“Using Funds from a 401K Account”

“Using Funds from a 401K Account”



Good morning Joe,

As you’re aware we have an accepted offer on a new home.  We are just waiting for Nicks quote on the work; Just a couple of questions about the loan/process.  Can I use 401k money to make the down payment t on the property?   And can we move in during the repairs or do we need to wait till everything is finished to move in?  

Thank you, Dan


The simple answer is it depends on the terms of the particular account. Many allow for withdrawal or the ability to borrow against these funds.


It is important to know if withdrawing these funds it will cause a tax consequence for an early withdrawal. This is not the case if someone borrows against the balance in the account and the payment does not count as part of the debt ratio as the person is borrowing from themselves. 


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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com



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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 5 commentsJoe Petrowsky • June 21 2017 12:36PM


Joe Petrowsky You could write a well-received blog just on this topic...if it you had the time? Great topic for conversation!

Posted by Sandy Padula and Norm Padula, JD, GRI, Presence, Persistence & Perseverance (HomeSmart Realty West & Geneva Financial, Llc.) about 2 years ago

Good morning Joe. Some are not aware of the opportunity. Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) about 2 years ago

Good Morning Joe- as Chief  HR officer and plan administrator I advised many to only use withdrawa as a result of advice from their accountan.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) about 2 years ago

Joe, I have been doing Investor properties with 401Ks in Oklahoma. Can you do these in Oklahoma?

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) about 2 years ago

Joe, the devil is in the details.  I recently had clients borrow money for a 10% second. It made much more sense as it elimited PMI which would have been nearly $600 a month. 

Posted by Kathleen Daniels, San Jose Homes for Sale-Probate & Trust Specialist (KD Realty - 408.972.1822) about 2 years ago