How much of my Roth IRA can I use to buy a house?

For a personal home purchase, specific limits apply. If you qualify as a first-time homebuyer (meaning you haven’t owned a primary residence in the past
two years), you can withdraw up to $10,000 in earnings from a Roth IRA penalty-free, provided the account has been open at least 5 years. You can always
withdraw your contributions at any time without tax or penalty. So a Roth IRA with $35,000 in contributions and $15,000 in earnings allows access to the full
$35,000 in contributions plus up to $10,000 of earnings for a qualifying first home purchase.

Earnings withdrawn beyond $10,000 before age 59.5, or before the 5-year rule is met, trigger a 10% penalty on the earnings portion.

For investment property, the structure is entirely different and significantly better. If the goal is to buy real estate with a Roth IRA as an investment, you
don’t take a withdrawal at all. You move the Roth IRA to a self-directed custodian that allows real estate, and the entire account balance can be directed toward a
property purchase. No $10,000 cap. No penalty. The IRA owns the property.

Roth IRA real estate investment rules require the same prohibited transaction compliance as any other self-directed IRA. You cannot buy property you’ll
personally use. No transactions with disqualified persons. All income flows into the IRA. But inside the Roth structure, all of that rental income and eventual
appreciation comes out completely tax-free on qualifying distributions.

The distinction is important: withdrawing Roth funds to buy a personal home means taking money out of the tax-sheltered environment. Using a self-directed Roth IRA
to buy investment real estate means keeping the money inside the account, where it continues to compound tax-free. The second approach is almost always the
better long-term financial decision.