Remember 2008 when the San Jose housing market was really, really bad (as opposed to just being bad now)? Congress passed the Housing and Economic Recovery Act with incentives for people to buy homes to support economic recovery; a big one being a tax credit for first-time homebuyers. It was such a good idea that it kept being renewed until just this past July.
Good for you if you took advantage of the tax credit and purchased a home. The year you claimed your credit will be very important when you file your IRS income taxes for 2010. If you claimed a federal income tax credit for a 2008 home purchase, you'll probably have to pay it back over the next 15 years, starting with your 2010 tax return. However, if you claimed a credit for a home bought in 2009 or 2010, you may not have to pay it back.
This is an issue for you to discuss with your accountant and/or tax preparer. The following link will take you to a good overview article to help familiarize yourself ahead of time with the tax implications.
http://www.smartmoney.com/personal-finance/taxes/do-you-have-to-repay-your-homebuyer-credit/
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