Founded in 1935 and based in Alexandria, VA, Pentagon Federal Credit Union (PenFed) caters mainly to individuals with U.S. government connections. The credit union offers multiple types of home purchase and refinancing loans alongside auto loans and credit card services. Among its offerings are VA loans, cash-out refinance loans, jumbo, and Super Jumbo loans and conventional fixed- and adjustable-rate mortgages.

Table of Contents: PenFed

  • Background of PenFed
  • PenFed Mortgage Rates
  • PenFed Mortgage Loans
  • PenFed Customer Service
  • PenFed Mortgage Qualifications

History of PenFed

Founded in 1935, Pentagon Federal Credit Union offers a variety of mortgage options to borrowers throughout the U.S. and in overseas holdings. The institution serves current and former military personnel, family members, government employees and individuals who belong to related organizations. While there are restrictions on who can join, military affiliation isn’t necessary to become a member.

Home loans from PenFed are available with fixed or adjustable rates, alongside specialized products such as VA loans and jumbo mortgages. In addition to its mortgage offerings, the credit union also provides auto loans and credit card services.

States Serviced: PenFed serves all 50 states and the District of Columbia. The financial institution also works with customers in Guam, Puerto Rico and Okinawa.

PenFed Mortgage Facts

  • Primarily serves clientele with a connection to the military or other government work
  • Offers many home loan types, including fixed-rate mortgages, ARMs, hybrid ARMs, VA loans, and jumbo mortgages
  • Assesses cases through an online application 
  • No minimum credit score requirements
  • Allows gifts toward down payments if they come from a family member
  • Affordability and payment calculators available online

Current PenFed Mortgage Rates

Today’s Best Home Mortgage Rates
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PenFed Mortgage Products

PenFed Fixed-Rate Loans

PenFed offers three standard lengths of fixed-rate mortgages, extending for 30, 20, and 15 years, though the 30-year loans are the most popular. These offer lower monthly payments, though homeowners will end up paying more in interest over the course of the loan than if they’d taken out a shorter-term option.

Borrowers who aren’t sure whether they’ll increase their income in the foreseeable future can gain peace of mind from having a fixed payment, rather than the increases associated with adjustable-rate mortgages.

PenFed Adjustable-Rate Loans

An ARM’s monthly rate will change over its duration. PenFed offers “hybrid” versions of these loans such as the 5/5. This loan has a fixed rate for five years, and then adjusts every five years for its duration. This is an alternative to more standard ARMs that change rate every year after an initial fixed-rate period. 

ARMs’ interest rates have caps on their monthly adjustments and overall caps, to prevent payments from becoming unreasonable for borrowers.

PenFed Jumbo Loans

When borrowers need more value from a loan than they can receive from a standard mortgage product, they turn to jumbo loans. In other words, when the cost of the home you’re looking to buy exceeds federally set limits, it’s likely a jumbo loan is your only option.

The 30-year jumbo loans offered by PenFed range in value from the 2018 standard of $453,100 (except for Alaska, Guam, Hawaii, and the U.S. Virgin Islands, whose limit climbs to $679,650) to $2 million. Loans between $750,000 and $2 million are considered Super Jumbo loans.

These products are available on a variety of models, including ARM and the hybrid 5/5 option. There are no fixed-rate jumbo mortgages through PenFed.

PenFed FHA Loans

Mortgages insured by the Federal Housing Administration are designed for homeowners who want a loan to buy a home but don’t have the funds on hand to pay the higher down payments of other mortgage types. These loans fold in the involved insurance costs, along with an upfront premium for that insurance.

Since this insurance is required for the full length of an FHA loan, borrowers have to factor it in when figuring out the varying costs of their loans.

PenFed VA Loans

The U.S. Department of Veterans Affairs offers mortgage backing for current and former service-members and their spouses. Other certified applicants may receive a Certificate of Eligibility from the VA. As part of its military-focused mission, PenFed offers VA loans in 15 and 30-year fixed-rate durations.

