PenFed Mortgage Review 2024
620 to 650
0% to 3%
Conventional, FHA, VA, jumbo, HELOCs
See how we reached our verdict. below.
- Broad selection of loan options, including conventional, FHA and VA
- Competitive mortgage rates
- Mortgage refinance options available
- Closing costs credit up to $1,500 available
- Higher minimum credit score than some other lenders
- No USDA loans
- No fully-online mortgage process
PenFed mortgage overview
Originally founded in 1935, PenFed Credit Union (short for Pentagon Federal Credit Union) is the second-largest federal credit union in the United States. While its offerings are geared toward military members and veterans who want to access affordable banking products, individuals don’t need a military affiliation to join.
- Areas of service: All 50 states, plus District of Columbia, Guam, Puerto Rico and Okinawa, Japan
- Digital service: No online mortgage process; borrowers can start an application online
- Headquarters: 7940 Jones Branch Dr., Tysons, VA 22102
- Website: PenFed.org
PenFed Credit Union rates, terms and fees
Rates
PenFed Credit Union offers competitive mortgage rates, which is likely connected to its high minimum credit score requirement for home loans.
PenFed’s rate spread increased from 0.11 percentage points in 2022 to 0.53 in 2023, according to national Home Mortgage Disclosure Act (HMDA) data. That means its rates were 0.53 percentage points higher than the average prime offer rate (APOR), a benchmark rate that shows the lowest rate a bank is likely to offer applicants. Higher rate spreads indicate a more expensive mortgage.
Despite the increase, compared with other national lenders, PenFed’s rate spread in 2023 was lower than average.
Fees
According to PenFed Credit Union, typical closing costs for a mortgage fall between 2% and 5% of the purchase price of a home. In its online mortgage disclosures, PenFed states that rates quoted for conventional loans, for example, assume a 1% origination fee, not to exceed $5,000. Outside of that, the lender doesn’t publish specific closing costs and fees that apply to its home loans.
HMDA data shows that PenFed’s total loan costs were $7,472 on average in 2023, and its average origination fees were $2,478. This puts PenFed Credit Union in the middle of the pack compared with the national lenders included in the data.
What discounts does PenFed Credit Union offer?
PenFed offers help with closing costs up to $1,500, but only if you also work with a real estate agent in their network to purchase a home.
What types of mortgage loans does PenFed Credit Union offer?
PenFed Credit Union offers a variety of home loans including:
Conventional loans
PenFed Credit Union offers conventional home loans for qualified buyers who have a minimum down payment of 3%. Fixed-rate and adjustable-rate mortgages (ARMs) are available. PenFed notes that buyers with a down payment of less than 20% will need to pay private mortgage insurance (PMI).
Conventional loan qualification requirements
- Minimum 650 credit score
- Proof of income, including one to two months of paystubs
- At least one year’s worth of W2 tax statements
FHA loans
PenFed also offers FHA home loans with down payment requirements as low as 3.5%. FHA loan limits apply, and borrowers pay both upfront and ongoing FHA mortgage insurance on their loans. FHA loans can be used to purchase homes with one to four units.
FHA loan qualification requirements
- Minimum 620 credit score
- Proof of income, including one to two months of paystubs
- At least one year’s worth of W2 tax statements
- Property appraisal from an FHA-approved appraiser
- Current information on debts you owe
- Maximum debt-to-income ratio (DTI) not disclosed
VA loans
VA loans are available to military members, veterans and eligible spouses, and they are known for offering less stringent credit requirements, low closing costs and no requirement for mortgage insurance. These loans are also offered with $0 down in some cases.
Applicants can also apply for a VA Interest Rate Reduction Refinance Loan (IRRRL) with PenFed.
VA loan qualification requirements
- Minimum 620 credit score
- Certificate of Eligibility (COE) from the U.S. Department of Veterans Affairs
- Military discharge paperwork (DD214) for veterans
- Statement of Service for active duty military
Jumbo loans
PenFed also offers jumbo loans in amounts from $766,550 up to $3 million. These loans come with fixed-rate or adjustable-rate options.
Jumbo loan qualification requirements
- Minimum 700 credit score
- Minimum down payment of 20%
- Minimum two years of employment history
- Proof of income, including one to two months of paystubs or two years of tax returns for the self-employed
- At least one year’s worth of W2 tax statements
- Maximum (DTI) not disclosed
- Minimum six months of cash reserves
Home equity lines of credit
PenFed Credit Union offers home equity lines of credit (HELOCs) that let borrowers access some of their existing home equity without changing the terms of their primary mortgage. HELOCs from PenFed come with expedited closing in 15 days and amounts from $25,000 to $50,000 with a 10-year draw period. Interest-only payments are made during the draw period, followed by a 20-year period of interest and principal payments.
HELOC qualification requirements
- Minimum 680 credit score
- Proof of income, including one to two months of paystubs
- At least one year’s worth of W2 tax statements
- At least two months of recent bank account statements
- Mortgage statement for all properties owned
PenFed Credit Union mortgage qualifications
| Credit score minimum |
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| DTI ratio Debt-to-income (DTI) ratio compares your monthly gross income to your monthly debt payments. maximum |
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| Down payment minimum |
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Don’t know your credit score? Get your free score on LendingTree Spring today.
How to boost your loan approval odds
HMDA data for PenFed shows that in 2023, the average loan-to-value (LTV) ratio for approved borrowers was 73.7% across all loan types. This means the average PenFed borrower had a down payment of 26.3% of their home’s purchase price. Just under half of approved borrowers had a DTI below 40% in 2023. PenFed approved about half of all loan applicants for mortgages in 2023.
Based on this information, you may have a better chance at loan approval if you increase your down payment amount and pay down consumer debt to lower your DTI.
