It's a good time to be a first-time homebuyer, thanks to attractive loan programs and a generous $8,000 income tax credit. Recently, the tax credit was loaded with new angles allowing first-time buyers all or part of the down payment, a stumbling block for about 50% of all first-time buyers. As of May 29th, the $8,000 federal tax credit can be used as "the down payment or closing costs" for buyers who apply for mortgages insured by the Federal Housing Administration (FHA) before Dec. 1st, 2009. A first-time buyer, as defined by the IRS, is anyone who has not owned a principal residence for three years prior to the purchase. For married taxpayers, the law test the home-ownership history of both the homebuyer and his or her spouse. According to Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, the idea to "monetize" the tax credits allows them to be immediately turned into cash, rather than waiting several months after the closing date of the transaction for the credits to be processed. There are income limits attached to the $8,000 first-time credit. A phase-out of the credit begins when the taxpayer's income exceeds $75,000, or $150,000 if married and filing jointly. The credit is eliminated completely when the taxpayer's income reaches $95,000 or $170,000 if married filing jointly.

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