Can I use my 401(k) or IRA for a down payment?

A 401(k) offers a borrowing route: take a loan of up to 50 percent of your vested balance, capped at $50,000, repay it with interest usually within five years (some plans allow longer for a primary residence), and there is no tax or penalty as long as it is repaid. The risk is that leaving your job can make the balance due quickly or convert it to a taxable distribution. IRAs have a true first-time-homebuyer exception: up to $10,000 per person, lifetime, penalty-free, and a spouse gets their own separate $10,000. You qualify as a first-time buyer if you have not owned a principal residence in the prior two years, and the funds must cover qualified acquisition costs within 120 days. The exception only waives the penalty; a traditional IRA withdrawal is still taxed as ordinary income. Roth IRA contributions can be withdrawn anytime, tax and penalty free, which is often the cleanest place to start. The real cost of every route is the retirement growth you give up, so the long-term numbers deserve a look before you tap retirement savings. Julian Cesar pairs buyers with lenders who can model how each source affects loan approval.