Absolutely!  As a matter of fact, the key to always staying in good shape is to alternate between phases of fat loss and muscle gain back and forth.  However, if all you are interested in is fat loss then you can continue your fat loss phase up until you reach your desired goal since the BRE System diet is designed in such a way that you never encounter plateaus.  You will also gain additional muscle during this phase but it is just not going to be as much as you would if you were to alternate to a muscle gain phase once you were to hit 6-7% body fat.