How to apply for a PenFed Credit Union mortgage
1. Choose your loan type
Compare loan types on the PenFed Credit Union website, along with their qualification requirements. Choose from conventional loans, FHA loans, VA loans and jumbo loans.
2. Get prequalified
PenFed doesn’t offer online prequalification. But you can get preapproved for a mortgage while locking in your mortgage rate for 60 days. Note that mortgage preapproval cannot be completed entirely online, and that you need to speak with a PenFed loan specialist to complete this step.
3. Submit a loan application
PenFed Credit Union doesn’t offer a fully online mortgage process, although applicants can enter basic information and begin the mortgage process through an online application. From there, buyers are connected with loan specialists who help facilitate the home-buying process.
PenFed offers an online mortgage dashboard for customers in the home-buying process and beyond. This dashboard lets applicants track their mortgages online or via the mobile app. After the loan process is complete, buyers can use the portal or mobile app to make mortgage payments and track their loan repayment process.
Documents you’ll need for prequalification or preapproval
- Identification
- Tax documents
- Bank statement
- Pay stubs
- Debt and asset statements
- Gift letters (if you’re using gifted funds)
Find out more about how to apply for a home loan.Is it safe to get prequalified with PenFed Credit Union?
PenFed Credit Union lets you get preapproved for a mortgage through its “Power Buyer” program. This move lets you determine how much you can afford to purchase, and it comes with a preapproval certificate that can help your offer on a home stand out.
Getting preapproved with PenFed lets you lock in a mortgage rate for 60 days. You can also extend the rate lock for another 30 days with a prorated daily fee.
Note that mortgage preapproval with PenFed requires an underwriting review and a hard inquiry on your credit reports.
PenFed Credit Union’s customer service experience
You can contact PenFed Credit Union in a branch or over the phone. Home loan servicing is available to U.S. customers Monday to Friday, 8 a.m. to 8 p.m. EST, at the following number:
- Phone: 800-585-9055
You can also send a secure message to PenFed through the bank’s secure messaging system, which you can access through your PenFed online dashboard.
How does PenFed Credit Union compare to other lenders?
|  |  |
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|---|---|---|---|
| LendingTree’s rating | |||
| Minimum credit score | 620 to 650 | 580 to 680 | 580 to 640 |
| Minimum down payment | 0% to 3.5% | 0% to 3.5% | 0% to 3.5% |
| Rate spread Rate spread is the difference between the average prime offer rate (APOR) — the lowest APR a bank is likely to offer any private customer — and the average annual percentage rate (APR) the lender offered to mortgage customers in 2023. The higher the number, the more expensive the loan. | 0.53% | 0.73% | 0.15% |
| Loan products and programs |
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| Better for: | PenFed Credit Union is a strong choice for buyers with good or excellent credit who want access to a range of loan options at competitive rates. | Rocket Mortgage stands out for its fully digital home loan process, which can be attractive for buyers who want to take care of mortgage details online. | While PenFed Credit Union caters to military members and veterans, Veterans United is the nation's largest VA lender. Their expertise can be a benefit when buying a home with a VA loan. |
PenFed Credit Union vs. Rocket Mortgage
Like PenFed, Rocket Mortgage offers conventional mortgages, FHA loans, VA loans, jumbo loans and home equity loans at competitive interest rates. But Rocket Mortgage is known for its fully digital mortgage experience that lets buyers move through the process by submitting documents online. That differentiates it from PenFed, which only offers a partially online application process. You can also utilize Rocket Mortgage to refinance your home.
→ Read more in our full Rocket Mortgage review.
PenFed Credit Union vs. Veterans United
Both PenFed and Veterans United serve military-affiliated borrowers, but Veterans United stands out for its experience and expertise when it comes to VA loans. The lender also offers conventional mortgages, FHA loans and USDA loans. Based on 2023 HMDA data, average mortgage rates from Veterans United were also lower than most other national lenders, including PenFed, and so were its average total loan costs.
→ Read more in our full Veterans United mortgage review.
Ready to compare lender offers on LendingTree? Get Your Rates TodayHow LendingTree rated PenFed Credit Union
LendingTree’s mortgage lender rating is based on a five-point scoring system that factors in several features, including digital application processes, available loan products and the accessibility of product and lending information.
LendingTree’s editorial team calculates each rating based on a review of information available on the lender’s website. Lenders receive a half-point on the “offers standard mortgage products” criterion if they offer only two of the three standard loan programs (conventional, FHA and VA). In some cases, additional information was provided by a lender representative.
PenFed Credit Union’s scorecard:
Publishes rates online
Offers standard mortgage products
Includes detailed product info online
Shares resources about mortgage lending
Provides an online application
= 0 points = 0.5 points = 1 point
Frequently asked questions
PenFed Credit Union may not offer a fully online mortgage process, but it does have a highly rated mobile app that lets users track their loan process and make mortgage payments on the go. Customers can also complete these tasks in their PenFed online dashboard.
PenFed Credit Union is a legitimate credit union that’s been in operation since 1935. The institution currently serves 2.9 million members worldwide and has over $33.5 billion in assets.
You can view more info about PenFed Credit Union’s state licenses and registrations through the Nationwide Multistate Licensing System and Registry (NMLS) website.
While applying for a mortgage with PenFed could temporarily impact your credit score, our credit score study shows that the impact is typically minimal and temporary. You can also increase your credit score over time by making on-time payments on your mortgage.
PenFed has an average rating of 4.1 out of 5 stars across more than 1,400 customer reviews on Trustpilot.com. More than 80% of reviewers gave the credit union 5 stars. The credit union has an A+ rating from the Better Business Bureau (BBB), though it is not accredited and its profile page shows more than 500 complaints closed in the last three years. The bulk of the lender’s complaints relate to auto loans, credit cards and other financial products outside of mortgages.