IRA funds distributed under the first-time home buyer program require that borrowers use them within ___________ to acquire, build, or improve a residence, and for closing costs.

The correct choice indicates that IRA funds distributed under the first-time home buyer program must be utilized within 120 days to acquire, build, or improve a residence, as well as for covering closing costs. This time frame is specified to ensure that the funds are directed toward immediate housing needs and to facilitate timely home purchase processes.

Using the funds within 120 days allows borrowers to make effective use of their IRA distributions without incurring penalties or taxes associated with premature withdrawals. This regulation is designed to encourage home ownership and assist first-time buyers in managing their finances efficiently.

The other options do not align with the IRS guidelines for first-time home buyers utilizing IRA distributions, which stipulate this 120-day period as a standard. Understanding these time constraints is crucial for borrowers looking to leverage their IRA funds for a home purchase efficiently.