USDA Loan Calculator

Calculate USDA Rural Development loan payments including the upfront guarantee fee and annual fee. USDA loans require no down payment for eligible rural properties.

USDA Loan Details

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USDA loans offer 100% financing

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Enter your USDA loan details to see your payment, fees, and total lifetime cost.

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Pro Tip

USDA annual fees (0.35%) are much lower than FHA MIP (0.50-0.55%). If you qualify for a USDA loan based on location and income, it is often a better deal than FHA financing.

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Understanding USDA Loans

USDA loans, formally known as USDA Rural Development Guaranteed Housing Loans, are a zero-down-payment mortgage option backed by the U.S. Department of Agriculture. Designed to encourage homeownership in rural and eligible suburban areas, these loans offer some of the most favorable terms available to qualifying borrowers.

The USDA loan program is particularly attractive because it requires no down payment, has lower guarantee fees than FHA mortgage insurance premiums, and offers competitive interest rates. The upfront guarantee fee of 1.0% can be financed into the loan, and the annual fee of just 0.35% is significantly less than FHA's annual MIP of 0.50-0.55%.

To qualify for a USDA loan, both the property and the borrower must meet eligibility requirements. The property must be located in a USDA-designated rural or suburban area (many areas that do not seem rural qualify), and the borrower's household income must not exceed 115% of the area median income. There are no minimum credit score requirements set by USDA, though most lenders require at least 640.

USDA loans are only available for primary residences and cannot be used for investment properties or vacation homes. The home must be modest in size and value relative to the area. Despite these restrictions, USDA loans provide an excellent path to homeownership for families in eligible areas who might otherwise struggle with the upfront costs of buying a home.

USDA Loan Fee Calculation

Total Loan = Home Price + Upfront Fee (1.0%)

Where:

Upfront Guarantee Fee = 1.0% of the base loan amount (can be financed)

Annual Fee = 0.35% of the outstanding loan balance, paid monthly

Down Payment = Not required ($0)

Monthly Annual Fee = (Outstanding Balance x 0.0035) / 12

Total Monthly = P&I + Annual Fee + Property Tax + Insurance

Example

$250,000 home with USDA financing at 6.25% for 30 years:

  • • Base loan: $250,000 (no down payment)
  • • Upfront fee: $250,000 x 1.0% = $2,500
  • • Total loan: $252,500
  • • Monthly P&I: $1,554.81
  • • Monthly annual fee: ($252,500 x 0.0035) / 12 = $73.65 (initial, declines over time)

Frequently Asked Questions

What is a USDA loan?
A USDA loan is a mortgage guaranteed by the U.S. Department of Agriculture for eligible rural and suburban homebuyers. The program aims to promote homeownership in rural areas by offering 100% financing (no down payment), competitive rates, and reduced mortgage insurance costs compared to FHA loans.
Is a down payment required for USDA loans?
No. USDA loans offer 100% financing, meaning no down payment is required. This makes them one of the most affordable ways to buy a home, alongside VA loans. However, borrowers still need to cover closing costs, which can sometimes be financed or paid by the seller.
What are the USDA guarantee fees?
USDA loans have two fees: an upfront guarantee fee of 1.0% of the loan amount (which can be financed into the loan) and an annual fee of 0.35% of the remaining loan balance (paid monthly). These fees are significantly lower than FHA MIP rates.
How do I know if a property is USDA eligible?
USDA eligibility is based on the property's location, not just rural farmland. Many suburban areas qualify. Use the USDA Property Eligibility map at usda.gov to check specific addresses. Income limits also apply and vary by county and household size.
What are the income limits for USDA loans?
USDA loan income limits are set at 115% of the area median income (AMI) for your county and household size. This means moderate-income households in eligible areas can qualify. The limits are updated annually and can be checked on the USDA website.