Building a Home in NH

The Home Buyer’s Guide To New Construction In Northern New Hampshire

The Granite State may be small, but within its borders are 18 miles of Atlantic Ocean coastline, the highest mountain summit in the Northeast, and a population known for its independence. New Hampshire residents enjoy outdoor activities such as skiing, hiking, and water sports as well as cultural pursuits. No wonder U.S. News & World Report ranks NH forth overall in its “Best States” ranking. The state also places third in the nation for the category of “Opportunity,” second for “Natural Environment,” and first in the nation for its low crime rate.

From the mountain town of Lincoln to the riverside beauty of Groveton and North Woodstock, as well as towns like Littleton that combine both mountain and water views,  Northern New Hampshire offers a peaceful and enjoyable small-town lifestyle and a variety of places to build your own home. Having operated across the Vermont border for more than a century, Union Bank has been serving communities in Northern New Hampshire since 2006 and we think the “Live Free” state is a great place to call home.

If you’re looking into new construction homes here, we offer Build/Construction Loans designed to make the process as smooth as possible from start to finish. You may also still be in the research phase of your decision-making, so we created this guide to help you build or buy a new construction home. From average costs to what to expect from the process and how to choose a builder, we hope you’ll find answers to all of your questions here. If you don’t, give us a call at 800.753.4343 or visit your closest New Hampshire branch. We’re always happy to chat and share the local expertise our lending team has developed over the years.

What are the benefits of building vs buying a house in NH?

With low unemployment and little-no personal income tax, New Hampshire is an attractive place to live for people at all stages of life. Whatever your preferred lifestyle and leisure activities, you can find a perfect spot to live in NH

New Home Construction

New Hampshire is small, but it isn’t crowded. If you desire a rural or suburban lifestyle, there are plenty of locations in the northern region of the state where you can purchase land to build on. Live in the White Mountains region to enjoy year-round outdoor activities like hiking, skiing, and ATV riding. If you’re looking for waterfront property, and your finances allow, choose between lots with views of the Connecticut River and other bodies of water in the North. The main benefit of building in NH is the flexibility of choosing where to live and designing a home that is personalized to meet your needs.

Home Buying

New Hampshire is currently in a “seller’s market” with low inventory, rising home values, and a median statewide sales price of $433,200, according to Redfin. Real estate broker Moe Archambault states that buyers “are unable to find what they’re looking for in a resale home and even if they find something in a resale home, by the time they’re done renovating and make it to their home, they’re almost better off to build new.” With no real estate slowdown in sight, it may be a better time to build new construction than to buy an existing house in Northern New Hampshire.

What is the average cost to build a home in NH?

Average cost of new construction home in NH is $143.34 per square foot


According to the home construction website ProMatcher, the average cost of a new construction home in New Hampshire  is $143.34 per square foot. That works out to $286,680 for a 2,000 square foot home, which is less than the state’s current median sale price for an older house. Of course, the ultimate cost of your new construction home will depend on multiple factors, including costs unrelated to the house itself. Here are the most important considerations:

  • Floor Plans: Make sure the design you select will fit your lot. If you find your own floor plan or use one from a different building company than the one you end up hiring, you may have to pay an extra fee. Obviously, the square footage of the plan will directly affect the total cost, so stick to the amount of space you need instead of thinking bigger is better. Overall, the more your home design conforms to typical styles, the cheaper it will be. If you go for a unique architecture style and/or expensive interior design features, you’ll hike up the end price of your home.
  • Basic Construction Costs: Get estimates from multiple home construction companies before you choose one to work with. The type of materials you select for inside your home, such as flooring and kitchen cabinetry can either raise the price or keep it lower. Stay mindful of prices as you make decisions about interior details.
  • Site Preparation: If your land lot is heavily wooded or has other obstructions like rocks, you’ll incur site preparation fees to clear the land for construction.
  • Permit Fees: In New Hampshire, each municipality has its own permitting rules and regulations. Call or visit your local town hall to find out the costs of various permits.
  • Labor Costs: This fluctuates by season and according to the present demand for construction workers.
  • Materials: As with labor, the cost of construction materials is influenced by supply and demand, reflecting prices in nation, and sometimes, international markets.

