401k Withdrawal for a house?

Not a good idea to pull from the 401K. Here's what I found:

http://beginnersinvest.about.com/od/401k/a/aa122104a_3.htm

All 401k hardship withdrawals are subject to taxes and the ten-percent penalty. This means that a $10,000 withdrawal can result in not only significantly less cash in your pocket (possibly as little as $6,500 or $7,500), but causes you to forgo forever the tax-deferred growth that could have been generated by those assets. 401k hardship withdrawal proceeds cannot be returned to the account once the disbursement has been made.

My Opinion: Taking a loan is a bad idea too. Why do in debt to go in debt?

What about a FHA loan? My sister just got one and it was pretty easy.

To take adavantage of the 8,000 first time buyer program through the government you have to be closed by November 30, 2009.
http://www.federalhousingtaxcredit.com/2009/index.html

Good Luck!