A confirmation, not a guarantee
A CPA letter confirms facts your accountant already has on file from preparing your returns. It is not an audit, and it is not a guarantee.
Key highlightsThe 30-second version
Neither agency requires one
Fannie Mae and Freddie Mac do not require one. If you have been told you cannot qualify without it, that is your lender's own condition rather than an agency rule.
What no CPA can certify
Your CPA cannot certify your ability to repay, your solvency, or that taking money out of your business is harmless.
Have us draft the letter.
[ Send us the lender's wording ]
Call (212) 641-0673 or send the contact form. Our team gets back to you within 24 hours, and we are available evenings and weekends.
Confidential, and handled by a CPA or EA.
What it is
A short written statement confirming things already on record
A CPA letter for a mortgage is a short written statement from your accountant confirming things already on record: who prepared your returns, what those returns reported, and that the business behind the income exists.
If you are self employed, the mortgage file that a salaried borrower fills with pay stubs has a gap in it. Lenders close it by asking your accountant to vouch for you, usually by sending a draft letter with the wording already written and a request to sign it.
Most of that wording is fine. The part that is not is usually the part the lender cares about most.
01The names
The five names for one CPA letter
Five names, one document.
- CPA comfort letter
- CPA income verification letter
- CPA verification letter
- CPA letter for self employed borrowers
- CPA letter for a home loan
Which one you hear depends on who is asking. Mortgage lenders and brokers tend to say comfort letter, landlords and property managers say proof of income, and adoption agencies, insurers, and consulates each have their own phrasing.
The label does not change what a CPA is permitted to write. It changes what the requester expects, which is why the first useful question is not what to call the letter but what it needs to say.
02The agencies
Fannie Mae and Freddie Mac do not require a CPA letter
Neither the Fannie Mae nor the Freddie Mac seller guide requires a CPA comfort letter for a residential mortgage. The AICPA has pointed this out directly, and it advises accountants to push back when a client is told the loan depends on one.
The request survives anyway, and the history explains why.
- Freddie Mac's Seller/Servicer Guide once contained this method, with wording close to the sentence lenders still ask for about a withdrawal not having a detrimental effect on the business.
- It was revised to place that determination on the lender or the broker.
- Fannie Mae's guide never contained it at all.
What is left is lender templates written when the Guide still said it.
So a file stuck until the accountant signs something is stuck on the lender's condition, not an agency rule. Ask your loan officer for the exact wording, and whether it is required at all. An optional request is easier to negotiate.
A CPA letter for a mortgage that stays inside the standards still does the job, because what a file needs from an accountant is corroboration of facts rather than an opinion about risk.
03 · 04What we can — and cannot — sign
What a CPA can, and cannot, put in writing
Historical facts on the record vs. anything the firm never examined.
Section 03 · What a CPA can put in writing
That you are a client, and for how long.
That the CPA prepared your returns, based on information you provided.
That figures shown to the lender agree with the returns as filed.
That the business exists, with its entity type, formation date, and ownership percentages.
That your filed returns reported self employment income in a stated line of work, for stated years.
Financial statements, where the lender wants more than a letter and will pay for a compilation, a review, or an audit. These are three different levels of assurance, and a compilation is the lightest of them.
Section 04 · What a CPA cannot put in writing
That you can afford the loan. Ability to repay is the lender’s assessment to make. It is the entire point of underwriting.
That the business is solvent or will remain a going concern.
That withdrawing funds for a down payment will not harm the business. This is the most requested prohibited sentence, and it is the one Freddie Mac moved onto the lender.
That your income will continue at its current level.
Under Circular 230, the Treasury rules governing practice before the IRS, a preparer may rely in good faith on the information a client provides, without verifying it. So a return is not evidence that its numbers were audited, and a letter implying otherwise misrepresents what happened.
There is also a liability point. If the loan later defaults, a lender can argue the letter was a substantial factor in extending credit, which leaves the accountant who signed a broad assurance carrying part of the lender’s risk.
05When to skip it
When you do not need a CPA letter
Not every self employed borrower needs one, and ordering a letter you do not need adds a week to the file for nothing.
- Your filed returns, at face value, already show enough income to qualify for the amount you want.
- You are using a bank statement program that qualifies income from deposits instead of returns.
- You have two or more recent years of W-2 income that qualifies you on its own.
- Your lender has not asked for one.
06Other routes
Alternatives a lender may accept instead
Where a letter is not available or not enough, three other routes come up most often.
Bank statement programs.
Twelve to twenty four months of business deposits used to qualify income, with no CPA letter in the file.
Returns with a preparer letter.
A narrower statement confirming only that the CPA prepared the returns, without any assurance beyond that.
A verification of self employment, or VOSE.
Confirms the business exists and that you are self employed, without verifying income.
Which of these your lender will take is a question for the loan officer, not the accountant.
07Chargeable work
Loan programs built around a CPA prepared profit and loss statement
Outside conventional lending, some programs are built around a CPA document.
Non QM lenders offering profit and loss or bank statement programs often qualify a self employed borrower on a profit and loss statement rather than on tax returns, and many require it prepared and signed by a CPA or an enrolled agent.
There is no central rulebook, so each lender writes its own. Where it applies, the accountant’s work is the income documentation rather than a letter about it.
Check one condition early
Some programs require that whoever prepares the statement also filed your most recent business return, which rules out borrowers who file their own. It is not universal, but it is common enough that if you do your own returns you want the answer before you apply.
