One of the oldest and largest credit unions in the nation, Navy Federal FCU, happens to be a big player in the home loan space.
Instead of just offering the same mortgages every other bank has readily available, they go a step further with their own unique offerings.
This includes a conventional zero down loan option, conforming and jumbo loans, and even an interest-only option if you’ve got some home equity.
Let’s learn more about this company to see if they’re the right fit for your home loan needs.
The one caveat with Navy Federal is that not everyone is eligible for a membership.
You or a family member must have some affiliation with the Armed Forces, DoD, Coast Guard or National Guard.
The good news is that’s a lot of people because Navy Federal has over eight million members nationwide, up from just seven (7 people) when they began all the way back in 1933.
Navy Federal is a Top-20 Mortgage Lender Nationwide
- Largest credit union in the United States
- Founded in 1933 and based in Vienna, Virginia
- Offers basic banking services (checking/savings accounts), mortgages, and home equity loans/lines
- Funded nearly $15 billion in home loans in 2023 (top-20 overall)
- Most active in the states of Florida, Virginia, and California
- Membership offered to active duty and veterans and their familes, along with Department of Defense Civilians
- May offer a price-match if you show them a lower quote from another lender
At last glance, Navy Federal is a top-20 mortgage lender thanks to loan production of nearly $15 billion in 2023 (the latest year available per HMDA).
They also happen to be the largest mortgage provider among credit unions, which makes perfect sense since they’re also the largest credit union in the United States.
The company got its start all the way back in 1933 and is based in Vienna, Virginia. They serve active duty military, retired military, veterans, and their familes, along with Department of Defense Civilians and the National Guard.
They are known to offer competitive loan products and price-match if you find a lower quote with an outside lender.
You have to be a member to bank with them, but they do not charge a membership fee.
And membership must be obtained by at least one borrower for initial loan approval, with any additional non-member borrowers required to become members as a condition of loan approval.
Navy Federal Home Loan Options
- They offer conforming, government, and jumbo loans
- Home purchase, refinance, and home equity loans/lines available
- In both fixed and adjustable-rate varieties
- For primary, 2nd homes, and investment properties
- Zero down options including VA loans and their Homebuyers Choice Loan
Navy Federal offers a wide variety of mortgage loan programs, including typical fixed-rate offerings like the 30-year fixed and 15-year fixed, along with a number of different adjustable-rate mortgages.
They actually don’t offer common fixed-rate loan programs like the 10-year and 20-year fixed, but do allow homeowners to amortize their loan over terms between 10-30 years if they choose.
For example, you could choose a 13-year term, but you’d be subject to 15-year fixed pricing. Or you could choose a 22-year term and be subject to 30-year fixed pricing.
If you’re an eligible veteran, you can apply for a VA loan with Navy Federal.
But they also have a proprietary zero down loan option that isn’t backed by the VA, helpful if you’re not eligible for VA financing.
Known as the “Homebuyers Choice Loan,” it comes with no down payment requirement and no mortgage insurance.
However, there is a 1% loan origination fee and it’s subject to a 1.75% funding fee, which can be financed into the loan amount. But in lieu of these fees, you can accept a higher mortgage rate.
This means veterans and active duty can get zero down financing, and others can do the same via their loan program.
It only comes in a 15-year or 30-year fixed – no ARMs are available.
Note that Navy Federal does not offer FHA loans or USDA loans.
Like most other mortgage lenders, they offer home purchase loans, rate and term refinances, and cash out refinances.
Navy Federal also has a home equity loan and HELOC option if you want to tap into your available home equity without disrupting your first mortgage.
And you can get interest-only financing with a minimum down payment of 20%, but they do not advertise those mortgage rates on their website.
Aside from providing mortgages on primary residences, they also have options for those financing a second home or an investment property.
For second homes, you have the option of a 30-year or 15-year fixed, with investment properties limited to 15-year fixed mortgages.
Finally, Navy Federal gives you the option to avoid private mortgage insurance or pay upfront mortgage insurance, assuming it’s required on your loan (generally when putting down less than 20%).
Navy Federal Offers Some Unique ARMs
- 3/5 Conforming ARM
- 3/5 Jumbo ARM
- 5/5 Conforming ARM
- 5/5 Jumbo ARM
If a fixed-mortgage rate isn’t for you, Navy Federal also offers adjustable-rate mortgages.
They are currently advertising both a 3/5 ARM and a 5/5 ARM, though they might offer the more traditional ARMs as well, such as 5/6 ARM or 7/6 ARM.
The 3/5 ARM is fixed for the first 36 months (three years) before adjusting. Then adjusts every five yeas thereafter. It has a 30-year loan term.
Similarly, the 5/5 ARM is fixed for the first 60 months (five years) before adjusting. Then adjusts every five yeas thereafter. It also has a 30-year loan term.
Be sure to inquire if you’re getting a quote from them. You can get these ARMs in jumbo loan amounts too if purchasing an expensive property.
