Interest rates are at a record lows and many investors may be looking for a new home.  Many people will tap their IRA accounts.  Generally you'll get a 10% penalty if you withdraw from your IRA prior to 59 1/2-there are a couple of exceptions including the first-time homebuyer distribution.  "First-time" is a little bit misleading as it includes any buyer of a principal residence if "such individual (and if married, such individual's spouse) had no present ownership in a principal residence during the two-year period ending on the date of acquisition of the principal residence" for which the exclusion is being currently claimed.  

The expenses that qualify for the first-time homebuyer expenses — up to a maximum of $10,000 — include the costs of acquiring, constructing or reconstructing the home. Included in the acquisition costs are normal closing costs and financing costs. This would include the down payment. 

The distribution is taxable...can't avoid the the IRS and you'll use IRS form 5329 to claim the exclusion from the penalty tax.

IRS Form 5329