As you read every word of this article you will discover why the government is offering first time home buyers an amazing incentive to buy a home. You will also learn four reasons why this may be the best time ever to enter the home buying market.

President George W. Bush recently signed into law the Housing and Economic Recovery Act of 2008. Within this new act are several elements to help the ailing housing market get back on its feet.

Included in this Act is the temporary tax credit for first time home buyers. If you are a first time buyer you may qualify.

One of the most intriguing features in this Act is the temporary tax credit for qualified first time home buyers.

The $7500 tax credit amounts to a dollar for dollar reduction of what the taxpayer owes. If the taxpayer owes less than $7500 the government will send a refund check for the difference between what the taxpayer owes and the $7500 credit.

Here are some of the details.

The tax credit is for first time home buyers only. But don't quit reading simply because you owned a home in the past. The government has its own definition of first time home buyer.

According to the government if you haven't owned a home 3 years prior to the purchase of your next home, you qualify as a first time home buyer.

If you are like me, you are probably skeptical when the government wants to give you something. Is there a catch? There is. Keep reading and by the time you reach the end of this article you will know what it is.

My first question regarding the tax credit qualifications was what kind of home can I buy and still receive the credit? Can I buy a new home? The answer is yes. How about a resale home? The answer is yes again.

I began to think this was starting to sound pretty good but before getting too excited I thought I'd better check out some more details.

Tax incentives go as high as $7,500. Congress wishes to credit you $7500 just for purchasing a home. Why? Is it because they are a bunch of really nice people up there in Washington DC? Well, I am not going to answer that question but the US Congress has a definite reason it wants you to buy a house soon.

Here is why this first time buyer credit is important to all of us and may be something you want to take advantage of.

This recent downturn in the housing market has been brutal for many homeowners. Real estate values have fallen. Credit has tightened. Homeowners and home buyers are having a difficult time obtaining mortgage loans. So the government is helping the market get its footing by offering incentives to home buyers. The tax credit to first time buyers is one of those incentives.

To qualify for this government incentive you need to act soon. You have to purchase a home after April 9, 2008 and before July 1, 2009. If you want to own a home this may be your window of opportunity but you must act before July 1, 2009.

Most likely we are seeing the formation of a bottom in the housing market. House prices may retreat a little more before we see an absolute national bottom. But in several cities and metropolitan centers, real estate values have remained steady.

It is beneficial to be a first time home buyer today.

First, home prices are low. They may be lower than you will ever see again in your lifetime. Prices have slid for now but the fact remains that as long as the United States continues to grow and prosper, the value of our homes will increase over the long term.

Second, interest rates are also low. The last time that we had this type of housing crunch was in 1979. The market conditions were very similar to today except for one thing. Interest rates were high. Many of us remember interest rates soaring to 18%. Compared to that market, today's interest rates are cheap.

Third, if you itemize taxes, the benefit of homeownership lowers the real cost of a mortgage even more.

Fourth, the government is offering you money in order to motivate you to buy a home.

You can qualify for this tax credit up to the full amount if you are a single tax payer with an income up to $75,000. For couples, combined incomes can add up to $150,000. But you can qualify for partial credit even if your income exceeds the limits.

Okay if you're like me, I know you've been waiting for the catch. The tax credit works like an interest free loan and must be repaid over a 15 year period.

Essentially the tax credit is a tax free, interest free loan from the US Government to help make buying a home more affordable. The only thing the government asks is that you return the money over the next 15 years or when you sell the house.

Not a bad deal!

As always, consult your financial adviser for more information regarding this program and your own personal financial situation.

Good Luck.