MortgageMath

USDA Loan Calculator

By MortgageMath Editorial Team Last reviewed Methodology

A USDA loan calculator estimates your monthly payment including the 1% upfront guarantee fee and 0.35% annual fee for USDA Rural Development loans. Enter your home price, interest rate, and term to see your complete monthly cost breakdown.

Total Monthly Payment

$2,034/mo

Loan: $252,500 (includes $2,500 guarantee fee)

Principal & Interest$1,661/mo
Annual fee (0.35%/yr)$73/mo
Property taxes$200/mo
Homeowner's insurance$100/mo
Total monthly payment$2,034/mo

Upfront Fee (1%)

$2,500

Total Loan

$252,500

Total Interest

$345,560

Lifetime Fees

$28,750

USDA fees: The 1.00% upfront fee ($2,500) is typically financed into your loan. The 0.35%/yr annual fee ($73/mo) is paid for the life of the loan.

What is a USDA loan?

A USDA loan is a government-backed mortgage for homebuyers purchasing in eligible rural and suburban areas, with no down payment required. The U.S. Department of Agriculture's Single Family Housing Guaranteed Loan Program (SFHGLP) enables lenders to offer 100% financing to income-qualified borrowers by guaranteeing the loan against default — reducing lender risk and enabling lower rates than borrowers might otherwise qualify for.

Despite the name, USDA loans are not limited to farms or remote rural areas. Many suburban communities within commuting distance of major cities qualify. The program covers a much broader geographic footprint than most homebuyers realize — approximately 97% of U.S. land area is eligible, including areas near cities like Charlotte, Nashville, Sacramento, and dozens of others.

For eligible borrowers, USDA loans offer compelling advantages: zero down payment, competitive interest rates, lower mortgage insurance costs than FHA, and financing for the guarantee fee (so you truly need $0 down in many cases). The main constraints are geographic eligibility and income limits.

USDA guarantee fees explained

Instead of private mortgage insurance (PMI), USDA loans use a two-part guarantee fee structure. This fee compensates the USDA for guaranteeing the loan and funds the program.

Fee Type Rate When Paid Example ($250K loan)
Upfront Guarantee Fee 1.00% At closing (can be financed) $2,500
Annual Fee 0.35%/yr Monthly over loan life $73/mo initially

The upfront guarantee fee of 1% is typically financed into the loan rather than paid in cash at closing. This means a $250,000 home purchase results in a loan of approximately $252,500 (purchase price + 1% fee). You do not need to bring this amount to closing.

The annual fee of 0.35% is calculated on the outstanding loan balance and divided into 12 monthly installments. Unlike FHA MIP, the USDA annual fee declines as your balance decreases — and can be cancelled when your loan-to-value reaches 80%, subject to lender requirements.

USDA vs. FHA vs. conventional: a comparison

For buyers with limited down payment funds, three main low-down-payment loan types are available. Here is how USDA compares:

Feature USDA FHA Conventional (3% down)
Min. down payment 0% 3.5% 3%
Geographic restriction Rural/suburban areas only None None
Income limit 115% of AMI None None (some programs)
Upfront MI/fee 1.00% 1.75% (UFMIP) None
Annual MI/fee 0.35% 0.55%–0.80% 0.30%–1.50% (PMI)
Can MI be removed? Yes — at 80% LTV Only with ≥10% down (11 yr) Yes — at 80% LTV (HPA)
Min. credit score 640 (streamlined) 580 (3.5% down) 620

For borrowers who qualify geographically and meet income limits, USDA is typically the most cost-effective low-down-payment option. The 0.35% annual fee is meaningfully lower than FHA's 0.55%–0.80%, and the 1% upfront fee is lower than FHA's 1.75% UFMIP.

USDA loan payment examples

Example: $250,000 home, 0% down, 30-year term, 6.89% rate

Payment Component Monthly Amount
Base loan amount $250,000
Upfront guarantee fee (1%, financed) $2,500
Total loan amount $252,500
Principal & Interest $1,663/mo
Annual fee (0.35%) $73/mo
Property taxes (est.) $200/mo
Homeowner's insurance (est.) $100/mo
Total monthly payment $2,036/mo

This buyer needs $0 down payment. The only cash required at closing is for appraisal, inspection, title insurance, and other closing costs — typically $3,000–$6,000, which can sometimes be covered by seller concessions.

