Refinance Mortgage Home Loans Refi

Take someone shopping for a typical single-family home in the Miami metropolitan area. The median price there is about $215,000 and a qualified first-time homebuyer would pay about $207,000 after the credit is factored in.

But prices in Miami are likely to fall 22.5% this year, according to projections by Fiserv and Moody's Economy.com. So by waiting a few months you could nail a $48,000 price cut -- a much better deal than the tax credit..

On the other hand, some cities are expected to post record price gains this year, including Eugene, Ore.; Napa, Calif.; Charleston, S.C.; and Cheyenne, Wyo. Buyers in those markets would receive a double benefit by making their purchases happen this month.

Of course, there's no guarantee that the forecasts will be accurate, but they're certainly something consumers should consider.

Who's eligible

Not every buyer qualifies for the credit. Here are some guidelines:

Homebuyers who have not owned a home for the past three years may earn up to $8,000 or 10% of the purchase price, whichever is lower.

Buyers who have owned a home for five consecutive years of the past eight qualify for up to $6,500 in credits.

There are income limits of $125,000 for single taxpayers and $225,000 for couples.

Anyone paying more than $800,000 for the home cannot claim the credit.

There's a prohibition on claiming the first-time homebuyer credit if either member of a couple owned a home within the three-year period. They can claim the existing homebuyer credit.

Homebuyers who are under 18 or are listed as dependents on the tax returns of others don't qualify. The home must be kept at least three years.

The credit may be claimed on 2009 taxes, even if the return was already filed. Just submit an amended return.

Note that buyers get the full amount of the credit they're due even if that exceeds the amount of taxes they owe. If you're a first-time buyer and your total tax bill for the year is $6,000, you get all that back plus another $2,000.