If you had left the money from employer 1 in employer 1's plan, you would be allowed to withdraw it after separating from service (subject to regular income tax plus a 10% penalty.)
However, by rolling over the money into the new plan, I suspect it becomes all part of the new plan's funds and is subject to the rules of the new plan only. They might allow withdrawals (but I suspect not) or they might allow a hardship withdrawal (but does this count as a hardship?).
Also, note that a withdrawal from a qualified workplace plan is not eligible for the first time home buyer exception to the 10% penalty. You would have had to rollover the money from the workplace plan into an IRA and then withdraw from the IRA for the home in order to get the penalty exception. If you are successful in withdrawing money from the present plan, it will be subject to regular income tax plus a 10% penalty.
