Your Guide to Buying a Home in New Hampshire

• In the state of New Hampshire, real estate purchases must be completed with the assistance of an attorney. 
• A representative from a title company may be able to help with some of the purchase details.
• The buyer and seller will get together at the same time, at the same table, to sign all documents.
• New Hampshire has unique factors on some properties, such as old heating tanks that need to be decommissioned.  

Phase 1: Finalizing the Purchase Details

While you and the seller may have come to terms on a purchase price, there are still many details that need to be finalized. 

Tip: This part of the process can be completed while you are working on the mortgage. It’s recommended that you begin Phase 1 and Phase 2 (the mortgage) and the same time. 

1. The first step is to have an offer accepted by the buyer. Once this happens, the contract becomes effective. 
2. At the same time, a deposit, called “earnest money,” is paid to the attorney overseeing the transaction. This cash is released to the seller when the deal is complete, and acts as a deposit to ensure the buyer is no longer actively selling and marketing the property to other buyers. 
3. As the buyer, you will now review any disclosures from the seller. Disclosures are simply statements of known issues with the property, such as past repairs or needed maintenance. These are beneficial to both parties, as they create a foundation of trust. Besides that, it’s best to release disclosures because they will be discovered during inspections. 
4. You now have a chance to complete inspections, which must be completed by a certain date. In the state of New Hampshire, homebuyers will likely want a basic home inspection, although it’s also common to have inspections for radon, termites, lead paint, and asbestos.
5. Older homes in New Hampshire may need to complete certification that a buried oil tank has been decommissioned. In the New England and other areas, home-heating oil tanks were buried in the ground to save space. These tanks, however, have created significant risk to the environment. Although it may not be a legal condition of the sale, it’s a good practice to have all buried tanks decommissioned. (Depending on the location of the tank, this can be expensive, so it may change purchase negotiations.) 
6. If the home uses a well, a test of the water may be required. 
7. Once inspections are complete, you (the buyer) have a chance to request changes to the purchase price or contract details. The seller can accept the request, completely deny the request, or (more commonly) offer a compromise. The buyer and seller will negotiate together until a final agreement is reached. 

Phase 2: The New Hampshire Mortgage

Most buyers in New Hampshire, as well as other areas of the U.S., will need a mortgage loan to make the purchase. Most contracts have a financing contingency date, which simply states that the buyer must take action towards getting a loan before a certain day. 

While approval is likely if you have already pre-qualified, you’ll need to run through a variety of steps to finalize your application. 

1. The first step is for you to submit an application. This can be done independently or with the help of a lending professional.
2. If you are approved, the lender will send out a good faith estimate, which is the estimated costs for closing the loan. 
3. You will now send a series of documents to the lender. These can cover a variety of different things, but they basically establish your general ability to repay the loan. Requested documents may include:
   

• Several months of bank statements
• Tax returns for the past two years or more
• Recent paystubs and other employment information, such as contracts
• Statements on current debts and liens
• Contact information for your employer (or employers)
• Financial disclosures, including payments that you make or receive. These can include divorce decrees, alimony, child support, bankruptcies, and legal judgements. 
• Information on recent credit activity
• Information on large deposits, such as cash gifts. 
• A “gift letter” if you are using a gift for your downpayment. This letter should include contact information for the gift giver, as well as a statement that verifies the money is a gift and not a loan that needs to be repaid. 
• Repeat information if needed. The lender may request duplicate or repeated information to strengthen your complete application. 

4. The lender will now issue a final decision. Assuming you are approved, you will receive an approval letter. This will state their willingness to support your loan while outlining the remaining steps, such as an appraisal. 

5. The financing contingency can now be removed from your contract. If there are complications, an extension can be requested. If a buyer is unable to secure financing by the deadline, they must provide evidence that they have made an effort and have performed their due diligence. 

6. An appraisal will be ordered. The appraisal helps establish the expected or market value of the property, which is crucial to lenders. If the appraisal comes back low, changes to the loan or the purchase price may be needed to secure financing. 

7. If needed, homeowners insurance will be ordered and proof of this insurance will be delivered to the lender. 

Once this process is complete, you should be ready to finalize the loan and secure the purchase. Remember to avoid making any changes to your financial situation during the application process, as it will impact your loan. For example, avoid purchasing a new car with a loan while you are buying a New Hampshire property.

