What credit score do I need for an FHA Loan in New Hampshire? UPDATED for 2026!

Buying a home in New Hampshire can feel like a big leap—especially if you’re worried about your credit score. Fortunately, FHA loans offer a more accessible path to homeownership, even if your credit history isn’t perfect. Backed by the Federal Housing Administration (a division of the U.S. Department of Housing and Urban Development), these government-insured mortgages are among the most popular financing options for first-time buyers and those with moderate incomes across the Granite State. In 2024, approximately 16% of all U.S. home purchases were financed with FHA loans, and in New Hampshire—where the median home sale price has climbed to roughly $488,000 and inventory hovers at just two months’ supply—understanding how your credit score factors into FHA eligibility can mean the difference between getting into a home or sitting on the sidelines.

FHA Loan Basics: How the Program Works

FHA loans are not issued directly by the federal government. Instead, the FHA insures mortgages originated by approved private lenders—banks, credit unions, and mortgage companies—against borrower default. Because the lender’s risk is substantially reduced by this federal guarantee, FHA-approved lenders are willing to work with borrowers who might not qualify for conventional financing: those with lower credit scores, smaller down payments, higher debt-to-income ratios, or limited credit histories. The trade-off is that FHA borrowers must pay mortgage insurance premiums (more on that below), but for many buyers, the accessibility benefits far outweigh this cost.

FHA Credit Score Requirements

The FHA sets minimum credit score thresholds that determine how much you need to put down:

• 580 or higher: You qualify for the minimum 3.5% down payment. On a $400,000 home, that’s $14,000 down.
• 500–579: You can still qualify, but you’ll need to put 10% down. On that same $400,000 home, that jumps to $40,000.
• Below 500: You are not eligible for FHA financing.

These are the official FHA guidelines, but it’s important to understand that individual lenders often impose their own stricter standards, known as “lender overlays.” In practice, most New Hampshire lenders prefer a minimum credit score of 600–620, particularly in competitive markets like Portsmouth, Manchester, and Nashua where multiple offers are common and sellers tend to favor buyers with stronger financial profiles. That said, FHA-approved lenders who work through New Hampshire Housing Finance Authority (NHHFA) programs may be more willing to work with borrowers at or near the FHA minimums, especially when paired with the state’s down payment assistance options.

Why Your Credit Score Matters More Than You Think

Your credit score doesn’t just determine whether you qualify—it directly affects the interest rate you’ll receive, which compounds into significant cost differences over the life of a 30-year mortgage. According to data compiled by Curinos in early 2026, borrowers with FICO scores of 760 or above are offered the lowest available rates, while those in lower credit tiers can expect to pay meaningfully more. The difference between the highest and lowest credit score tiers translates to roughly $165 per month in additional costs—or approximately $59,000 in extra interest over 30 years on a typical loan.

As of early February 2026, the national average 30-year FHA mortgage rate sits around 6.28% (6.34% APR), according to Bankrate’s survey of major lenders. The average FHA borrower carries a 674 FICO score and pays approximately 6.41% interest. Moving that score from the mid-600s to 760 or above could trim a quarter to half a percentage point off your rate—a savings that adds up to tens of thousands of dollars over the life of the loan.

FHA Loan Limits in New Hampshire: A County-by-County Breakdown

FHA loan limits vary by county and are recalculated annually based on local median home prices. New Hampshire has 10 counties, and for 2025, the single-family FHA loan limits are as follows:

Rockingham and Strafford counties carry substantially higher limits because they fall within the Boston-Cambridge-Newton metropolitan statistical area, which HUD classifies as a high-cost market. This is a major advantage for buyers looking in Seacoast communities like Portsmouth, Exeter, Hampton, and Dover, where median home prices routinely exceed $500,000. Hillsborough County (home to Manchester and Nashua) also carries a slightly elevated limit above the national floor. For 2026, the national FHA floor limit has increased to $541,287 for a single-family home, and county-specific limits are expected to rise accordingly.

Understanding FHA Mortgage Insurance Premiums (MIP)

Every FHA loan requires mortgage insurance—this is the cost of the federal guarantee that makes the program possible. FHA mortgage insurance comes in two parts:

Upfront Mortgage Insurance Premium (UFMIP): A one-time fee equal to 1.75% of your base loan amount, due at closing. On a $400,000 loan, that’s $7,000. Most borrowers finance this amount by rolling it into the loan balance rather than paying it out of pocket.

Annual Mortgage Insurance Premium (MIP): A recurring premium divided into 12 monthly installments and added to your mortgage payment. For the most common scenario—a 30-year loan with less than 5% down—the annual MIP rate is 0.55% of the loan amount. With 5% or more down, the rate drops to 0.50%. On a $400,000 loan at 0.55%, that works out to roughly $183 per month.

Here’s the critical detail many buyers miss: if you put less than 10% down (which most FHA borrowers do), MIP remains for the entire life of the loan. The only ways to eliminate it are to refinance into a conventional loan once you’ve built sufficient equity, or to pay off the mortgage entirely. If you put 10% or more down, MIP drops off automatically after 11 years of payments. This is one reason many financial advisors suggest using an FHA loan to get into the home, then refinancing into a conventional mortgage once your credit improves and your loan-to-value ratio reaches 80%.

Other FHA Qualification Requirements

Credit score is just one piece of the FHA underwriting puzzle. Lenders will also evaluate:

Debt-to-Income Ratio (DTI): The FHA generally allows a maximum DTI of 43%, meaning your total monthly debt obligations (including the proposed mortgage payment) should not exceed 43% of your gross monthly income. However, borrowers with compensating factors—such as significant cash reserves, a history of making similarly sized housing payments, or a strong employment record—may qualify with DTIs up to 50% with certain lenders.

