What is a conventional loan?
A conventional loan is any mortgage that isn't part of a government program like FHA, VA or USDA. Most conventional loans are conforming: they follow Fannie Mae and Freddie Mac's rules and stay within the loan limits set each year, so lenders can sell them to those two companies. Loans that don't conform, such as jumbo loans, are less standardized, and eligibility and pricing vary more from lender to lender.
How big can a conforming loan be in southern NH?
For 2026, the one-unit conforming limit depends on the county:
| County | Towns include | One-unit limit |
|---|---|---|
| Hillsborough | Nashua, Manchester, Bedford, Merrimack, Hudson, Litchfield, Milford, Amherst, Hollis, Pelham, Goffstown, Weare | $832,750 |
| Merrimack | Concord, Hooksett | $832,750 |
| Rockingham | Salem, Windham, Londonderry, Derry, Exeter, Plaistow, Hampstead | $962,550 |
| Strafford | Dover, Rochester, Durham | $962,550 |
A loan above the limit is a Jumbo loan A loan above the conforming loan limit, used for higher-priced homes. See the full glossary with lender-set rules. The loan limit guide covers jumbo loans and the higher limits for 2 to 4 unit homes.
What kinds of homes can I buy with a conventional loan?
Fannie Mae's rules recognize three uses: a principal residence you live in, a second home you use for part of the year, and an investment property you own but don't live in. That flexibility is one reason buyers of lake and vacation homes and rental properties often use conventional financing, since FHA loans are for homes you live in.
Do conventional loans have mortgage insurance?
Some do. With a smaller down payment, a conventional loan typically needs private Mortgage insurance (PMI or MIP) Insurance that protects the lender on many loans with a smaller down payment. It's added to your payment and can often be removed later. See the full glossary (PMI), which protects the lender, not you. Unlike FHA mortgage insurance on many loans, PMI on most conventional loans for a home you live in can be cancelled once you build enough equity. How to remove PMI explains the rules.
Is there a conventional option for moderate incomes?
Yes. Fannie Mae's HomeReady loan is designed for buyers with lower incomes or limited savings. Eligibility depends on income compared with the area median for the home's location, and it's open to repeat buyers as well as first-time buyers. Gifts, grants and community second mortgages can help with the down payment, rent payment history can be considered, and if every buyer is a first-time buyer, one must complete homeownership education. Freddie Mac has a similar program, and NH Housing's Home Preferred programs also pair with conventional loans for eligible buyers.
Is conventional or FHA better?
It depends on your credit, savings and the home. The CFPB notes that conventional loans typically cost less than FHA loans but can be more difficult to qualify for. FHA can help when credit or savings are still building; conventional often wins when credit is strong, when you want mortgage insurance you can remove, or when the home is a second home or rental. Tom prices both from several lenders so you can compare. See the FHA guide.
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Sources
- CFPB, Conventional loans
- Fannie Mae Selling Guide B2-1.1-01, Occupancy Types
- Fannie Mae, HomeReady Mortgage
- FHFA, 2026 conforming loan limits by county
Checked October 2026. Limits and program rules change, so confirm current figures before you rely on them.
General information only, not tax or legal advice. Program availability, eligibility and terms vary by lender and are subject to change and to underwriting approval. Not a commitment to lend.