PenFed Mortgages

PenFed Mortgages

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Written by Emily Moore
Edited by Sally Jones

About PenFed Mortgages

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PenFed Mortgages (NMLS #401822) is the home loan division of PenFed Credit Union. It offers a wide variety of home loans at competitive rates. In 2021 its mortgage division originated $18.9 billion in loans. The company has a fully online application process, and perks for borrowers include no origination fees and lender credits for home purchases. It does have a pending class-action lawsuit involving unauthorized hard credit checks.


  • Lender credit up to $2,500 for home purchase
  • No lender fees for most home loans
  • Power Buyer upfront approval


  • Branches in only 12 states, D.C. and some military bases
  • No USDA loans
  • High credit requirements for FHA and conventional loans

Bottom Line

PenFed Mortgages is a credit union and lender that originates loans virtually in 50 states. Borrowers must be credit union members, but anyone can join. You can get a rate quote by filling out an online form.


PenFed Mortgages doesn’t publish starting mortgage rates on its website, but you can get rate estimates by filling out an online questionnaire. In recent years, its rates for home purchase loans were competitive and lower than the national averages (in 2020 and 2021), according to data from the Home Mortgage Disclosure Act.

Mortgage rates vary by lender. They’re calculated using factors like the current state of the economy, Federal Reserve rates and the real estate market. Your personal finances and the location and cost of the home you’re purchasing also affect rates.

PenFed Mortgages has fixed-rate and adjustable-rate mortgages (ARMs). A fixed-rate home loan has the same interest rate for the life of the loan, and the most common fixed-rate mortgage terms are 30 years, 20 years and 15 years. An ARM usually has an introductory interest rate, then the rate changes periodically. For example, a 3/1 ARM will have a fixed rate for the first three years, then your rate will change every year.

PenFed Mortgages average home purchase rate vs. national average

YearDifference from national average
Information pulled from public Home Mortgage Disclosure Act data. Rates reflect noncommercial home purchase loans only.

Application process

PenFed Mortgages has an online mortgage application, or you can apply in person or on the phone. You can also upload documents online and check the status of your application on the website or through the mobile app.

You’ll need to provide proof of your income and assets, employment verification and credit score information. When you submit your final application to PenFed Mortgages, it will also require W-2 statements, complete bank statements, investment and retirement account statements, recent pay stubs and a copy of the purchase agreement for the property. Usually two months of statements are sufficient.

If you’re happy with the rate the company offers you but you haven’t found a home yet, PenFed has a rate lock to secure the interest rate for 45, 60 or 90 days.

PenFed Mortgages application features

Online application
Mobile document upload
Physical branches12 states and D.C., plus 4 military bases
Publishes minimum rate on websiteX
Rate lock45, 60 or 90 days
Pre-qualification (no hard credit pull)X
Certified approval letter

Loan types

PenFed Mortgages originate many types of home loans, including VA, FHA, conforming conventional and jumbo loans. It also offers refinancing and home equity lines of credit (HELOCs). It has both fixed and adjustable rates.

VA and FHA mortgages are backed by the federal government and geared toward first-time homebuyers and borrowers with lower credit scores who can offer little to no down payment. Conventional (including jumbo) loans don’t have government backing and usually have more stringent credit requirements and down payment minimums. PenFed offers conventional mortgages up to $647,200 and jumbo loans if the amount exceeds this limit.

In 2021, PenFed received 12,917 home purchase applications. It closed on 7,439 (about 58%) of these and denied 1,558 (about 12%).

Loan applications for home purchases only by year

Home purchase applications12,91710,9855,876
Home purchase loans closed7,4396,3592,904
Home purchase applications denied1,5581,1541,023
Home purchase preapprovals denied8012
Information pulled from public Home Mortgage Disclosure Act data. Includes conventional, USDA, VA and FHA mortgages.


In 2021, when interest rates were at historic lows, PenFed Mortgages closed more refinance loans than home purchase loans. Now, as interest rates are rising, the number of people refinancing is likely to go down. There are several reasons you might refinance, including to:

  • Lower your interest rate
  • Reduce your monthly payment
  • Change from a variable-rate to fixed-rate loan

However, there are closing costs to take into consideration. It’s important to look at the overall cost of refinancing over the life of the loan. PenFed has a mortgage calculator that lets you run various scenarios to see what’s right for you.

Home purchase vs. refinance loans by year

Home purchase loans22.27%31.73%25.02%
Refinance loans35.50%27.16%18.91%
Cash-out refinance12.44%6.50%7.18%
Information pulled from public Home Mortgage Disclosure Act Data. Includes conventional, USDA, VA and FHA mortgages.

