Generally, if youare participating in your employer’s 401k retirement plan, you can borrow up to a specified limit from the account penalty-free to buy a house. A relative can also draw from their own 401k account to help you purchase a house. Please note: If you withdraw from your own 401k account, the lender handling your approval will look at it as outstanding debt and calculate it into your debt-to-income ratio. The conditions of the 401k loan are set by your employer. It can be very different with many employers in terms of interest rates and fees. Also, you should find out what happens if you leave your job before you fully repay the loan from your 401K. In many case the loan becomes due immediately upon departure and tax penalties may apply to the oustanding balance.