PenFed HELOC Review

Is PenFed legit?

Yes, PenFed is a legit lender and one of the largest credit unions in the country. Founded in 1935, PenFed was originally created for military members but is now open to everyone. It’s federally insured by the National Credit Union Administration (NCUA) and is an Equal Housing Member.

In addition to HELOCs, PenFed has full banking capabilities and offers conventional, jumbo, FHA and VA mortgages, as well as refinancing options.

What makes PenFed shine?

For homeowners looking for faster access to their home’s equity who also meet certain requirements, PenFed claims to be able to pull it off in as little as 15 days — weeks quicker than is typical. It also doesn’t charge origination fees and covers most of the closing costs, which it says is a value between $500 and $8,500.

Where PenFed falls short

PenFed isn’t as transparent on its website as we’d like to see. For example, at the top of its HELOC page, it says rates start at 7.375%, but that’s misleading. Turns out that 7.375% is only possible for fixed-rate advances, and they must be for at least $10,000. When you check the fine print, it says HELOC rates are the prime rate (7.5% as of March 2025) plus a margin — and subject to change on a monthly basis.

It’s also unclear if you’ll be penalized for closing your HELOC early. It states “some” lenders may charge a penalty for closing your HELOC in the first three to five years. But third-party reviews report that you’ll have to repay the closing costs that PenFed paid on your behalf if you close your HELOC within 36 months.

While it’s not uncommon for lenders to withhold some information, you may want to call to learn more about the terms and conditions of a PenFed HELOC before you apply.

PenFed HELOC details

PenFed contact info

Costs and fees

While most borrowers won’t have to pay closing costs on a PenFed HELOC, there are some costs and fees to be aware of:

• Appraisal fee. If an appraisal is required, PenFed estimates the cost to be between $500 and $850.
• Annual fee. The company charges $99 per year to maintain your account.
• Taxes. Residents of FL, LA, MD, MN, NY, TN or VA may be responsible for city, county or state taxes.
• Ongoing fees. Check your loan agreement for late payment or NSF fees or penalties, like charges for early repayment.

Calculate your monthly loan payments

Use our mortgage affordability calculator to get an idea of how much you can borrow and compare monthly loan payments based on different rates and terms.

How to qualify for PenFed HELOC

PenFed is a bit vague about its requirements to qualify for a HELOC, but here’s what it states on its website:

• Minimum credit score of 680
• Proof of income
• Combined loan-to-value (CLTV) ratio of 85% or less
• Debt-to-income (DTI) ratio of no more than 43% to 50%
• 15% to 20% equity in the home

Required documentation

Here’s a list of the minimum documents you’ll need to apply for a PenFed HELOC:

• At least one to two months of pay stubs
• A year of W-2s
• Two months of recent bank statements
• Mortgage statements of all properties owned
• List of current debts
• Two years of tax returns if self-employed

How to apply

Here’s how to get a PenFed HELOC:

1. Call, visit a branch or start the application online.
2. Submit the required documents.
3. Undergo a credit check, appraisal and underwriting.
4. Receive a decision, which typically takes at least two weeks.

How PenFed compares to other lenders

PenFed reviews and complaints

We couldn’t find reviews specifically about PenFed’s HELOC loan product, but these reviews and complaints reflect how customers feel about PenFed Credit Union in general.

There were basically no positive reviews for PenFed on the Better Business Bureau (BBB), except one brief mention by a customer who said they got a decent rate to refinance their student loans. Complaints included poor customer service, a lack of transparency, inaccurate credit reporting and technical difficulties.

PenFed had more positive reviews on Trustpilot, where customers praised the helpful customer service, competitive rates and fast approval process. Less satisfied reviewers point to outdated technology, rates higher than advertised, rude customer service and delays in funding. Quite a few long-time customers also say that while they used to be happy with Penfed, their more recent experiences have been disappointing.

Frequently asked questions

Can I get a PenFed HELOC on an investment property?

Yes. You can take out a PenFed HELOC on an investment property or a second home, provided it meets certain requirements. For example, it can’t be a mobile home, co-op, timeshare or a commercial property.

Is there a PenFed home equity loan?

No. There is no PenFed home equity loan. The only options to pull equity from your home are with a HELOC or a cash-out refinance. If you prefer a home equity loan, you’ll need to look elsewhere.