Plan loan
If the plan permits it, a participant may borrow against the account and repay through plan terms. Job changes or missed repayment can create tax consequences.
Buying a Home
Using a 401(k) for a home purchase
A retirement-plan loan and a hardship withdrawal are different tools with different repayment, tax, penalty, and plan consequences. Explore them carefully before touching retirement money.
Hardship withdrawal
A qualifying distribution generally is not repaid to the plan and may be taxable or subject to penalties, depending on the circumstances.
Mortgage documentation
The lender may need plan statements, withdrawal or loan terms, proof of receipt, and evidence of funds used for the transaction.
Get qualified advice
Ask the plan administrator and a tax professional about consequences, then let me confirm how the funds and any repayment affect the mortgage.
Written by Marta Lillard
25+ years of mortgage experience, explained in plain English.
Mortgage Broker · First Coast Mortgage Funding · NMLS #879436 · Licensed in Florida and Georgia
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