USDA Loan Calculator

What is a USDA loan?

A USDA loan is a mortgage issued by a private lender and guaranteed by USDA Rural Development under Section 502 of the Housing Act of 1949. The guarantee covers 90% of the note, and that backing is what lets the lender advance 100% of the purchase price with no cash down. USDA does not lend its own money on the guaranteed side: the lender originates, funds, and services the loan, USDA stands behind it, and on default the agency reimburses the lender. The other Section 502 product, the direct loan, is funded by USDA itself and is reserved for very low and low income households.

The program exists to finance modest homes in places conventional credit underserves. The property has to sit in an eligible area, generally a community of 35,000 or fewer people that is rural in character, and household income has to land at or below 115% of the area median. Meet both tests and the loan behaves like any other fixed-rate mortgage: 360 monthly payments, interest and principal split inside each one, and a balance that reaches zero on payment 360. There is no county loan limit on the guaranteed program, so the amount you can borrow is set by repayment ability rather than by a ceiling published each January the way FHA and conventional limits are.

The price of the 100% financing is two fees. An upfront guarantee fee of 1% of the loan amount is due at closing and is normally financed, and an annual fee of 0.35% of the outstanding balance is billed in twelve monthly installments for the life of the loan. Together they replace mortgage insurance: USDA loans carry no PMI and no premium that can be cancelled, because the fee is the insurance. On a $350,000 purchase those fees are $3,500 upfront and $102.08 a month, which is materially cheaper than the 0.85% annual MIP an FHA borrower pays on a similar loan. Both figures are set by statute and by fiscal-year notice, not by your lender, and they cannot be negotiated away.

USDA loan requirements for 2026

• Location: the home must be in a USDA-eligible area. Eligibility is driven by population (35,000 or fewer) and by whether the area is rural in character, which means many outer suburbs qualify even though nobody would call them farmland. Roughly 97% of U.S. land area is eligible, but far less of the population is. Confirm the exact street address on USDA's property eligibility map before you tour houses, because an ineligible address kills the file after the offer is accepted.
• Income limit: adjusted household income may not exceed 115% of the area median income. The FY2026 national standard limits, published July 13, 2026, are $122,800 for a household of one to four people and $162,100 for five to eight, with each person above eight adding 8% of the four-person limit. High-cost counties run higher, and every adult who will live in the home counts toward the figure, not just the borrowers on the note. Deductions for dependents, elderly members, and childcare reduce the countable total, so gross income near the cap can still qualify.
• Credit: USDA sets no minimum credit score. What it does set is a threshold: a middle score of 640 or better routes the file through GUS, the Guaranteed Underwriting System, for an automated Accept recommendation. Below 640 the loan is not dead, it moves to manual underwriting, where documented rent, utility, and insurance payment history can stand in for a thin file. Most lenders still overlay a 620 floor on top of the agency's own rule.
• Debt-to-income: 29% of gross monthly income for total housing costs and 41% for housing plus all other monthly debts, measured against repayment income rather than gross. Manually underwritten files with documented compensating factors, such as cash reserves after closing, a payment close to your current rent, or a two-year employment history, can stretch to roughly 32% and 44%.
• Property and occupancy: the home must be your primary residence and cannot be a second home, a vacation property, or a rental. It has to appraise for value and meet USDA's safe, sound, and sanitary standards, the same HUD Handbook 4000.1 baseline FHA uses: structural soundness, safe water and septic where applicable, no peeling lead paint, and no defective wiring.
• Loan structure: a fixed-rate loan, most commonly a 30-year term, with no prepayment penalty. The upfront fee may be financed so the loan can reach 100% of appraised value plus the fee, and there is no maximum loan amount, only the amount your income and debts support.
• Citizenship and federal debt: you must be a U.S. citizen, non-citizen national, or qualified alien, and a clear CAIVRS response is required. A record of federal debt, including a prior default on a federal loan, stops the file before underwriting starts.

How to use this calculator

1. Enter the home price you are considering. Leave the down payment at $0, since USDA permits 100% financing, unless you are deliberately putting cash down to reduce both the loan and the 1% fee.
2. Set the interest rate. Guaranteed rates are negotiated between you and the lender and USDA does not publish them; 6.5% is the benchmark used in every worked example on this page, and current quotes live on the rates page.
3. Choose the term: 360 months for the standard 30-year, or 180 months if you are modeling a 15-year payoff.
4. In the eligibility panel, enter household size and annual household income for everyone who will live in the home, then read the pass or fail result against the limit the panel applies.
5. Read the payment results: the loan amount, the principal and interest figure, the monthly line for the 0.35% annual guarantee fee, and the total before property taxes and homeowners insurance.

