Hardship for the Purchase of a Primary Residence

DC plan provisions for hardship withdrawal - "Safe Harbor" hardship.

Ms. Jones wants a hardship withdrawal for the purchase of her primary residence.  The catch is the home will be in her husband's name.  Is this allowable?  

If the plan’s provision is no more restrictive than the tax-law rule:

One hopes the claim form has the claimant state, under penalties of perjury and other false-statement crimes, that the hardship distribution is for:

“Costs directly related to the purchase of a principal residence for the [participant][.]”

26 C.F.R. § 1.401(k)-1(d)(3)(ii)(B)(2) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401(k)-1#p-1.401(k)-1(d)(3)(ii)(B)(2)

I read the phrase’s syntax to set a condition that the property bought, or to be bought, be or become the participant’s principal residence. I do not read it to require that the participant be or become an owner of that property.

Others might interpret the rule differently.

I do not give advice to anyone.

I think it satisfies the "principal residence" criteria but I am not a lawyer.

That said taking a hardship distribution to buy a property in someone else's name seems like the height of financial stupidity on the participant's part but it's not my money.

Also, I'm not a lawyer, but is it a factor if the state is a community property state, so the primary residence is technically hers?  Sometimes if the spouse has debt in their name, a better interest rate can be obtained through the lender if only one spouse applies, and they meet all of the income requirements by themselves.

As a spouse, the husband is generally the primary beneficiary.  Aren't hardships available to cover hardship costs for primary beneficiaries?