USDA guaranteed home loans charge two fees: an upfront guarantee fee and an annual fee. For fiscal year 2027, which runs from October 1, 2026 through September 30, 2027, USDA Rural Development set the upfront guarantee fee at 1.00 percent and the annual fee at 0.35 percent, for both purchase and refinance loans (USDA RD bulletin, Sept 16, 2026). The upfront fee can usually be financed into the loan. The annual fee is collected monthly in your payment. USDA sets both by fiscal year, so check the current year's notice when you apply.
The fees fund USDA's guarantee of the loan, which protects the lender if the borrower defaults. The program rules are in 7 CFR part 3555 (7 CFR 3555).
USDA announces fees for each fiscal year. Ask your lender which fiscal year's fees apply to your Conditional Commitment, especially if your loan is approved near October 1. At the start of each fiscal year, USDA has noted a short lapse of about a week before new funding is available, during which it issues Conditional Commitments subject to the availability of funds. Lenders can still close loans as scheduled, and USDA obligates them once funding arrives, per the same bulletin.
No. The annual fee is a USDA program fee. It is not private mortgage insurance, and the Homeowners Protection Act cancellation rules for PMI do not apply to it (12 U.S.C. 4902). If you want to stop paying it, the usual path is refinancing into a different program, if you qualify and the numbers work. See mortgage insurance overview.
A USDA loan requires an eligible property location and household income within USDA's limits for the area. Check both on the USDA eligibility site. Many addresses inside Fort Worth city limits are not eligible, while some areas in surrounding counties are. See USDA guaranteed loans.
Fictional example: a buyer finds a home in an eligible area outside Fort Worth and hears "no mortgage insurance on USDA." The buyer learns there is an upfront guarantee fee, financed into the loan, and an annual fee collected monthly. On the Loan Estimate, the financed fee raises the loan amount slightly, and the annual fee appears in the projected payment. The buyer compares the full payment with an FHA and a conventional option before deciding.
USDA also finances eligible manufactured homes under its own property rules.
If you are looking at homes outside the city, I can check USDA eligibility for the address and your income, then compare the full payment with FHA and conventional. Book a call, or start an application.
Links checked Oct 21, 2026.
About the author: McKade Lively, NMLS 2704474, American Pacific Mortgage Corporation dba True North Home Loans, NMLS 1850.
Equal Housing Opportunity.
Last reviewed: Oct 2026