First Home Buyer Exemption-IRA Withdrawal for Investment Property

[Jesse Clune]

Hi BP community! 

I'm looking for confirmation on whether the home needs to be your primary residence for the first home owner's $10,000 exemption to the 10% early withdrawal penalty? From reading the IRS rules, it looks like an eligible dwelling has to be your 'main home', which is essentially defined as your primary residence. Based on this, if you use traditional IRA funds for an investment property deposit, the 10% early withdrawal penalty applies?

Background-Looking to buy an investment property through roofstock and looking to use traditional IRA funds for part of the deposit (I know I have to pay tax on the withdrawal, but hoping to avoid the 10% early withdrawal penalty). Main criteria-3+star neighborhood, 20% down, 10-12% cash-on cash return, ~7-8% cap rate, 80-130k purchase price, 1% rule, amongst others. These are my starting filters. There aren't many frequent results, but they do come up and I overlay other criteria as well from here. I just want to confirm funding options before proceeding.

Thank you! 

Jesse