The tax credit is for first time home buyers only.  For the tax credit program, the IRS defines a first time home buyer as someone who has not owned a principal residence during the three year period prior to the purchase.

The tax credit does not have to be repaid UNLESS you sell the home within three years of the purchase date.

The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000

The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.

Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full credit.

The tax credit is refundable!  What does this mean?

The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset.  Typically, this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5000 and had tax witholding of $4000 for the year, then without the tax credit the taxpayer would owe the IRS $1000 on April 15.  WITH the tax credit, a qualified homebuyer would receive a check for $7000.