The Bottom Line: Military-focused with strong customer service and easy-to-find rates, but few online capabilities.
National / Regional
Min. Down Payment
Loan Types and Products
Purchase, Refinance, Reverse, Jumbo, Fixed, Adjustable, FHA, VA
Pros & Cons
Wide range of affordable mortgage products designed for military members
Willing to look at rent, utility and cell phone payments as part of its credit evaluation
Lower minimum loan amounts than many other lenders
Online application available
$1,000 mortgage rate match program
Operates in all 50 states
Can't apply via mobile app
Online platform doesn't allow tracking or secure upload of financial documents
Longer than usual closing times due to high volume
Having diverse and flexible home loan options is important to many borrowers, and Navy Federal Credit Union offers those choices in spades. The credit union also stands out because of the customers it serves: military members and their families.
Navy Federal was founded in 1933, and its membership encompasses Department of Defense and Coast Guard active-duty, civilian and contractor personnel and their families. The Vienna, Virginia-based credit union is the largest in the world, with more than 6 million members. It has more than $78.6 billion in assets, according to internal data.
The credit union has found its sweet spot in serving first-time homebuyers, who comprise 55% of its mortgage business. That's only going to grow as more members enter the housing market after their active-duty service is up, says Katie Miller, vice president of mortgage lending.
Navy Federal Credit Union mortgage products
Members can choose from a wide variety of purchase and refinance loans that Miller says were created with affordability in mind, especially for those who might be strapped for cash for a down payment.
When you apply for a Navy Federal mortgage, you can choose from the following loans, with up to 100% financing and no mortgage insurance available in some cases:
30-year and 15-year fixed-rate loans.
Federal Housing Administration loans.
Department of Veterans Affairs loans.
Adjustable-rate mortgages with 1/1, 3/1, 5/1, 7/1, 10/1 and 2/2 terms.
3/5 and 5/5 ARMs.
The various adjustable-rate loans that Navy Federal offers target military families, who often must relocate every few years. The credit union also offers mortgage options for second homes and investment properties.
The HomeBuyers Choice program is for first-time homebuyers. It offers fixed-rate loans of 15 or 30 years with up to 100% financing and no mortgage insurance premiums. You can get the 1.75% funding fee waived for an interest rate increase of 0.375. That minimizes the amount of cash you need at closing.
The Military Choice program has the same benefits as the HomeBuyers Choice, but with special pricing on mortgage rates and origination fees for active-duty and veteran borrowers, Miller says. Also, Navy Federal’s standard 1% loan origination fee can be rolled into the loan or waived in exchange for paying a higher mortgage rate, further reducing the amount of cash you need to close.
Serving those who serve
The underwriting model for Navy Federal lets loan officers evaluate a borrower’s situation using alternative credit scoring instead of adhering to strict credit overlays or traditional FICO scores, Miller says. In other words, Navy Federal can evaluate your borrowing risk beyond numbers on a piece of paper; it takes your entire financial picture into consideration.
Loan officers can look at whether you pay your rent and utility bills on time, keep an existing Navy Federal checking or savings account in good standing and make timely payments on other credit accounts, as well as evaluate your military service, Miller says.
“That’s the unique component of being a credit union, particularly since many of our members have been with us for decades throughout their military service,” Miller says. “A lot of them join up when they turn 18, so even if they have a thin credit profile, we can see their financial profile from the beginning. That’s a benefit for them when they apply for a mortgage with us.”
Focusing on first-time home buyers
With one in four of its members obtaining a mortgage — many of them first-time home buyers — Navy Federal is focusing more attention on this growing share of its business, Miller says. It already has a full online mortgage application, while some of its competitors are just now building one out.
Once you apply online for a Navy Federal mortgage, a loan officer calls within 24 hours to review the application and possibly provide conditional approval. That means the loan is approved upfront but requires additional documentation to close, unlike many conventional loans.
VA loans have stringent eligibility and documentation requirements. Having someone guide you step by step through the process, especially in the midst of a relocation or deployment, is a big part of Navy Federal’s customer service appeal, Miller says.
“Our members really prefer the human interaction we offer as a credit union, especially since half of our business comprises VA loans,” she says. “Our loan officers will take customers and even [real estate agents] by the hand and explain how the process works.”
NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.