08Other letters
The other letters lenders and agencies ask for
The mortgage version is the most common.
Self employment verification
for a lender, a landlord, or a benefits agency.
Profit and loss statement preparation or compilation,
based on the books and records provided.
Business existence or good standing,
often for a bank opening a commercial account.
Address or residency confirmation,
usually tied to what appears on a filed return.
Gift letter support,
where a down payment is coming from a family member.
Visa and immigration income letters,
for consulates and for sponsors filing affidavits of support.
Rental application verification,
where a landlord wants income confirmed before a lease. If a New York building has asked you for a projection rather than a confirmation, that is a different document.
09If it is rejected
Options when a lender rejects the wording
A rejected clause rarely stops the file.
Step 1 — Locate the sentence
Ask which sentence is causing the problem. Often it is one clause in a template nobody has looked at closely, and the lender proceeds as soon as it comes out. Ask too whether a different document would do, since a bank statement, a filed return, or a compiled statement often does.
Step 2 — Escalate to paid work
If the lender will not move at all, a compilation or a review is the paid alternative. It costs more and takes longer, and it gives the file something a letter cannot, which is work the CPA performed.
What does not work is shopping for an accountant willing to sign what your CPA declined. The wording is prohibited for every CPA, and a letter going beyond the standards is worth less to a lender who understands them.
10Before we draft
Documents and consent we need before drafting the letter
The lender’s request in writing, the returns for the years in question, the name and address of whoever the letter is addressed to, and your signed consent to release return information to them.
Federal law requires your written consent before a preparer discloses return information to a lender, so nothing leaves this office without it. If we prepared your returns, that is usually the whole list.
From your first email to a signed letter
You send four things
The lender’s request in writing, the returns for the years in question, the name and address of whoever the letter is addressed to, and your signed consent to release return information.We test every sentence
Each one gets the same question. Is this a past fact the firm already has a record of? Anything else, whether a forecast or something never examined, fails it.Past fact, already on record
Signed as written. Client status, what the returns reported, entity type and ownership, and that figures agree with the returns as filed.A forecast, or never examined
Sent back with wording the lender can accept. Ability to repay, solvency, going concern, and the effect of a withdrawal all come out.If the lender will not move
A compilation or a review is the paid alternative. It costs more and takes longer, and it gives the file work the CPA performed rather than a statement about it.
You know which parts can be signed before any drafting starts, and before anything reaches your lender.
We will tell you before we start which parts of the request we can sign and which we cannot, so you know before closing what the letter will say.
Most lenders accept a letter dated within 60 to 120 days of closing, so there is no advantage in ordering one months ahead.
12+ years
serving NYC
150,000+
returns filed
50 states
covered
5 star
Google and Yelp
Open
evenings and weekends
From the record
On the ethics — and on the service
“Anytime that we have a client that brings up a situation that we think is ethically incorrect or there’s a possibility of some type of a rule that’s broken, we immediately disengage, only because, you know, for license purposes... but also just for pure ethics too. It’s just not a side of anything that I want to be involved in.”
George Dimov, CPA
“Excellent, speedy service, and super professional. I needed an employment/income verification completed and Dominique, George and team made the process super easy... In a city where there are many firms to choose from I will be a repeat client!”
Matthew Ackerman
Google review
Frequently asked questions
What borrowers ask before we start
No. Neither seller guide requires one for a residential mortgage. Freddie Mac's guide once described a comfort letter method and was revised to put that determination on the lender or broker, and Fannie Mae's never contained it. Where a lender insists, that is the lender's own underwriting condition.
Facts already on record: that you are a client and for how long, that the firm prepared your returns from information you provided, that figures shown to the lender agree with the returns as filed, and that the business exists with its entity type, formation date, and ownership percentages.
Most templates contain at least one sentence asking the accountant to vouch for the future, or for something never examined. Usually that is ability to repay, solvency, or a withdrawal not harming the business. Those are prohibited for every CPA, so changing accountants does not change the answer.
Often, yes. Non QM profit and loss programs commonly accept a statement prepared and signed by a CPA or an enrolled agent. Some lenders specify a CPA, so ask before assuming either way.
Most lenders accept one dated within 60 to 120 days of closing. Requirements vary, so confirm the window with your loan officer rather than ordering early.
No. Comfort letter, income verification letter, verification letter, letter for self employed borrowers, and letter for a home loan are five names for the same document. What differs is the requester’s expectation, not what a CPA may write.
The lender's request in writing, the returns for the years in question, the name and address of the recipient, and your signed consent to release return information. Federal law requires that consent before anything is disclosed.
Ask which sentence caused the problem, since it is often one clause in an unexamined template. Ask whether another document would satisfy the file. If the lender will not move, a compilation or a review is the paid alternative.
Still have a question? Ask a CPA directly or call (212) 641-0673.
Send us the wording
Forward the lender’s wording
Send us what your lender has asked for and the returns behind it. We will tell you what can be signed as written, what needs rewording, and what the lender has to decide for itself. Call (212) 641-0673 or send the contact form. No charge for the conversation.
This page is general information, not advice for your circumstances. Because what a lender will accept, and what a CPA may sign, turn on the specific request, speak to a CPA before acting on anything here.
Reviewed by George Dimov, CPA, New York, NY. Serving clients in all 50 states, 15+ years preparing returns for self employed borrowers and the verification letters lenders ask them for. President of George Dimov, CPA, a New York City firm serving clients across the five boroughs and nationwide.