Although you cannot distribute money from your 401(k) program penalty-free or tax-free, you may be able to borrow money from it.
Your ability to borrow will depend on whether your particular plan documents allow it. In order to qualify, such loans must meet all the following requirements.
• You must borrow less than 50% of your vested account, or $50,000, whichever is less.
• The loan must be repaid within five years, unless the money is used to buy your primary residence.
• Loan payments must be substantially equal, and payments must be made at least quarterly. You cannot pay $1 per year for five years, with all the accrued interest and principal due at the end of the loan repayment schedule.
There are some other technical requirements, such as reductions on the $50,000 limit if you already have outstanding loans from your 401(k). Ask your plan administrator for details.