You misunderstand. The first time home buyer exemptions is only for the 10% early distribution penalty, not the normal tax. The penalty only applies if you are under age 59 1/2 so at 61 there is no penalty reguardless of what you do with the money.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
