Use this comprehensive USDA Mortgage Payment Calculator to estimate your total monthly housing expenses, including the Upfront Guarantee Fee (UGF) and Annual Fee (AF), crucial components of a USDA Rural Development Loan.
USDA Rural Development Loan Calculator
Estimated Monthly Payment
$0.00P&I + Annual Fee (UGF is financed).
Detailed Calculation Steps
USDA Mortgage Formula
The total monthly payment is the sum of the Principal & Interest (P&I) payment and the Monthly Annual Fee (AF). The P&I calculation uses the effective principal, which includes the financed Upfront Guarantee Fee (UGF).
2. Monthly Rate (r): Annual Interest Rate / 12 / 100
3. Number of Payments (n): Loan Term (Years) * 12
4. P&I Payment (M_PI): P_eff * [ r(1 + r)^n ] / [ (1 + r)^n – 1 ]
5. Monthly Annual Fee (M_AF): (P_eff * Annual Fee / 100) / 12
6. Total Monthly Payment (M): M_PI + M_AF
Formula Sources: USDA Official Program Guide | Amortization Formula Overview
Variables Explained
- Loan Amount: The principal amount borrowed before the Upfront Guarantee Fee is added.
- Annual Interest Rate: The nominal annual percentage rate (APR) of the loan.
- Loan Term (Years): The duration of the loan, typically 30 years for a USDA Guaranteed Loan.
- Upfront Guarantee Fee (UGF): A one-time fee, typically 1.00%, that is usually financed into the loan, increasing the effective principal.
- Annual Fee: A recurring yearly premium, typically 0.35%, charged on the remaining effective principal balance, paid in monthly installments.
Related Financial Calculators
- FHA Loan Payment Calculator
- Debt-to-Income Ratio Calculator
- Mortgage Affordability Tool
- VA Funding Fee Estimator
What is a USDA Guaranteed Loan?
The USDA Single Family Housing Guaranteed Loan Program (SFHGLP) assists approved lenders in providing low- and moderate-income households the opportunity to own adequate, modest, decent, safe, and sanitary dwellings as their primary residence in eligible rural areas. It is one of the last true $0 down payment mortgage options available in the U.S.
A unique feature of the USDA loan is the structure of its mortgage insurance, referred to as guarantee fees. There is an Upfront Guarantee Fee (UGF) that is typically financed into the loan amount, thereby increasing the total loan balance. Additionally, there is an Annual Fee (AF) which is calculated based on the outstanding effective principal balance and paid monthly. These fees are what this calculator specifically accounts for to provide an accurate monthly cost estimate.
How to Calculate a USDA Mortgage Payment (Example)
- Establish Input Values: Assume a $200,000 Loan Amount, 6.00% Interest Rate, 30-Year Term, 1.00% UGF, and 0.35% Annual Fee.
- Determine Effective Principal: $200,000 * (1 + 0.01) = $202,000.
- Calculate Monthly P&I: Use the amortization formula with $202,000 Principal, a monthly rate of $0.06 / 12 = 0.005$, and $360$ payments. This results in an estimated P&I of $1,211.08.
- Calculate Monthly Annual Fee: ($202,000 * 0.0035$) / 12 = $58.92.
- Find Total Payment: $1,211.08 (P&I) + $58.92 (AF) = $1,270.00 Total Monthly Payment.
Frequently Asked Questions (FAQ)
The UGF is a one-time fee charged by the USDA, typically 1.00% of the loan amount, which is almost always financed into the total loan principal.
No, the USDA loan program is not strictly limited to first-time buyers, but it is limited to eligible properties in rural areas and to borrowers who meet income limits for the area.
Unlike FHA loans, the USDA Annual Fee is not automatically canceled. It remains for the life of the loan unless the borrower refinances out of the USDA program.
The USDA Annual Fee is similar to Private Mortgage Insurance (PMI) but is based on a fraction of the *outstanding effective principal* rather than the original loan amount, and it generally has a lower cost than traditional PMI.