How does your tax return have anything to do with the $7500 loan? (And yes, I think "loan" is the accurate way to describe this. Yes it's an interest free loan, but it's still money you have to pay back. Saying it's a tax credit, even though the IRS describes it this way, is misrepresentation in my opinion)
In fact, if you're getting a tax return every year, you're getting ripped off. I set my withholding so that I end up with a small (< $1000) deficit at the end of the year (which has to be paid when filing). If you overwithhold, you're withholding, and paying the IRS with present dollars, and only getting back 1 future dollar for each present dollar withheld, which is a rip-off. You don't want to underwithhold by too much, otherwise they can assess penalties for that. You should be setting your withholding target so you're withholding about $0 - $100 less then what you expect your tax liability to be. That minimizes the interest free loan you're giving to the govt, while leaving you a decent size cushion to avoid getting hit by penalties for underwithholding.
If you're a first time homebuyer, you should be taking the $7500 regardless of your circumstances or whether you need the money. At the minimum you can buy bank CDs / treasuries with a 2 - 17 year maturity and collect the interest on those. (Since repayment of the loan begins 2 years after you receive the credit)
