USDA Fees Structure
- Upfront Guarantee Fee: 1.00% of the loan amount financed at closing.
- Annual Guarantee Fee: 0.35% per year divided into 12 monthly payments.
USDA Loan Cost Comparison Table ($250,000 Purchase Price)
| Interest Rate | Upfront Fee (1%) | Total Financed | Monthly P&I | Monthly USDA Fee (0.35%) | Total Monthly |
|---|---|---|---|---|---|
| 5.75% | $2,500 | $252,500 | $1,472.91 | $72.92 | $1,545.83 |
| 6.25% | $2,500 | $252,500 | $1,553.88 | $72.92 | $1,626.80 |
| 6.75% | $2,500 | $252,500 | $1,636.57 | $72.92 | $1,709.49 |
Formulas
\(\text{Upfront Fee} = \text{Home Price} \times 1.00\%\) \(\text{Total Loan Financed} = \text{Home Price} + \text{Upfront Fee}\) \(\text{Monthly USDA Fee} = \frac{\text{Home Price} \times 0.35\%}{12}\)
Frequently Asked Questions
What is a USDA Loan?
A USDA loan is a 0% down payment mortgage backed by the U.S. Department of Agriculture designed for low-to-moderate-income buyers purchasing homes in designated rural and suburban areas.
What are the USDA guarantee fees?
USDA loans require a 1.00% upfront guarantee fee (financed into the loan) and an annual fee of 0.35% divided into 12 monthly payments.