam Ibn Abd al-Barr stated that any increase in a loan or any benefit enjoyed by the lender is usury and forbidden if it is stipulated as a condition.

The reason for prohibiting this transaction is that a loan contract is intended for assistance and nearness to Allah. If the lender stipulates an increase for himself, it deviates from its intended purpose, thus invalidating its permissibility. The same applies to the lender stipulating any action that brings him benefit, such as renting out a house.