VA loans have several advantages over conventional loans, with low or negated down payments, no need for private mortgage insurance, and the ability to streamline refinance.

PenFed Cash-Out Refinance Loans

When homeowners refinance a home by taking out a new mortgage worth more than the existing one, they essentially convert the equity they’d accumulated into cash. Since interest on a mortgage is tax-deductible and mortgage loans tend to be lower than credit card rates, PenFed offers cash-out refinance loans to deliver money to homeowners planning to use their funds for purposes such as building emergency funds.

PenFed Mortgage Customer Service

The credit union offers many user-friendly tools on its website, such as a detailed frequently asked questions page and an automatic mortgage calculator that helps potential borrowers determine monthly payments of various loan types, calculate the relative affordability of different offerings and see whether it’s an appropriate time to refinance a property.

Fixed-rate mortgages and ARMs are described with easy-to-understand charts and descriptions.

Over the past year, 63 complaints about PenFed have been filed with the Better Business Bureau in Virginia, where the credit union’s headquarters is located. The reviews filed with the lender’s local BBB, which extends from the Washington, D.C. area into Philadelphia and eastern Pennsylvania, largely focus on PenFed’s car loan and credit card products.

Most of these contain a high percentage of complaints, with some focusing on communication issues and wait times. However, PenFed does attempt to resolve the situations and address the problems head-on, more often than not.

The lender has a years-long archive of informative content about the various types of loans it offers, and a considerable presence on Facebook, Twitter, and mobile devices via an app. PenFed recommends home loan applicants have documentation ready for the loan process, including:

  • Photo identification for every person applying for the loan
  • W-2 forms and income tax returns stretching back 2-3 years
  • Pay stubs or income information for the self-employed
  • Credit card, current loan and financial asset statements
  • Address history
  • Documents to prove financial gifts were not loans

PenFed Lender Rating

When we look at a lender’s reputation, we look at several different factors, including its financial stability. Its age can, therefore, be important, since a long-established company has a proven track record, and so a higher likelihood of being able to meet its obligations. PenFed Credit Union was founded in 1935, making it almost one hundred years old.

It is insured by the National Credit Union Administration and is an equal housing lender. Other things we look at are ratings with the Better Business Bureau (BBB), as this can be a good indicator of how real consumers review it. PenFed is not BBB accredited, though it does have a rating of A+.

Its review score with the BBB is 1.5 stars out of a possible five, based on the average of 22 customer reviews, which is very low for an institution of its size. BBB reviews are based on the Virginia headquarters of the financial institution.

  • Information collected Nov. 6, 2018

PenFed Mortgage Qualifications

Income requirements Down payment minimums Gift funds accepted? Minimum credit score
None specified 10% for conforming loans, 20% for nonconforming loans, 25% for Super Jumbo loans Yes (relatives) None specified


Sometimes, PenFed cannot make a determination about loan approval based on online data. In these cases, a representative may request additional documentation to form a more complete financial picture of an applicant.PenFed does not assess loan applications solely on the basis of credit scores and explains that loan applications are based on the “total financial picture” of a member.

The credit union operates an automated underwriting system through a web portal to make financial determinations about whether applicants are qualified. According to PenFed, its online application takes around 20 minutes and involves a Good Faith Estimate and Truth In Lending disclosure mailed within 3 days.

When it comes to accepting gift funds, the credit union does allow borrowers to receive money toward a down payment from their relatives. However, there are restrictions. When a loan covers 20 percent or more of the home’s purchase price, the borrower must prove that their own assets cover at least 5 percent of that price. Furthermore, gifts should be verified by bank receipts or deposit slips.

PenFed Phone Number & Additional Details

  • Homepage URL: https://www.penfed.org/
  • Company Phone: 1-800-247-5626
  • Headquarters Address: PO Box 1432, Alexandria, VA 22313-1432

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