Loan from 403b vs Roth 403b

[Ryan Thurm]

Hello there. Long time lurker, first time poster. 

I've done some research about the possibilities of using a 403b loan as a source of down payment for BRRRR strategy. I'm fairly young and only have 50k in my 403B. Half of it is from employee match and appears to be, according to Fidelty, in a plain Jane 403b while my contribution is in Roth 403b. I'm vested about 45k of the 50k and was planning to take a loan for 20k for a down payment.

Here comes the question: is there any negative tax advantages of taking out a loan from 403b versus Roth 403b? When I go through the process of getting the loan, there is no distinction on where the money is coming from, but I would think it has some tax implications? I have read through multiple posts debunking double taxation from 401k loan, which is pre-tax, but could not find distinction on retirement account loans from pre- or after-tax accounts.

If anyone could shed some light on this, I would greatly appreciate it! Thanks!

[Adam Britt]

I have another question to add. I too have recently learned about using these to fund real estate.

Is borrowing from a 403b the same as “rolling into a self directed IRA?” I hear both terms but am unsure if they both are the same thing.

On topic, if my hunch is correct, shifting over to self directed instead of simply borrowing would have tax advantages beyond either of these, since you would simply be changing management of your account. Not taking it out.