The credit applies to escrows that close AFTER May 1, 2010.

1. The state has allocated a total of $200 million - $100 million for each of the two credits.  Once the money is gone, the credit goes away.  (Last year, the state offered a similar credit only for new home buyers and it was gone in less than 4 months.)
2. If you’re a first-time buyer who’s buying a new home, you can only take the new home buyer credit.
3. In order to claim the first-time buyer credit, the first time buyer must receive the application and documentation within 2 weeks after close of escrows.
4. Since new home buyers often have to wait months until their home is ready, eligible buyers can reserve the credit ahead of time, in order to ensure that the money isn’t already gone by the time their home is ready for occupancy.
5. Both credits are only good on single-family residences, including condos and townhomes, but not duplexes, triplexes, etc. (even if you plan to live in one of the units).
6. The maximum credit is $10,000 or 5% of the home’s purchase price, whichever is less.
7. The credit is payable in three equal installments for the 2010, 2011 and 2012 tax years.  On a home priced at $200,000 or more, that works out to a maximum credit of $3,333 a year.
8. The credit in any tax year can’t exceed your actual tax liability.  So if you qualify for a $3,333 credit but your state income tax for the year is only $2,500, then you only to claim $2,500.
9. You cannot carry over any unused credits to future tax years.

There are a number of other conditions and requirements, such as that the buyer must be at least 18 years old and not claimed as a dependent by another taxpayer and that the buyer or buyer’s spouse can’t be related to the seller.

For full details or information or to check eligibility for either of these credits, be sure to contact your tax advisor or visit the first time buyer tax credit information page: http://ftb.ca.gov/individuals/new_home_credit.shtml