Their ARM rates are pretty competitive relative to most other lenders, who often barely provide a discount in exchange for the risk.
But a fixed option might still be the better call unless you get a substantial rate discount.
Navy Federal Mortgage Rates
- They advertise most of their mortgage rates on their website
- Including discount points needed to obtain the associated rate
- Rates appear to be very competitive/lower than the competition
- Especially their ARM rates
I always appreciate a lender that openly advertises its mortgage interest rates, and Navy Federal checks that box.
You can always find their daily mortgage rates on their website for most of their home loan products, including any discount points that must be paid to acquire said rate.
They seem to have competitive fixed rates and really low ARM rates, so if you’re looking at an ARM, consider Navy Federal.
Just note that they tend to charge a 1% loan origination fee on all their products.
Of course, you can and should always negotiate regardless of what they’ve got posted on their website.
They appear to offer a free biweekly mortgage payment option, but they also note in the fine print if you choose to do that, it remains the payment arrangement for life.
In other words, you better make sure you want to make larger-than-necessary monthly payments until you sell your home or refinance your mortgage.
The company also recently launched its No-Refi Rate Drop, which allows you to lower your rate in the future for just $250 after signing a single document, assuming mortgage rates come down.
This is their name for a mortgage rate modification, which gives you the lower rate without all the paperwork, closing costs, and long undewriting timelines.
Navy Federal Mortgage Rate Match
- Navy Federal appears to be confident that they offer some of the lowest rates around
- That’s why they offer a $1,000 rate match guarantee
- If you find a lower mortgage rate and Navy Federal is unable to match it they may compensate you
- But you have to prove it with documentation and jump through some hoops to qualify
One neat perk the company offers is its so-called “Mortgage Rate Match,” which as the name implies will match the interest rate of a competitor.
So if you’re able to find a lower mortgage rate while comparison shopping, Navy Federal will match that rate or give you $1,000.
Of course, the typical restrictions apply and you’ll need to lock your rate with Navy Federal before submitting the rate match request.
Additionally, you’ll need to provide a Loan Estimate from a competing lender within three calendar days of locking your rate, and the terms have to be identical.
In other words, there are probably a lot of outs for Navy Federal, but if you’re able to muster all that and they can’t/won’t go any lower, you might be able to snag $1,000.
Special Freedom Lock Option
Speaking of locks, Navy Federal also offers its “Special Freedom Lock” option for both home purchase loans and refinance loans.
It allows you to lower your locked-in interest rate up to 0.50% if rates improve up to 7 days prior to closing, at no cost to you.
In addition, you can exercise it twice during that time period. So if rates happen to fall right away, you can make the request. And if they fall a second time, you can make a second request.
But the cumulative rate drop can’t exceed 0.50% and it can only be exercised twice, within a week before closing.
It’s basically a free up-to-two-times re-lock option offered on all loan types that also comes with a 60-day lock period.
The caveat is you have to request this Special Freedom Lock option at the time you initially lock your loan. And it’s possible pricing might be worse if a 60-day rate lock is required (vs. say a 30-day lock).
So keep that in mind if pricing is better on a 30-day lock and rates aren’t expected to fall.
Navy Federal HomeSquad
In mid-2019, they launched “HomeSquad,” which is essentially their take on the digital mortgage that has been becoming more and more mainstream with mortgage lenders these days.
It allows borrowers to generate a quick pre-approval and to check loan status 24/7 via their mobile phone once they are approved.
During the loan process, borrowers can upload key loan documents like pay stubs, tax returns, letters of explanation, and so on.
You can also connect bank accounts for automated asset verification, and notices are sent straight to your preferred device as milestones are met.
This technology better aligns them with the likes of Quicken Loan’s Rocket Mortgage, and makes them really hard to beat given their low rates and quality customer service.
Why Choose Navy Federal for Your Mortgage?
- Competitive mortgage rates
- Zero down loan options
- Free re-lock option if rates fall after you lock
- Biweekly mortgage payment option
- They service your home loan for life
Aside from the many perks and options mentioned, their home loan products are available nationwide.
So as long as you’re eligible for a Navy Federal membership, they’re probably worth at least checking out no matter where you are in the country.
Assuming their interest rate and lender fees are competitive, they offer a few more advantages to borrowers.
They claim to offer personal guidance from start to finish, so ideally their loan officers are top-notch relative to other big bank officers.
Additionally, once your loan funds, they’ll actually hang onto it for the life of your loan. That means Navy Federal is not only your lender, but also your loan servicer.
This can be convenient and less confusing as many lenders simply originate home loans and quickly sell them off to a differ ent entity, creating more paperwork and potential headaches.
Knowing your loan will stay with the company may also lead to a more transparent and friendly experience.
With Navy Federal, you can rest assured that you’ll be a borrower for life with them, so they’ll probably want to take good care of you along the way.
(photo: Dave Lawler)
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.