A realistic set of inputs for 2026: home price $350,000, down payment $0, base loan $350,000, the 1% upfront fee of $3,500 financed for an amortizing balance of $353,500, rate 6.5%, term 360 months, annual fee 0.35%. That configuration returns $2,234.36 of principal and interest plus $102.08 of annual fee, for $2,336.44 before escrow. Add property tax at roughly 0.9% to 1.2% of value a year, which is $263 to $350 a month on $350,000, and homeowners insurance at $1,200 to $2,000 a year, or $100 to $167 a month, for a full housing payment near $2,753. Because the 29% housing benchmark governs qualification, that payment needs about $9,494 of gross monthly income, or $113,922 a year, before any other debts enter the calculation. Size the income side in the debt-to-income calculator and the cash side in the closing cost calculator.

How a USDA payment is calculated

The principal-and-interest portion uses the same amortization formula as every mortgage on this site. The USDA-specific work happens on either side of it: the 1% upfront fee is added to the balance before the formula runs, and the 0.35% annual fee is calculated separately on the outstanding balance and appended to the payment afterward.

M = P × [ i (1 + i)ⁿ ] ÷ [ (1 + i)ⁿ − 1 ]

Here M is the monthly principal and interest payment, P is the financed loan amount including the upfront guarantee fee, i is the monthly interest rate (annual rate divided by 12), and n is the number of payments. The annual fee never enters the formula. It is computed on the balance and added afterward, exactly the way FHA's annual premium is handled, because it is a charge on the outstanding principal rather than part of the amortization.

Worked example: $350,000 home, 0% down, 6.5%, 30 years

Step 1: the down payment is $0, so the base loan is the full $350,000. Step 2: the upfront guarantee fee is 350,000 × 0.01 = $3,500, and because it is financed the amount that amortizes is 350,000 + 3,500 = $353,500, which is the 101% financing the program allows. Step 3: the monthly rate is 6.5% ÷ 12 = 0.005416667 and n = 30 × 12 = 360. Step 4: the compounding factor is 1.005416667 to the 360th power = 6.991798, so M = 353,500 × 0.005416667 × 6.991798 ÷ 5.991798 = $2,234.36. Step 5: the annual fee is charged on outstanding principal, so 350,000 × 0.0035 = $1,225 a year ÷ 12 = $102.08 a month; on the financed balance of $353,500 the first-year figure is $1,237.25 ÷ 12 = $103.10, and it falls every year as the balance falls. Step 6: the payment before taxes and insurance is $2,234.36 + $102.08 = $2,336.44.

Step 7 works both ends of the schedule. Month one's interest is 353,500 × 0.005416667 = $1,914.90, so only $319.46 of the first $2,234.36 payment reduces principal. Total repayment is $2,234.36 × 360 = $804,370, which makes lifetime interest $804,370 − $353,500 = $450,870. Financing the upfront fee costs $22.12 a month against the unfinanced $2,212.24 payment, or $7,963 across 360 payments, of which $4,463 is interest on a $3,500 fee. Then the annual fee: $102.08 × 12 = $1,225 in year one, assessed on a balance that shrinks each month, so the dollar amount declines over the term but never reaches zero while the loan is open. The structural point is that on a USDA loan the fee is permanent, whereas conventional PMI ends at 80% loan-to-value and FHA MIP on a 15-year note ends after 11 years.

Worked scenarios

Three inputs move a USDA payment: the purchase price, the interest rate, and the program fees wrapped into the balance. Each table below holds two of them constant so the effect of one change is visible at a time. All figures are principal, interest, and guarantee fee only; property taxes and homeowners insurance are separate escrow lines.

Price scenarios: 0% down, 6.50%, 30-year term

Every row is priced at the same rate and term, and every row starts with no cash down, so the last column tracks the purchase price closely: each additional $50,000 of home adds $319.19 of principal and interest and $14.58 of annual fee, for $333.77 a month. The upfront fee is not cash out of pocket because it is financed, but it does raise the amortized balance by 1% of the loan, which costs $22.12 a month on the $350,000 example at 6.50% over 30 years. Run your own price through the affordability calculator to see what the income side must support at the 29% housing benchmark.

Rate scenarios: $350,000 home, $353,500 financed, 30-year term

Half a point of rate is worth $114.95 a month on this balance and $41,382 across 360 payments; the other half point from 6.50% to 7.00% is worth $117.48 a month and $42,293. The annual fee line does not move with the rate at all, which is why rate shopping is worth doing on a USDA loan exactly as it is on a conventional one. The full amortization mechanics behind these columns are in the amortization guide.

