If I take money from my 401k to cover closing cost during underwriting, will this hurt the process and will they deny my loan?

Pulling funds or borrowing funds from a 401(k) is standard and common in mortgage lending. You should have no problems whatsoever.

Hi Carlene-This is common practice as long as your 401K terms and conditions of withdraw allow you to do so:) This should not hold up your loan process.