We thought we would throw this thought out to BP to see what thoughts the experienced might have...Angela, taking early distribution from your IRA will subject you penalties are well as taxation (both on state and federal levels).

try Navy Federal, around here there are a dozen CUs. 

Whatever your feelings are about debt for yourself, a great concept to recognize is that other people will indebt themselves enormously (and banks and the government and family members will assist those people in indebting themselves) for the purpose of buying a place to live.  

I briefly browsed the internet, but there is so much conflicting information...where is the best source (government agencies included) to look for the information?

They have my SSN on government documents.  

Bank fraud is investigated by the Federal Bureau of Investigation(FBI) and is punishable by fines of up to $1,000,000, or up to 30 years in federal prison, or both." 

I was thinking of just adding a prohibition for illegal activities under state or federal law.

They are a private company and are not restricted access or kept from doing an inspection from the government unless the house is under some sort of government claim such as eminent domain, crime scene investigation or condemned.

The regulators don't like it, examiners don't like it and neither do state and federal entities.

Purchases of new homes climbed 7.8 percent from the previous month to a seasonally adjusted 539,000 annualized pace in February, a seven-year high, according to the latest U.S. government report.