Employment and Income History: You’ll need to document a consistent two-year employment and income history. W-2 employees should be prepared to provide recent pay stubs, two years of W-2 forms, and two years of federal tax returns. Self-employed borrowers face additional scrutiny and will typically need to furnish complete business tax returns, profit-and-loss statements, and evidence that their business has been operating for at least two years.

Down Payment Sources: Your down payment can come from personal savings, a financial gift from a family member (with a documented gift letter), employer assistance programs, or state and local down payment assistance programs. The FHA does not allow down payment funds to come from the seller or any party with a financial interest in the transaction.

Property Requirements: The home must be your primary residence—FHA loans cannot be used for investment properties or second homes. The property must also pass a HUD-approved appraisal, which evaluates both the home’s market value and its compliance with minimum property standards covering safety, structural soundness, and habitability.

New Hampshire Down Payment Assistance and First-Time Buyer Programs

One of the most underutilized advantages available to FHA buyers in New Hampshire is the suite of assistance programs administered by the New Hampshire Housing Finance Authority (NHHFA). These programs can dramatically reduce the cash you need to close:

Home First and Home First Plus: A bond-financed program that pairs a rate-advantaged mortgage with optional down payment and closing cost assistance of $5,000, $10,000, or $15,000. The assistance takes the form of a 0% interest, zero-payment second mortgage that is fully forgivable after four years. Available for FHA, VA, and USDA loans through NHHFA-approved lenders.

Home Flex Plus: Similar to Home First but with less restrictive income limits, making it accessible to a broader range of buyers. Available with FHA, VA, USDA, and conventional loans, with down payment assistance options up to $25,000 as of early 2025.

1stGenHomeNH: A pilot program offering an additional $10,000 in down payment assistance specifically for first-generation homebuyers—defined as borrowers whose parents have never owned a home, or who were formerly in foster care or hold refugee/asylum status.

Home Start Homebuyer Tax Credit (MCC): A federal Mortgage Credit Certificate that allows eligible first-time buyers to claim a dollar-for-dollar federal tax credit of up to $2,000 per year for the life of their mortgage. Unlike a deduction, a tax credit directly reduces your tax bill, and borrowers can adjust their W-4 withholdings to receive the benefit as increased take-home pay each month. This program can be combined with NHHFA’s cash assistance and down payment programs for maximum savings.

FHA 203(k) Rehabilitation Loans: For buyers eyeing a fixer-upper, the FHA 203(k) program allows you to finance both the home purchase and up to $35,000 in renovation costs in a single mortgage. NH Housing offers this through its Home Flex program at its standard low rates—a compelling option in a market where move-in-ready homes command premium prices.

To access any NHHFA program, you’ll need to work with an NHHFA-approved lender, complete homebuyer education (available face-to-face through organizations like AHEAD, HOMEteam, or the Housing Partnership), and meet income and purchase price limits for the municipality where you’re buying. Even with cash assistance, expect to contribute a minimum of 1% of the purchase price from your own funds.

How to Improve Your Credit Score Before Applying

If your score isn’t where you need it to be, a focused effort over 60–90 days can make a meaningful difference. The strategies below are listed in order of typical impact:

Pay down revolving balances. Credit utilization—the percentage of your available credit you’re currently using—is one of the most heavily weighted factors in your FICO score. Reducing credit card balances to under 30% of their limits (ideally under 10%) can produce a noticeable score increase within a single billing cycle, sometimes in as little as 30 days.

Eliminate late payments. Payment history is the single most important component of your credit score. Set up autopay for at least the minimum due on every account, and bring any past-due accounts current immediately.

Dispute errors on your credit report. Request your free reports from annualcreditreport.com and review each one carefully. Incorrect late payments, accounts that don’t belong to you, and inaccurate balances are more common than you might expect. Filing a dispute with the credit bureau can result in removal or correction within 30 days.

Avoid new credit inquiries. Each hard inquiry (triggered by applying for new credit) can temporarily reduce your score by a few points. In the months leading up to your mortgage application, hold off on opening new credit cards, financing furniture, or co-signing loans.

Become an authorized user. If a family member with a long-standing, low-balance credit card is willing to add you as an authorized user, their positive payment history on that account may boost your score—even if you never use the card.

FHA vs. Other Loan Options: Finding the Right Fit

For borrowers with credit scores between 580 and 620, an FHA loan is often the only viable option. Once your score exceeds 620, it’s worth comparing FHA and conventional side by side, because conventional loans offer the significant advantage of cancellable private mortgage insurance (PMI)—which drops off once you reach 20% equity. If you can qualify for a conventional loan with a competitive rate, the long-term savings on mortgage insurance alone can be substantial. VA loans, for those who qualify, typically offer the lowest rates of any program and require no monthly mortgage insurance at all.

Is an FHA Loan the Right Move for You?

If your credit score is 580 or above and you don’t have a large down payment saved, an FHA loan remains one of the most practical paths to homeownership in New Hampshire. Combined with NHHFA down payment assistance—which can provide up to $25,000 in forgivable second-mortgage funds—and the Home Start tax credit saving you up to $2,000 annually on your federal taxes, the total cost of getting into a home may be lower than many buyers realize. Even if your score is in the 500–579 range, you may have options with a 10% down payment and the right lender.

The smart approach is to start early: check your credit, address any issues, get pre-approved, and understand the full range of programs available to you before you start touring homes. In a competitive market with limited inventory, the buyers who win are those who come to the table prepared.

Need guidance? Our experienced agents at Bean Group, brokered by eXp Realty, can help you evaluate financing options and connect you with FHA-approved lenders in your area. Connect with a local buyer’s agent today and start your journey to homeownership.