USDA Mortgage Calculator - Estimate Monthly Payment, Annual Fee and Total Loan Costs

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What Is the USDA Upfront Guarantee Fee?

The USDA Upfront Guarantee Fee is a one-time charge currently set at 1% of the loan amount. This fee can either be paid at closing or rolled into the loan amount and financed over the life of the loan.

Calculation Example

Scenario:

• Home Purchase Price: $200,000
• Down Payment: $0 (USDA loans allow zero down payment)
• Base Loan Amount: $200,000
• Upfront Guarantee Fee Rate: 1%

Calculation Steps:

1. Calculate Upfront Guarantee Fee:
   $200,000 × 1% = $2,000
2. If you finance the fee into your loan:
   New Total Loan Amount = $200,000 + $2,000 = $202,000

Impact on Your Monthly Payment

By rolling the $2,000 upfront fee into your loan, your monthly payment will increase slightly. For example, at a 6.5% interest rate over 30 years:

• Without fee financed: $200,000 loan ≈ $1,264/month (principal & interest)
• With fee financed: $202,000 loan ≈ $1,277/month (principal & interest)
• Difference: Only about $13/month more

Note: These figures don't include property taxes, insurance, or the annual guarantee fee.

What Is the USDA Annual Guarantee Fee?

In addition to the upfront fee, USDA loans include an annual guarantee fee, currently set at 0.35% of the remaining loan principal balance. You don't pay this fee in one lump sum; instead, it's divided into 12 monthly payments and built directly into your mortgage payment, making it easier to budget.

Example Calculation:

Initial Loan: If your initial loan balance is $300,000, the 0.35% rate equals $1,050 per year, or approximately $87.50 per month.

After 5 Years: As you pay down your loan, this fee decreases as well. After five years, your loan balance might be around $200,000, at which point the annual fee drops to $700, or approximately $58.33 per month.

Note: The annual guarantee fee automatically adjusts as your loan balance decreases over time, meaning you'll pay less each year as you build equity in your home.

Reference Sources

This calculator is based on official USDA Rural Development program guidelines. For the most current and detailed information, please refer to these authoritative government sources:

USDA Rural Development - Single Family Housing Guaranteed Loan Program

Official program homepage with eligibility requirements, property guidelines, and application information.

USDA Property Eligibility Map

Check if a specific property address is located in a USDA-eligible rural area.