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Published: Aug 29, 2023 14 min read

Pentagon Federal Credit Union, known as PenFed, offers various financial products for its members, from banking to credit cards and student loans. The credit union, which was established in 1935 and counts more than 2.8 million members, also offers home equity lines of credit (HELOCs). Membership is obtained by opening a savings account with a $5 initial deposit.

Below, you’ll find an in-depth analysis of PenFed home equity products, which include two types of HELOCs. We’ve evaluated the pros and cons, rates and eligibility requirements of each. Read on to find out if a PenFed is a good choice for your particular funding needs and financial circumstances.

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Best for fast HELOC funding

PenFed offers the HELOC Express option for a quicker closing experience. Your home equity line of credit could be ready to access within 15 days, so long as you meet eligibility requirements. Your home must qualify for an online appraisal to confirm the value of your home, and your loan-to-value ratio (LTV) cannot be greater than 80%. Additionally, you must submit all requested documentation in a timely manner.

Another bonus to PenFed’s HELOC Express program: For qualified borrowers, PenFed pays the origination fee. This benefit also applies to regular PenFed HELOCs, but combined with the expedited processing time, PenFed is an ideal choice for fast HELOC funding.

PenFed HELOC pros and cons

  • Close in as few as 15 days with HELOC Express
  • Skip the in-person home appraisal
  • Loan amounts from $25,000 to $500,000
  • No origination fee for qualified borrowers
  • Minimum credit score requirement of 680
  • No flexibility in draw or repayment periods
  • Annual fee of $99

Pros explained

Close in as few as 15 days with HELOC Express

While traditional HELOC closing processes can take up to six weeks, PenFed offers a faster process with its HELOC Express program, through which you could close on your line of credit within 15 days. However, to qualify for a quick closing, required documents must be submitted by the requested dates, and your home must qualify for an online appraisal.

Skip the in-person home appraisal

With PenFed’s HELOC Express, you skip the in-person home appraisal required by most HELOC lenders. Availability of this feature depends on the location of your home, as PenFed employs a third party to conduct online appraisals — also known as automated valuation (AVM) — to assess your home’s value.

Note that loan amounts greater than $400,000 automatically require an in-person appraisal. However, borrowers who don’t qualify for an online appraisal due to the loan amount or because their home is ineligible can still apply for a traditional PenFed HELOC.

Loan amounts from $25,000 to $500,000

With either a traditional HELOC or the HELOC Express, PenFed allows borrowers to choose from loan amounts starting at $25,000. The maximum borrowing amount is $500,000. The exact amount you qualify for will depend on your particular home equity and creditworthiness details.

No origination fee for qualified borrowers

Origination fees on HELOCs can range from 1% to 8% of the total loan amount. However, PenFed generally does not charge an origination fee. In most instances, the credit union covers the credit report fee, flood certification, property ownership search and other aspects of the underwriting process that constitute the origination fee.

Borrowers who take out a $500,000 HELOC, though, are required to pay the origination fee. This cost from $500 and $8,500. It’s also important to note that if an in-person home appraisal is required, the borrower must foot the cost, which is estimated to be between $550 and $850.

Cons explained

Minimum credit score requirement of 680

PenFed’s minimum credit score requirement stands at 680, which falls in the good range per FICO standards. Like with all loans, the better your credit score, the more likely you are to be offered the lowest interest rate available.

Unfortunately, borrowers with poor credit scores are unlikely to be approved for a PenFed HELOC. They’ll need to look into getting a home equity loan with bad credit.

Annual fee of $99

The annual fee for a PenFed HELOC, whether of the standard variety or the PenFed Express HELOC, is $99. Other lenders charge less — for example, PNC Bank’s annual fee is $50 — or waive the annual fee altogether.

No discounts offered

PenFed does not advertise any discounts for its HELOCs. Other lenders, such as Bank of America and PNC Bank, offer rate discounts when you set up automatic payments through their checking or savings accounts. Some HELOC lenders also offer rate discounts if you withdraw a minimum amount of funds during a set time early in the draw period.

PenFed HELOC offerings

PenFed offers two types of home equity lines of credit to its members: A traditional HELOC and the HELOC Express. While these two products are quite similar, there are some specific benefits as well as requirements for each.

One borrower can hold multiple home equity loans with PenFed for a maximum total borrowing amount of $1 million. The credit union allows for a combined loan-to-value (CLTV) ratio — the amount of loans secured by a property versus the value of that property — of up to 85% for owner-occupied residences and second homes, and 80% for condos.

Note that there is no PenFed home equity loan option, as the credit union’s only equity-based products are HELOCs. If you’re looking for other types of home equity products, check our list of the best home equity loans for guidance.

Home equity lines of credit (HELOCs)

Regular PenFed HELOCs range from $25,000 to $500,000 with a 10-year draw period and a 20-year repayment period. You must have a loan-to-value ratio of no more than 85% to qualify, and you’re required to leave at least 15% equity in your home. The minimum credit score required to apply is 680.

An in-home appraisal is required for this type of HELOC. Additionally, the closing process could take up to 30 days or more, although it could be faster depending on your circumstances.

HELOC Express

The PenFed HELOC Express is much like a regular HELOC, except that it offers a much faster closing process. Your HELOC could be available to you within 15 days of application. The credit score requirement (680 FICO) is the same as a traditional PenFed HELOC, but your loan-to-value ratio must be slightly lower at 80%. The PenFed HELOC option requires that you retain at least 20% of the equity in your home.

An in-home appraisal may not be required for a HELOC Express, so long as your home qualifies. (This is determined in part by your home’s location.)

