PenFed Credit Union: 2025 Home Equity Review

PenFed Credit Union overview

In business since 1935, PenFed (officially Pentagon Federal) was founded in 1935 as a credit union for government and military employees. Today, it is the third-largest credit union in the U.S., with 2.9 million members around the country (enrollment is now open to all) and $35.4 billion in assets.

Pros and cons of PenFed

How Bankrate scored PenFed Credit Union

Affordability: 5/5

• APR: PenFed has extremely competitive rates on its HELOCs. It also offers the latitude for HELOC borrowers to switch between fixed and variable interest rates on their line of credit. 
• Fees: $99 annual fee on all HELOCs. Credit lines of $400,000 and up incur appraisal fees and possibly other closing costs.

Because PenFed’s interest rates are consistently on the low end and they charge few fees, the lender scores 5 out of 5 for affordability.

Availability: 4.5/5

• Loan products: PenFed just offers a HELOC product, but does not offer home equity loans. 
• Footprint: PenFed is licensed to operate in all states and the District of Columbia. 
• Credit score: PenFed requires a credit score of 680 or above to qualify for a home equity line of credit — about average for home equity lenders.
• Loan minimum: $25,000, which is slightly on the high side.
• Draw requirement: None, except for properties in Texas, where there’s a minimum draw requirement of $4,000. 

PenFed’s nationwide footprint results in a 4.5 out of 5 for availability, the score dampened a bit by only one product and the $25,000 loan minimum. 

Borrower experience: 4/5

• Rate transparency: For an exact rate estimate, consumers must fill out an online form or call the company to provide information. The company provides some information in terms of lowest-available rate, but an additional margin on the variable APR is not clearly outlined.
• Convenience: In-branch service is limited to only a small number of states. There is a full array of online banking options.
• Customer service: Support is available Monday-Saturday, including evening hours during the week by phone, email, and online chat.
• Fixed-rate options: PenFed offers a fixed-rate HELOC conversion option, allowing borrowers the flexibility to switch several times over the life of their loan at no charge — the latter a nice perk. 

Due to the limited branch locations and rate opacity, the borrower experience score dips to 4 out of 5.

PenFed Credit Union’s reputation

With a focus on service to public employees, the company has a trustworthy reputation.

PenFed retains a 4+-star rating on TrustPilot, where many consumers commend their swift rate processing and approval processes. 

To date, fewer than 150 complaints have been filed in the Consumer Finance Protection Bureau (CFPB) database that are specific to PenFed’s HELOC product. By comparison, some similarly-sized national banks have tallied thousands of complaints for HELOCs specifically.

Home equity loan products offered

PenFed’s home equity lines of credit range from $25,000 to $500,000 and include a 10-year draw period followed by a 20-year repayment period. They are traditional, variable rate HELOCs, but they can be converted to a fixed-rate option, allowing you to lock some or all of your balance, with a minimum of $10,000 per fixed-rate advance. You can have three separate fixed-rate balances open at a time, with a maximum of two new advances per year. The repayment terms for these fixed-rate balances is 20 years.

How to qualify for a home equity loan with PenFed Credit Union

For a HELOC, PenFed requires a minimum credit score of 680 and a debt-to-income (DTI) ratio of no more than 50 percent. PenFed also requires proof of income, at least one year of W-2s, at least two months’ of your most recent bank account statements and a mortgage statement for all properties owned. You might also need to provide documentation for current debts and self-employment income. 

PenFed does require a combined loan-to-value (CLTV) ratio limit of 85 percent for loans on both primary and secondary residence; that figure is 80 percent for condominiums and for any property located in Texas.

Remember that you do need to be a member of the credit union to apply for a home equity line of credit.

How to apply with PenFed Credit Union

You can start the application process with PenFed online, including applying for membership. To become a member, you’ll need to open and maintain a $5 savings account with the credit union. You will have to close the HELOC over the phone or via e-notary, if your state allows it.

Alternatively, you can request a call from a loan officer. For any questions during the application process, you can call customer service at 800-970-7766, Monday through Friday from 7 a.m. to 11 p.m. ET, Saturday from 8 a.m. to 11 p.m. ET or Sunday from 9 a.m. to 5:30 p.m. ET, or send a secure message online.

• Methodology

  To determine a home equity lender’s Bankrate Score, Bankrate rates lenders on a scale of one (1) to five (5) stars — with five (5) the highest rating — based on a variety of factors relating to the lender’s products and services. To assign our ratings, we assessed each mortgage lender across three core areas:

  • Affordability: Annual percentage rate (APR) - 80%; introductory APR - 20%
  • Availability: Licensing - 50%; credit score - 20%; loan minimum - 10%; draw requirement - 10%; loan products - 10% 
  • Borrower experience: Rate transparency - 35%; convenience - 35%; customer service - 20%; fixed-rate options - 10%

  Learn more about our methodology.