I stand corrected ... although that is not how I read the rules on the penalty exception... I read it as both must be first time owners to get the penalty exception for the IRA withdrawal... not that you cannot take the exception for your own distribution.
First home.
Even if you are under age 591/2, you don't
have to pay the 10% additional tax on up to $10,000 of
distributions you receive to buy, build, or rebuild a first
home. To qualify for treatment as a first-time homebuyer
distribution, the distribution must meet all the following requirements.
1. It must be used to pay qualified acquisition costs (defined
next) before the close of the 120th day after the
day you received it.
2. It must be used to pay qualified acquisition costs for
the main home of a first-time homebuyer (defined below)
who is any of the following.
a. Yourself.
b. Your spouse.
c. Your or your spouse's child.
d. Your or your spouse's grandchild.
e. Your or your spouse's parent or other ancestor.
3. When added to all your prior qualified first-time homebuyer
distributions, if any, total qualifying distributions
can't be more than $10,000.
If both you and your spouse are first-time homebuyers
(defined later), each of you can receive
distributions up to $10,000 for a first home without
having to pay the 10% additional tax.
Qualified acquisition costs.
Qualified acquisition costs include the following items.
Costs of buying, building, or rebuilding a home.
Any usual or reasonable settlement, financing, or
other closing costs.
First-time homebuyer.
Generally, you are a first-time homebuyer if you had no present interest in a main home
during the 2-year period ending on the date of acquisition of the home which the distribution is being used to buy,
build, or rebuild. *****If you are married, your spouse must also meet this no-ownership requirement.
<a rel="nofollow" target="_blank" href="
https://www.irs.gov/pub/irs-pdf/p590b.pdf">https://www.irs.gov/pub/irs-pdf/p590b.pdf</a>
