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Senator Isakson and Rep Graves (both from GA) have introduced a bill that would allow homeowners to withdraw up to $50,000 or 50% of your 401(k) balance, whichever is less, penalty-free from their 401(k) to make payments on their mortgage. Payments to the mortgage must be made within 120 days of the withdrawal and taxes (at the homeowners' marginal rate) would still be due.

Here is a link to the bill:

and a link to Isakson's press release

This being a federal bill, state taxes would have to be dealt with separately, so there still may be state tax penalties.

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