How the calculator works
A USDA guaranteed loan is made by a private lender and guaranteed by USDA Rural Development under its Single Family Housing Guaranteed Loan Program. You can borrow with no down payment, but you pay two fees for the guarantee: a one-time upfront fee and an annual fee that is collected monthly.
- Base loan = home price minus any down payment.
- Upfront guarantee fee = 1.00% of the base loan. USDA allows it to be added to the loan amount, which is what most borrowers do.
- Principal and interest is figured on the total loan (base loan plus the financed fee) at a fixed rate.
- The annual fee is 0.35% of each loan year's average scheduled unpaid balance, divided into 12 monthly amounts. Because the scheduled balance falls every year, the fee falls too.
- Property tax and homeowners insurance are added on top to show the full monthly payment.
At a glance
- Upfront guarantee fee
- 1.00%
- Purchase and refinance, FY 2027
- Annual fee
- 0.35%
- Of the average scheduled balance, for the life of the loan
- Fee year
- Oct 1, 2026 – Sep 30, 2027
- USDA reviews fees each fiscal year
- Loan terms
- Fixed rate, up to 30 years
- 7 CFR 3555.104
Worked example
You buy a $300,000 home with $0 down at a 6.25% fixed rate for 30 years, and you finance the upfront fee.
- Upfront fee: $300,000 × 1% = $3,000. Total loan: $303,000.
- Principal and interest: about $1,866 a month.
- Year-one annual fee: the average scheduled balance in year one is about $301,400, so the fee is about $88 a month. The quick shortcut ($303,000 × 0.35% ÷ 12) gives $88.38, close enough for budgeting.
- With $3,600 a year in property tax and $1,500 in insurance, the year-one payment is about $2,379.
- The monthly fee drops to about $75 in year 10 and $50 in year 20. Over 30 years the annual fees add up to roughly $20,600.
| Fee | Rate | Charged on | How it is paid |
|---|---|---|---|
| Upfront guarantee fee | 1.00% | Loan amount | At closing, or added to the loan |
| Annual fee | 0.35% | Average scheduled unpaid balance each year | Billed yearly in arrears; usually collected monthly with your payment |
The rules behind the numbers
USDA announced on September 16, 2026 that for fiscal year 2027 the upfront guarantee fee stays at 1.00% and the annual fee stays at 0.35% for both purchase and refinance loans. The federal regulation (7 CFR 3555.107) caps the annual fee at 0.5% of the average annual scheduled unpaid balance and says it applies for the life of the loan. USDA's annual fee FAQ adds two details this calculator follows: the fee is based on the total loan including a financed upfront fee, and it uses the scheduled balance, so extra principal payments don't lower it.
Edge cases
- Your lender's figure may differ by a few dollars. USDA's systems produce the official annual fee schedule, and lenders may round the monthly amount up.
- Fees can change each October. The rates that apply are the ones in effect when USDA issues your conditional commitment.
- The loan can exceed the appraised value only by the upfront fee. The maximum loan is the appraised value plus the financed fee, or the price plus eligible costs, whichever is less.
- No PMI. The annual fee takes the place of mortgage insurance, and it doesn't cancel at 80% loan-to-value.
What to do next
Compare this payment with an FHA loan or a conventional loan with PMI. If you have served in the military, also run the VA loan calculator. Estimate the rest of your cash needs with the closing cost calculator, and read first-time homebuyer programs in New York for state help.