Can I use a 401(k) loan versus an IRA withdrawal for my down payment, and what are the trade-offs?

Both are possible but come with different rules. A 401(k) loan lets you borrow up to 50% of your vested balance or $50,000, whichever is less, and you repay yourself with interest; there is no tax or penalty unless you leave your job and cannot repay, in which case the balance becomes a taxable distribution. A Roth IRA lets you withdraw your contributions anytime tax- and penalty-free, and first-time buyers can take up to $10,000 of earnings penalty-free, per the IRS. Traditional IRA withdrawals allow the same $10,000 first-time-buyer exception from the penalty but you still owe income tax. Raiding retirement to buy a home slows your long-term compounding, so use it only if the numbers and timing truly justify it.