First-time homebuyers can now take advantage of a tax credit thanks to the new Housing and Economic Recovery Act of 2008. The credit is available for homes purchased between April 9, 2008 and July 1, 2009. The maximum amount allowed is $7,500 and it could be claimed on the individual's 2008 Federal tax return. It could be used to reduce the taxpayer's bill or to be paid out dollar for dollar if no taxes are owed. However, the credit must be repaid over a 15 year period in the form of an additional amount of $500 on each Federal tax return for the following 15 years. This cedit is basically an interest free loan. Many limitations apply, so a tax professional should be consulted by those who plan on taking an advantage of the tax credit.