What Is the Difference Between a Conventional Loan and an FHA Loan in NH?

🏡 Conventional Loan vs. FHA Loan in New Hampshire — What’s the Difference?

If you’re buying a home in Plymouth, Campton, Thornton, Rumney, Ashland, or anywhere in Central NH, you’ll need to decide what loan type is best for you.

The two most common options are Conventional loans and FHA loans.

Here’s a simple, clear comparison to help you choose.

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What Is a Conventional Loan?

A Conventional loan is not backed by the government.

These loans follow Fannie Mae and Freddie Mac guidelines.

Advantages of Conventional Loans:

✔ Lower mortgage insurance costs

✔ PMI can be removed at 20% equity

✔ Higher loan limits

✔ Better for buyers with strong credit

✔ More flexible property standards

Typical Requirements:

➡️ 620+ credit score

➡️ 3%–20% down

➡️ Stronger debt-to-income ratios

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What Is an FHA Loan?

An FHA loan is insured by the Federal Housing Administration.

It is designed to help buyers who have:

✔ Lower credit scores

✔ Higher debt

✔ Smaller down payments

Advantages of FHA Loans:

✔ 3.5% down payment

✔ Easier credit qualification

✔ Flexible income requirements

Typical Requirements:

➡️ 580+ credit score

➡️ 3.5% down

➡️ FHA appraisal standards

➡️ Mortgage insurance (MIP) required

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Key Differences Between FHA and Conventional Loans

Down Payment

FHA: 3.5%

Conventional: 3%–20%

Credit Score

FHA: More lenient

Conventional: Higher scores preferred

Mortgage Insurance

FHA: MIP required for 11 years or life of loan

Conventional: PMI removable at 20% equity

Property Standards

FHA: Stricter (safety, structure, habitability)

Conventional: More flexible

Best For

FHA: First-time buyers, limited savings

Conventional: Buyers with strong credit, higher income, or larger down payment

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Which Loan Is Better for NH Buyers?

Choose FHA If You:

✔ Have lower credit

✔ Have less money saved

✔ Need easier approval

Choose Conventional If You:

✔ Want lower long-term costs

✔ Want to avoid lifelong mortgage insurance

✔ Have good credit and stable income

Local market conditions in Plymouth, Thornton, Campton, and Rumney often determine which option is more competitive.

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Q&A

Q: Can I switch from FHA to Conventional later?

A: Yes — many buyers refinance into a Conventional loan once their credit improves or equity increases.

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Keywords

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Jim Johnson Real Estate Agent

58 NH Route 25A

Wentworth, NH 03282

P: (857) 249-7392

W: www.JimJohnsonRealEstateAgent.com

Licensed New Hampshire REALTOR® with Three Hills Real Estate Services

Broker Email: info@ThreeHillsRES.com

Broker Website: www.ThreeHillsRES.com