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.

Buying – 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.

November 21, 2025

What’s Your Real Condo Buying Power Right Now?

Before you fall in love with quartz counters and skyline views, it’s worth taking a clear look at what your real condo budget gets you in Arlington. Here’s how to calculate your true buying power—beyond the online calculators.

November 14, 2025

10 Open House Red Flags That Matter — and the Green Lights That Don’t

Touring an open house? Here are the 10 red flags that truly matter — and the green lights you shouldn’t worry about at all. A must-read for condo and home buyers.

November 7, 2025

Don’t Make This Costly Condo Inspection Mistake

A single vague word in a condo inspection agreement cost one buyer thousands in repairs. Learn how to avoid this costly condo inspection mistake and protect your investment.

October 31, 2025

Murder, Mystery, and Misrepresentation

A dream home, a dark past, and a legal twist — discover what Virginia law says about “haunted” houses and when sellers have to disclose them.

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 10, 2025

Mortgage Rates Are Melting Their Grip on the Market

For years, ultra-low mortgage rates froze homeowners in place. But as more loans reset and equity builds, Arlington’s condo market is starting to thaw — slowly but surely.

October 3, 2025

Buying & Selling in the Shutdown: What to Expect

The government shutdown is creating short-term challenges for buyers and sellers in Arlington—from slower FHA/VA/USDA loan processing to NFIP flood insurance lapses. Furloughed federal employees may not be able to use income to qualify until the shutdown ends, while Social Security/disability income continues. With smart planning and flexibility, closings can still move forward.