You actually have several different issues involved here. Let's take them one at a time.
First, can your fiancee qualify? She bought the home May 7, 2005, and lived there until October 2008. She then moved in with you. OK. The IRS says:
For homes purchased after November 6, 2009, long-time residents can also get the credit under a special rule for a qualifying replacement home. To qualify, you must have owned and used the same home as your principal residence for at least five consecutive years of the eight-year period ending on the date you buy your new principal residence.
She would have have had to have owned and used the same home as her principal residence for at least five consecutive years. Unfortunately, she only used it as her principal residence for 3 years. Therefore, she wouldn't qualify under the replacement home tax credit. (State and federal authorities will look to things like vehicle registration to determine a person's principal residence.)
Would she qualify as a first-time homebuyer? The IRS says:
For homes purchased after April 28, 2008, and before November 7, 2009, taxpayers (including spouse, if married) who owned a principal residence at any time during the three years prior to the date of purchase are not eligible for the credit. This means that you can qualify for the credit if you (and your spouse, if married) have not owned a home in the three years prior to a purchase.
Again, unfortunately no. She owned a principal residence (that is, she owned the property and used it as her principal residence) up until October 2008. After that point, it wasn't her principal residence. Still, that's well short of the 3 year restriction imposed by the IRS.
Again, I'm not an accountant or a lawyer, so this isn't accounting or legal advice. You really should talk to one of those. However, I don't see how your fiancee could qualify under either area of the tax credit provisions.
Hope that helps.