Client's plan using safe harbor language for both the "needs" and the "necessary" tests. Participant A received a hardship withdrawal for purchase of a principal residence approximately one year ago. The plan administrator knows that the money was not used for this purpose. This same participant is again requesting a hardship to purchase a primary residence. The plan administrator is asking for advice here. They do not believe that the withdrawal will be used for this purpose, but since this is a safe harbor hardship provision should they go ahead and approve and not concern themselves?

Thanks