Getting a Conventional Loan in New Hampshire When You're Self-Employed

Conventional Loan

Getting a Conventional Loan in New Hampshire When You're Self-Employed

Reviewed by the HomeMath editorial team Updated 2026-08-06

Key takeaways

Minimum credit score for a conventional loan is typically around 620.
Most lenders expect at least a 20% down payment to avoid private mortgage insurance.
Self‑employed borrowers usually must provide two years of federal tax returns.
Debt‑to‑income (DTI) ratios are generally capped at about 43%.

Getting a conventional mortgage while you run your own business in New Hampshire takes a bit more paperwork, but the process is straightforward once you know what lenders look for.

Eligibility Basics

Conventional loans are not backed by the government, so lenders set their own standards. The key factors are credit score, down payment, debt‑to‑income ratio, and documented income.

Documenting Self‑Employment Income

Because you don’t receive a regular pay stub, lenders rely on tax and financial statements to verify earnings.

Two years of complete federal tax returns (including all schedules) are the standard requirement.
A year‑to‑date profit‑and‑loss statement can help show current income trends.
Bank statements for the past few months may be requested to confirm cash flow.

Credit Score and Down Payment

A credit score of about 620 or higher puts you in the qualifying range for most conventional programs. While a 20% down payment lets you avoid private mortgage insurance (PMI), some lenders will accept as little as 5% if you meet other criteria, though PMI will apply.

Debt‑to‑Income (DTI) Ratio

Most conventional lenders cap the DTI at roughly 43% of your gross monthly income. This includes the projected mortgage payment, taxes, insurance, and any other recurring debts.

New Hampshire Specifics

New Hampshire does not levy a state income tax on wages, which means you won’t have a state tax return to provide. However, self‑employed borrowers still need to submit federal returns. The state also tends to use attorney‑led closings rather than title‑company closings, so you’ll likely work with a local real‑estate attorney during settlement.

Steps to Apply

Check your credit report and address any errors.
Gather two years of federal tax returns, profit‑and‑loss statements, and recent bank statements.
Calculate your DTI to ensure it falls below the 43% threshold.
Shop around for lenders that specialize in self‑employed borrowers.
Submit a loan application and provide the required documentation.
Review the loan estimate, negotiate any fees, and proceed to closing with your attorney.

This article provides general information and should not be considered personalized financial advice.

FAQ

How many years of tax returns do I need to provide as a self‑employed borrower?

Most conventional lenders require the last two full years of federal tax returns, including all schedules, to verify stable income.

What is the maximum debt‑to‑income ratio allowed for a conventional loan?

Generally, lenders cap the DTI at about 43% of gross monthly income, though some may allow slightly higher ratios with compensating factors.

Can I use retirement savings for my down payment?

Yes, you can withdraw from a 401(k) or IRA for a down payment, but be aware of potential taxes, penalties, and the impact on your retirement balance.

Does New Hampshire’s lack of a state income tax affect loan qualification?

It means you won’t have a state income‑tax return to submit, but lenders still rely on your federal tax returns and other documentation to assess income.

Do I need a co‑signer if my credit score is lower than 620?

A co‑signer with a stronger credit profile can help you qualify, but the co‑signer becomes equally responsible for the loan repayment.

What should I expect from an attorney‑led closing in New Hampshire?

An attorney will handle title searches, prepare the deed, and oversee the signing of documents, ensuring legal compliance and protecting both buyer and lender.

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