No Overlay’s Lending As The Agencies Intended.

When a lender says they have “no overlays,”it means they follow the agency’s published guidelines (Fannie Mae, Freddie Mac, FHA, VA, USDA) without adding extra internal restrictions on top of them. Instead of tightening credit, income, asset, or property rules beyond what the program requires, the lender underwrites directly to the standard agency criteria. This allows more borrowers to qualify who might otherwise be declined by lenders with stricter rules. For borrowers, no overlays translate into more flexibility and fewer unnecessary roadblocks. Things like minimum credit score buffers, extra reserve requirements, stricter condo approvals, or additional employment documentation are often lender overlays. Removing those layers helps borrowers use the full benefit of the loan program they’re applying for, especially in complex scenarios such as self-employed income, asset depletion, condo projects, or recent credit events.