The Housing and Economic Recovery Act of 2008 provides a 8000 dollar new refundable tax credit for individuals who are qualified first-time homebuyers of a principal residence in the United States. For 2008, the credit applies to a principal residence purchased by the taxpayer after April 8, 2008.

Homebuyers who qualify are allowed a one-time credit against their income tax for the year of purchase. Unlike some past credits, this one must be repaid over a 15-year period. As a result, the new tax credit works like an interest free loan. You take the full credit on your 2008 return, and then repay the credit amount in equal payments over 15 years, with no interest charges.