Where a participant owns part of the primary residence the participant is living in, will a loan to the participant to purchase a greater share in the residence count as a loan to acquire a primary residence? 2 people bought a house together and both count it as their primary residence. One now wants to purchase the interest of the other. Can this plan participant get a loan from the plan and amortize it for more than 5 years due to being a loan for a primary residence?

At first, I thought no. Now, I'm thinking this is sort of analogous to paying off a loan from a third party that was used to purchase a primary residence. So now I'm thinking this would be o.k.

I'd appreciate other opinions. Thanks.

Did you ever get an answer to this question, because I have the exact same question

There is a symantical ambiguity in the answer- If the participant already owns the house (e.g., each spouses usually owns an undivided interest in the entire residence as tennants in the entirety with a single deed) how can acquiring the right to the other spouse's interest be acquiring a primary residence? In other words a T by E could only be converted to sole ownership but the undivided interest would still be the same. On the other hand if each party owned 1/2 interest as a tennancy in common which is a separate legal interest for each with separate deeds then maybe the purchase of the 1/2 not owned is the purchase of a primary residence since it is the purchase of a separate legal interest in the primary residence.