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Navy Federal Review | VA Loans
By Kat Tretina MONEY RESEARCH COLLECTIVE
Navy Federal Credit Union — often known simply as Navy Federal — has over 11.8 million members worldwide. As a non-profit credit union, Navy Federal is able to offer loans and credit products with lower rates than you may find elsewhere. Because Navy Federal caters to veterans and active-duty service members, it’s a leading provider of U.S. Department of Veterans Affairs (VA) loans.
With Navy Federal Credit Union, eligible borrowers can take advantage of low interest rates on VA loans and added cash back benefits.
Navy Federal Credit Union VA Loans Overview
- Up to 4% of closing costs covered by seller
- Get $400 to $9,000 in cash back with RealtyPlus
- Options for those ineligible for VA loans
- Limited number of branches available
- Does not list its credit or income requirements
- Membership required to view personalized rates
With a VA loan from Navy Federal Credit Union, borrowers can qualify for up to 100% financing, and the home seller can cover up to 4% of closing costs — helping you save money. If you purchase a home using the RealtyPlus program, you may qualify for up to $9,000 in cash back benefits.
Borrowers that aren’t eligible for VA loans may qualify for other options, including Military Choice loans — a type of mortgage that requires no down payment.
Navy Federal is membership based, and you must be a qualifying military veteran or service member to become a member. Unless you are a member, you can’t view personalized rates, and the credit union doesn’t list its credit or income requirements online.
Although Navy Federal Credit Union does operate brick-and mortar branches, the number of branches is very limited compared to that of other banks and credit unions. You may not have a branch near you, so you may not be able to get in-person help.
Navy Federal Credit Union’s Services
Navy Federal Credit Union provides a range of banking services, including checking and savings accounts, credit cards and loans. For homebuyers interested in taking out a mortgage, there are several mortgage options available. According to the lender, borrowers that use Navy Federal’s mortgages save an average of $2,500 due to its low rates and the lack of a private mortgage insurance (PMI) requirement.
What’s offered
Although Navy Federal offers conventional mortgages, it has two mortgage products specifically designed for military veterans, service members and reservists:
- VA Loans: As a provider of VA loans, Navy Federal allows eligible borrowers to purchase a home with 0% down — eliminating a common barrier to homeownership. VA loans have no PMI, so borrowers with a down payment under 20% can save a significant amount of money. Plus, Navy Federal allows home sellers to contribute up to 4% of the home’s value toward closing costs. If you purchase a home through Navy Federal’s RealtyPlus program, you can also get between $400 and $9,000 in cash back benefits.
- Military Choice: If you aren’t eligible for a VA loan, another option is Navy Federal’s Military Choice loan. Like VA loans, Military Choice loans don’t require a down payment. And the seller can contribute up to 6% of the value of the home toward closing costs. Military Choice loans tend to have higher interest rates than VA loans, but they typically have lower APRs than conventional loans.
| Navy Federal Credit Union VA Loans and Military Choice Options | ||||
| APR | Down Payment Requirement | Loan Terms | Seller Contribution to Closing Costs | |
| VA Loans | As low as 4.682% | 0% | 15 Years 30 Years |
Up to 4% |
| Military Choice | As low as 6.056% | 0% | 30 Years | Up to 6% |
| *Rates listed are current as of August 3, 2022. Your rates may vary based on your location, credit history and loan amount. |
||||
Interest rates on mortgages can fluctuate. However, we found that the annual percentage rates (APRs) on Navy Federal’s VA loans and Military Choice loans were lower than the national average for all mortgages.
What isn’t offered
Although Navy Federal has several low down payment programs, it doesn’t issue Federal Housing Administration (FHA) loans, a popular option for borrowers with less-than-perfect credit. Nor does it offer loans through the U.S. Department of Agriculture (USDA), which are loans with no down payment requirement that can be used to buy property in rural areas.
Requirements for a VA Loan from Navy Federal
To qualify for a VA loan from Navy Federal Credit Union, you must meet the following criteria:
- Have membership in Navy Federal Credit Union or join it before applying for a mortgage
- You or your spouse must have:
- 90 consecutive days of active service during wartime
- 181 days of active service during peacetime
- Served more than six years with the National Guard or Reserves
- If you don’t meet those criteria, you must be the spouse of a military member who died in the line of duty or as the result of a service-related disability. If you remarried, you are not eligible.
- You must have a certificate of eligibility (COE) from the U.S. Department of Veterans Affairs
Navy Federal doesn’t list its minimum credit score or income requirements, but you will have to undergo a credit check and meet its underwriting guidelines.
Navy Federal Credit Union membership is limited to active duty service members, veterans and Department of Defense personnel. Immediate family members of individuals belonging to the armed forces are also eligible; qualifying family members include spouses, parents, children, siblings and grandparents.
