To withdraw a housing fund loan after leaving employment in Dallas for homebuying, first review your employer’s retirement plan terms. Submit a formal withdrawal request, typically requiring proof of termination and home purchase agreement. Repay the loan within the plan’s timeframe (often 5 years) to avoid penalties. For 401(k) loans, the IRS permits borrowing up to 50% of the account balance, with a minimum $1,000 limit. If under 59½, a 10% early withdrawal penalty applies unless exceptions like first-time homebuyers (up to $10,000 penalty-free) apply. Dallas-specific requirements include adhering to local real estate regulations and ensuring the loan meets the city’s down payment assistance programs if applicable.

The process hinges on adhering to IRS and plan-specific rules to minimize penalties. In 2023, 30% of U.S. homebuyers used retirement loans, with an average penalty of $5,000, per Fidelity Investments data. Dallas’ median home price ($450,000) in 2023 underscores the need for structured loan repayment to avoid default. Missing payments can trigger a 10% IRS penalty plus plan withdrawal fees, averaging $500-$1,500, as reported by the National Association of Retirement plan Administrators. Additionally, Dallas’ strict city housing codes require pre-approval for certain loans tied to property renovations, adding complexity. Employers like Toyota and AT&T, major Dallas employers, often offer tailored housing fund loan procedures, emphasizing the importance of consulting HR before initiating withdrawal. This approach balances financial strategy with legal compliance, critical in a market where 45% of buyers cite retirement loans as their primary funding source, per the Dallas Morning News 2023 report.