The full explanation
USDA may also charge the lender an annual fee on the loan balance for the life of the loan, which may also be passed on to the borrower. The regulation caps each fee; USDA announces the current amount, and it can change.
An example
Felipe sees a USDA guarantee fee on the Loan Estimate for his USDA loan. He asks the lender whether that cost is passed on to him and whether there will also be an annual fee.
With real numbers
Computed with official data for the whole U.S. In your county the numbers may differ.
- Upfront fee (1%)
- $3,327
- Annual fee, per month (0.35% a year)
- $97
On a USDA loan for the typical U.S. home value ($332,700, no down payment), the current upfront fee (1%) would be $3,327, and the annual fee (0.35% of the balance) would add about $97 a month in the first year.
Computed with: American Community Survey (ACS) 5-year estimates (2020–2024) · USDA Rural Development: Fiscal Year 2027 Conditional Commitment Notice (SFH Guaranteed) (October 9, 2026)
You will see it in…
- The Loan Estimate and Closing Disclosure for a USDA loan
- USDA notices with the current fee
- Your monthly payment, if the lender passes the annual fee on to you
