The full answer is a little complicated. If you are a first time home buyer (defined by the IRS), you have an income of less than $75,000 ($150,000 if married filing joint), and you bought a new home between April 9th, 2008 and July 1, 2009 you are eligible for the Federal Housing Tax Credit for First time Home buyers.
The $7,500 credit is called a refundable credit. This means it will first be applied towards any money that you owe the IRS. Whatever is left over will be given to you.
However, it must be paid back over the next 15 years (that's $500 a year). If you sell the house during that time, the remainder of the $7500 must be paid back from the gain on the sell of the home. If you sell the home for a loss, the debt is canceled!
My thanks to Maximum Title, for this explanation -
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