Should all imports in a function come at the top of the function?

import_1.py

def create_app(config_key):
    """
    A factory function to create a Flask application instance and do
    some initializations.
    """
    # import `config_dict` dictionary from configuration module:
    # `config.py`
    from config import config_dict

    configuration = config_dict.get(config_key)
    print "Config %s " % config_key  ####DEBUG
    try:
        app = Flask(configuration.APP_NAME)
    except AttributeError:
        app = Flask(__name__)

    # Get the configuration settings for this application instance
    app.config.from_object(configuration)

    # Let's know the mode the app is running in. Create object of config
    # instance to get its string representation
    print 'Initializing app ...\nMode:\t%r' % configuration()  ####DEBUG

    # Initialize flask-extensions. Call <init_app> method on each
    # extension's instance
    configuration.init_app(app, bootstrap, db, login_manager)

    # Pass objects into Jinja2 environment globals
    import utils
    jinja_env = app.jinja_env
    jinja_env.globals['isinstance'] = isinstance
    jinja_env.globals['utils'] = utils

import_2.py

def create_app(config_key):
    """
    A factory function to create a Flask application instance and do
    some initializations.
    """
    # standard library imports
    from inspect import getmembers, isfunction

    # local imports
    from helpers import utils
    from config import config_dict

    configuration = config_dict.get(config_key)
    try:
        app = Flask(configuration.APP_NAME)
    except AttributeError:
        app = Flask(__name__)

    # Get the configuration settings for this application instance
    app.config.from_object(configuration)

    # Let's know the mode the app is running in. Create object of config
    # instance to get its string representation
    print 'Initializing app ...\nMode:\t%r' % configuration()  ####DEBUG

    # Initialize flask-extensions. Call <init_app> method on each
    # extension's instance
    configuration.init_app(app, bootstrap, db, login_manager)

    # Pass some needed objects into Jinja2 environment globals
    jinja_env = app.jinja_env
    jinja_env.globals['isinstance'] = isinstance
    jinja_env.globals['utils'] = utils