What Are Qualified First Time Homebuyer Distributions?
Using funds from a 401k for a down payment on a home is NOT an exception to the early withdrawal penalty. If you took money out of a traditional IRA, the first $10,000 would not be subject to the early withdrawal penalty.
Can a first time home buyer take a traditional IRA distribution?
The next choice would be to take a distribution from a traditional IRA. As a first-time homebuyer, you can take a $10,000 distribution without owing the 10% tax penalty, although that $10,000 would be added to your federal and state income taxes.
