I want to buy my first house. Can I use my IRA to help make the down payment?

I want to by my first house. Can I use my IRA to help make the down payment?

Surprise, even if you've owned a home before, you could still be considered a "first-time" home buyer in the eyes of the IRS. The tax code defines a first-time home buyer as someone who hasn't owned a home for the past two years, even if you owned one before then.

You can withdraw up to $10,000 from a traditional IRA penalty free to buy or build a home. You'll still owe taxes on your earnings, though. And if you're married, your spouse must also be considered a "first-time" home buyer, too.

If you have a Roth IRA, you can withdraw your contributions tax and penalty free anytime for any reason. You can also withdraw up to $10,000 of your earnings without taxes or penalties for a "first" home if you've held the Roth for at least 5 years.

In both cases, the $10,000 is per person — each spouse can withdraw $10,000 from his or her IRA for the home purchase. But the $10,000 is a lifetime limit, so the money you withdrew before counts against the penalty-free money you can withdraw now or again in the future.