PenFed Mortgage Review
PenFed at a glance
 | Minimum credit score: 620 to 650 Minimum down payment: 0% to 3.5% Available loan products and programs: Conventional, FHA, VA, jumbo, HELOC |
Our verdict: PenFed is a good choice for consumers that prefer the convenience of full banking services along with a competitive array of mortgage products including HELOCs.
| Pros | Cons |
|---|---|
Offers a wide variety of mortgage products including jumbo and HELOCs Members may be eligible for mortgage closing-cost credits up to $2,500 Serves customers in all 50 states | No rate information is published online No online mortgage application is available Higher credit score standards for conventional and FHA loans than minimum guidelines require |
Pentagon Federal Credit Union, or PenFed for short, is a full-service financial institution offering deposit and loan products, including mortgages in all 50 states and the District of Columbia as well as Guam, Puerto Rico and Okinawa. Members can access services via the web seven days a week, 24 hours a day, but you can’t apply for a mortgage online.
PenFed mortgage products
PenFed offers a wide variety of standard loan programs along with special homebuyer lock options, closing cost credits and even home equity lines of credit (HELOCs).
Conventional
- Fixed-rate mortgages and adjustable-rate mortgages available
- Programs with down payments as low as 3%
- Up to $2,500 worth of lender credits for qualified buyers
- Minimum credit score of 650 in most cases
FHA
- Purchase loans available with down payments as low as 3.5%
- Available to buyers with scores as low as 620
VA
- No down payment mortgage for qualified military borrowers
- No mortgage insurance regardless of down payment
- Eligible buyers may receive a $2,500 closing cost credit
- Homeowners with current VA loans may be eligible for the interest rate reduction refinance loan (IRRRL) with no appraisal required.
- Current homeowners can tap equity with a VA cash-out refinance
HELOCs
HELOC is short for home equity line of credit, and PenFed offers this line of credit product to homeowners to use for home improvement, debt consolidation, higher education expenses or any other financial need.
Jumbo loans
If you’re buying in an expensive part of the country, PenFed offers jumbo loans for loan amounts over the current conforming loan limits. Borrowers can choose fixed- and adjustable-rate options.
Special programs
PenFed’s Lock While You Shop program allows borrowers to lock in a mortgage rate before signing a purchase contract, giving you 60 days to find a home and an option to extend your lock for 30 days. Most lenders don’t allow you to lock your rate until you’re under contract for a home purchase.
PenFed mortgage rates and fees
Rates
PenFed doesn’t provide rates online. Clicking on the “Get My Rate” button takes you to an information screen where you can fill in information about the mortgage you’re seeking. However, clicking the “Get My Rate” button once the form is completed also gives PenFed the green light to call, email or text you with rate information.
Compared to other large national lenders, PenFed’s rates are fairly low, and on average came in around 0.11 percentage points above the average prime offer rate (APOR) in 2022. The APOR is a benchmark rate that captures what is, in effect, the lowest APR a bank is likely to offer in the current market. Mortgage loans aren’t typically considered “higher-cost” until they reach 1.5 percentage points over the APOR.
Fees
The average total cost of taking out a mortgage with PenFed was $5,095 in 2022, according to data from the Federal Financial Institutions Examination Council (FFIEC). That included an average of $1,213 in origination fees.
| Mortgage rates published online? | |
| Rate information updated daily or weekly? | |
| Lender fees disclosed? |
PenFed online mortgage application experience
PenFed doesn’t offer a full online application experience. The “Get Started” button takes you to several homebuying-related question options which PenFed uses to contact you — but the button isn’t on the home page. You’ll need to click “Buy a Home” under the “Mortgage & Home Equity” drop-down menu to find it.
PenFed’s website doesn’t provide information about their loan approval or closing processes.
How to boost your loan approval odds
PenFed doesn’t reveal the exact minimum requirements it uses to approve or deny your application. However, based on nationwide data from 2022, we can say that PenFed approved customers who — on average — had a 72% loan-to-value (LTV) ratio or better. Most had a debt-to-income (DTI) ratio below 40%.
In that same year, PenFed denied about 35% of its mortgage applications. That’s on the higher end of what we see with large, national mortgage lenders. For comparison, some large lenders have denial rates in the low teens.
PenFed’s customer service experience
PenFed provides online and phone support for customers needing information about the loan process or who have questions about their current PenFed mortgages.
- 844-634-0795 is the number for help with new loans or applications in process
- 844-460-3717 is the number for customers with current PenFed mortgages
There is also a “Mortgage Contacts Help Center” button that gives customers a form to fill out for a direct message to PenFed.
How does PenFed compare to other lenders?
| PenFed | Bank of America | Mr. Cooper | |
|---|---|---|---|
| Lender rating | |  |  |
| Minimum credit score | 620 to 650 | Not disclosed | Not published |
| Minimum down payment | 0% to 3.5% | 0% to 3% | 0% to 3.5% |
| Loan products and programs |
|
|
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| Rate spread* | 0.11% | 0.41% | 0.58% |
*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) PenFed offered to mortgage customers in 2022. The higher the number, the more expensive the loan.
How we rated PenFed
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’s scorecard: 3/5
Publishes rates online
Offers standard mortgage products
Includes detailed product info online
Shares resources about mortgage lending
Provides an online application