Can zakaah be given to one who will build a house with it?
Question

Is it permissible to give my zakaah to a person who needs the money to build a house?.
Praise be to Allah.There are eight categories of people who are entitled to zakaah, whom Allaah mentions in the verse in which He says (interpretation of the meaning):  
“As-Sadaqaat (here it means Zakaah) are only for the Fuqaraa’ (poor), and Al‑Masaakeen (the poor) and those employed to collect (the funds); and to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for Allaah’s Cause (i.e. for Mujaahidoon — those fighting in a holy battle), and for the wayfarer (a traveller who is cut off from everything); a duty imposed by Allaah. And Allaah is All-Knower, All-Wise”
[al-Tawbah 9:60]
These categories have been explained in the answer to question no. 46209. 
The majority of scholars are of the view that the poor or needy person is to be given that which will suffice him and those on whom he spends for a year. They set the time as one year because zakaah is paid every year. 
It says in al-Mawsoo’ah al-Fiqhiyyah (23/317): 
The amount of zakaah that should be given to the poor or needy person: 
The majority (the Maalikis, and it is one view of the Shaafa’is and is the view of the Hanbalis) were of the view that the person who is in need and is entitled to zakaah due to poverty or want should be given zakaah that is sufficient for him and for those on whom he spends for an entire year. And he should not be given more than that. They specified one year because zakaah is usually given every year, and because the Prophet (peace and blessings of Allaah be upon him) stored food for his family for one year. End quote. 
Based on this opinion, it is not permissible to give the poor or needy person zakaah funds with which to buy or build a house, because this is more than what will suffice him for one year. Rather he should be given money to pay the rent of a house for a year. 
Imam al-Shaafa’i was of the opinion (which is also mentioned in one report from Ahmad and was the view favoured by Shaykh al-Islam Ibn Taymiyah) that the poor or needy person should be given enough zakaah funds to make him independent of means, and they did not limit that to what will suffice him for one year. 
It says in al-Mawsoo’ah al-Fiqhiyyah (23/317): 
The Shaafa’is, according to one report, and the Hanbalis according to one report that was narrated, are of the view that the poor and needy may be given that will save them from want and make them independent of means, which is what will suffice them on a permanent basis, because of the marfoo’ hadeeth of Qubaysah which says: “Asking of people is not permissible except for three: a man who is stricken by a calamity which destroys all his wealth, so it is permissible for him to ask of people until he gets enough to get by on.” They said: If he had a skill or trade, he should be given something with which to buy the tools of his trade, regardless of whether they are expensive or not so that he can earn enough money to almost suffice him. If he was a trader he should be given in a similar fashion.   And if he was a farmer, a farm should be bought for him and its produce may be enough for him on a continual basis. End quote. 
Shaykh al-Islam Ibn Taymiyah said, in al-Ikhtiyaaraat (p. 105): 
The poor man may take of zakaah that which makes him independent of means, even if it is a lot. This is one of the two views in the madhhabs of Ahmad and al-Shaafa’i. End quote. 
Al-Mardaawi (may Allaah have mercy on him) said in al-Insaaf (7/255): 
The correct view is that both the poor and needy may take that which will suffice them for a year. It was narrated from him [Imam Ahmad] that he may take that which is sufficient for him to engage in trade or the tools of his trade and so on.  
Others, including Shaykh Taqiy al-Deen (Ibn Taymiyah) favoured the view that it is permissible for the one who is entitled to zakaah to take one lump sum of zakaah which will make him independent of means, even if it is a large amount. End quote. 
Imam al-Shaafa’i (may Allaah have mercy on him) said (8/256): 
There is no defined amount of what may be given to the poor person, except that it should be that which will take him out of poverty and make him independent of means, whether that is a little or a lot. End quote. 
Zakariya al-Ansaari quoted in Asna al-Mataalib (1/100) from al-Qaadi Ibn al-Tayyib a comment on the words of Imam al-Shaafa’i; he said: 
What he means is that independence of means should be permanent. Each of them should be given that which will give him capital and extra for living expenses. If a person is a scholar who does not know how to do business well, land should be bought for him, the produce of which will suffice him on a permanent basis, and if he has a skill, then the tools of his trade should be bought for him. End quote. 
Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) said in al-Sharh al-Mumti’ (6/221): 
The poor man should be given that which will suffice him until the end of the year, because zakaah is repaid every year. If it is said that he should be given it until he becomes independent of means and is no longer described as poor, that is a valid point. The same may also be said of the needy. End quote. 
Based on this view, we may give him enough to buy a house in which he and his family will live or we may give him the cost of the tools of his trade, if he has a skill, or we may give him enough to buy property that he can rent out, and the rent will suffice him, if he does not have a skill or does not know how to engage in trade. So there is nothing wrong with giving him money to buy a house to live in. 
Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) favoured the first view, which is that it is not permissible to give a poor person zakaah with which to buy a house, rather a house may be rented for him with zakaah funds. 
He (may Allaah have mercy on him) was asked about a poor man whose friends wanted to collect zakaah for him to buy a house, and in fact they collected zakaah for him and bought a house for him, knowing that the people who paid zakaah were not thinking of buying a house or anything else, rather their intention was to pay zakaah. 
He replied: 
I do not think that it is permissible to give zakaah to buy a house for a poor person, because buying a house takes a lot of money. If the aim is to meet the needs of the poor person, then a house may be rented for him with zakaah funds. I will give an example of that: a house may be rented for a poor man for ten years at a cost of ten thousand riyals, but if we buy a house for him we will not find anything for less than one hundred thousand or two hundred thousand. So it is not permissible to give him this money and deprive other poor people. We say: It should be rented for the poor person, and if he is still poor when the rental period ends, then we should rent it for him again. As for buying a house for him with zakaah funds, I do not think it is permissible. 
Yes, if one of the scholars has issued a fatwa saying that this is permissible, then this issue is one that is subject to itrihaad. End quote from Fataawa Noor ‘ala al-Darb. 
And Allaah knows best.