Navy Federal Credit Union’s Credentials
Navy Federal is highly respected and has received high ratings for its financial stability and customer service. It’s a reputable credit union and mortgage lender, so you can take out a VA loan with confidence.
Licenses and Registrations
Navy Federal Credit Union is federally insured by the National Credit Union Administration. It is licensed to issue mortgages in all 50 states and the District of Columbia.
Awards and Certifications
Navy Federal was selected as the best multichannel bank for customer experience quality in Forrester’s 2022 U.S. Customer Experience Index.
Third-Party Ratings
When it comes to financial stability, Navy Federal Credit Union has high ratings. Weiss Ratings gave the lender an “A” (excellent) rating based on its stability, capitalization, liquidity, profitability and asset quality. Weiss selected Navy Federal as one of the strongest credit unions in the country.
Navy Federal also has a five-star rating from Bauer Financial. That rating puts it in the “superior” category, and is recommended by Bauer.
Regulatory or Legal Actions
Like other major lenders, Navy Federal has been the target of some lawsuits and regulatory actions in the past.
Notably, the Consumer Financial Protection Bureau (CFPB) ordered Navy Federal to pay $28.5 million for improper debt collection actions.
It’s not uncommon for a lender of Navy Federal’s size to experience these kind of issues, but it’s a good idea to research any lender you’re considering before submitting an application or signing a loan agreement.
Navy Federal Credit Union’s Accessibility
Navy Federal Credit Union has a strong reputation for customer service, and it’s available to customers in a variety of ways.
Availability
Unlike other lenders that only offer customer support during business hours, Navy Federal offers 24/7 customer service.
Contact Information
You can reach Navy Federal Credit Union with questions any time, day or night. Navy Federal offers the following contact options:
- Chat
- Secure Message
- Phone: 888-842-6328
- In person: Visit a local branch for in-person assistance.
User Experience
Although some lenders allow you to check rates and loan options online, Navy Federal requires you to be a member and sign into your account to view mortgage rates and get a loan pre-approval.
If you do take out a loan through Navy Federal Credit Union, you can use its website to view loan documents and make payments online.
Limitations
For those that prefer working with a loan officer in person, Navy Federal Credit Union may not be the best choice. Although it does operate brick-and-mortar branches, it only has 350 branches worldwide. To put that in perspective, consider that Chase — the largest commercial bank in the country — operates over 4,700 branches in the U.S.
Navy Federal Credit Union’s Customer Satisfaction
In Navy Federal VA loan reviews, customers praise the lender’s customer support, quick response time and low rates. The lender is also highly rated by third-party consumer agencies.
Customer Complaints
On TrustPilot, Navy Federal Credit Union’s TrustScore is 4.7 out of five based on over 11,000 reviews, placing it in the “excellent” category.
Third-Party Ratings
Because Navy Federal Credit Union has restrictions on who is eligible for membership, it was not ranked against other lenders in the J.D.Power 2021 U.S Primary Mortgage Origination Satisfaction Study. However, J.D. Power did evaluate Navy Federal Credit Union for its mortgages and customer satisfaction. It gave the credit union a score of 861 out of a possible 1,000, which is higher than the industry average.
Navy Federal Credit Union FAQ
Who's eligible for a Navy Federal VA loan?
To qualify for a Navy Federal VA loan, you must be eligible for Navy Federal Credit Union membership and meet the eligibility requirements for VA loans set by the U.S. Department of Veterans Affairs.
How much can you borrow with a Navy Federal VA loan?
Technically, there isn't a limit on VA loans. However, Navy Federal Credit Union will look at your income, credit history and other assets to determine how large of a mortgage you can get.
What is the minimum down payment for Navy Federal VA loans?
You can qualify for a Navy Federal VA loan with 0% down and no PMI.
What are the benefits of a Navy Federal VA loan?
With a Navy Federal VA loan, you can qualify for a mortgage with no down payment and no PMI. And the seller can contribute up to 4% of the home's value toward closing costs, allowing you to save thousands of dollars.
Does Navy Federal charge an origination fee for VA loans?
On VA loans, Navy Federal Credit Union charges an origination fee that is 1% of the loan amount. However, the fee may be waived if you agree to a mortgage with an interest rate that is 0.25% higher for the life of the loan.
How We Evaluated Navy Federal Credit Union VA Loans
We evaluated VA loans from 20 leading mortgage lenders to identify the best options. We compared Navy Federal VA loans to other VA mortgages and examined available rates, loan terms, fees, customer service and added benefits. Particular emphasis was placed on origination and funding fees and APRs.
Summary of the Navy Federal Credit Union Review
If you are a military veteran or service member and qualify for Navy Federal Credit Union membership, a Navy Federal VA loan may allow you to buy a home with 0% down and no PMI. Plus, you may qualify for other benefits, like seller contributions to closing costs and cash back bonuses.
However, not everyone is eligible for membership to the credit union. To ensure you’re getting a good rate, hop around and compare the best VA loans from top lenders.
