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PenFed Credit Union VA Loans Review
By Kat Tretina MONEY RESEARCH COLLECTIVE
The Pentagon Federal Credit Union — more commonly known as PenFed — serves over 2.5 million members worldwide. It has a range of loan products, including U.S. Department of Veterans Affairs (VA) loans with low interest rates and no down payment requirements.
PenFed VA loans may give borrowers additional benefits, such as up to $2,500 in lender credits and discounts on homeowners insurance. With those add-ons, PenFed stands out as a leading VA lender.
PenFed Credit Union VA loans overview
- Up to $2,500 in lender credits
- No lender fees
- Discounts on homeowners insurance
- Membership is easy to obtain
- Membership required
- Does not list its rates online
- Must work with loan officer to lock in rates
PenFed Credit Union’s VA loans allow you to buy a home with no down payment and no private mortgage insurance (PMI). Unlike some lenders, it doesn’t charge lender fees, so working with PenFed could help you save money.
You may also be eligible for up to $2,500 in lender credits when you take out a mortgage through PenFed. The credit is available to all of its members that submit a completed home mortgage application on or after March 1, 2020. You can receive the credit once the loan closes, and the amount of the credit is dependent on your mortgage amount.
As a PenFed member, you are eligible for other valuable benefits like discounts on homeowners insurance and title services that can help you save money as a new homeowner.
PenFed VA mortgages are only available to eligible credit union members, so you’ll have to join before you can apply. Nevertheless, anyone can become a member by opening a checking account with the credit union with an initial deposit of $5.
PenFed doesn’t list its rates online, so you have to join the credit union and submit your personal information to view detailed rates and check your eligibility for a mortgage. To lock in your rate, you must contact a PenFed loan officer.
PenFed Credit Union’s services
PenFed is a major credit union that operates in 50 states and the District of Columbia, Puerto Rico, Guam and Okinawa. In 2021, the credit union originated $18.9 billion in home loans and financed over 4,000 homes.
What’s offered
PenFed Credit Union is a full-service credit union that offers a variety of banking and lending products, such as checking accounts, credit cards and auto loans.
As a mortgage lender, it also offers:
- Conventional mortgage loans
- Fixed-rate and adjustable-rate mortgages
- Jumbo loans
- Federal Housing Administration (FHA) loans
- VA loans
- VA Interest Rate Reduction Refinance Loan (IRRRL)
- Resources for first-time home buyers
PenFed Credit Union VA loans have fixed interest rates and allow you to buy a home with 0% down and no PMI. PenFed doesn’t charge lender fees, and you may be eligible for up to $2,500 in lender credits when you close on your loan.
Again, PenFed doesn’t list its rates online but it does allow you to enter basic information about yourself to view potential rates (and this will not affect your credit score). But you’ll have to work with a PenFed mortgage loan officer to lock in your rate and loan terms.
What’s not offered
Through PenFed, you may be eligible for several mortgage programs, including FHA loans. However, PenFed doesn’t offer U.S. Department of Agriculture (USDA) loans, popular options for those with low to moderate incomes and less-than-perfect credit who want to buy a home in a rural area.
Although PenFed does allow members to apply for home equity lines of credit (HELOCs), it does not offer home equity loans. Those looking to borrow a lump sum for home renovations or other expenses will have to work with another lender.
Requirements for a VA loan
PenFed’s VA loan eligibility requirements are as follows:
- You must be eligible for a VA loan per the U.S. Department of Veterans Affairs’ guidelines.
- You or your spouse must have:
- 90 consecutive days of active service during wartime
- 181 days of active service during peacetime
- Served more than six years with the National Guard or Reserves
- If you don’t meet one of the above requirements, you must be the spouse of a qualifying military service member that passed away in the line of duty or as a result of a service-related disability. Surviving spouses who have since remarried are no longer eligible.
- You must have a certificate of eligibility (COE) from the U.S. Department of Veterans Affairs. To obtain it, you must be a veteran, active-duty service member or current or former activated member of the National Guard or National Reserve.
- You must have a credit score of 620 or higher to qualify for a VA loan.
PenFed Credit Union’s credentials
PenFed is a reputable credit union that is available to members nationwide. It has high ratings for both financial stability and customer service.
