USDA Loan Calculator. Check Your USDA Home Loan Eligibility

Discover your buying power with this USDA mortgage calculator

USDA home loans are one of the least-known — but most powerful — home buying options in today’s market.

These loans require zero down payment. That means you can buy a home even though you don’t have a lot of money saved up.

USDA loans also come with ultra-low rates and low credit score minimums.

USDA mortgage eligibility

USDA loans are typically available to those who meet the following qualifications:

• Purchasing a home in a USDA-eligible area (most areas outside major cities are eligible)
• Income at or below 115% of the area’s median income
• A credit score of 640 or higher (although some lenders accept lower scores with compensating factors)
• A debt-to-income ratio of 41% or less (higher DTI acceptable with compensating factors)
• 1-2 years of consistent employment history (most likely 2 years if self-employed)
• A home that meets USDA property standards

These are general guidelines, however, and home shoppers should get a full qualification check and pre-approval letter from a USDA lender. Many buyers are eligible, but don’t know it yet.

USDA mortgage calculator: Fees and definitions

The above USDA mortgage calculator details costs associated with USDA loans or with home buying in general. But many buyers don’t know why each cost exists. Below are descriptions of each cost.

Principal and interest. This is the amount that goes toward paying off the loan balance plus the interest due each month. This remains constant for the life of your fixed-rate loan.

Property tax. The county or municipality in which the home is located charges a certain amount per year in taxes. This cost is split into 12 installments and collected each month with your mortgage payment. Your lender collects this fee because the county can seize a home if property taxes are not paid. The calculator estimates property taxes based on averages from tax-rates.org.

Homeowners insurance. Lenders require you to insure your home from fire and other damages. This fee is collected with your mortgage payment, and the lender sends the payment to your insurance company each year.

HOA/other. If you are buying a condo or a home in a Planned Unit Development (PUD), you may need to pay homeowners association (HOA) dues. Lenders factor in this cost when determining your ratios. (See an explanation of debt-to-income ratios above). You may put in other home-related fees such as flood insurance in this field, but don’t include things like utility or maintenance costs.

USDA mortgage insurance.  The agency charges an annual fee which is paid in 12 equal installments along with the mortgage payment. The fee is equal to 0.35% of the loan amount per year. The fee is much lower than FHA mortgage insurance or even most conventional PMI rates.

Upfront USDA fee. The USDA charges an upfront fee which is rolled into the loan amount. The amount of the fee is currently 1.0% of the loan amount. The fee goes to USDA to defray the costs of running the program. The agency is able offer these loans at discounted rates and down payments in part because of this fee.

Loan term. The number of years it takes to pay off the loan (assuming no additional principal payments). USDA loans come in 30- or 15-year options.

Down payment. This is the dollar amount you put toward your home cost. USDA requires no down payment, but buyers can make a down payment if they desire. Down payments can come from a down payment gift or eligible down payment assistance program.

Interest rate. The mortgage rate your lender charges. Shop at least three lenders to find the best rate.

USDA-eligible areas

About 97% of U.S. land mass is eligible for a USDA loan. Many suburban as well as rural neighborhoods qualify. If you are buying outside a major city, it’s worth checking into your area’s USDA eligibity status.

Learn more about eligible geographic areas here.

More about USDA loans

Learning about USDA loans is easy. See our USDA loan guide for everything you need to know about the program. Additionally, see our other articles on this powerful loan program.

• The USDA loan process
• About USDA income eligibility
• USDA income lookup tool
• Eligible areas
• USDA down payment and closing costs
• Minimum credit scores
• USDA vs FHA: Which is better?

Apply now for a USDA loan

Home buyers — if they have heard of the program at all — assume USDA loans are only for farms or homes that are too far removed from civilization.

On the contrary, USDA mortgages are for regular homes in the suburbs.

Check your eligibility, and become a homeowner sooner than you thought possible.

Sources:

Property tax averages: http://www.tax-rates.org/taxtables/property-tax-by-state
USDA fees: https://www.rd.usda.gov