The USDA Rural Development Loan has whats called a Guarantee Fee. This is essentially the same concept as mortgage insurance on other loan types. There are two different fees charged. The upfront and the annual. The upfront fee is often confusing for borrowers because of the word upfront. People often think they must actually bring this money at or before closing. Actually this fee is rolled into the loan. The current upfront percentage used is 2.75%. For example if the loan amount is $100,000 it will become a loan amount of $102,750 on the USDA home loan. The added amount has minimal impact on the total monthly payment. The annual fee is just as confusing. The current annual fee is .50% but is paid out monthly.