Yes. A 401k that was funded by company's contributions has stricter rules for withdrawal than one that she has contributed to. Rules for early withdrawal are pretty strict, and usually allowed only in emergencies. It would probably be best to sit down with her company's benefits office and discuss the situation in person. There may be a way she can borrow the money if the request is worded properly. You should be aware that you will have to pay income tax on any early withdrawals and may also have to pay a penalty which can take a big bite out of her money.

Borrowing against you 401K is one of the appeal to many people even it is not a good one. However, the plan can specifically disallow it. You can see the summary plan description (SPD) or the plan document to find out. Generally, you can take it from your employer or the 401K vendor's service rep. They would not lie to you in general.

If the plan does not allow loans, then you cannot borrow from it period. The company sets up the plan with the requirements and allowances they wish. She may asked the company to change the plan to allow loans, I have seen some small companies do this for highly valued employees. It costs a bit to amend the plan document so it all depends on the company.... Hardship withdrawal would be for foreclosure-- and it must be to that point for this purpose.. that is regulations, not company choice. They do not have to allow that in the plan either... Some plans allow for loans only in hardship (as defined by ERISA law) situations.. the plan documents defines all options... employees should read this thoroughly before investing, and understand the rules.

Ask if you can take out a loan! Most good 401k's have were you can have up to 3 loans...... maximum......not all at 1 time but over i think a 5 year period.