First time homebuyer Tax Law: Need help

[Robin Edwards]

My wife and I are looking for a house hack property in Houston or Galveston.  This will our first time buying a home, so we are very green at this.

We are using my IRA account to fund our down payment. I understand that first time home buyers are eligible to withdraw up to $20,000 penalty free. However, I am can't find any clarification on these two questions.

1)  Do we have to pay taxes on the $20,000 withdrawal as it is recognized as income?

2)  Do we have to live in the property to qualify for the penalty free exemption?

Anything else we need to know?

Thanks,

Frank & Robin