Under the extension signed into law by President Obama on November 6, 2009, the Federal Government is offering a tax credit of up to $8,000 to people who sign a contract to buy their principal residence before April 30, 2010 (you must close before June 30).

Who Qualifies? First-time home buyers, or people who have previously owned their principal residence, but not in the last 3 years, are eligible for a "first time homebuyer" credit of up to $8,000. New: buyers who are in the process of selling, or who have recently sold, their principal residence are eligible for up to $6,500.

How Much Can I save? 10% of the purchase price, up to $8,000 if first time buyer, or $6,500 otherwise, for buyers making less than $125,000/year (single) or $225,000/year (married). Individuals who make $125,000-145,000/year or couples that make $225,000-245,000/year may qualify for a reduced tax credit. If your income is greater than $145,000 (single) or $245,000 (married), you won't qualify.

What if I don't pay $8,000 in taxes? You'll still get the full amount, via a refund for the balance.

Do I have to pay back the $8,000? No. Unlike the "tax credit" passed in 2008, which had to be paid back over 15 years, the current credit is an outright grant. You just need to hold onto your home for at least 3 years.

Do I have to wait until April 15 to get my credit? Not necessarily. Once your sale closes, and you qualify for the credit, you can reduce the amount of witholding you pay with every paycheck. How much you recover before the end of the year will depend on your income, witholding, and the date of your closing.