You can use the tax credit on an FHA loan only and you still must have a 620 credit score and the 3.5% down payment. you can use the $8000 on top of your down payment or for closing costs. If the USDA program is available in your area,this might be your best option. This is a no down payment program with less stringent credit requirements ,however there are income and loan limits. You must purchase in what is designated a rural; area,and that designation is pretty generous.

First things first. You would need to get in touch with a local mortgage lender, either your bank, or a mortgage broker, and proceed with all the paperwork to see if you qualify for a mortgage loan and for how much. If you are a first-time homebuyer and you purchase a home before the end of this year, you may be able to use the tax credit (up to $8,000) that is available for first-time homebuyers towards your down payment and/or closing costs. First find out what you qualify for in a mortgage loan and what type of mortgage would best suit your situation. The lender you contact will be able to help you with that. Then find a good realtor in your area to help you in your new home search. Despite the naysayers, this is a good time for first-time homebuyers to purchase a home. In most areas, prices are very affordable and interest rates are lower than they have been in the recent past. Best of luck.