When a lender says the loan program will not allow something, the agent and the buyer write it down as a rule and stop asking. Three loan officers who do not work together describe the same pattern, and one of them names two debt-to-income numbers, 43% and 62%, that both came off the same program.
Jennifer Beeston has a word for the rule a company adds on top of a program's own guidelines. She calls it an overlay. Three mortgage professionals gave examples of it in the same month.
Beeston, a mortgage lender of 19 years, starts with her own first job. At a bank 18 years ago she was told the ceiling was fixed: "we could not go over a 43% debt-to-income with VA". She was new, so she repeated it to borrowers. "That was just for that bank, guys." She then names what she sees on VA files now — "the computer will approve you at 62%" — and adds that "VA itself doesn't have a credit score minimum". Then the story this find is named for. A veteran who owned multiple VA properties told her "my lender's saying they have a four maximum for VA loans". Beeston's note on the other loan officer: "the loan officer that I talked to him from the other company like really, really thought it was a real guideline". By her account, "did we help this gentleman get his fifth VA loan? Hell yeah."
A loan officer who runs The Rate Update, and who says "I've been doing this for over 38 years", describes the same thing from the shopping side. "different banks have different programs. They have different rates, they have different fees". Then the line: "One place might approve you where the other one might deny you". His answer is volume — "I'm going to compare your loan to 30, almost 40 different lenders".
Austin Clarence, a mortgage loan officer at Nexa Mortgage, puts a count on one product. On bridge loans he says "I think we have about 30 different lenders who offer some different variation of the bridge loan", and that they differ on fees, structures, and how long you get to sell.
Two numbers from the same source on the same loan program: 43% at one bank, 62% out of the automated approval. One veteran told the maximum was four, who by Beeston's account went on to a fifth.
“my lender's saying they have a four maximum for VA loans”
All three are describing the same gap — a program's guidelines on one side, one company's version of them on the other. They name it differently. Beeston calls it an overlay, the Rate Update loan officer calls it different banks having different programs, Clarence calls it different variations of one product. The counts they attach are where it gets specific: 43% at a bank against a 62% automated approval on the same VA program, 30 to 40 lenders compared on one application, about 30 lenders offering one product. What an agent has to choose is whether a decline gets recorded as the program's answer or as one company's answer.