USDA versus FHA versus conventional: $350,000 home, 6.50%, 30-year

The USDA row is the only zero-down row here that is not a VA loan, and it beats the FHA row on both cash and payment: $12,250 less at the table and $74.97 a month less, because 0.35% of guarantee fee undercuts 0.85% of MIP on a similar balance. The conventional 5%-down row is $40.85 a month cheaper than USDA, but it needs $17,500 of cash, it only stays cheaper while PMI is running, and the USDA borrower still had $17,500 to put elsewhere. The 20%-down row finances $73,500 less than the USDA row, which is why its payment is $566.65 lower; it is not an apples-to-apples comparison, it is the price of $70,000 sitting in the transaction instead of in your accounts. Details of the conventional side are in FHA vs conventional and what is PMI.

USDA loan costs and fees

• Upfront guarantee fee: 1% of the loan amount. On a $350,000 loan that is $3,500, and on a $400,000 loan it is $4,000. It may be financed, partly financed, or paid in cash at your option, and it is nonrefundable once USDA issues the Loan Note Guarantee. The statutory ceiling is 3.5%, so the current 1% is a policy setting, not a fixed law.
• Annual guarantee fee: 0.35% of the outstanding balance. On $350,000 that is $1,225 a year, billed as $102.08 a month. The rate is locked when the conditional commitment issues, it applies to purchases and refinances alike, and it runs for the entire life of the loan with no cancellation at 80% equity. The statutory cap is 0.50%.
• Technology fee: $25 flat. Charged on loans processed through GUS, may be financed into the loan, and nonrefundable once the guarantee issues.
• Interest rate: set by the lender, not by USDA. Guaranteed rates typically price a quarter to a half point below comparable conventional quotes for the same borrower because the guarantee removes most of the lender's loss risk; a quarter point on $353,500 is about $57 a month.
• Closing costs: budget 2% to 5% of the loan amount, which is $7,000 to $17,500 on $350,000, plus prepaid taxes and insurance. An appraisal runs $400 to $700 and a home inspection $300 to $600; neither is optional in practice, and well and septic testing adds a few hundred more where the property needs it.
• Mortgage insurance: none. There is no PMI and no separate monthly premium, because the guarantee fee plays that role at 0.35% instead of the 0.5% to 1.5% conventional PMI range or FHA's 0.85% MIP.

USDA loan tips for 2026

• Verify the address before you fall in love with the house. Population caps at 35,000 and areas are re-designated as census data changes, so a street that qualified last year may not qualify this year. Pull the property eligibility map for the exact address and screenshot the result; roughly 97% of land area passes, and the ones that fail are discovered at the worst possible moment.
• Check income against the FY2026 limits, not last year's. The national standard rose to $122,800 for a one-to-four-person household and $162,100 for five-to-eight on July 13, 2026, up from $119,850 and $158,250. Count every adult who will live in the home, apply the dependent, elderly, and childcare deductions, and confirm your county's row at rd.usda.gov before assuming you are over the line.
• Protect a 640 middle score. That is the GUS threshold for an automated Accept, and the difference between an automated file and a manual one is documentation volume and approval speed. Below 640 you are not rejected, but you will be asked for 12 months of rent receipts, utility records, and nontraditional tradeline letters.
• Hold your ratios at 29 and 41 before a lender tests them. On $8,500 of gross monthly income that is $2,465 for housing and $3,485 for all debts. Check your own numbers in the debt-to-income calculator early; stretching to the 32/44 manual-override range needs reserves and a written explanation, not just a desire to buy.
• Price the annual fee against FHA before you choose the program. 0.35% versus 0.85% on a $350,000 loan is $102.08 against $239.24, a $137.16 monthly difference that comes to $49,378 over 360 payments. If the property is outside a USDA area, that gap is exactly what an FHA loan costs you in insurance alone.
• Plan the exit for a fee that never cancels. Reaching conventional 20% equity on the $353,500 financed balance requires a value of $441,875, which is 26.3% above a $350,000 purchase. Track the value annually: every year you keep the 0.35% fee is $1,225 in year one, and a conventional refinance or a recast conversation is worth having once you cross the threshold.
• Get a GUS pre-underwrite, not just a prequalification. There is no county loan limit to fall back on, so your approval letter is the entire budget. Ask the lender for the GUS findings report with your pre-approval so the seller knows USDA has already run the file, and ask how long their conditional commitments are taking this quarter.

