FHA Loans Are Beneficial to NH Homebuyers

FHA loans help many New Hampshire homebuyers qualify for homeownership with flexible guidelines and low down payment options.

Down Payment & Required Cash

FHA loans allow buyers to purchase with a low down payment and flexible upfront cash requirements.

  • FHA requires 3.5% down for credit scores above 580
  • Credit scores 500–579 require 10% down
  • Sellers may pay closing costs and prepaid expenses
  • When the Seller pays closing costs for the Buyer is is a “Seller Concession”
  • Seller concessions must be negotiated in the purchase contract
  • FHA limits seller concessions to 6% or actual closing costs & prepaid expenses (whichever is less)
  • Typical closing costs & prepaid expenses average about 4% of the purchase price
  • Down Payment Assistance
    Down payment assistance helps eligible buyers cover some or all of the required down payment and, in some cases, closing costs. Down payment assistance can be a second mortgage or a grant.
    • FHA allows buyers to use approved down payment assistance from qualified sources
    • New Hampshire Housing offers a strong down payment assistance program many FHA buyers use successfully
    • Additional assistance programs may also be available depending on eligibility
    • An experienced mortgage professional can help identify the best program for your situation
    • Examples of assistance programs include:
      • Rosebud Down Payment Assistance
      • Axis Down Payment Assistance
      • GOAT Down Payment Assistance
      • Empowered Down Payment Assistance

FHA Mortgage Insurance

FHA loans require mortgage insurance, which protects the lender and allows more buyers to qualify with lower down payments and flexible credit guidelines.

Upfront Mortgage Insurance Premium (UFMIP)

  • FHA charges an upfront mortgage insurance premium based on loan term, loan amount, and down payment
  • For most 30-year FHA loans, the upfront premium equals 1.75% of the base loan amount
  • Buyers may finance the upfront premium into the loan instead of paying it in cash

Annual FHA Mortgage Insurance (MIP)
FHA also charges an annual mortgage insurance premium paid monthly
For most loans with minimum down payment, the annual premium equals about 0.55%
Borrowers who put 5% or more down typically receive a reduced annual premium of about 0.50%

How to Estimate Monthly FHA Mortgage Insurance
Base loan amount × annual MIP ÷ 12 = monthly FHA mortgage insurance payment

Qualifying for an FHA Loan

FHA loans offer flexible qualification standards, which helps many buyers become eligible for homeownership.

  • FHA allows credit scores as low as 500 with sufficient down payment
  • Lenders submit FHA loans through an automated underwriting system (AUS)
  • The system returns either an “Accept” or “Refer” decision

When AUS returns Accept

  • Automated findings determine the documentation and underwriting requirements
  • Most approved FHA loans follow the Accept findings

When AUS returns Refer

  • The loan must go through manual underwriting
  • Manual underwriting typically requires stronger compensating factors and additional documentation

Non-Traditional Credit

  • Borrowers without a credit score may still qualify
  • FHA allows approval using non-traditional credit history when borrowers meet program requirements

FHA + New Hampshire Housing

FHA loans can be combined with New Hampshire Housing programs to provide additional benefits.

FHA Eligible Properties

  • FHA loans support owner-occupied residential properties including:
  • 1-unit homes
  • 2-unit homes
  • 3 + 4 unit homes*
  • Condominiums**
  • Manufactured homes***

    *For 3- and 4-unit owner-occupied properties, FHA requires a “self-sufficiency test” to show the property can financially support itself. FHA calculates the projected market rent from the other units, as confirmed by the appraiser, and multiplies it by 75%. That amount must be equal to or greater than the full monthly mortgage payment (principal, interest, taxes, insurance, and mortgage insurance). This requirement does not apply to 1- or 2-unit properties. FHA treats 3–4 unit properties as small income-producing properties. The self-sufficiency test measures whether the property can support the debt.
    How the FHA self-sufficiency calculation for a 3-4 unit property works:
    Appraiser determines market rent for every unit.
    Add up the total market rents for ALL units.
    Multiply total rents by 75% (assumes a 25% vacancy/expense factor).
    Compare result to full PITI (Principal, interest, tax & insurances)mortgage payment
    • If 75% of total rent ≥ PITI → PASS
    • If 75% of total rent < PITI → FAIL

      ** Condominiums must be on the FHA approved condo list or must be FHA approvable

      *** Manufactured homes must be built after 1978 and sit on their own lot. A structural inspection of the foundation is required to determine if it meets FHA standards
      FHA does not lend on manufactured homes in parks or co-ops.

FHA renovation and using FHA for new construction

  • renovation funds are available thru the FHA 203K standard programs.
  • All required docs and more details can be obtained by contacting Renee Duval
  • click here for more info on FHA renovation/203K loans.
  • FHA new construction with less than 10% down requires the builder to provide additional documentation

Contact us today for more information about FHA loan programs

Bookend Lending is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency. 

Frequently Asked Questions About FHA Loans in New Hampshire

What credit score is needed for an FHA loan?

FHA may allow credit scores as low as 500 with sufficient down payment. Most FHA approvals occur with credit scores of 580 or higher.   Some borrowers with scores over 700 choose FHA because of its many benefits!

How much down payment do you need for an FHA loan?

Most FHA borrowers qualify with a 3.5% down payment. Credit scores below 580 require a minimum 10% down. 

Are FHA loans only for first-time homebuyers?

No. FHA loans are available to both first-time and repeat homebuyers who meet program requirements.

Do FHA loans have income limits?

No. FHA does not set income limits. Qualification depends on credit, debt ratios, employment, and property eligibility.

Do FHA loans require mortgage insurance?

Yes. FHA requires both an upfront mortgage insurance premium and an annual premium paid monthly.

Can the seller pay closing costs on an FHA loan?

Yes. FHA allows seller concessions up to 6% of the purchase price or actual closing costs, whichever is less.

Can I use down payment assistance with an FHA loan?

Yes. FHA allows approved down payment assistance programs, including programs offered through New Hampshire Housing and other approved sources.

Can FHA be used to buy a multi-family home?

Yes. FHA allows financing for owner-occupied 1 to 4 unit properties. Three- and four-unit homes must meet the FHA self-sufficiency requirement.

Can FHA be used for renovation or fixer-upper homes?

Yes. FHA 203k loans allow buyers to finance both the purchase and renovation of a home within one loan.

What are FHA loan limits in New Hampshire?

FHA loan limits vary by county and are updated annually.

Standard FHA Loan Limit: Belknap, Carroll, Cheshire, Coos, Grafton, Merrimack, and Sullivan Counties
1 Unit: $541,287
2 Unit: $693,050
3 Unit: $837,700
4 Unit: $1,041,125

Higher-Cost FHA Loan Limit Counties

Hillsborough County
1 Unit: $589,950
2 Unit: $755,250
3 Unit: $912,900
4 Unit: $1,134,550

Rockingham & Strafford Counties
1 Unit: $962,550
2 Unit: $1,232,250
3 Unit: $1,489,500
4 Unit: $1,851,100

Still have questions about FHA loans?
Every buyer’s situation is different. If you’d like help reviewing FHA options, down payment assistance, or qualification, contact Renee Duval at 603-345-5644 for personalized guidance.

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