The VA doesn’t offer HELOCs, but some veteran-focused lenders offer more favorable terms for this borrowing option.
If you’re looking for a way to borrow money for a home renovation, medical expense or other large purchase, you might consider leveraging the equity you’ve built in your home. Home equity lines of credit, or HELOCs, are flexible borrowing options that allow borrowers to take out funds against their home equity.
HELOCs can be a useful tool for funding emergency expenses. Still, they come with associated interest charges and credit limits, so potential borrowers should ensure they can afford to make any payments. Unfortunately, the U.S. Department of Veterans Affairs (VA) doesn’t offer a HELOC program – like it does with VA mortgages – so you won’t qualify for a particular loan based on your service. The good news is that several HELOC lenders offer incentives or more flexible eligibility requirements for veterans. Read on to learn more.
Quick Winners
- Best for an Introductory Rate: Armed Forces Bank
- Best for High Max LTV: Navy Federal Credit Union
- Best for Flexible Membership Requirements: PenFed Credit Union
- Best for Quick Funding: Guaranteed Rate
- Best for Fixed-Rate HELOC: Figure
Best for an Introductory Rate: Armed Forces Bank
Pros:
- Low promotional APR for first six months
- Competitive ongoing rates
- Option to waive annual fee
- Low closing costs
Cons:
- Max LTV only available on loans up to $250,000
- Not available in all states
Nitty Gritty: Armed Forces Bank is an institution that caters to military members, with 75% of its team also affiliated with the military. Its HELOC is a competitive option for veterans, thanks to a max LTV of 85%, low closing costs and a low, fixed introductory APR for the first six months. While an annual fee of $50 typically applies after the first year, HELOC applicants can waive the fee by setting up auto-drafts from a checking account with the bank or an affiliate.
HELOCs from Armed Forces Bank might be a better choice for those who need to borrow smaller amounts. The maximum LTV of 85% only applies to loan amounts up to $250,000. For loan amounts above that threshold, the maximum LTV is 70%. Terms may also vary by state.
Specs:
- Minimum credit score: Not disclosed
- National/regional: National
- Max LTV: 85%
Best for High Max LTV: Navy Federal Credit Union (NFCU)
Pros:
- High max LTV
- No closing costs
- Optional credit card for accessing funds
- Interest-only payments available
Cons:
- Higher rates than some competitors
- Slower funding times than other lenders
Nitty Gritty: Navy Federal Credit Union is popular among military lenders for its loan and banking products. To qualify for membership with the credit union, you’ll need to be an active duty or former armed forces member or a current Department of Defense employee. The immediate family of service members can also qualify for membership.
Navy Federal’s HELOC has a slightly higher starting interest rate than competitor products, but it makes up for this cost with other savings, including no closing costs. It also offers the highest max LTV of HELOCs on our list, at 95%. The draw period on Navy Federal’s HELOC is also long, at 20 years, followed by a 20-year repayment term.
Specs:
- Minimum credit score: Not disclosed
- National/regional: National
- Max LTV: 95%
Best for Flexible Membership Requirements: PenFed Credit Union
Pros:
- Competitive interest rates
- Quick closing
- No origination fee
- Option to keep your existing mortgage rate
Cons:
- $99 annual fee
- Closing costs of up to $8,500 may apply.
Nitty Gritty: Like NFCU, PenFed Credit Union has a history of serving military members and their families. Unlike other credit unions, however, membership to PenFed is much easier to qualify for, requiring a $5 deposit into a Membership Regular Savings Account. Its HELOC comes with a competitive APR and benefits, including no origination fee and closing in as little as 15 days.
Specs:
- Minimum credit score: 680
- National/regional: National
- Max LTV: 85%
Best for Fixed-Rate HELOC: Figure
Pros:
- Quick, fully online application process
- Fixed interest rate
- Fast funding in as little as five days
- Competitive APR range
Cons:
- Origination fee applies
- Must withdraw full loan amount at origination
Nitty Gritty: While Figure doesn’t exclusively cater to veterans, its HELOCs can be a competitive choice for any applicant. In addition to being competitive with other APRs, interest rates on Figure HELOCs are fixed rather than variable, which can result in more predictable (and sometimes more affordable) monthly payments. Funding is also quick: You can complete a fully online application in just a few minutes and access your money in as little as five days.
Specs:
- Minimum credit score: 640
- National/regional: National
- Max LTV: 85%
Best for Quick Funding: Guaranteed Rate
Pros:
- Quick, fully online application process
- Fixed interest rate
- Fast funding in as little as five days
- Competitive APR range
- No closing costs (except origination fee)
Cons:
- Higher minimum loan amount than some lenders
- Shorter draw periods than some competitors
Nitty Gritty: Like Figure, Guaranteed Rate is not a financial institution that caters specifically to veterans. However, its HELOC can be a good choice for service members and non-military. In addition to a 100% online application process and funding times as short as five to 10 days, Rate offers a competitive range of APRs that borrowers can reduce by enrolling in autopay and paying a 1.99% origination fee.
