YES! According to the 1997 Taxpayer Relief Act, as a first-time homebuyer, you can withdraw up to $10,000 (if your married a total of $20,000) penalty-free from your individual retirement account (IRA) for a downpayment to purchase a house. You will, though still need to pay income tax on the amount drawn. You can check out the official rules at www.irs.gov. Just note that $10,000 is a lifetime limit and the money must be used within 120 days of the date you receive it. Also the first-time homebuyer using the funds can be you, your child, grandchild, parent or spouse. Also if you are buying the home as a couple, BOTH parties must qualify as first-time homebuyers. The law, though, defines a first-time homebuyer as someone who hasnt owned a house for the past two years.