We all know how bad things are in the housing market. Sales are down and Americans are afraid to make a home buying commitment in these uncertain economic times.  But here is great news for those first time home buyers who are ready to pursue the American dream of owning their own home.

There is a new, temporary $7,500 first-time home buyer tax credit that is expected to help millions of Americans own their first home.

The tax credit is available for first-time home buyers; this includes people who have not owned a home that is their primary residence for at least three years.

The credit depends on how much money the home buyer makes. To receive the full tax credit amount of $7,500, the income limits are $75,000 a year for single taxpayers and $150,000 for married taxpayers filing joint returns. For partial credit, the upper limit is $95,000 and $170,000, respectively.

The home purchase must occur on or after April 9, 2008, and before July 1, 2009.

The tax credit works as an interest-free loan with up to 15 years to repay. For example, a buyer claiming the full $7,500 credit would repay the loan at a rate of about $500 a year.

The National Association of Home Builders has a Web site to help people understand how this incentive works.