Borrowing from 401k

You could if your employer's plan allows it, but it's a poor idea.  For one thing, you usually have to repay the loan within five years.  If you lost your job or were otherwise unable to repay on time, you'd be hit with taxes and penalties that would make that a very expensive loan indeed.  More important, you'd be giving up the extremely valuable benefit of tax-free compounding that your retirement money is earning now. 

You may be thinking of a relatively new law that allows up to $10,000 to be taken penalty-free from an IRA for down payment on a first-time home purchase.  With that one also, the homebuyer gives up that valuable right for tax-deferred earnings on the $10,000, and doesn't even have the right to put it back.  The advantage is that the borrower is at least free of the usual 10% charge for early withdrawal.  The money withdrawn is however immediately subject to income tax.   That's because unlike your 401k proposal, it's not a loan, but rather immediate income.