Using Navy Fed’s 0% Down Mortgage for House Hacking—Worth It?

Question

Hi everyone,

I’m exploring options for house hacking/investing and came across Navy Federal’s zero-down mortgage programs—the Homebuyers Choice and Military Choice loans (0% down, no PMI). I’m curious if anyone has used one of these specifically for:

• House hacking (e.g. multi-unit, renting out part of the property while living on-site)

• Investment purposes—buying with the intent to rent or resell.

If you’ve used either, what have been your pros and cons? For example:

• How did occupancy requirements or underwriter scrutiny impact your plan?

• Were there major delays or communication challenges?

• What were the rate, fee, and closing timelines like?

• Any surprises regarding membership eligibility, membership application, or underwriting hurdles?

I’d love to hear your experiences—positive or negative—and learn what worked well (or didn’t).

Thanks in advance!

Hamp Lee III · Answer

I have used this program for one of my homes. (I'm retired military and have five homes total.)

This was my first of two loans with Navy Federal and the other homes are VA loans.

The military choice program is primarily for military members/veterans who exhausted their VA home loan benefit, so you will need to live in the residence. I'm not sure if there was a residency requirement, but most lenders require 12 months, but you want to be sure as already mentioned in the thread.

I found the interest rate to be a bit high at the time when compared to other lenders, but otherwise, no issues for me. I closed on the second loan with Navy Federal a few weeks ago and it took a lot for me to get across the line...

For the home with the military choice loan, I've rented it for almost three years now...no issues.

I hope this helps.

I wish you all the best.

Vandana Thapa · Answer

@Tajana Reagan Navy Federal’s Homebuyers Choice and Military Choice loans sound great on the surface, zero down and no PMI. They can absolutely work for house hacking, but they do come with some important rules and trade-offs you should know about.What to keep in mind:- You must live there: These loans are only for your primary residence. Renting out extra units or rooms is fine, but you can’t buy just to rent or flip.- Underwriting takes a closer look: Be ready for more questions about how you’ll live in the home, and expect things to move a little slower than conventional or VA loans.- Rates and costs: The interest rate is usually a little higher than VA or conventional loans, but you save upfront since you don’t need a down payment.- Membership matters: You’ll need to be a Navy Fed member, and setting that up can sometimes delay the process.- For investors: These loans are great for your first property if you want to keep cash in hand. But if your plan is to build a rental portfolio, you’ll eventually want to use other loan options that are more investor-friendly.So, big picture Navy Fed’s zero-down programs are a solid way to get started with house hacking. They let you preserve cash and get into a property with very little upfront. Just know they’re not designed for long-term portfolio building, and at some point you’ll want to shift into conventional or investor-specific financing.

This response is for educational purposes only and not intended as financial, tax, or legal advice. Always consult your own advisors before making investment decisions

Joseph Harr · Answer

I was also looking into the Military Choice loan at Navy FCU. I've heard from some agents and lenders (obviously they're salespeople who want you to use them or their referrals) that sellers don't like working with Navy FCU. I don't know how true that is, especially considering the other comments who have had no issues using them. The rate was higher and I wasn't allowed to get a duplex. I'm still considering going with this product if I find the right, move in ready single family property that would work for a house hack.

Patrick Roberts · Answer

I'd read the mortgage/deed of trust/loan agreement carefully. This sounds like some kind of special program that they will balance sheet. I'm virtually certain that this will be for a primary residence only, meaning you can't buy it as an investment property - it has to be your new home. It's also very possible they require you to remain an occupant of the property for as long as the loan is outstanding.

Michael K Gallagher · Answer

@Tajana Reagan in general when doing high LTV loans the largest thing that seems to come up in my experience is appraisal issues, not always with the value but often with the condition.  My area has many multi families that are quite old so if you can focus on newer or even new construction and still make your numbers work to me that's the best and lowest risk way to implement the house hack, but for sure do it!  its amazing.

Ricardo R. · Answer

Hi @Tajana Reagan do you still need help on this?

Using Navy Fed’s 0% Down Mortgage for House Hacking—Worth It?

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