There are certain things that are deductible as pre-tax. Medical expenses, dependent care..... A new stove is not one of them. Post tax, no one cares. Pre-tax, the IRS cares. As for the interest free, if the same organization charges interest to others than the amount you are not charged becomes taxable income as well. Who advises them on this stuff?
Section 125 - Kitchen oven - I don't think so.