Buying A Home With 401k Money Apr 2026

Most experts consider a loan the better option because it avoids immediate taxes and penalties as long as it is repaid.

Using 401(k) funds to buy a home is possible, but it is generally considered a high-cost strategy due to potential taxes, penalties, and lost retirement growth. In 2026, most buyers choose between taking a or a hardship withdrawal , each with distinct rules. 1. The 401(k) Loan (Recommended Over Withdrawal) buying a home with 401k money