PenFed Credit Union
Courtesy of PenFed Credit Union

Pentagon Federal Credit Union, or PenFed for short, was established in 1935 and currently serves more than 1.7 million members. The financial institution operates in all 50 states and the District of Columbia, and primarily serves members of the military community and government employees.

However, it’s possible to join even if those don’t apply to you, and membership can give you access to several perks, including competitive home equity lines of credit, or HELOCs.

Lender snapshot

If you’re a PenFed member or thinking about joining to get a HELOC, here are a few lender highlights to consider:

  • Offers three types of HELOCs.
  • You can borrow up to a loan-to-value ratio (LTV) of 90 percent on your primary residence or 80 percent on a non-owner occupied home, depending on the loan type.
  • HELOC amounts range from $10,000 to $400,000, depending on the type of loan.
  • You’ll need to apply to get the full details of your options.

Pros and cons

To make a good decision regarding a home equity product, it’s important to know both the benefits and drawbacks of the lender and its offerings. Here’s what you need to know about PenFed:


  • Interest rates are competitive: HELOC rates go as low as 4.25 percent, depending on the type of HELOC you choose. According to Bankrate, the average HELOC rate is 7.24 percent, as of late August 2019.
  • Flexible borrowing limits: The minimum loan amount and maximum LTV can vary by loan. But you’ll have the flexibility to borrow as little as $10,000 or as much as $500,000, with an LTV as high as 90 percent, depending on which option you choose.
  • Relatively low cost: PenFed pays most of the closing costs associated with its home equity products. However, you may be on the hook for taxes in certain states and appraisal fees if an appraisal is required.


  • Lacks transparency: You may need to apply for a home equity product with PenFed to find out if you qualify, and you’ll need to at least call to get the full details of the different loans it offers to compare. When we tried to get more information about things like eligibility requirements and repayment terms, the credit union declined to share.
  • You have to be a member to apply: Unlike banks and other traditional lenders, credit unions require you to join as a member before you can even apply for a loan. While it’s possible for anyone to join PenFed, it can be an extra complication that could be a deal-breaker for some.
  • Early termination penalty: PenFed covers most of the closing costs on its HELOCs. But if you close your account within 24 or 36 months, depending on the loan type, you’ll be required to reimburse the lender for the closing costs it paid on your behalf.

Mortgage products

PenFed Credit Union provides several mortgage products, including conventional, jumbo and VA loans, and it also offers three types of HELOCs.

Home equity loans range from $10,000 to $400,000, and repayment terms range from five to 20 years. There are, however, some limitations. For example, if you’re getting a loan on a non-owner occupied home, the longest repayment term available is 12 years. And if your LTV is greater than 85 percent, the maximum loan amount is $250,000.

PenFed offers three different types of HELOCs:

  • HELOC: You can borrow between $10,000 and $400,000, with an LTV limit of 90 percent if you occupy the home or 80 percent if you don’t.
  • Interest-only HELOC: You can borrow between $10,000 and $400,000 but are limited to a maximum LTV of 85 percent.
  • 5/5 HELOC: You can borrow between $25,000 and $400,000, but are limited to a maximum LTV of 75 percent on an owner-occupied home and 70 percent on a non-owner occupied home. Repayment terms range up to 15 years, and your variable interest rate adjusts just once every five years instead of annually.

Repayment terms aren’t publicly disclosed for all three HELOCs. If you’re planning to apply with PenFed regardless of that information, it may not be a problem. But if you want to shop around and compare different lenders, not having those facts can make it difficult.

Lender costs

PenFed doesn’t charge any lender fees at closing on any of its home equity products, although you may be on the hook for taxes and an appraisal fee if required. That said, if you pay off or close your loan within 24 months from closing (36 months for the 5/5 HELOC), you’ll be required to reimburse PenFed for all the closing costs it paid on your behalf. The lender doesn’t make any mention of an annual fee on its HELOCs on its website.

As for the interest rate, here’s where the APRs start for each product:

  • HELOC: 5.25 percent variable.
  • Interest-only HELOC: 5.25 percent variable.
  • 5/5 HELOC: 4.25 percent variable.

The APR you qualify for is based on your creditworthiness and the loan term.

Borrower requirements

PenFed doesn’t list a minimum credit score or maximum debt-to-income ratio requirement on its website, and wouldn’t confirm either when we reached out.

Having this information upfront might not matter if your credit is stellar and you don’t have a lot of debt. But if you’re not sure, you may want to avoid having to go through the entire application process for a loan that you wouldn’t have qualified for in the first place.

If you’re not sure whether you’d qualify for a HELOC, consider applying with a lender that shares their eligibility requirements publicly.

Also, remember that you need to be a member of the credit union to apply. To be eligible for membership with PenFed, you’ll need to meet one of the following requirements:

  • Be retired, honorably discharged or currently serving in the military
  • Be an employee of the U.S. government or another qualifying organization
  • Live or work in an eligible location
  • Belong to an eligible association or organization

If you don’t meet any of those requirements, you can qualify by making a one-time donation of $17 to join the National Military Family Association.

How to apply

You can start the application process with PenFed online, but you’ll need to be a member to access the application. Alternatively, you can submit some information about yourself and request a call from a loan officer.

We were unable to determine how much of the application process takes place online and whether you’d need to speak with a loan officer over the phone or at a physical branch to complete the process.

View home equity rates

Tap into the value you have in your home to get the funds you need.

Get started

If you’re thinking about getting a HELOC, take some time to compare what PenFed has to offer with other home equity lenders. This process can be especially helpful if your credit is less than perfect, and you need to know a lender’s eligibility requirements.

If you decide to go with PenFed, compare the different home equity products on its website, and pick the one that best suits your needs. If you have any questions during the membership or application process, you can call the credit union’s customer service team at 800-247-5626, send an email to or send a secure message online.

If you call, agents are available Monday through Friday from 7 a.m. to 11 p.m. Eastern, on Saturday from 8 a.m. to 11 p.m. Eastern, and on Sunday from 9 a.m. to 5:30 p.m. Eastern.

How Bankrate Rates PenFed

Overall Score 4.1
Availability 3.1
Affordability 4.6
Customer Experience 4.5

Editorial disclosure: All reviews are prepared by staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.