-- Only principal residences -- or in the IRS's words, ''the one you live in most of the time'' -- are eligible. No second homes, investment properties or houses located outside the United States pass the test. However, the definition of "home" extends far beyond conventional houses sited on lots. It "can be a ... houseboat, housetrailer, cooperative apartment, condominium or other type of residence," according to Form 5405. For example, if you buy a sail- or powerboat with full living facilities, tie it up at a marina, and make it your "main home," you should be eligible to claim the credit, though you may want to run all the specifics of your situation by your accountant or tax adviser.
-- Even it's your first home purchase, you are not be eligible if your adjusted gross income is above $95,000 (single filer) or $170,000 (married joint filers). Married couples with incomes between $150,000 and $170,000 are eligible for reduced credits, based on a phase-out schedule. Single filers with incomes between $75,000 and $95,000 also are subject to reduced credit limits. District of Columbia residents who are eligible for the city's first-time homebuyer credit are barred from use of the federal tax credit. Taxpayers who use tax-exempt mortgage bonds issued by state or local governments to finance home purchases also are ineligible.
-- You can't claim the $7,500 credit if you buy your house from a ''related person,'' meaning a spouse, parents, grandparents, children or a corporation or partnership where you own more than 50 percent of the stock or capital interests.
If you pass all these tests, and get the purchase done by whatever deadline date Congress decides as part of the final stimulus package, you should be able to take $7,500 off your federal tax bottom line, and not worry about ever paying it back.