USDA Loan Closing Costs and Timeline: What to Expect After Approval

Once you’ve been pre-approved for a USDA loan, it might feel like the hard part is over — but the final stretch to closing can be the trickiest. Between appraisal delays, document surprises, and misunderstanding the costs involved, USDA borrowers can hit unexpected roadblocks.

This guide walks you through:

• What closing costs to expect with a USDA loan

• How long the USDA closing process typically takes

• What can delay your closing

• Who pays for what

• And how to prepare so your loan closes smoothly

What Are USDA Loan Closing Costs?

Closing costs are the out-of-pocket expenses you’ll pay when finalizing your home loan. These costs are in addition to your down payment — but with a USDA loan, the down payment is $0, so your closing costs become your only up-front expense.

Here are common fees you may encounter:

Learn More: USDA Guarantee Fees

Who Pays Closing Costs on a USDA Loan?

Typically, the buyer pays the closing costs, but there are exceptions and strategies that can help reduce your out-of-pocket burden:

• Seller Credits: Sellers can contribute up to 6% of the loan amount toward your closing costs.

• Lender Credits: Some lenders offer closing cost assistance in exchange for a slightly higher interest rate.

• Gift Funds: Friends or family may provide gift funds to cover eligible costs.

• Rolling Costs Into the Loan: If the home appraises for more than the sale price, you may be able to roll in closing costs (excluding prepaid items).

Tip: Use Loan Watch to compare your Loan Estimate and spot high or unusual fees.

How Much Will I Actually Pay?

Closing costs usually range from 2% to 5% of the purchase price. For a $250,000 home, that’s $5,000–$12,500.

Use our USDA Mortgage Calculator to estimate your monthly payment, including property taxes, insurance, and USDA fees.

How Long Does It Take to Close a USDA Loan?

The USDA closing timeline is typically 30–45 days, but it can vary depending on:

Common USDA Closing Delays

Because USDA loans require final sign-off from the U.S. Department of Agriculture, they can take longer than conventional loans. Here’s what often slows things down:

• Appraisal issues — USDA appraisers follow stricter standards (e.g., no peeling paint, broken HVAC, or foundation concerns).

• Property eligibility — Homes must be located in an eligible rural area and meet livability standards.

• Income discrepancies — USDA considers total household income, not just borrower income.

• Missing documents — Late submission of pay stubs, W-2s, or tax returns can stall underwriting.

• Backlog at the USDA office — During peak seasons, USDA reviews may take up to 10+ days.

How to Avoid Delays and Close Smoothly

To give yourself the best chance at an on-time closing:

• Work with a lender experienced in USDA loans
• Submit all documentation early and thoroughly
• Budget for appraisal repairs just in case
• Build flexibility into your closing timeline
• Use Loan Watch to verify Loan Estimate accuracy
• Stay in close communication with your agent and lender

FAQs: USDA Closing Costs & Timeline