Finding Land To Buy And Build On

If you are buying your own land to build on (as opposed to an empty lot in a planned subdivision), you’ll need to remember real estate’s golden rule: location is everything. Since building regulations are determined on a local level in NH, the municipality you choose to live in will influence your choice of land nearly as much as the condition of the lot itself. So look for a real estate agent with demonstrable experience handling land transactions and keep this checklist of questions within reach and in NH:

  • What is the land zoned for? Are there any zoning restrictions on what you can build?
  • Is your land in a wetland area?
  • Is it part of a designated Historic District?
  • What are the required setbacks? Are there any view ordinances on the land?
  • Is the land contaminated with asbestos, spilled fuel, or other environmental toxins? Conduct your own testing to be sure.
  • Are there any landslide or flood risks?
  • What are the easements (if any) on your land? Will you have road access?
  • Is the land “raw” (meaning nothing has been added) or “improved” (meaning there may already be some or all utilities installed)?
  • Are there any utilities set up on the land, such as electricity?
  • Is the water source from the municipality or from a well?
  • Is there a septic or sewer system installed?
  • Will you own any mineral or timber rights to the land?
  • What is a fair price? If you obtain land financing from a bank, an appraisal will be part of the process. If you’re paying in cash, make sure you hire an independent appraiser before you agree to a sale price (something that would be part of the normal process if you were getting a mortgage).

How To Choose Between Home Builders In NH

Follow these tips to select the best home builder with the fairest price for your plans.

  • Start with a complete list of potential home builders in your area. Use the National Association of Home Builders to find your local chapter and list of home construction companies. You may also want to read online reviews and ask around for recommendations from people in your community.
  • Sort the list according to the builder’s years of experience in NH. You want a company with lots of local expertise on state laws and municipality ordinances.
  • Look at the builder’s prior work in person. Drive by developments or single homes the company has worked on. This will give you a sense of the builder’s style and whether it is compatible with yours. It also gives you the chance to ask the builder’s former clients about their satisfaction with the end result.
  • Inspect the contract to make sure the builder has included all costs, however small. Doing your best to prevent surprises will help keep the cost in line with your original budget.


What To Expect From The Home Building Process In NH

Home Building Process in NH

Generally, new home construction unfolds in four phases:

  1. Financing
    We’ll talk more about this in the next section, but it goes without saying that you can’t start the home building process without knowing how to get a new home construction loan.
  2. Prep Time
    This includes the permit approval process and any site preparation work.
  3. Construction
    Phase two starts with laying the foundation of your house and framing the walls. Over time, the interior will be fleshed out with mechanics, drywall, finishings, and hardware.
  4. Inspection and Certificate of Occupancy
    The builder is ready to give you the keys to your new home but first it will need to be inspected and you will need to receive a certificate of occupancy before you can move in.

How Do Home Construction Loans Work?

The process of applying for and using home construction loans differs from the typical mortgage loan process in several ways. There are also some similarities.

  • The bank checks your credit and appraises the floor plan for your new home.
  • You must purchase all the required insurance policies.
  • You may need to come up with a higher down payment for a home construction loan than a regular mortgage. This is because your new home won’t realize its full value until it’s finished.
  • Upon approval, the bank usually pays the builder in response to their invoices.
  • Once your new home is complete, you’ll probably have to convert your construction loan into a home mortgage loan.

Partner With A Local Lender For Home Construction Loans And Land Financing

Talk with a local NH lender to get started

Just as you want to find an experienced builder with local expertise, you can have a better financing experience when you work with a locally knowledgeable lender. Union Bank has been a trusted lender since 1891. Our success serving the communities of Northern VT and Northern NH has been recognized by American Banker Magazine, which has ranked us among the top ten performing community banks in America, four years in a row.

Union Bank is particularly experienced in construction lending and our Land Loans and Home Construction Financing can be customized to suit your needs. Our local ownership gives us maximum flexibility with lending decisions. You’ll also appreciate the convenience of our home construction loans, which are designed to carry you through the entire process without adding any stress to your life. Once you approve an invoice from your contractor, you can authorize us to pay them so you don’t have to act as a middleman.

Take the next step toward realizing your new dream home. Call us for more information or visit your nearest branch in northern Vermont or northern New Hampshire today.