I have 15% down for a 300k coop. I found that many in my area have boards demanding I give the lender 20% down as a requirement. I got an offer accepted and was planning to take a 401k loan for the last 5%. My work HR says they need proof it’s going to be used to buy a home, because if not, terms are a 5-year plan, but for a home, I can stretch to 10 years, which I need to do financially. I sent them an accepted offer document from my attorney. The HR guy said that is the least kind of proof they would accept. Then the head of the 401k plan steps in, the owner of the company, and says it’s not enough. He says they need a fully executed contract. My attorney is baffled. How can I get one without the money? What’s the point of a ‘home loan’ option in the plan if you can’t actually use it to BUY the home? Has anyone dealt with this before? First thing tomorrow I am going to try once again to delicately get it through to the owner to figure this out.
Why aren’t you dealing directly with your 401k provider?
Shay said:
Why aren’t you dealing directly with your 401k provider?
I did, but the 401k provider doesn’t make all the rules. The employer can make their own rules and stipulations on distributions as well, as they are the creator of the plan for the employees. So I need their approval on a loan. Does that make sense for my employer to have a say in whether I can borrow my own money? Noooope. But here we are.
Ask the 401k company what they need if the accepted offer contract is not enough.
Not sure what you mean. This isn’t about the 401k company. They will give me the money as soon as my job’s HR approves the loan. It’s the 401k plan manager (owner of my company) who is demanding the completed contract. But like my original post says, that’s impossible without the loan to actually get the contract.