When Congress extended and expanded the federal homebuyer tax credit in November, it created an exciting opportunity for more consumers than the original version, adding repeat buyers to those that could benefit.

Much has been written about the tax credit created for first-time homebuyers. But many people may not realize that there is now an attractive opportunity for existing homeowners as well.

Now, repeat homebuyers who purchase a principal residence can receive a credit of up to $6,500 as long as they have been living in their current home for five consecutive years out of the past eight years preceding the purchase.

Income requirements have been relaxed as well. Under the new rules, the credits are available to single buyers with incomes up to $125,000 or married couples earning up to $225,000. Partial credits may be available to homebuyers who earn more.

“This is great news for all homebuyers,” says Rick Davidson, president and CEO of Century 21 Real Estate LLC. “The expanded tax credit, combined with low interest rates, outstanding values and a great selection of homes is creating what may be a once-in-a-lifetime opportunity to get the home of your dreams at a price you can afford.”

But buyers need to act quickly to capitalize on the tax credit.

Congress extended the credit until April 30, 2010, giving buyers who have signed a purchase contract by that date until June 30 to close on their home.

This may be an ideal way to maintain home ownership for consumers who have considered down-sizing–or moving up to match their current circumstances.

^*This is not meant to be tax or legal advice. Consult a tax professional for details.

The announced changes are:

• Mortgage insurance premiums will be increased to 2.25%. This will go into effect in the spring.
• New borrowers will need a FICO score of 580 to qualify for FHA’s 3.5% down payment program. Borrowers with less than a 580 will have to put down at least 10%. This will go into effect in the early summer.
• Allowable seller concessions will be reduced from 6% to 3%, effective in the early summer.

“The FHA’s delinquency rate has been spiraling higher, and they’re trying to take some steps to tighten qualifying standards,” says Mike Larson, a real estate analyst with Weiss Research. “For a buyer at the margin, it will make it tougher to qualify for an FHA loan. You may have to have a better credit score or come up with more money.”

Since FHA loans are particularly popular with first-time buyers due to their low down payment, buyers need to be acutely aware of these impending changes and take appropriate steps to ensure they will qualify.