Taxes, IRA, First time home purchase?

I took an early distribution from my IRA account to finance the purchase of a first home. I took about $900 more than than I needed (the closing costs had been overestimated if you can believe that). I know I can rollover the $900 back into the IRA to avoid the 10% early distribution penalty. Can I use the $900 as the second month's payment on the mortgage to have it qualify as a home purchase expense and in this manner avoid the 10% penalty?

Public Comments

1. No. Mortgage payments don't count.
2. Pay down the mortgage principal an additional $900 and you should be OK. It cannot be a regular mortgage payment. Make a separate payment and put the notation "additional principal payment."