I was told that you can do a one-time tax free stock sale for the purchase of your first primary residence. Is there any truth to this?

Sale of what stock from where? If you are selling off stock or mutual funds that you have purchased independently then no.

These would be stocks acquired in an ESPP.

Check the rules of the stock plan. Ask the plan admin

I've not heard of any "tax free stock sale" from an ESPP that you could use for a 1st time home purchase. The rules for how the sale of your ESPP shares are handled at tax time are pretty complicated - here's a link to a document from E-Trade that provides an overview:
https://content.etrade.com/etrade/op...nk/espptax.pdf
Again, there's nothing in there about exceptions for 1st time home buying.

No, the stock sale will NOT be tax-free.

You can withdraw money (up to $10,000) from your IRA and avoid the 10% Early Withdrawal Penalty, but you STILL have to pay taxes on the money.