Category Archives: Blog

No Doc / No Ratio Investment Property loan are back.

Do you own or want to own an investment property but, you keep getting turned down because your income is not sufficient or you own too many investment properties. These new loans do not verify your income. As long as you can put down 20% or you have 25% equity in your property you can…
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FHA Loans down to a 500 credit score with 10% down.

Almost all lenders require a 620 credit score to get an FHA mortgage. Most lenders use an automated system to get the customers loan approval (Total Score Card) which runs through DU (Desktop Underwriter) or LP (Loan Prospector). We can get you a mortgage with a 500 credit score if you have 10% to put…
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No income verification loans are back for investors.

If you are an investor you know the challenges of showing income on your tax return when you own investment properties. With this new product the underwriter will only look at the income the property is producing for rent. This program can be used for purchases and refinances. This product can be used for a…
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New FHA changes, could affect you.

FHA has completely re written their new handbook called the 4000.1. The new FHA guidelines will affect everyone, which will make it harder to get an FHA loan in most situations. Here are some of the more important changes: Student Loans. Old Rule- FHA would allow the student loan payment to be excluded if the…
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3% down conventional mortgage, min. credit score 620.

You can now put down 3% when buying a home if you have at least a 620 credit score. Before the housing collapse we were allowed to put down nothing, now we are back to putting down only 3%. If you are buying a home the 3% down payment can be all given to you…
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FHA mortgage should I use Fannie Mae or Freddie Mac.

People do not realize that 95% of all lenders use Fannie Mae to get loans approved. The reason for this is because it is more difficult for a lender to get approved to do Freddie Mac loans. If a customer gets turned down for an FHA loan there is a very good chance the lender was trying to go to Fannie Mae with it. People need to work with a mortgage company that can offer both Fannie Mae and Freddie Mac mortgages. Freddie Mac will do loans Fannie Mae will not. Barclay Butler Financial Inc. can do both Freddie Mac & Fannie Mae mortgages.


I have seen many FHA loans that Fannie Mae will not do and Freddie Mac will. Fannie has trouble when a customer is using a gift, has lower credit scores (below 640), has low income or high debt to income ratios and or  has limited credit trade lines on their credit report. Freddie Mac also looks at a credit report differently. There may be an error on the credit report and Fannie Mae will turn down the loan but Freddie Mac will not.

When some one is getting a gift from a family member, this adds additional risk to the loan. Fannie’s underwriting system (DU) sometimes cannot recognize the gift in their system, and therefore will turn down  the loan. Most mortgage companies will miss this and just tell the customer they have been turned down.

When customers have lower scores in general I see that Freddie Mac’s underwriting system (LP) is more aggressive in approving the loan.

Freddie Mac underwriting system is also more friendly when a customer has over a 50% debt to income ratio or lower income.

If a customer has very limited trade lines on  their credit report, Freddie Mac again is more apt to approve the loan than Fannie Mae. When I am referring to trade lines I am referring to auto loans, credit cards, student loans, boat loans etc. If a customer has 3 or less open and active trade lines I see Freddie being more friendly.

A lot of customers have errors on their credit report. The most common errors I see are related to a bankruptcy, short sale, or a foreclosure. If a customer had a previous bankruptcy some of the trade lines will not be reported correctly. I have seen where the bankruptcy has been discharged 6 yrs. ago but one of the trade-lines is still reporting it current and Fannie Mae (DU) turns down the loan but Freddie Mac will not. The same will hold true for a Foreclosure. The foreclosure trade-line is still showing active but the foreclosure occurred 5 yrs. ago. Short sales will cause the same problem on your credit report.

Both Fannie Mae & Freddie Mac follow the same rules that FHA mandates. The reason for the discrepancies is how Fannie Mae’s underwriting system (DU) reads an application and credit report versus Freddie Mac’s underwriting (LP).

I would use a mortgage company that knows and offers both Fannie Mae and  Freddie Mac mortgages.

Barclay Butler Financial uses both underwriting systems. Barclay Butler Financial closes approx. 20-30% of its loans with Freddie Mac. That means you have a lot better chance getting your loan closed.