Documents required for a PenFed Home Equity Line of Credit

In order to qualify for a PenFed HELOC, you will need the following:

  • Proof of income
  • Minimum of one year of W2s or proof of self-employment income
  • Minimum of two months of your most recent bank account statements
  • Mortgage statement for all properties owned
  • Suitable debt-to-income ratio
  • Homeowners insurance policy

Additional documents may be required to verify your finances. These include:

  • Self-employment income (2 years of tax returns)
  • Current debts (e.g. auto loans, credit cards, alimony)
  • Debt-to-income ratio (DTI)

PenFed Home Equity Line of Credit Pricing

Below you’ll find information about HELOC rates and closing costs for PenFed HELOCs.

PenFed HELOC rates

PenFed HELOC rates tend to follow the starting rate commercial banks use, which is also known as the prime rate and is influenced by the current federal funds rate. Like most lenders, PenFed sets a variable interest rate for its HELOCs. However, you may be able to switch to a fixed rate on a portion of your interest payments.

Closing costs

Closing costs are paid for by PenFed if the account is kept open for at least three years. However, if your HELOC is for the maximum loan amount ($500,000), you will be required to pay closing costs that range from $500 to $8,500. Additionally, PenFed charges an annual fee of $99.

PenFed home equity financial stability

PenFed is federally insured by the National Credit Union Administration. However, the credit union is not currently rated by major credit agencies such as Standard & Poor’s or Moody’s and Fitch. However, PenFed, established in 1935, is the second largest federal credit union in the U.S., with over $35.3 billion in assets, according to the PenFed website. The credit union also releases its audited annual financial statements, which are freely accessible to the public.

PenFed home equity accessibility

You can apply for a PenFed Credit Union HELOC through the financial institution’s website, by phone or through one of its multiple branches across the U.S.


PenFed has branches located throughout the U.S. It also provides services in Puerto Rico, D.C. and Guam. In addition to its physical locations, PenFed phone and online banking services are available 24/7. The credit union also has customer service lines dedicated to assisting with mortgage-related questions.

Contact information

There are a multitude of ways to reach PenFed customer service, including:

  • An online form to request a call or email from an agent
  • A chat feature on the contact page for virtual assistance
  • The PenFed phone number for general inquiries, at 1-800-427-5626 (Monday through Friday 7 a.m. to 11 p.m. EST, Saturdays 8 a.m.- 11 p.m. EST, Sundays 9 a.m.-5:30 p.m. EST)

To access PenFed customer service for mortgage products, see below.

  • Home loan servicing: 1-800-585-9055 (Monday to Friday, 8 a.m. to 8 p.m. EST)
  • Mortgage and home equity sales: 1-800-970-7766 (Monday to Friday 9 a.m. to 9 p.m. EST, Saturdays 9 a.m. to 5 p.m. EST)
  • Mortgage and home equity processing: 1-866-386-7193 (Monday to Friday 9 a.m. to 9 p.m. EST)

You can also contact PenFed customer service specifically regarding HELOCs by calling 1-833-443-0717.

User experience

The credit union's website is well-organized and easy to use. PenFed also provides helpful information via its virtual Learning Hub, where you can find extensive information about PenFed home loans, VA loans, auto loans, student loans and other financial topics.

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PenFed home equity customer satisfaction

PenFed is not accredited by the Better Business Bureau (BBB) but has an A+ rating. However, the credit union holds a 1.18 out of 5-star average rating from 242 customer reviews on its BBB profile. The number of complaints lodged against PenFed in the past three years totals 582, though all of these complaints have been closed per BBB standards.

It’s worth noting that none of the BBB submissions at the time of publication of this article are PenFed HELOC reviews. All of the complaints and reviews relate to other financial products offered by the credit union.


How long does it take PenFed to approve a loan?

It typically takes about two to three weeks for PenFed to approve a loan. However, this timeline can vary depending on the individual circumstances of the loan. A HELOC Express, for instance, may be processed within 15 days.

How fast can PenFed close a HELOC?

PenFed advertises that it can close its HELOC Express in as little as 15 days for well-qualified customers that have their documents in order.

How to use PenFed home equity line of credit

A PenFed home equity line of credit can be used for any purpose, as is the case with most HELOCs. Many homeowners use HELOCs to finance home improvements, consolidate or pay off high-interest debt, pay medical expenses or cover education costs. Once you have been approved for a HELOC with PenFed, you can access your funds via checks, online transfers or through a specialized HELOC credit card.

How we evaluated PenFed home equity products

We evaluated PenFed's home equity services based on several key factors, from availability and the range of products offered to customer service and user experience.

  • Availability: We looked at the states where PenFed offers home equity services, availability in each state and any restrictions that may apply.
  • Types of home equity loans: We examined the two kinds of home equity loans, a HELOC and a HELOC Express, available through PenFed.
  • Customer service: We considered the credit union's customer service availability, responsiveness to customer feedback and user ratings.
  • Rates and terms: We evaluated PenFed's interest rates, fees and repayment terms to determine if they are competitive with other home equity lenders.
  • User experience: We assessed the overall user experience of PenFed's website, including how easy it is to navigate, access information and apply for a loan.
  • Customer reviews: We reviewed PenFed's customer ratings from the Better Business Bureau (BBB) and other online review sites to gauge customer satisfaction.

Summary of Money's PenFed HELOC review

Even among the best home equity loans, PenFed is a strong choice for borrowers with good credit or better — especially those looking for a quick HELOC closing with no in-home appraisal needed. Additionally, it could be a boon to many borrowers that, in many cases, PenFed pays the origination fee on its HELOCs.

However, it’s worth noting that borrowers with poor credit may not be eligible for a PenFed Credit Union HELOC. Additionally, borrowers will be required to pay an annual fee of $99 on their HELOC.

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