When most markets fail, the government does not do much. The housing market is different. It forms the backbone of modern America. The giant banking bailout is one big sign of its importance, but homebuyers are getting help as well.

The housing market is like the food system in the sea. You need plankton for bigger animals to survive. With real estate, you need first time buyers to fuel the market. They will buy, sell and move up, which fuels the market from the bottom up.

This process starts with first time homebuyers. They are critical to the system. Without them, there is nobody moving up from the bottom and the system will come to a grinding halt.

The current market is bereft of first time buyers. Without these buyers, the market is stagnating. While there are all kinds of finance problems contributing to this, the government has acted to motivate first time buyers to get back into the market.

The Housing and Economic Recovery Act of 2008 is the magic pill. It provides a tax credit of 10 percent of the purchase price of the home up to a maximum of $7,500. Only the government would think a $75,000 home can be found, but there you go.

If you hate paying taxes, you should love tax credits. Why? The tax credit is not deducted from your income. It is deducted directly from the amount you are supposed to pay Uncle Sam. Take a minute to think about that.

Assume I can claim this first time buyer tax credit in the amount of $7,500. I determine I owe $2,500 to the IRS after doing my taxes. I would then apply my tax credit to this and send in a return telling the agency to send me $5,000.

You are probably wondering if it is realistic to ask for more than I actually owed. Yes. This is a fully refundable tax credit. In plain language, this means that it does not matter what I owe. Not bad, eh?

So, is there a catch? Yes and it is very big. This tax credit is a fraud. Why? It must be paid back. Fortunately, you have fifteen years to do it. If you claim the full tax credit, this means paying an additional $500 a year which is not too bad.

The amount of money you make also can be a problem. Couples making more than $150k and non-couples making over $75k face a phase out problem. If you are making this kind of money, however, you probably should already own a home.

Will this tax credit get first time buyers back into the market? Nothing is certain with this wild market, but it certainly cannot hurt? Now if the banks would just get their acts together.