Explain to me why it's stupid to take $$ from a 401K for a down payment

[Anonymous]

Back to the original question: for a 401K loan purely for the the purpose of a home purchase/downpayment, no, it's not stupid. We had close to $600K in my husband's 401K but were shy of 20% for downpayment given a myriad of reasons that had slowed our savings rate (student loans, childcare, paying for our own wedding, medical bills.) A 401K loan allowed us to buy our "forever" home in a great school district, with an awesome commute, which in this area comes with outsized prices and the necessity of a jumbo loan so that pesky 20% was large. For us it was definitely the best decision. There were no penalties or taxes for it, as other PPs have correctly clarified, and we paid "ourselves" back in 4 years.