The full explanation
There are two paths: the USDA guarantees a loan made by a private lender, or it lends directly to very-low-income families. To qualify, your income must be within the limit for your area and the home must be in an eligible area, which you can check on the USDA's map.
An example
Ana wants to buy in a small town. She checks the USDA map, sees the area is eligible and asks a lender about a USDA-guaranteed loan, which requires no down payment.
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, in the “Loan type” box (USDA/RHS)
- The USDA eligibility map for your address
- State assistance programs that accept USDA loans
