401k for seller finance deal?

[Elijah Summo]

Hello,

I'm looking into buying my first home and the option to do seller financing will be on the table. Is it possible to use 401k funds for the down payment on a seller financed deal or can you only use 401k with traditional loan types?

[Jeremy Horton]

Don't see why you couldn't

I do 401k loans for rehabs and stuff from time to time - quick, easy, paid interest goes back into my account and 50k is plenty for what I do most of the time 

If you don't pay the loan back it just turns into a withdraw (with some penalties) so it's less risky imo

The major drawback is the loan amount misses time being in the market. It can work out good too though, I took a 50k loan out last August, the market tanked and I just paid off the remaining balance a couple months ago. Bought stocks at a discount. I will say most of the time it will go the opposite way though and you'll lose out on the gains since the market generally goes up