Licenses and registrations
PenFed is federally insured by the National Credit Union Administration. It is licensed to issue mortgages in all 50 states, the District of Columbia, Puerto Rico and Guam.
Awards and certifications
In 2022, PenFed was a finalist in the 2022 USA Customer Experience Awards.
Third-party ratings
PenFed Credit Union is one of the nation’s largest credit unions, and its financials have been reviewed and rated by leading credit agencies.
Weiss Ratings gave PenFed an overall B+ rating, but it received an “excellent” rating for stability.
Bauer Financial gave PenFed a five-star rating, putting it in the “superior” category — Bauer’s highest possible rating.
Regulatory or legal actions
Although it’s not unusual for major mortgage lenders to experience lawsuits or regulatory actions, no such actions have been taken against PenFed in recent years.
PenFed Credit Union’s accessibility
PenFed is well-known for its customer service and accessibility.
Availability
PenFed Credit Union’s mortgage team is available during business hours:
- Monday through Friday: 9:00 a.m. until 9:00 p.m. EST
The mortgage team is not reachable on weekends.
Contact information
You can contact PenFed Credit Union with any questions with the following contact methods:
- Online Chat
- Phone: 800-970-7766
- In person: Visit a local branch for in-person assistance.
User experience
As a PenFed Credit Union member, you can sign into your account to view your application status, make payments and view loan documents. PenFed also has a mobile app you can use to manage your account from your phone.
Limitations
PenFed Credit Union does not offer 24/7 customer service, and customer support for mortgage applications is unavailable on weekends. For those that prefer in-person help, PenFed has a limited number of physical locations — just 44 nationwide — so there may not be a branch near you.
PenFed Credit Union’s customer satisfaction
PenFed Credit Union reviews highlight the credit union’s responsive customer support, competitive rates and easy application processes.
Customer complaints
On Trustpilot, PenFed has a TrustScore of 4.6 out of 5 based on over 900 reviews, placing it in the “excellent” category.
Third-party ratings
PenFed was not included in J.D. Power’s mortgage servicer or mortgage origination studies.
PenFed Credit Union FAQ
Can anyone join PenFed credit union?
Like other credit unions, PenFed Credit Union only issues its products — including VA loans — to its members. But unlike other credit unions, it doesn't limit membership to employees of certain companies or veterans; anyone can join PenFed.
To join, fill out a membership application online and open a savings account with a $5 deposit.
What credit score do you need for PenFed?
To qualify for a VA loan from PenFed Credit Union, prospective homebuyers need a credit score of 620 or higher. If your score is below that guideline, focus on improving your credit by paying down debt and making all of your payments on time before applying for a mortgage.
Does PenFed have physical locations?
PenFed Credit Union does have physical branches located throughout the country. However, it has fewer branches than some other banks. As of 2022, PenFed operates 44 branches nationwide. You can use the branch locator tool to find the nearest branch.
What are the benefits of PenFed?
PenFed Credit Union offers several benefits to its members:
- Low interest rates: PenFed Credit Union offers competitive interest rates on its mortgages and loans.
- Discounts: As a member of the credit union, you may be eligible for valuable discounts on homeowners insurance, title services and other products.
- Lender credits: You can receive up to $2,500 in lender credits when your PenFed Credit Union mortgage closes.
These perks, coupled with the benefits of a VA loan — better rates, no mortgage insurance requirements, the ability for sellers to cover some closing costs, etc. — make PenFed an option worth considering.
How we evaluated PenFed Credit Union’s VA loans
To identify the best VA loan lenders, we researched 20 top mortgage lenders. We looked at factors like available interest rates, repayment terms, lender fees, customer service and additional benefits. We particularly focused on added lender fees and APRs.
Summary of PenFed Credit Union’s review
Like other credit unions, PenFed Credit Union offers competitive interest rates and a variety of loan options, and it doesn’t charge lender fees on VA loans. But unlike other credit unions, PenFed membership is open to anyone. You can join online with just a $5 savings account deposit, making it a convenient option.
However, rates and terms can vary by lender, so it’s wise to shop around to ensure you find the lowest rates. You can use our list of the best VA loans to research your options.
