Editorial Review

PenFed Credit Union Mortgage Review 2020

Ideal for military or government-employee borrowers, with the competitive rates and personal service of a member-owned credit union.

Hal M. Bundrick, CFPJanuary 2, 2020

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Our Take


NerdWallet rating 

The bottom line: PenFed excels at serving military and government-affiliated borrowers, but it does not have branches in every state.


PenFed: NMLS#401822

Min. Credit Score


Min. Down Payment


Loan Types and Products

Purchase, Refinance, Home Equity, Jumbo, Fixed, Adjustable, VA

Pros & Cons


  • Offers a large selection of home loan products, including a low-down-payment mortgage designed for first-time home buyers.

  • Offers the HomeReady mortgage program to help borrowers of limited means buy a home with closing cost and down payment assistance.

  • Adjustable-rate loans include the unusual 15/15 ARM, in which the rate adjusts only once over the life of the 30-year loan.


  • Charges an origination fee, which varies by loan product.

  • Branch offices may be hard to find, or nonexistent, where you live.

Compare to Other Lenders

Quicken Loans
Veterans United
Min. Credit Score


Min. Credit Score


Min. Down Payment


Min. Down Payment


Loan Types and Products

Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA, USDA

Loan Types and Products

Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA, USDA

Full Review

The PenFed mortgage department is an important component of the credit union's services to its far-flung membership. As with other credit unions, its customers are members of what amounts to a not-for-profit financial cooperative.

Credit union profits aren’t taxed and don't feed a stock price or enrich a board of directors. Instead, they flow as dividends — and lower rates on loans of all kinds — back to members.

PenFed, formerly Pentagon Federal Credit Union — and originally the War Department Credit Union — rose from modest beginnings. Established in 1935 by 10 investors, the credit union now has over $25 billion in assets and 1.8 million members worldwide.

PenFed mortgage products

PenFed offers a wide array of home purchase and refinance mortgages in a variety of terms, including 10-, 15-, 20- and 30-year fixed loans. PenFed has a giant selection of adjustable-rate mortgages, from 3/1 ARMs to the unusual 15/15 ARM, in which the rate adjusts only once over the life of the 30-year loan.

There are also jumbo loans, which are high-balance mortgages for borrowers with an original loan amount that exceeds the conforming loan limit, and of course VA loans, which are backed by the Department of Veterans Affairs. PenFed also offers home equity lines of credit.

PenFed doesn’t offer FHA loans, which are insured by the Federal Housing Administration, but offers two conventional mortgages geared especially to first-time buyers:

  • The First Time Home Buyer Advantage program requires a down payment as low as 3%, has no income limits or origination fee, offers a $500 reward for the 60th-on-time mortgage payment and an optional job loss protection program for two years. The latter program pays the mortgage for up to $1,500 a month for six months if the borrower loses a job.

  • The HomeReady program, which has income limits, accepts a wide range of income sources for qualification and allows down payment and closing costs from multiple sources, including gifts and grants. Repeat buyers can also apply.

PenFed mortgage process

You have to be a member to get a mortgage from PenFed, though gaining credit union membership is easier these days than it used to be. If you served in the military, including National Guard, reserves and active duty, or are a government employee or contractor, you’re in, easy.

Civilians who want to become a member can join an auxiliary organization, such as the American Red Cross, Voices for America's Troops and the National Military Family Association, with one-time dues of under $20.

To start the application process, you can visit a branch if one is near you, call PenFed's toll-free number or fill out an online form, asking a loan officer to contact you.

You can apply online. If you’re already a PenFed member and have registered for an online account, you can apply after logging in. If you’re not a member yet, you can fill out an online form, and a loan officer will respond with a link to an application if you wish to proceed that way. (You will need to become a credit union member before you can get approved for a mortgage.)

A loan officer will serve as a single point of contact and work with you through the mortgage process. You can get loan status updates online or through the PenFed mobile app.

PenFed mortgage rates and fees

PenFed publishes sample mortgage rates on its website for the various types of loans it offers. The rates are based on a credit score above 740. Online personalized rates based on location, credit score or other factors are not available.

PenFed offers free, 60-day rate locks on its mortgages, but charges an origination fee, which varies by loan. However, you can save 0.5% of your loan amount up to $20,000 if you use a PenFed network real estate agent and preferred title provider.

PenFed customer service

While PenFed offers mortgage loans to members in all 50 states, actual brick-and-mortar locations follow a military footprint, with the most branches in the Washington, D.C., area and in Texas. There is at least one branch in California, Georgia, Hawaii, Nebraska, New Jersey, New Mexico, New York, North Carolina and Pennsylvania. There are also branches in Guam, Japan, Portugal and Puerto Rico.

PenFed’s toll-free member service phone line is open seven days a week, with hours 7 a.m. to 11 p.m. Eastern Time Monday through Friday. You can also email member services or submit a form through the website, or mail or fax inquiries.

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.