You need to talk to an accountant regarding this, but a lot of accountants aren't upto speed on this due to the law just going into affect.

Since your wife likely deducted mortgage interest within the past 3 years, she is not qualified. It has been explained to me by a mortgage lender that what they are looking at as qualification is if you've deducted mortgage interest in the past 3 years as the test for if you've qualified. If you file jointly, then you would be disqualified too, at least thats what has been explained to me.

There is a lot of confusion regarding this as the law has just been passed and everyone is still trying to digest the changes. You will need to talk with a accountant regarding this, as it's really a tax question, not a real estate question.

The requirement for the $8,000 credit for 1st time homebuyers is that neither party of a couple owned a house that was their primary residence in the past 3 years. You state that your wife owned a home over a year and a half ago, but that she is not on the title. If she is not on the title, how did she own the home? You also state that it was over 1 1/2 years ago, but was it over 3 years ago? My recommendation is for you to consult your tax professional for details, and your lawyer if there is some question re whether your wife owned a home.