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Can I use my retirement funds to buy a house?

Yes, you can use a loan or a withdrawal from your retirement account to provide down payment funds for a home purchase. However, doing so may come with additional penalties or costs.

Likely, the best case scenario is if you qualify as a first-time homebuyer and withdraw funds from an individual retirement account (IRA) for the down payment of a home purchase. 
  • A first-time homebuyer may be a borrower who did not have ownership interest in a home in the past two years. If you are married, this requirement also applies to your spouse.
  • If qualified, you may be able to use up to $10,000 from your IRA toward the down payment of your home without a penalty. $10,000 is a lifetime limit. 
  • For Roth IRAs, your first contribution may need to be at least five years ago to qualify.
  • If qualified, your withdrawal may not be subject to taxes that typically apply to early withdrawals from retirement accounts. You have a 120-day window from the date of the withdrawal to use the funds.  
Other scenarios may involve additional costs. You may be able to borrow money directly from your account with an interest rate or withdraw funds before the defined retirement age with an early withdrawal penalty. This is not intended to serve as tax advice. Please consult a tax professional to accurately assess your unique situation.