Do USDA Loans Require Mortgage Insurance?
Do USDA Loans Require Mortgage Insurance?
How the USDA Guarantee Fee Works
USDA Fee vs FHA MIP
Which Costs Less?
What This Means for Your Payment
Keep Exploring
Related Blog Posts
Frequently Asked Questions
See Your USDA Payment With the Guarantee Fee
USDA loans do not use traditional PMI or FHA MIP. Instead, they charge a USDA guarantee fee — currently about 1% upfront (often financed into the loan) and 0.35% annual on the outstanding balance, which is typically lower than FHA mortgage insurance.
Two pieces make up the fee — an upfront charge and a smaller annual fee paid monthly. Here is how each one works on a typical Guaranteed loan.
Both programs charge insurance-like costs — but the structures differ. USDA’s annual piece is often cheaper than FHA MIP, while conventional PMI can drop once you hit 20% equity.
USDA often wins on monthly MI-like costs versus FHA — especially when you qualify for zero down in an eligible area. Conventional can win later if you build equity and cancel PMI.
The guarantee fee shows up in your monthly payment and, if not financed, in cash to close. Here’s how to think about it before you apply.
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Related guides to help you compare options and move toward pre-approval.
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Recent articles from our blog on USDA loans, rural eligibility, and zero-down financing.
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We will run the numbers on upfront and annual fees — and compare USDA to FHA and conventional for your scenario.
- window.open('https: Contact Us How the USDA Guarantee Fee Works Two pieces make up the fee — an upfront charge and a smaller annual fee paid monthly. Here is how each one works on a typical Guaranteed loan. USDA Fee vs FHA MIP Both programs charge insurance-like costs — but the structures differ. USDA’s annual piece is often cheaper than FHA MIP, while conventional PMI can drop once you hit 20% equity. Which Costs Less? USDA often wins on monthly MI-like costs versus FHA — especially when you qualify for zero down in an eligible area. Conventional can win later if you build equity and cancel PMI. What This Means for Your Payment The guarantee fee shows up in your monthly payment and, if not financed, in cash to close. Here’s how to think about it before you apply. Keep Exploring Related guides to help you compare options and move toward pre-approval. 2MG Daily Related Blog Posts Recent articles from our blog on USDA loans, rural eligibility, and zero-down financing. {blogLoading ? ( ) : blogError ? ( Try Again