First time home buyers in the US can save some money in buying their home. Thanks to the American Recovery and Reinvestment Act of 2009 or popularly known as the Economic Stimulus Plan, aspiring home owner may now be able to use their 2008 tax credit of up to $8,000 to pay for their new home. The tax credit can also be used as a down payment. Those people who have closed their loans already and have filed their 2008 tax return can file an amended return and include Form 5405.

Individuals who have bought homes in the past may still take advantage of the tax credit because the definition of a new home buyer is anyone who has not bought a residence in the last 3 years. Individuals who have bought vacation homes and rental houses are not grounds to disqualify them as applicants.