Can traditional IRA distribution money be used toward 5% Down Payment?

Asked by MadisonQuestions, Madison, WI Sun Jan 19, 2014

Can traditional IRA distribution money be used toward 5% Down Payment on a Conventional loan?
I know that an IRA distribution can be used towards closing costs, but can some of it be used towards the 5% down payment for a 30-year loan? Do banks allow this? Credit unions?

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Mon Jan 20, 2014
Yes you can as long as you follow procedures and document it properly. If you are working with a lender, make sure that they know what you are doing and can specifically instruct you on how to do it and whether it will create any other issues. (I won't be able to advise on this without understandion your entire picture financially as well as mortgage program)

If you do not have a lender yet, make sure that you deal with one that can explain all of this to you well ahead of time and is responsive enough to map out the plan for your financing from the start.

I'm available to help you at your convenience if you wish.

I can do a full underwriting approval ahead of time if need be and I also offer credit score improvement programs for free while we work on your mortgage. Everyone likes to raise their score!

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Robert L. Hanson
Gladewater National Bank
First Time Homebuyer Specialist

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Eric Reusch, Agent, Fitchburg, WI
Mon Jan 20, 2014
Sure Just ask your lender. The internet will generate lots of advice, most of it wrong, because real estate is local and the best advice comes from someone in your own neighborhood. I'll be glad to hook you up with a great lender here to answer your questions and give you sound advice for your individual circumstances.
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Eric Reusch, Agent, Fitchburg, WI
Mon Jan 20, 2014
Short answer Yes long answer Talk to your lender and get pre approved before you do anything else. There's no point in looking at homes If you can't buy one of them. I'll be glad to send you my list of top loan officers with a variety of banks credit unions and mortgage bankers and brokers.
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I'm already pre-approved, but that's kind of a joke and based on an honor system. Of course I was truthful with everything I filled out on pre-approval. It checked my credit and then just took my answers to what I filled in for income and assets. It didn't even ask about debts, and it didn't verify anything except credit. I know that will happen eventually. I'm just worried about the actual approval process, not the pre-approval, I already have that.
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