I know of the 9 or so things you can qualify for tapping your retirement accounts for penalty-free, the first-time home buyer exemption is one of the areas taxpayers misunderstand/screw-up...so any help would be greatly appreciated.  

Tenant will prove dirty apartment at move in with pictures ,call the tenant apologize for the misunderstanding, return the money and move on; Tenant  will most likely win in court and you will most likely pay deposit plus penalties x3, plus your lawyer's inflated fees good luck

This includes misunderstandings of how the state's hierarchy of license works.  

For your protection and to avoid any misunderstandings, please provide me with a written proposal to review - as soon as possible."  

Thanks for the shout out @Justin WindhamMy two cents:I agree with @Patrick Desjardins but maybe I'm misunderstanding the nature of the relationship.

@Sam Bagwell I did more research and realized I had a misunderstand of the law, which I have now cleared up. 

I am curious about the part that says "repurchase the loan....from your SDIRA for $100"Perhaps I am misunderstanding? 

Do not misunderstand me I do not seek the secret to overnight success, I am looking to build a strong education, knowledge is one of the keys too success. 

a misunderstanding cost me one month of headaches for me, tenant and i have one abatement (hud not paying rent to owner because of list of repairs not taken care of) on my record. sometime the inspectors let you do small repairs/adjustments on the fly. understand that the vast majority of inspectors are not there to "get you": are there to make sure there is no danger/slumlording happening.

It is a misunderstanding he should say he wasn't familiar with section 8 and she  could of explained or directed him to someone who could.