Just like VA loans, you can borrow 100% of the cost of your home. That’s because the USDA guarantees 90% of your loan value for your lender, which means lenders are taking on less risk. But that doesn’t mean you’ll owe nothing at closing.
Fee schedules for USDA loans are a little different than FHA and VA loans. Regardless of your down payment size, you will need to pay both an upfront fee (1%) at closing on top of the usual closing costs. If your appraised value comes in higher than your loan amount, it might be possible to roll these costs into your loan.
Lastly, USDA loans have an annual fee (currently .35% of your current loan balance) which is added onto your monthly payment. It’s not mortgage insurance—no matter how much you pay off on your loan, this fee won’t go away. Fortunately, it’s not a lot, and as your loan balance decreases, the monthly cost will, too.