Phase 3: Closing the New Hampshire Real Estate Purchase

Now it’s time to finalize the purchase. In New Hampshire, final settlement will take place at one table, often at the office of the attorney who is overseeing the transaction. 

1. Before final settlement, a title search will be completed. This is to make sure there are no complications with ownership of the property. 
2. The buyer’s attorney or title company will begin preparing the required documents for changing the title and deed. Title insurance will also be prepared and a final closing date will be scheduled. 
3. The mortgage company will estimate a final cash figure for finalizing the purchase. This can include the downpayment, agent fees, origination fees, and more. 
4. Before completing the sale, a final walkthrough will be completed. Usually this is done just before final settlement, and the buyer, seller, and agents will often go straight from the walkthrough to the settlement table. 
5. The seller will sign all the closing documents. The buyer will sign their documents, including all loan agreements and contracts. 
6. Now the buyer will pay the remaining fees. A cashier’s check may be requested. 
7. The transaction will be recorded with the appropriate New Hampshire city or county. 
8. The buyer now receives the keys to their wonderful New Hampshire property!

Conforming Loan Limits in the State of New Hampshire

The limits for conforming loans are set by the Federal Housing Finance Agency. This group studies the cost of homes in the United States and sets limits on a county-by-county basis. In high-cost areas, this limit can be increased significantly, but most of the country is under the “base limits.” 

In New Hampshire, the majority of the state is under the base limits. In the southeast corner, in counties like Sullivan and Cheshire, as well as the northern counties like Coos County, the limit for a single-family home is $548,250. If you are interested in buying a multiunit property, the limit for a duplex is $702,000, the limit for a three-unit is $848,500, and the limit for a four-unit property is $1,054,500.

However, there are two counties in the state that have higher limits. It will come as no surprise that to New Hampshire citizens that Rockingham County, which is considered part of the Boston metropolitan area, and Strafford county, a coastal county that sits just to the north, have higher limits. Conforming loans for single-unit properties in these counties have a limit of $724,500. A two-unit has a limit of  $927,500, while a three-unit has a limit of $1,121,150. If you want a four-unit property in one of these counties, the limit is $1,393,300 for a conforming loan.

Remember, these are limits for conforming loans only. There are other options, such as New Hampshire jumbo loans.

Downpayment Assistance Programs in New Hampshire

Downpayment assistance (DPA) is available throughout the state of New Hampshire. If you are struggling to save for a purchase, these programs can help you finally become a homeowner with an affordable mortgage payment.

Statewide New Hampshire DPA Programs

While local and non-profit organizations provide downpayment support in New Hampshire, one organization in particular stands out. The New Hampshire Housing Finance Authority, often called “New Hampshire Housing,” is part of the state government. Tasked with increasing homeownership, they have two programs in particular that help buyers purchase a home.

Home Flex Plus
The Home Flex Plus program provides cash assistance to buyers who are struggling with a downpayment. The support comes as a second mortgage that can equal 4% of the main mortgage loan. Best of all, the downpayment loan can be forgiven after four years. One of the main benefits of this program is the high income restriction; households with incomes as high as $151,200 are still eligible to use this support.

Home Preferred Plus
This program is essentially the same as the Flex option, but it has tighter income restrictions. With this program, you need to be at or below 80% of the area’s median income.

Major Local DPA Programs in New Hampshire

A variety of city and county governments offer downpayment assistance. Here is one example of a program available to buyers in a specific city.

Portsmouth HomeTown Program
The Portsmouth Housing Endowment Trust Fund offers financial assistance to buyers who are struggling to generate a downpayment. If you are trying to purchase a home in Portsmouth and have never owned a property before, this program may help you overcome the downpayment hurdle. The amount of support will vary, but it’s mostly based on your income and assets. The assistance in this program is a second loan that has a 0% interest rate. Also, the program does not require payments for 10 years.

Common Requirements for Downpayment Support in New Hampshire

These programs are intended for low- and moderate-income earners who have struggled to save enough for a downpayment. As such, the largest requirement is an income restriction. To use these programs, you need to have an income that is around the area’s median salary.

There are also limits on purchase price, as well as a requirement for credit scores. Some programs also require that you are a first-time homebuyer, although some waive this requirement if you are a police officer, military veteran, or have not owned a property in the past 3 years.

New programs are constantly being created, and details on existing programs are always changing. For up-to-date information on downpayment assistance in New Hampshire, contact our team today!