Deep within the massive new stimulus plan are a few lines of text that could save American home buyers a pile of cash.  According to the new plan, first-time home buyers who buy a home this year will be eligible to receive an $8,000 tax credit.

This important change gives qualifying home buyers cash they do not have to pay back unlike the $7,500 tax credit already available to some home owners under last year’s Housing and Economic Recovery Act.

Under the previous plan, the $7,500 tax credit was a 15-year interest-free loan and was available to home buyers who purchased their homes after April 9, 2008, and before July 1, 2009.  The new tax credit offers a larger tax credit, but it also has very specific restrictions, from the date of purchase to the buyer’s income.

Some of the eligibility qualifications include:

• The buyer must be a first-time home buyer.
• The plan defines a “first-time home buyer” as “buyer who has not owned a principal residence during the three-year period prior to the purchase.
• “The house must be bought between Jan. 1, 2009 and Dec. 1, 2009.  For anyone who purchased a home before the New Year, it won’t qualify.
  
• The tax credit only counts if the home is bought after Jan. 1 and  the home cannot be purchased after Dec. 1 — meaning there are 30 days at the end of this year during which time anyone buying a home would not be eligible for the credit.  Why the cutoff doesn’t naturally fall at the end of the year is anyone’s guess.
  
• The buyer’s modified adjusted gross income (MAGI) must be less than $95,000 for an individual or $170,000 for a married couple filing a joint return. Up to a modified adjusted gross income of $75,000 for individuals and $150,000 for joint filers.
  
• As income rises from there, however, the amount of available credit declines until the buyer’s MAGI reaches $95,000, at which point the buyer is no longer eligible for credit.
• The house purchased must be the buyer’s  “primary” home.
  
• Eligible home types include single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.
  
• The buyer must live in the home for at least three years after the purchase date.  Home purchasers cannot move, sell or otherwise leave the home they purchase for at least three years to retain eligibility to receive the tax credit.
• The cost of the home is $80,000 or more. According to the way the plan is written, the home buyer receives 10 percent of the home purchase price — meaning, to receive the maximum available $8,000 credit, the home must be bought for $80,000 or more.

Confused?  Click over to FederalHousingTaxCredit.com and clear your head.