Conventional Loan
Conventional Loan Down Payment Requirements in New Hampshire
Reviewed by the HomeMath editorial team Updated 2026-08-06
Key takeaways
- Minimum down payment for a conventional loan is typically 3% of the purchase price.
- A 5% down payment is common to avoid higher private mortgage insurance (PMI) premiums.
- Putting down 20% or more eliminates PMI and can improve loan terms.
Conventional loans are not backed by a government agency, so lenders set their own down‑payment rules. The minimum is usually 3% of the home’s price, which allows buyers with limited cash to qualify.
Why lenders require a down payment
The down payment provides the lender with a cushion against loss if the borrower defaults. A larger payment reduces the loan‑to‑value (LTV) ratio, meaning the borrower has more equity and the loan is less risky for the lender.
Typical thresholds
- 3% minimum – often allowed with strong credit and a solid debt‑to‑income ratio.
- 5% or more – many lenders prefer this level to keep PMI costs lower.
- 20% or higher – eliminates private mortgage insurance and may qualify the borrower for better interest rates.
New Hampshire specifics
New Hampshire does not have a state income tax, which can make the overall cost of homeownership slightly lower than in many neighboring states. Most closings in the state are handled by a real‑estate attorney rather than a title company, so buyers should budget for attorney fees in addition to standard closing costs. The New Hampshire Housing Finance Authority also offers a first‑time‑buyer program that can provide down‑payment assistance for qualified borrowers.
Regardless of the down‑payment amount, lenders will verify that the funds are legitimate – whether they come from savings, a gift, or an assistance program.
This article provides general information and is not personalized financial advice.
FAQ
Can I use gift funds for the down payment on a conventional loan in New Hampshire?
Yes, most lenders accept gift funds for a conventional loan, but the donor must provide a signed gift letter stating the money is a gift and not a loan, and the borrower may need to document the donor’s ability to give the gift.
Do I need a home inspection before a conventional loan can close in New Hampshire?
While a home inspection is not required by the lender, most buyers choose to have one. An inspection can uncover issues that might affect the property’s value and the lender’s appraisal.
How does private mortgage insurance (PMI) work if my down payment is less than 20%?
PMI protects the lender if the borrower defaults. The premium is usually added to the monthly payment and can range from 0.3% to 1.5% of the original loan amount per year. PMI can be cancelled once the loan balance falls below 80% of the home’s value.
Are there state programs that can help with my down payment in New Hampshire?
The New Hampshire Housing Finance Authority offers down‑payment assistance and favorable loan terms for eligible first‑time homebuyers. Applicants must meet income, purchase price, and credit criteria to qualify.
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