There are many parts to the new housing bill, but one of them will directly benefit first-time homebuyers -- a tax credit of up to $7,500.

Under the new housing bill, home buyers who have not owned a home in the last three years will be eligible for a tax credit equal to 10 percent of the property up to a maximum of $7,500.

A tax credit is much more valuable than a deduction. A credit reducesdollar for dollar the amount of tax you owe. A deduction merely reducesthe amount of your income that is taxable.

The credit is $3,750 for married couples filing separately. Unmarried people who jointly purchase a home will be able to divide the $7,500 credit.

Some have criticized the program because it is actually a loan that must be repaid over 15 years at zero percent interest beginning in the second year after they purchase the home. For example, a home buyer who qualified for the whole credit would pay $500 for 15 years or about $41.67 per month.

High-income home buyers don’t qualify for the credit -- for people who make more than $75,000 as single filers or $150,000 as joint filers, it begins phasing out and completely phases out when singles make more than $95,000 or couples make more than $170,000. 

Lastly, there is a window of time that the credit is good for -- it applies only to homes purchased on or after April 9, 2008, and before July 1,2009.

For more information, you can also visit http://www.federalhousingtaxcredit.com/.