Q: I want to make a hardship withdrawal from my 401(k) at work for a down payment for a house or a condo. Is there a limitation as to how much I can withdraw, and will there be a penalty or tax for withdrawing the money?

A: You have to check with your 401(k) plan administrator to find out if (1) your plan permits you to borrow from it for any reason, including the purchase of a home and (2) how much you can borrow.

If you cannot borrow from the account, you may opt to “cash out” your 401(k). If you are younger than 59 1/2 years of age, you will owe a 10 percent penalty on the amount plus whatever regular income taxes are owed in your marginal bracket. You should make a 401(k) withdrawal your last option.

A better option would be to consider 100 percent financing, which is available to borrowers with excellent credit, from many lenders. I’d rather see you pay private mortgage insurance than borrow from your 401(k).

Start with your plan administrator and ask for the rules on borrowing from your 401(k) plan.

Feb. 28, 2001.