Top FHA Lenders: Pennymac Is #1 Overall, But Is Biggest the Best?
If you’re in need of an FHA loan, you might be curious who the top FHA lenders are. By top, I mean largest.
While biggest certainly doesn’t mean best, or cheapest for that matter, it can helpful to know the major players.
If nothing else, these companies should at least have a good understanding of the process and a decent track record of closing such loans.
This can be especially important if you’re purchasing a home and need a competent lender that will actually get you to the finish line.
However, the smaller shops (and even mortgage brokers) could be a perfectly viable option as well, assuming they’re well-versed in FHA lending.
Top FHA Loan Lenders (Overall)
|Ranking||Company Name||2021 Loan Volume|
|2.||Freedom Mortgage||$32.0 billion|
|3.||Rocket Mortgage||$27.8 billion|
|4.||Lakeview Loan Servicing||$20.9 billion|
|5.||Caliber Home Loans||$12.9 billion|
|7.||Amerihome Mortgage||$11.9 billion|
|8.||United Wholesale Mortgage||$11.6 billion|
|9.||Nationstar Mortgage||$11.1 billion|
|10.||U.S. Bank||$10.8 billion|
Last year, nearly a half-trillion ($475 billion) in FHA loans were originated by a couple thousand banks, credit unions, and independent mortgage lenders.
But some companies did a lot more volume than others and dominated the FHA lending space.
That brings us to the top-10 list, which is based on HMDA data for 2021 compiled by advisory firm Richey May.
The number one spot for 2021 was claimed by Pennymac with $32.3 billion in FHA loan volume, narrowly beating out Freedom Mortgage, which was the top FHA lender in 2020.
Pennymac operates a large correspondent lending business (B2B) and also runs a retail channel. Many former Countrywide execs are involved.
Freedom Mortgage is a government loan specialist, originating a whopping $32 billion in FHA loans, nearly half of their $58 billion in VA loan production, which made them the top VA loan lender last year.
Third was mortgage behemoth Rocket Mortgage with $27.8 billion in FHA loans. If you include only the retail channel, they were actually #1.
The fourth spot went to a big loan servicer, aptly named Lakeview Loan Servicing, which funded $20.9 billion in FHA loans.
It dropped off quite a bit from there, with Caliber Home Loans snagging the fifth spot with $12.9 billion funded.
Others in the top ten included Newrez, AmeriHome Mortgage, United Wholesale Mortgage, Nationstar Mortgage, and U.S. Bank.
Wells Fargo, a bank that has seen its share of mortgage controversies over the past few years, didn’t even crack the top-10, and barely the top-20. They only managed $4.5 billion in FHA loan production last year.
Top FHA Purchase Lenders (for Home Buyers)
|Ranking||Company Name||2020 Loan Volume|
|2.||Lakeview Loan Servicing||$12.3 billion|
|3.||U.S. Bank||$9.2 billion|
|4.||AmeriHome Mortgage||$9.0 billion|
|5.||Caliber Home Loans||$8.8 billion|
|6.||United Wholesale Mortgage||$8.5 billion|
|7.||Rocket Mortgage||$8.5 billion|
|8.||Fairway Indpt. Mortgage||$7.4 billion|
|9.||Freedom Mortgage||$7.4 billion|
Now let’s break it down by transaction type, separating home purchase loans from refinance loans.
Some lenders specialize in mortgage refinances for existing homeowners, while others focus on home buyers.
The top FHA lender for home purchases was again Pennymac, with $21.4 billion in total volume.
They easily beat out their nearest competitor, Lakeview Loan Servicing, which acts as a loan servicer and mortgage lender. The company’s $12.3 billion was nearly doubled by PennyMac.
Third was U.S. Bank and its $9.2 billion in FHA purchase loans, a strong showing for a brick-and-mortar bank.
In fourth was AmeriHome Mortgage with $9.0 billion in production, followed by Caliber Home Loans with $8.8 billion.
These are the mortgage lenders that might be well-suited for a home buyer looking to finance their purchase with an FHA loan.
Why? Because they close thousands of these types of home loans annually, so they should know what they’re doing.
As mortgage rates rise and the refinance market fades, more banks and lenders will want to be on this list.
Top FHA Refinance Lenders (for Existing Homeowners)
|Ranking||Company Name||2020 Loan Volume|
|1.||Freedom Mortgage||$24.6 billion|
|2.||Rocket Mortgage||$18.1 billion|
|4.||Lakeview Loan Servicing||$8.6 billion|
|5.||Nationstar Mortgage||$7.5 billion|
|7.||Caliber Home Loans||$4.0 billion|
|8.||United Wholesale Mortgage||$3.1 billion|
|9.||American Advisors Group||$3.0 billion|
|10.||Planet Home Lending||$2.5 billion|
Now let’s talk about who’s closing the most FHA refinance loans, which are reserved for existing homeowners.
These folks are typically refinancing to get a lower mortgage rate, usually via the FHA’s streamline refinance program that makes it pretty simple to qualify.
The undisputed king of FHA refis was Freedom Mortgage last year, with a big $24.6 billion in total production. However, their total was down quite a bit from $29.1 a year earlier.
The nation’s number one mortgage lender overall was still pretty far off, with Rocket mustering just $18.1 billion of these types of loans.
They were followed by Pennymac with $10.9 billion, Lakeview with $8.6 billion, and Nationstar Mortgage with $7.5 billion.
Others cracking the top-10 refi list included Newrez, Caliber Home Loans, United Wholesale Mortgage, American Advisors Group (likely due to reverse mortgages), and Planet Home Lending.
With rate and term refinances expected to cool a ton in 2022, these totals will likely be down considerably. Whether that changes the names on this list remains to be seen.
To sum things up, it doesn’t matter how big a bank or mortgage lender is, as long as they’re financially sound and operationally competent.
You can have an amazing experience with a local mortgage broker or a massive depository bank. You can also have a bad experience with either.
Take the time to vet the lender or individual you plan on working with, whether it’s an FHA loan or any other type of home loan.
And make sure they specialize in the type of financing you need. Oh, and you should know the type of loan you want before speaking to any interested parties.
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