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 arm. You don't borrow from USDA — you borrow from an ordinary approved lender, and USDA guarantees a portion of the loan against default. That government backstop is what lets a lender write a 100% financed mortgage with no down payment and no private mortgage insurance.

There are two distinct programs, and the difference matters when you compare quotes:

• Guaranteed (Section 502 Guaranteed).Issued by a private lender, guaranteed by USDA. This is the program most buyers mean when they say “USDA loan,” and it's what the calculator above models — 0% down, a 1% upfront guarantee fee, and a 0.35% annual fee.
• Direct (Section 502 Direct). Lent by USDA itself to low- and very-low-income households, with payment-subsidy assistance that can reduce the effective interest rate. Income limits are far tighter than the Guaranteed program, and the fee structure above does not apply.

In exchange for zero down, USDA attaches two conditions no other program has: the house must sit in an area USDA designates as rural, and your household income must fall under a county limit. Clear both, and USDA is usually the cheapest low-down-payment mortgage available. If you're early in the process, the first-time homebuyer guide walks through how this fits alongside the other loan types.

USDA vs FHA vs Conventional

These are the three programs a rural buyer without a large down payment will actually be quoted. For an eligible borrower, USDA is usually the cheapest of the three: nothing down, the smallest upfront fee, and the lowest ongoing fee. The trade-off is that USDA is the only one of the three that tests where the house is and what you earn.

The cancellation row is the one that catches people out. Conventional PMI falls away on its own at 78% LTV, so a buyer with decent credit who can reach 20% equity quickly may pay less over the full term on a conventional loan even though the monthly payment starts higher. USDA's 0.35% fee never cancels — but it's small enough that refinancing out is rarely worth it on its own. Price the alternatives with the FHA loan calculator, the PMI calculator for a conventional quote, and the VA loan calculator if you've served.

USDA Loan Income Limits by State

There is no single national USDA income limit — and no single per-state number either. USDA sets a limit for every county, pegged at roughly 115% of that area's median income, and the figure can swing widely between counties within the same state.

For the Guaranteed program, most counties use the standard limits (effective July 12, 2024):

• $112,450 for a household of 1–4 people
• $148,450 for a household of 5–8 people

Lower-cost rural counties can sit below that baseline — as low as roughly $91,900 (1–4) and $121,300 (5–8) — while designated high-cost counties (parts of California, Colorado, the Northeast, Hawaii, and others) allow meaningfully higher limits. Because the bracket depends on your specific county and household size, the only reliable way to find your number is the official lookup.

See the current figures in the USDA Guaranteed income limit map (PDF). Remember that USDA uses adjusted income — after deductions for dependents, child care, and certain disability expenses — so a household that looks over the limit on gross pay often qualifies once adjustments are applied.

USDA Loan Guarantee Fee Explained

USDA doesn't charge PMI. Instead, two guarantee fees fund the program and replace traditional mortgage insurance — and they're both built into the calculator above.

• 1% upfront guarantee fee. Charged once at closing on the loan amount. Almost every borrower finances it into the loan rather than paying cash, so a $250,000 loan carries a $2,500 fee rolled into the balance.
• 0.35% annual fee.Calculated on the outstanding balance, divided by 12, and added to each monthly payment. On a $250,000 loan that's about $73 a month at the start, and it shrinks every year as the balance falls.

Side by side, that's the cheapest insurance package among low-down-payment loans: FHA charges 1.75% upfront plus 0.50–0.55% annually, and conventional PMItypically runs 0.5–1.5% a year depending on credit and down payment. Unlike FHA MIP, the USDA annual fee is the only ongoing charge — there's no separate monthly insurance line.

Am I Eligible for a USDA Loan?

USDA eligibility comes down to two program tests, both of which must be met before a lender even looks at your credit:

• Property location. The home must sit in a USDA-eligible rural area. Check any address against the official USDA property eligibility map. “Rural” is broader than it sounds — plenty of suburbs of mid-sized cities qualify.
• Household income. Adjusted income for everyone in the home must be at or below the county limit (115% of area median income). Use the income inputs in the calculator above for a quick standard-limit screen.

Clear both tests and your lender still underwrites you on credit and debt-to-income. Most USDA-approved lenders want a credit score around 640 for streamlined processing (USDA sets no official minimum), and DTI is generally capped near 41% with some flexibility. The home must also be your primary residence. Once you know what you can afford, the affordability calculator and closing costs calculator help you plan the full cash-to-close picture.