Common USDA loan mistakes

• Assuming USDA is only for farmland. The test is population and rural character, not crop acreage. Plenty of buyers write off whole counties they never checked, while a buyer two towns over closes with nothing down. The map is free and takes ninety seconds; use it before the showing, not after the inspection.
• Counting only the borrowers' income. USDA counts every adult who will live in the home, whether or not they sign the note. A parent or adult child earning $45,000 living in the house can push adjusted income past $122,800 in a four-person household and end the file, and discovering that at underwriting is months too late.
• Treating 0% down as no cash needed. On a $350,000 purchase budget $7,000 to $17,500 in closing costs plus prepaid taxes and insurance, which commonly means $10,000 to $22,000 at the table. The financed $3,500 upfront fee raises the payment by $22.12 a month, so the zero-down feature is a loan structure, not a zero-cost one.
• Forgetting the annual fee when comparing quotes. A lender quoting $2,234.36 of principal and interest is not quoting the payment. The guarantee fee adds $102.08, taxes and insurance another $400 to $500, and the qualified number a lender underwrites is $2,753 or higher, not $2,234.
• Buying a house that fails the property standards. The USDA appraisal checks safety, soundness, and sanitation under HUD Handbook 4000.1: peeling paint, defective wiring, a failing well or septic, or a roof at end of life will halt closing until repaired. Order your own inspection for $300 to $600 so you learn about those items while you still have leverage.
• Accepting the first rate and fee quote. Origination charges vary by roughly 1% of the loan amount between lenders, which is $3,500 on $350,000, and a quarter point of rate is another $57 a month. Request the same loan amount, same points, and same lock window from three lenders on the same day before committing.

Frequently asked questions

What credit score do I need for a USDA loan? USDA sets no minimum score, but a middle score of 640 or better is required to run the file through GUS for an automated Accept recommendation. Below 640 the loan moves to manual underwriting, where rent and utility payment history can substitute for a thin file. Most lenders still overlay a 620 floor, so 640 is the practical target and 680 keeps your ratios flexible.

What is the USDA guarantee fee? Two fees replace mortgage insurance: 1% of the loan amount upfront, which is $3,500 on a $350,000 loan and is normally financed, plus 0.35% of the outstanding balance annually, or $1,225 a year and $102.08 a month at that balance. Both are set by USDA rather than your lender, both are nonrefundable, and the annual fee runs for the life of the loan.

What are the USDA income limits for 2026? Household income must be at or below 115% of area median income. The FY2026 national standard limits, published July 13, 2026, are $122,800 for a one-to-four-person household and $162,100 for five to eight, with high-cost counties higher still. Every adult living in the home counts toward the figure, and deductions for dependents, elderly members, and childcare reduce the countable total before the test is applied.

Is there a maximum USDA loan amount? No county loan limit applies to the guaranteed program, unlike FHA and conventional financing where the ceiling resets each January. The amount you can borrow is set by repayment ability, and the upfront fee can be financed on top of 100% of appraised value, which is the 101% financing the program permits. A $350,000 purchase with nothing down produces a $353,500 balance.

Can I use a USDA loan outside rural areas? Only if the address sits in an eligible area, which generally means a community of 35,000 or fewer people that is rural in character. Many outer suburbs qualify, and roughly 97% of U.S. land area passes the test, though far less of the population does. Check the specific street address on USDA's property eligibility map before touring, because an ineligible address is the most common cause of a collapsed USDA deal.

What debt-to-income ratio does USDA require? The benchmarks are 29% for total housing cost and 41% for housing plus all other monthly debts, measured against repayment income rather than gross. Manually underwritten files can reach roughly 32% and 44% with documented compensating factors such as cash reserves or a payment close to your current rent. On $8,500 of gross monthly income, 29% caps housing at $2,465.

What is the difference between a USDA guaranteed and direct loan? The guaranteed loan is originated by a private lender, backed by a 90% USDA guarantee, and capped at 115% of area median income with the 1% and 0.35% fees attached. The direct loan is funded by USDA itself for very low and low income households at or below 50% and 80% of area median, with subsidized interest rates and payment assistance possible for the lowest incomes.

Do USDA loans have mortgage insurance? No. The guarantee fee plays that role instead: 1% upfront and 0.35% annually, which on a $350,000 loan is $3,500 and $102.08 a month. FHA would charge $239.24 a month of MIP on a comparable balance and conventional PMI commonly runs 0.5% to 1.5% of the loan a year. The USDA charge is cheaper on both counts, but it never cancels while the loan is open.

Related calculators

• Mortgage Calculator — full PITI with taxes, insurance, and an amortization schedule
• FHA Loan Calculator — the 3.5%-down alternative when the property is outside a USDA area
• VA Loan Calculator — 0% down with no guarantee fee at all for eligible service members
• Affordability Calculator — what the income side needs to support at 29% housing
• Closing Cost Calculator — the $7,000 to $17,500 of cash a USDA loan still requires
• Debt-to-Income Calculator — test the 29/41 benchmarks before a lender does