The Foreclosure Prevention Act of 2008 (H.R. 3221) was passed by the U.S. Senate on April 10 this year. In it, it includes a bail out for mortgage industry by giving $7000 tax credit to home owners who purchased a bank owned home as their primary residence.

The $7000 can be divided equally between the two years after the purchase. For married couples filing separately, it can be divided into $3500 per person.

In order for investors to claim this tax credit, they need to live in the house for 24 months.