To use your 401(k) to buy a house without a penalty, you have two primary methods: taking a or utilizing a Roth 401(k) contribution withdrawal . While common, "hardship withdrawals" for home purchases usually still incur the 10% penalty unless a rare specific exception applies. 1. Take a 401(k) Loan
A loan is the most direct way to avoid the 10% early withdrawal penalty because the money is borrowed, not permanently withdrawn. Using a 401(K) Withdrawal for a Home Purchase - Chase Bank use 401k to buy house without penalty