Can I really borrow from my 401(k) to use as a down payment?

Yes—most employer 401(k) plans allow you to borrow the lesser of 50% of your vested balance or $50,000. The funds can be used for your down payment and/or closing costs, and as long as you follow the plan’s repayment rules, it’s treated as a loan, not a taxable withdrawal.

How much are closing costs when buying a home?

In many markets, including Arlington, closing costs typically run about 2.5%–3.0% of the purchase price. On a $500,000 condo, that’s roughly $12,500–$15,000 in addition to your down payment.

Can the seller really pay my closing costs?

Yes. Depending on your loan type, the seller may be able to credit between 3%–6% of the purchase price toward your closing costs. This is negotiated in your offer and can significantly reduce the cash needed to close.

Do I need 20% down to buy a home?

No. Many first-time buyers use 3% down conventional loans or 3.5% down FHA loans. While 20% down eliminates mortgage insurance, it's not required—and waiting to save that much can delay homeownership by years.

How do lenders view a 401(k) loan for a down payment?

Most lenders view a 401(k) loan as an acceptable source of funds. It usually isn’t counted as a monthly debt in your debt-to-income ratio, but you’ll need to document the loan terms and provide a paper trail for the funds.

Is tapping my retirement account for a down payment a bad idea?

It depends. Buying sooner helps you build equity instead of paying rising rent, but it temporarily reduces your retirement growth and carries the risk that comes with a 401(k) loan. It's important to evaluate your full financial picture.

What if my credit score isn’t perfect?

If your credit is bruised, you may still qualify. FHA loans are flexible on credit scores and require only 3.5% down. A lender can determine which programs are available based on your credit profile.

Ask The Broker – Arlington VA Condos | Every building. Every listing.

December 12, 2025

First-time buyer researching how to use retirement funds and seller credits to afford a condo.

The First-Time Buyer’s Secret: Borrow From Your 401(k) and Ask the Seller to Pay Your Closing Costs

Struggling to save for a down payment? Many first-time buyers use a smart combo: borrowing from a 401(k) and negotiating seller-paid closing costs. Here’s how this strategy works, what lenders allow, and when it makes sense.

October 24, 2025

A Smart Buyer’s Guide to Earnest Money Deposits

When you make an offer on a condo, your earnest money deposit shows the seller you’re serious about buying. Learn how much to put down, when it’s due, what happens if it’s late, and how to protect it so you don’t risk losing your deposit.

October 17, 2025

Boards Behaving Badly. What to do?

When your condo board stops following the rules, you don’t have to stay silent. Here’s how to file a complaint and what steps to take in Virginia.

September 5, 2025

10 Condo Rules That Surprise Buyers (and some Sellers)

Condo buyers in Arlington are often surprised by the fine print. From pets and rentals to flooring, parking, and even blinds, here are 10 condo rules that catch both buyers and sellers off guard.

May 8, 2025

Sold “As Is:: Hidden Gem or Hidden Trouble?

When you see a property listed “as-is,” it might sound like a warning—but it’s not always a red flag. In this article, we break down what the term really means for both buyers and sellers, what rights each party still has, and how to navigate inspections and negotiations with confidence.

May 2, 2025

The One Condo Term Buyers Always Get Confused About

In this edition of Ask the Broker, we break down what a “limited common element” really means in a condo. From balconies to parking spaces, learn which parts of the property are yours to use—but not to own—and why it matters when buying, selling, or budgeting for repairs.