In this paper, we explore the interfacial effects appearing in highly strained La0.7Ca0.3MnO3 (LCMO) ultra-thin films (10-12nm) grown on BaTiO3 (BTO) ferroelectric substrates. The strong tendency to phase separation of this optimally doped manganite contributes to the exotic phenomena observed in magnetism and transport experiments: the so-called Matteucci magnetic loops, magnetic granularity and a second metal insulator transition are observed between 50K and the LCMO Curie temperature, 180K. All these properties define the multiferroic character of these heterostructures, which in LCMO//BTO system is strongly linked to magnetoelastic coupling.