Unfortunately, the rules for 401k plans are different than IRAs, even though they have the same basic purpose.
If you had rolled over the funds to an IRA (or done a partial rollover) and then withdrawn the money from the IRA, you can be exempt from the 10% penalty on the first $10,000, if you use the money to buy a home and have not owned any home you lived in for at least two years prior.
But a direct withdrawal from an 401(k) is not eligible for the penalty exemption.
Also, all 401k withdrawals are exempt if you are age 55 or older when you leave the job, even though the age for IRA withdrawals is 59-1/2.
No. Buying a house is not one of the exceptions to 10% early withdrawal penalty from a 401(k) plan.
Please read this TurboTax Help article on the exception cases.
Unfortunately, the rules for 401k plans are different than IRAs, even though they have the same basic purpose.
If you had rolled over the funds to an IRA (or done a partial rollover) and then withdrawn the money from the IRA, you can be exempt from the 10% penalty on the first $10,000, if you use the money to buy a home and have not owned any home you lived in for at least two years prior.
But a direct withdrawal from an 401(k) is not eligible for the penalty exemption.
Also, all 401k withdrawals are exempt if you are age 55 or older when you leave the job, even though the age for IRA withdrawals is 59-1/2.