It was iffy there for a while, but Congress did renew the Tax Credit for eligible U.S. taxpayers! It now includes a credit up to $6500 for buyers who HAVE owned a home in the past 3 years. See website for details about other qualifying criteria.
There is also a provision for active military personnel that extends the deadline to purchase until 2011, giving our service members an extra year to take advantage of the credit.
Another benefit is length of occupancy, which is waived for military buyers who have to relocate within the first 3 years because of official business.
All other buyers must agree to occupy the property as a primary residence for the first 3 years, or forfeit the credit.
One concern lawmakers had (and still have!) is fraud. In the beginning, there was no IRS requirement to prove you actually bought a home, other than filling out the proper form. Also, there were numerous mortgage companies, and realtors too, who heavily promoted that you could get the credit before you buy - just by implying on the correct tax form that you intend to buy this year and amending your 2008 tax returns. Not so!
Now the IRS is requesting proof, which is easily handled by sending in a copy of your Settlement Statement (HUD-1) with the proper tax forms when filing for your refund.
The extension and expansion of the Federal Housing Tax Credit will ultimately lead to more buyers looking for homes, which is very welcome in an area that has plenty of inventory!
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