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Will I still be able to take the 10k penalty-free distribution later when I find a house?

Yes, but if something happens so that that deal falls through too, I don't know if you would be allowed to redeposit the money a second time back into your IRA, as I think you are only allowed to take possession of the funds tax-free once in a year, as with an indirect rollover. If you have other funds you can use for your home purchase, it might be safer to use them and then reimburse yourself from the IRA after the closing.
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