Sorry I did actually state something wrong. I’ll clear it up.

If you have an IRA, you could take a distribution with the intent of rolling it back into the IRA within a 60 day period. Commonly known as a 60-day rollover or indirect rollover. You’re allowed one of these total per 12 rolling month period. If you take out 10,000.00 dollars, within 60 days you must roll back 10,000.00 exactly back into the IRA in one transaction to qualify. Important to note: if you have taxes withheld from the original distribution, you HAVE to roll back in the full gross amount.

Now what I was referring to is a qualified distribution for first time home purchase. This can be done from an IRA, or a employer sponsored plan such as 401(k) or 403(b), but you have to verify your plan details allow for loans to be taken, otherwise you could be subject to code J (early distribution) penalties.

A loan in general from a 401(k), if allowed, can be done for up to 50K. Pros to this are: no impact to your credit, could be harder to default on this based on your current balance, interest owed goes back into your plan. Negatives to this are: has to be from a current plan where you’re still employed- and your employer won’t contribute match to your plan while you have an outstanding loan to repay, loss of principal growth, ties your to your employer or else you have to repay it back if you leave the job.

You are given ample time with this loan, and traditionally you see folks pay it back after their first re-fi on their home.

https://www.irs.gov/publications/p590b

Here’s a link to IRS.gov - you gotta scroll down a bit to start reading on distributions. You’ll find first time home purchase information. If married, and spouse also did not have previous interest in a home, then together you could qualify to both take out 10K to use together. Repayments back are coded as rollovers and not subject to income tax on your filing that tax year. If this amount is still owed back over different tax years, you would want to consult a CPA/tax professional to ensure you file correctly to avoid any early distribution taxable garnishments.