USDA Mortgage Calculator

What does a USDA loan calculator work out?

A USDA loan calculator estimates the monthly payment on a Single Family Housing Guaranteed Loan: principal and interest on the full purchase price plus the financed 1% upfront guarantee fee, the 0.35% annual fee that replaces mortgage insurance, and the escrowed tax and insurance. It then shows what the same home costs with an FHA or a conventional loan.

The program is run by USDA Rural Development under 7 CFR Part 3555. The Agency does not lend the money; it guarantees a loan made by an approved lender, which is why no down payment is required and why the borrower pays guarantee fees rather than private mortgage insurance. The fees fund the guarantee without an appropriation, and USDA sets both rates for each federal fiscal year (1 October to 30 September). For FY2026 they are 1.00% upfront and 0.35% annual, unchanged since FY2017.

How are the USDA guarantee fee and annual fee calculated?

The upfront guarantee fee is 1.00% of the loan amount. Almost every borrower finances it: on a $250,000 purchase with nothing down the fee is $2,500, the loan becomes $252,500 and the loan-to-value ratio at closing is 101%. Paying it in cash at closing keeps the loan at $250,000 and lowers the payment by about $15 a month at 6.25%.

The annual fee is 0.35% of the average annual scheduled unpaid principal balance for each loan year, divided by twelve and collected with each payment for the life of the loan (7 CFR §3555.107(h)). "Scheduled" matters: the fee follows the amortization schedule, so extra principal payments do not lower it — they only end it sooner by paying the loan off early. On the $252,500 loan the year-1 average scheduled balance is $251,159, so the fee is $73.25 a month in year 1, $72.37 in year 2, and it keeps falling as the balance does. Over 30 years the annual fee totals $17,202.36 and the two fees together $19,702.36.

A calculator that charges 0.35% of the opening balance all year overstates the year-1 fee by about 40 cents a month ($73.65 instead of $73.25) — small, but it is the kind of difference that shows up when you compare the figure with your lender's Loan Estimate.

USDA vs FHA vs conventional loan: which costs less?

On a $300,000 home at 6.25% for 30 years with $2,500 tax and $1,200 insurance, the USDA payment is $2,261.86 with nothing down: P&I of $1,865.62 on a $303,000 loan plus an $87.91 annual fee. FHA comes to $2,254.72 — $7.14 a month less — but only after a $10,500 down payment.

FHA needs 3.5% down ($10,500), adds a 1.75% upfront premium ($5,066.25) and charges 0.55% annual MIP under HUD Mortgagee Letter 2023-05. Conventional 97 needs 3% down ($9,000) and, at a 740 credit score, roughly 0.70% PMI ($169.75 a month), for about $2,269.82.

The differences that last are the ones to weigh. FHA's annual MIP runs for the life of the loan when the down payment is under 10%, and so does the USDA annual fee; conventional PMI cancels automatically once the balance reaches 78% of the original value under the Homeowners Protection Act. USDA's fee rate (0.35%) is lower than FHA's (0.55% on a 30-year loan under $726,200 with more than 95% financing) and far lower than PMI at most credit scores, but the USDA loan is larger because nothing goes down and the fee is financed, so its P&I is higher. The strip beside the result runs this comparison at your price, rate and term; the FHA and PMI figures come from the same verified dataset the FHA and conventional calculators use.

Who is eligible for a USDA rural development loan?

Both the home and the household must qualify, and this page cannot check either — it links to the USDA tools that can. The home must be a single-family primary residence in an eligible rural area under 7 CFR §3555.201, a definition that reaches many suburbs and small towns; income-producing farms are excluded.

The only way to know whether an address qualifies is the USDA property eligibility map, linked beside the result.

Adjusted household income may not exceed 115% of the area median income for the county (7 CFR §3555.151). Income from every adult in the household counts toward the limit, whether or not they are on the loan, before deductions for dependants, child care, elderly household members and medical expenses. The USDA income eligibility tool gives the limit for your county and household size.

There is no USDA minimum credit score in the regulation. Lenders using the Guaranteed Underwriting System generally look for 640 or higher for an automated approval; lower scores and non-traditional credit can be manually underwritten.

What do people get wrong about USDA loans?

USDA loans are not farm loans. Working farms and income-producing agricultural property are ineligible for the Single Family Housing Guaranteed program, which exists for ordinary owner-occupied homes in eligible areas — including many suburbs. Nor is a USDA loan a direct government loan: an approved private lender makes it and USDA guarantees it.

Closing costs can be financed only when the appraised value exceeds the purchase price, up to the appraised value; otherwise they are paid in cash or by seller concessions of up to 6% of the price. The 101% figure refers to the financed upfront fee, not to closing costs.

There is no prepayment penalty, so extra principal is allowed and shortens the loan — the schedule below shows the effect. What it does not do is reduce the annual fee rate or the fee for a given loan year, because the fee is set on the scheduled balance. This calculator does not model refinancing, USDA direct loans (Section 502 Direct, which have different terms and payment assistance), the one-time county loan limits that apply to direct loans, or the lender's own fees and points.