hardship - purchase of a residence

[Scuba 401]

the plan uses the safe harbor definition of hardship. does construction of a principal residence equal purchase of a residence?

[ETA Consulting LLC]

Of course it does.

Good Luck!

[QDROphile]

The mechanics can be a lot more complex. The plan does not have to extend to the limit of wha the law allows.

[Scuba 401]

The mechanics can be a lot more complex. The plan does not have to extend to the limit of wha the law allows.

i think the plan can deny this hardship request but still soliciting opinions here.

[ACox]

Hardships can be allowed for costs directly related to purchase of a principal residence (excluding mortgage payments). To me a hardship to build a house would be considered a cost directly related to purchase of principal residence. Provided of course that the principal residence would be reasonably located and not 5 hours away at the beach.

[RCK]

I agree with the consensus here that it constitutes a hardship. The challenge is how to apply your normal documentation rules--there is probably not going to a signed purchase agreement.

[GMK]

If you permit the hardship distribution, consider an escrow, in case something falls through.

See also:

http://benefitslink.com/boards/index.php?showtopic=48405