FHA vs. Conventional Loans in New Hampshire: Which Is Right for You? (2026)

Quick answer: An FHA loan in New Hampshire lets you buy with a 580 credit score and 3.5% down, but mortgage insurance usually stays for the life of the loan. A conventional loan needs stronger credit (typically 620+, best pricing at 740+) yet allows as little as 3% down and cancellable PMI once you hit 20% equity. Lower credit or thin savings favors FHA; strong credit favors conventional.

Deciding between an FHA vs conventional loan is the single biggest financing choice most Southern New Hampshire buyers face, and it changes both your monthly payment and how much cash you need at closing. With the 30-year fixed rate sitting at 6.49% the week of July 9, 2026 (Freddie Mac) and the statewide single-family median at about $575,000 (NHAR, June 2026), the gap between these two loan types can add up to real money over the life of your mortgage. Here is how they actually compare for buyers in Bedford, Manchester, Nashua, and the surrounding towns.

What's the difference between an FHA vs conventional loan?

An FHA loan is backed by the Federal Housing Administration and built to help buyers with lower credit scores or smaller down payments qualify. A conventional loan is not government-insured; it follows guidelines set by Fannie Mae and Freddie Mac and rewards borrowers with stronger credit and more equity. Both are widely available from every lender we work with across New Hampshire, so the right choice comes down to your credit profile, your down payment, and how long you plan to keep the loan.

How much do you need to put down in New Hampshire?

FHA requires 3.5% down with a 580 credit score, which is about $20,125 on a $575,000 home. Conventional loans can go as low as 3% down for qualified first-time buyers (roughly $17,250 on that same price), though 5% is more common. The headline down payments look similar, so the deciding factor is usually mortgage insurance and credit, not the cash to get in the door. If your savings are tight, pair either loan with the state assistance programs we cover in our first-time home buyer NH programs guide.

What credit score do you need for each?

FHA officially allows a 580 score at 3.5% down (or 500–579 with 10% down), but many New Hampshire lenders set their own floor at 620 or 640. Conventional loans generally start around 620, with the best rates and lowest PMI reserved for scores of 740 and up. This is the crux of the FHA vs conventional loan decision: if your score is in the 580–660 range, FHA often prices better; once you clear the mid-700s, conventional almost always wins.

How do FHA and conventional loan limits work in NH?

Loan limits cap how much you can borrow before stepping into jumbo territory. For 2026 the baseline conventional (conforming) limit is $832,750 nationwide (FHFA). FHA limits vary by county:

• Hillsborough County (Manchester, Nashua, Bedford, Amherst, Hollis, Merrimack, Goffstown, Hooksett): FHA one-unit limit $589,950
• Rockingham & Strafford Counties (Portsmouth, Salem, Derry, Londonderry, Dover) — part of the Boston metro: FHA one-unit limit $962,550

That is a meaningful split. A buyer eyeing a $700,000 home in Bedford is above the Hillsborough FHA ceiling and would need a conventional or jumbo loan, while the same purchase in Londonderry could still fit inside the FHA limit. Knowing your county's number early keeps your pre-approval realistic.

What about mortgage insurance — MIP vs PMI?

This is where the two loans diverge most over time. FHA charges an upfront mortgage insurance premium (MIP) of 1.75% of the loan amount plus an annual premium around 0.55%, and if you put down less than 10%, that MIP stays for the life of the loan. Conventional PMI ranges from about 0.25% to 2.0% annually depending on credit and down payment — but it cancels automatically once you reach 20–22% equity. For a strong-credit buyer, that cancellable PMI can save thousands over the years you own the home. For a buyer with a 640 score, FHA's flat MIP is often the cheaper monthly cost. Run both scenarios with your lender before you commit.

So which loan is right for you?

The FHA vs conventional loan choice really comes down to two things: your credit score and how long you plan to keep the mortgage. Choose FHA if your credit is in the 580–660 range, your savings are limited, or you have a couple of recent credit hiccups. Choose conventional if your score is 700+, you can reach 20% equity in a reasonable timeframe, or you want to avoid paying insurance for the life of the loan. Many of our buyers start FHA and refinance into a conventional loan a few years later once their equity and credit improve — a smart path in a market where inventory finally loosened to about 2.5 months this summer. Want a second set of eyes on your numbers? Start with our New Hampshire buyer resources, grab our free NH home buyer guide, or reach out to The Phinney Team and we'll connect you with a trusted local lender.

Related reading

• First-Time Home Buyer NH Programs & Tips (2026) — down payment assistance that pairs with both loan types
• New Construction vs. Existing Homes in New Hampshire — how loan choice shifts on a new build
• Do You Need a Real Estate Agent to Buy a Home in NH? — who does what in the financing process

Frequently asked questions

Is an FHA or conventional loan better for a first-time buyer in NH?

It depends on your credit. First-time buyers with scores under about 660 usually get a lower monthly payment with FHA thanks to its flat mortgage insurance. First-time buyers with strong credit (720+) typically save more with a conventional loan because PMI is cheaper and eventually cancels.

Can I switch from FHA to conventional later?

Yes. Many New Hampshire buyers refinance an FHA loan into a conventional loan once they reach roughly 20% equity or their credit score improves. That move drops the lifetime MIP and can lower the payment, especially if rates fall from today's 6.49%.

Do sellers in New Hampshire prefer conventional offers?

In competitive situations some sellers view conventional financing as slightly stronger because of stricter appraisal expectations on FHA loans. A well-documented FHA pre-approval and a solid agent presentation usually level the playing field, especially in this summer's more balanced market.

What credit score gets the best conventional rate in 2026?

Pricing improves in tiers, with the strongest rates and lowest PMI generally reserved for scores of 740 and above. Between 620 and 740 you can still get a conventional loan, but your rate and insurance cost rise as your score falls.