Under the 1997 Taxpayer Relief Act, first-time home-buyers can now withdraw up to $10,000 penalty-free from an individual retirement account (IRA) for a down payment to purchase a principal residence.  This $10,000 is a lifetime limit.  The law defines a first-time home-owner as someone who hasn’t owned a house for the past two years.  If a couple is buying a home, both must be first-time homeowners.  Ask your tax accountant for more information, or contact the IRS at (800) 829-1040 or their Website at www.ustreas.gov .

Reference:

 http://www.fool.com/money/allaboutiras/allaboutiras12.htm

 http://www.fairmark.com/rothira/first.htm