HELOC and home equity loans

PenFed Mortgages offers a home equity line of credit (HELOC), which is a line of credit against the equity in your current home. It’s different from refinancing, and you don’t need to sell your home to access the equity.

A HELOC can be used for home improvements, debt consolidation or other expenses. There is usually a draw period (where you can use the allocated funds) and a repayment period. A HELOC does require putting your home up as collateral.


Mortgage lenders have varying requirements for borrowers. They look at your credit score, debt-to-income ratio and how much money you have for a down payment. This information helps them determine how much house you can afford and assess their risk in lending you money. Government-backed loans, like FHA and VA loans, have less stringent requirements than conforming conventional and jumbo loans.

As of publishing, PenFed’s credit score requirements may be a bit higher than the industry minimums, at a preferred 650 for conventional and preferred 620 for FHA loans.

For a conventional loan, you’ll have to put down at least 3%, though putting less than 20% down can mean paying private mortgage insurance (PMI). This doesn’t apply to VA loans, however.

National mortgage requirements by type

Min. credit scoreMin. down paymentCompare with other lenders
ConventionalTypically 620Typically 3%Mortgage lenders
FHA5003.5% with 580 credit scoreFHA lenders
VASet by lender (often 580)0%VA lenders

For other loan types, see our guides on home equityUSDA and jumbo loans.

Costs and fees

PenFed Mortgage advertises that it doesn’t charge lender fees for some mortgages. Origination fees are usually about 0.5% to 1% of the loan amount, so this can mean big savings. Other closing costs may include the appraisal fee, attorney fees, real estate taxes and PMI. In total, closing costs for a home purchase may add up to 2% to 5% of the loan amount.

The company has a closing cost estimator tool on the website. You will also receive a Loan Estimate about three days after you submit your application, which will provide an estimated breakdown of these costs.

PenFed Mortgage does offer a lender credit for approved home loans to help offset the cost of getting a mortgage. The credit ranges from $500 to $2,500, depending on the borrower’s loan amount.


What is PenFed Mortgages?

PenFed Mortgages is a division of PenFed Credit Union, which was established in 1935. Its headquarters are in Tysons, Virginia.

Is PenFed Mortgages legit?

PenFed Mortgages is a legitimate lender. It does have a pending class-action lawsuit regarding unauthorized hard credit checks, and it’s always important to research a lender fully. It closed $18.9 billion in mortgages in 2021. Its rates tend to run lower than the national average, but its credit requirements can be more stringent than some other lenders specify.

Where is PenFed Mortgages available?

PenFed Mortgages are available in all 50 states. It has physical branches in Washington, D.C., Maryland, Virginia, California, Florida, Georgia, Hawaii, Nebraska, New Jersey, New Mexico, New York, North Carolina and Texas and at military bases in Guam, Japan, Portugal and Puerto Rico.

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Rated with 1 star
Verified Reviewer
Original review: Nov. 14, 2022

PenFed has been worse to deal with than the Federal Government. All impersonal communication and phone robotics. All "sir" and no service. They have been running me around for a month about my application to remove PMI from my mortgage, and now I get an anonymous letter, with no contact info. for that "division", telling me that I never qualified in the first place because of a 5 year "seasoning" requirement. I've been on the phone dozens of times with a dozen reps for over a month, I have exchanged a dozen emails with a case manager (with no telephone contact for her).

I have sent a professionally prepared property valuation, and it was all a waste of time from the start! Hours and hours of preparation and frustration for nothing! PenFed made me pre-pay by phone (big phone ordeal!) for an appraiser of their choosing--a company with a one-start customer rating and a dead-end web address--and their feckless appraiser neglected to include a comparable sale 3 months ago on my own street in my own housing development. Instead, he reached back 12 months to a low sale that was part of a estate liquidation, for one of only 4 comparables, and he put a value on my house $30,000 less than the real estate's estimate based on 14 comparables in the last six months. Talk about incomptence, talk about negligence.

But it doesn't stop with the appraiser. I sent the real estate agent's report to my Pen Fed case manager, and she has kept me waiting a week on the "form" to "process" my challenge of the appraisal. "Process" is all I get, and now an anonymous letter I just called to complain to Pen Fed Customer Service, and they gave me a 3-day window for a supervisor call-back! It's all robotics: the computer doesn't let me; I have no access; wrong department; the process requires a form; you can't call them, I can't call them, they have to call you--within a week. Worse than the Federal government. It's even in the name, PenFed. Well, I am: fed up.

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PenFed Mortgages Company Information

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PenFed Mortgages