A first-time homebuyer distribution must meet the following requirements:
- It must be used to pay qualified acquisition costs before the close of the 120th day after the day the participant received the distribution.
- It must be used to pay qualified acquisition costs for the main home of a first-time homebuyer who is any of the following.
- The participant.
- The participant’s spouse.
- The participant’s child, or a child of the participant’s spouse.
- The participant’s grandchild, or a grandchild of the participant’s spouse.
- The participant’s parent or other ancestor, or the parent or other ancestor of the participant’s spouse
- When added to all the participant’s prior qualified first-time homebuyer distributions, if any, total qualifying distributions cannot be more than $10,000, i.e. the $10,000 is a lifetime limit.
Additional Helpful Information
- For married couples, each spouse is eligible for a $10,000 first time homebuyer distribution from his/her own IRA.
- In cases where a distribution from an IRA is intended to be used for first-time home-buyer purposes, the 60-day period is extended to 120-days, providing the rollover is being made because the transaction did not occur by reason of a delay or cancellation of the purchase or construction of the residence