FIRST TIME HOME BUYER TAX CREDIT

The $8,000.00 tax credit is for 1^st Time Home Buyer's only. The IRS defines a "1^st Time Home Buyer" as someone who has NOT owned a principal residence in the past 3 years. (PAST 3 years - if you sold a home 3 years and a day ago you will qualify.)
The tax credit does NOT have to be repaid unless the home is sold or ceases to be used as the buyer's principal residence within three years after the initial purchase.
The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.00.
The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase (closing) executed by June 30, 2010 will qualify. (Layman's terms: you must be under a binding sales contract by April 30, 2010 and close on the home before June 30, 2010.)
Income Limits:

Homes purchased "On or AFTER" January 1, 2009 and "On or BEFORE" November 6, 2009, the income limits are $75,000.00 for single taxpayers and $150,000.00 for married taxpayers.
Homes purchased "On or AFTER" November 6, 2009 and "On or BEFORE" April 30, 2010 (contract signed, closing before June 30, 2010), the income limits are $125,000.00 for a single taxpayer and $225,000.00 for married taxpayers.

NO... You can amend your last years Tax Filing to receive the credit! (You can of course wait if you would like too.)

How do I apply for the credit? What documentation if any will I be asked to supply?

Application: There is a specific Government Form, IRS Form 5405, that will need to be filled out. Consult a local tax advisor or research the government website.
Documentation needed: You will need to supply a copy of your HUD 1 Settlement Statement (you will sign and receive this document at the closing of your home).