Navy Federal Credit Union Mortgage Review 2024: Saluting an Appealing Lender (2024)

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John Egan

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Navy Federal Credit Union Mortgage Overview

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Vault Verified

Expert Take: Among the advantages of Navy Federal’s mortgages are attractive interest rates and no private mortgage insurance or down payment for some loans. However, the credit union won’t lend money to a homebuyer unless they’re a member of the credit union, which requires being affiliated with the U.S. military or the Department of Defense. Also, Navy Federal’s mortgage menu doesn’t include low-down-payment FHA loans, which are popular with first-time homebuyers.

Pros

No down payment for some mortgages
No private mortgage insurance (PMI) for some mortgages
Rate-match program

Cons

Must be a member to apply for a mortgage
No FHA loans
Down payment for conventional fixed-rate mortgages is higher than some others

Vault’s Viewpoint on NFCU Mortgages

Navy Federal may be an ideal choice for a mortgage if you’re a military member, veteran or relative of one. Most notably, some of its mortgages do not require a down payment or private mortgage insurance. Navy FCU’s mortgage rates tend to be competitive as well.

However, you must be a member of Navy Federal to apply for a mortgage. This credit union has two other downsides: It offers no FHA loans and requires a 5% down payment for conventional fixed-rate mortgages.

About Navy Federal Credit Union

The nonprofit Navy Federal Credit Union, founded in 1933, serves military members, veterans, U.S. Department of Defense employees and their families. As of January 2024, Navy Federal had more than 13.5 million members, assets totaling $171 billion and 355 global branches.

As measured by total assets and members, Navy Federal ranks as the largest credit union in the U.S.

In J.D. Power customer satisfaction studies published in 2023, Navy Federal received above-average scores among U.S. mortgage originators and U.S. mortgage servicers.

Minimum Credit Score	700, although Navy Federal may accept lower scores
Days to Close	Typically 30 days
Minimum Down Payment	0% for most mortgages; 5% for conventional fixed-rate loans
Terms Offered	10 to 30 years

Minimum Borrower Requirements

One of the main requirements for Navy Federal (or any other mortgage lender) is a minimum credit score. At Navy Federal, you should ideally have a score of at least 700. That’s above the minimum score of 620 required for most mortgages.

However, Navy Federal considers your banking history with the credit union along with your credit score, so you may qualify for a mortgage with a score below 700.

Other minimum requirements may include:

Navy Federal Credit Union membership
A debt-to-income ratio of 36% or less
Stable employment history covering at least two years
Ownership of assets such as a car, a home, savings accounts, retirement accounts and investments

How to Apply for a NFCU Mortgage

To apply for a mortgage at Navy Federal, visit the credit union’s website, go to a branch or call 877-573-2324.

Here’s some of the information or documents you’ll need to apply for a Navy Federal mortgage:

Date of birth
Social Security number
Navy Federal Share Savings account number
Two-year address history
Two-year work history
Proof of income, such as tax returns and pay stubs
Information on assets or accounts that are not held by Navy Federal
Current information about HOA dues, homeowner insurance and liens
Certificate of eligibility (only for VA loan)
Source of down payment (if down payment is required)

How Does Navy Federal Credit Union Stack Up Against Competitors?

If you’re a servicemember, veteran or relative but aren’t a member of Navy Federal, you might try two other military-focused financial institutions—USAA Bank and PenFed Credit Union—when you’re shopping for a mortgage.

NFCU vs. USAA

USAA stands out in one important category: The minimum required credit score for a conventional mortgage may be as low as 620. If you have a credit score below 700, USAA could be a better fit than Navy Federal. Also, the minimum down payment for a conventional USAA mortgage backed by Fannie Mae is 3%, while Navy Federal requires a 5% down payment for its conventional fixed-rate mortgage.

One of the factors favoring Navy Federal as a mortgage lender compared with USAA is that it has a wider array of no-down-payment options. In addition, several of Navy Federal’s mortgage rates are lower than USAA’s (as of April 2024).

NFCU vs. PenFed

One advantage that PenFed holds over Navy Federal is that it doesn’t require you to be a member to apply for a mortgage. Also, you don’t have to be affiliated with the military to be a member of PenFed.

Another PenFed benefit is that it offers FHA loans whereas Navy Federal does not. The minimum credit score for these mortgages is typically 620. As yet another bonus, PenFed offers some mortgages with lower interest rates than some of Navy Federal’s mortgages (as of April 2024).

However, Navy Federal does beat PenFed in other areas. For example, Navy Federal supplies more no-down-payment mortgage options than PenFed does. On top of that, Navy Federal promises to match a better rate that you find from another mortgage lender. If Navy Federal can’t match the rate, you’ll receive a $1,000 payout.

Frequently Asked Questions

What Is the Navy Federal Housing Scandal?

A CNN investigation found that Navy Federal approved 77% of mortgage applications from white borrowers, but only 56% from Hispanic borrowers and 48% from Black borrowers in 2022. The news report prompted federal lawmakers to demand answers from Navy Federal and spurred legal action against the credit union on behalf of alleged victims.

In response, Navy Federal said it treated the concerns raised by the CNN report “very seriously” and had hired a prominent civil rights attorney to review the credit union’s mortgage lending practices. Navy Federal suggested that some of the data compiled by CNN may have been flawed.

Does Navy Federal Run Credit for Pre-approval?

When you seek preapproval for a Navy Federal mortgage, the credit union will conduct what’s known as a hard credit pull, also called a hard inquiry. A lender typically performs a hard credit pull when you apply for new credit. A hard inquiry stays on your credit report for two years, but it normally affects your credit score for just one year, usually by fewer than five points.

What Types of Loans are Offered at Navy Federal?

Mortgages provided by Navy Federal include VA loans, Military Choice loans for members who’ve already used their VA benefits, Homebuyers Choice loans geared toward first-time buyers, conventional fixed-rate mortgages and adjustable-rate mortgages. In addition, it offers home equity loans, auto loans, personal loans and student loans.

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Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.