USDA Loan Calculator

What is a USDA loan?

A USDA loan is a mortgage backed by the U.S. Department of Agriculture’s Rural Development program. Its headline benefit is $0 down: eligible buyers can finance 100% of the home price. The program is designed to help people buy a primary residence in qualifying rural and many suburban areas, and eligibility hinges on two things — where the property is located and how much your household earns. Income must sit at or below the program limit for your county (commonly up to 115% of the area median income), and the address must fall inside a USDA-eligible zone on the official eligibility map. Despite the “rural” label, a surprising number of suburban and small-town addresses qualify.

The two USDA fees

USDA loans do not use traditional private mortgage insurance, but they do carry two fees that fund the guarantee program:

• Upfront guarantee fee — currently 1.0% of the loan amount. This is charged once at closing and is almost always financed into the loan rather than paid in cash, so it raises your balance slightly instead of your out-of-pocket cost.
• Annual fee — currently 0.35% of the balance. This is paid monthly, split into 12 installments and added to each payment. It is similar in spirit to mortgage insurance but is generally cheaper than the mortgage insurance charged on an FHA loan.

How 100% financing works

Because USDA allows zero down, the base loan equals the full home price. The calculator then adds the upfront guarantee fee on top of that base loan (since it is financed in), and amortizes the combined amount over your chosen term using the standard mortgage formula. The annual fee is calculated on the loan amount and divided by 12 to get the monthly portion. Your estimated monthly payment is the principal-and-interest payment plus that monthly fee. Note that the annual fee technically recalculates each year on the declining balance; this tool approximates it using the original balance, which keeps the estimate slightly conservative.

A worked example

Using the defaults — a $300,000 home with no down payment:

• The upfront guarantee fee of 1.0% is $3,000, financed into the loan.
• That makes the total loan amount $303,000.
• Principal and interest at 6.25% over 30 years is about $1,866/month.
• The annual fee is $303,000 × 0.35% ÷ 12 ≈ $88/month.
• Together the estimated payment is roughly $1,954/month.

Remember this figure is principal, interest and the USDA annual fee only. Your real monthly cost will also include property taxes and homeowners insurance, which vary widely by location.

What affects your USDA payment

• Interest rate. Even a small rate change moves the principal-and-interest portion noticeably over a 30-year term.
• Loan term. USDA guaranteed loans are typically 30-year fixed; a shorter term raises the payment but cuts lifetime interest.
• The upfront guarantee fee. Financed in, it adds to your balance and therefore to both your payment and your total interest.
• The annual fee. At 0.35% of the balance split monthly, it is a steady add-on to every payment.
• Taxes and insurance are extra. Property taxes and homeowners insurance are not included here and can add hundreds of dollars a month.
• Income and location eligibility. If your income or address falls outside USDA limits, you may not qualify at all — check before you plan around it.

Frequently asked questions

Who qualifies for a USDA loan?

USDA loans are for buyers purchasing a primary home in an eligible rural or many suburban areas, with a household income at or below the program limit for that county (typically up to 115% of the area median income). The property location and your income are the two biggest gates. Check the USDA eligibility maps and income limits for your address before counting on it.

Is a USDA loan really $0 down?

Yes. The USDA guaranteed loan program allows 100% financing, so eligible buyers can purchase with no down payment. You still need to cover closing costs, though those can sometimes be rolled in or covered by a seller credit or gift, and you need to meet credit and income guidelines.

What are the USDA fees?

There are two. An upfront guarantee fee, currently 1.0% of the loan amount, is usually financed into the loan rather than paid in cash. Then an annual fee, currently 0.35% of the loan balance, is split into 12 monthly installments and added to your payment. These act like USDA’s version of mortgage insurance but are generally cheaper than FHA mortgage insurance.

How is a USDA loan different from FHA and VA loans?

All three are government-backed. FHA requires a small down payment (usually 3.5%) and charges mortgage insurance. VA loans are for eligible veterans and service members with $0 down and a one-time funding fee but no monthly insurance. USDA offers $0 down for eligible rural and suburban buyers within income limits, with a low upfront fee plus a small monthly annual fee.

Does a USDA loan have mortgage insurance?

Not in name, but the annual fee plays the same role. Instead of traditional PMI or FHA mortgage insurance, USDA charges a 0.35% annual fee on the loan balance, divided into your 12 monthly payments. It tends to be cheaper than FHA mortgage insurance for a comparable loan.

Can I use a USDA loan for any home?

No. The home must be in a USDA-eligible location, be your primary residence, and meet basic condition and size guidelines. Investment properties, vacation homes and most homes in dense urban areas do not qualify. Confirm the address on the USDA eligibility map and confirm current fees with a lender.

Related tools

Comparing government-backed options? Try the VA loan calculator for another $0-down path, the refinance calculator if you already own and want a better rate, the closing cost calculator to estimate the cash you still need at the table, and the mortgage points calculator to see whether buying down your rate pays off.