401K/Divorce/rollover

I'm getting half of my ex's 401K in the divorce settlement. I'd like to purchase a townhome. Can I use the funds received from the 401K as a downpayment without paying a penality? I live in Missouri.

Kbeckett,

After you have the funds in your IRA, and you are older than 59.5 years of age you can take the money out without penalty. Income taxes may apply.

Or you may qualify as a first time homebuyer (FTH). As an FTH you may qualify to use up to $10,000 from your IRA for home acquisition. That $10,000 must be used for home acquisition within 120 days. You will need to pay income tax on that amount. If you take more to pay the income tax, the penalty and income tax will apply the "more".

Thank you, clydewolf, for your response to my question. You've been very helpful.