One drawback: The draw period on Rate’s HELOC is shorter than most alternatives, at two to five years. While this may benefit those who don’t need extended access to funds, others may want to opt for a competitor offer with a longer draw period.
Specs:
- Minimum credit score: 640
- National/regional: National
- Max LTV: 85%
What is a HELOC?
A HELOC—or home equity line of credit—is a type of revolving credit that leverages a borrower's home equity. It can be used for various purchases, such as making home repairs or improvements, consolidating high-interest debt or covering an emergency expense.
The amount you can borrow with a HELOC is determined by factors including your eligibility based on credit history and loan-to-value (LTV) ratio, or the amount you owe on your home compared to how much it is worth. As a revolving credit loan, you can pull out money from your HELOC multiple times during your draw period, up to your available credit limit.
“Once the HELOC is opened, you can draw funds against the available credit limit to cover various expenses. Think of it like a credit card: the credit is available for use, but interest charges and monthly payments are only due when there is an outstanding balance. Proceeds from a HELOC can be used for home improvements, college tuition, debt consolidation, major purchases, a down payment for an investment property or to set aside cash reserves for emergencies,” explained John Dustman, senior vice president and head of consumer lending and advisor banking at Axos Bank.
During the draw period, most HELOCs only require you to make payments equal to the interest on what you borrowed. After your draw period ends (typically between five and 10 years), you enter the repayment period, where you must pay back both the interest and principal. Depending on your HELOC, interest rates can be fixed or variable.
How to Choose a HELOC as a Veteran
Veterans have access to various loans designed specifically for service members, such as VA mortgages. However, the VA does not have a program for HELOCs.
“This distinction is important, because the benefits associated with VA loans used to purchase a home or refinance an existing mortgage do not apply to HELOCs. Many veterans are not aware of this difference, which can impact the product attributes and features considered when shopping for a HELOC,” said Dustman.
Rather, banks and credit unions that specifically service veterans and active-duty military members may offer HELOCs with more favorable terms, such as competitive interest rates, flexible eligibility requirements or high maximum LTV limits.
Dustman added that financial institutions may otherwise offer special incentives or discounts for veterans.
That means when shopping for a HELOC as a veteran, you’ll want to consider the same features as any other borrower.
“The best place for a veteran to start is by working with a loan officer that you know, like and trust – ensure you are talking with someone who has your best interests in mind,” said Evan Luchaco, a Portland-based home loan specialist for Churchill Mortgage.
Compare features, including draw and repayment period terms, origination or other associated fees, interest rates, customer service reputation and borrowing limits to find the best HELOC for you.
Why You Should Trust Us
Emily Sherman has been writing about personal finance for the past seven years. She has covered topics including mortgages, credit and more for various major publications. She consulted industry experts, including a home loan specialist and senior vice president at a major bank, to ensure all the data presented in this article is accurate.
Methodology
To evaluate the best HELOCs for veterans, we analyzed offerings from major banks, credit unions and other financial institutions. We looked at factors including interest rates, max LTV, origination fees and other costs. We also considered closing time, prioritizing loans that provided borrowers quick access to funds. To ensure the HELOC was a good choice for veterans specifically, we looked for institutions who catered to the military community, had flexible credit score requirements and positive customer service reputations according to sources such as TrustPilot and the Better Business Bureau. For more info, read Benzinga’s full mortgage methodology.
FAQ
Is there a HELOC for veterans?
Technically, there are no HELOCs specifically for veterans, and the VA does not offer a HELOC program. However, there are HELOCs available from financial institutions that cater to veterans.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 HELOC will depend on various factors, including your interest rate and whether you are making interest-only payments or paying against your principal and interest during your repayment period. Using our HELOC payment calculator.
You can estimate your monthly HELOC payment based on your interest rate and repayment terms.
What is the best home equity line of credit for the military?
The best HELOC for military members will depend on individual needs, including whether you are looking for a fixed or variable rate, your preferred repayment terms and other factors. For instance, Armed Forces Bank is our top choice for competitive introductory interest rates, while NFCU is a good pick for its high maximum LTV limit.
Sources
- John Dustman, senior vice president and head of consumer lending and advisor banking at Axos Bank
- Evan Luchaco, a Portland-based home loan specialist for Churchill Mortgage
- HELOC lender information sourced from company websites, including Armed Forces Bank, Navy Federal Credit Union, PenFed Credit Union, Guaranteed Rate and Figure.
About Emily Sherman Harding
Emily Sherman is a journalist with more than seven years of experience writing about personal finance, higher education, and business topics. Her work has been featured in publications including Buy Side from the Wall Street Journal, U.S. News & World Report, USA Today, and Forbes Advisor. When she’s not writing, you can find Emily curled up with a good book or planning her next vacation using points and miles.