Frequently Asked Questions

What is a USDA loan?
A USDA loan (officially called a USDA Rural Development Guaranteed Housing Loan) is a government-backed mortgage offered by the U.S. Department of Agriculture for eligible rural and suburban homebuyers. The most notable feature: USDA loans require zero down payment, making them one of the few 100% financing options available to American homebuyers. The program is designed to promote homeownership in rural and smaller suburban communities.
Who qualifies for a USDA loan?
To qualify for a USDA loan, you must: (1) purchase a home in a USDA-eligible area (check the USDA eligibility map at eligibility.sc.egov.usda.gov); (2) have household income at or below 115% of the area median income (AMI); (3) be a U.S. citizen, non-citizen national, or qualified alien; (4) use the home as your primary residence; and (5) meet credit and income requirements, typically a 640+ credit score for streamlined processing. Homes must meet USDA minimum property standards.
What areas are eligible for USDA loans?
USDA eligible areas are designated by the USDA and typically include rural areas and many suburban communities with populations under 35,000. Eligibility is not limited to farms or remote rural areas — many suburban towns surrounding major cities qualify. The easiest way to check is the USDA's official eligibility map tool at eligibility.sc.egov.usda.gov. Eligibility boundaries are updated periodically as census data changes.
What are USDA guarantee fees?
USDA loans have two fees instead of PMI: (1) Upfront Guarantee Fee: 1% of the loan amount, paid at closing. This is typically financed into the loan, so you do not need to pay it in cash. (2) Annual Fee: 0.35% of the outstanding balance, paid in monthly installments. Unlike FHA MIP, the USDA annual fee can be removed once your loan balance reaches 80% of the original appraised value, though this requires a formal request.
How do USDA fees compare to FHA fees?
USDA fees are generally lower than FHA fees for most loan scenarios. USDA: 1% upfront + 0.35% annual. FHA: 1.75% upfront + 0.55%–0.80% annual (depending on loan amount and LTV). On a $250,000 loan, USDA annual fees are $875/year vs. FHA annual fees of $1,375–$2,000/year. Over 30 years, this difference is significant. For eligible borrowers in qualifying areas, USDA is typically the cheaper option.
Can I use a USDA loan to buy a farm or agricultural property?
No — USDA Guaranteed Housing Loans are for residential properties, not agricultural operations. The home must be a primary residence used for personal habitation. The USDA does have separate programs for farm loans, but these are entirely different products administered by the USDA Farm Service Agency. The USDA Rural Development housing loan is specifically for purchasing, building, or improving a home in an eligible rural area.
What credit score do I need for a USDA loan?
While the USDA does not set a minimum credit score requirement, most USDA-approved lenders require a 640+ credit score for automated underwriting approval. Borrowers with scores below 640 may qualify through manual underwriting, which requires more documentation and stronger compensating factors. Lenders typically want a clean payment history for the past 12 months with no late payments on housing expenses.
Is there an income limit for USDA loans?
Yes — USDA loans have household income limits set at 115% of the area median income (AMI) for the county or metropolitan area. These limits vary significantly by location. For example, in rural Missouri, the limit for a 4-person household may be around $90,000, while in suburban Maryland, it could exceed $120,000. Income limits are based on total household income, including all adults who will live in the home, not just the borrowers on the loan.
How long does USDA loan approval take?
USDA loans typically take 30–45 days to close, similar to conventional loans. However, some lenders may take longer due to the additional USDA underwriting step. After lender approval, the file must be submitted to the USDA for a final conditional commitment, which adds 2–7 business days. During busy periods, USDA processing times can extend further. Work with a lender experienced in USDA loans for faster processing.
Can I refinance a USDA loan?
Yes — USDA offers several refinance options, including the USDA Streamlined Assist Refinance, which allows existing USDA borrowers to refinance with minimal documentation and no new appraisal requirement. To qualify, you must have made at least 12 months of on-time payments and achieve a net tangible benefit (typically a lower payment). The streamlined refinance does not allow cash-out.

Related Calculators

FHA Loan Calculator
Compare FHA loan costs against USDA — useful for borrowers who qualify for both programs.
VA Loan Calculator
Another zero-down option for eligible veterans — compare costs with USDA.
PMI Calculator
Compare conventional loan PMI costs against USDA guarantee fees.
Rent vs Buy Calculator
Factor USDA loan costs into a rent vs. buy comparison for rural areas.

Sources & Methodology

This calculator is for informational purposes only and does not constitute financial advice. USDA fee rates are current as of 2026. Eligibility requirements vary. Consult a USDA-approved lender and verify property eligibility before applying.