Some scholars see no harm in performing the funeral prayer in the mosque

Hazrat Hisham bin Urwah narrates from his father that the funeral prayer of Hazrat Abu Bakr Siddiq was performed in the mosque itself.

Hazrat Abdul Muttalib bin Abdullah bin Hantab narrates that the funeral prayer of Hazrat Abu Bakr and Hazrat Umar was performed facing towards the pulpit.

Hazrat Abdullah bin Umar (may Allah be pleased with them) narrates that the funeral prayer of Hazrat Umar was offered in the mosque.

Hazrat Aisha (may Allah be pleased with her) narrates that by Allah, the Prophet Muhammad (peace and blessings be upon him) offered the funeral prayer of Hazrat Suhail bin Baida in the mosque.

It is narrated from Hazrat Muhammad bin Amr that the funeral prayer of Hazrat Umar was offered near the pulpit, and people in large groups were performing his funeral prayer.