I can say with about 99.99% certainty that they will not *each* be entitled to an $8K credit. If that were the case, married couples all across the country would be enjoying a combined $16K in tax credits. Or people would be jointly buying homes together to "double-dip" on the tax credit. Neither of those scenarios are happening.

Since you are financing the purchase, they may not be eligible for a credit at all. See the IRS rules for form 5405 (the homebuyer tax credit form):

http://www.irs.gov/pub/irs-pdf/i5405.pdf

Homes that are gifts are excluded from the credit. As are homes acquired from a related person.

It's not that big a stretch to see the IRS claiming since you are financing the home for your children that it's a "gift" or that they've "acquired" it from you. Regardless of how the home is deeded, the IRS may not consider your children "buyers" as they have nothing to do with the financing. Things always get tricky with the IRS when it comes to transactions involving relatives.

However, I am not a tax professional, and you should seek the advice of a tax professional. This isn't something you want to take any chances with.

Straight from the IRS:

If, within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full amount of the credit is due at the time the income tax return for the year the home ceased to be your principal residence is due.