When borrowers apply for a mortgage, especially those who are self-employed, lenders often request a verification letter from a Certified Public Accountant (CPA). While tax returns, P&L statements, and bank statements carry the most weight, a CPA letter can help confirm business details, clarify income trends, and support underwriting decisions.
This guide provides a detailed explanation of what lenders expect, what CPAs can legally write, and a professional how to ask your CPA for a mortgage letter that complies with AICPA guidelines and state regulations.
Why Mortgage Lenders Request CPA Letters
Mortgage lenders, whether Conventional, FHA, VA, USDA, or Portfolio, use CPA letters to verify information they cannot confirm through tax documents alone. It is not an income replacement tool; instead, it supplements the borrower’s financial profile.
Who Typically Requests the Letter?
- Mortgage Loan Officers (MLOs)
- Underwriters
- Loan Processors
- Fannie Mae / Freddie Mac approved lenders
- Portfolio lenders with internal guidelines
What the CPA Letter Can Confirm
CPAs can verify facts already supported by documentation, such as:
- Length of self-employment
- Type of business and ownership percentage
- Whether the business is active
- Whether financial records (P&L, Balance Sheet) were prepared by the CPA
- Whether bookkeeping is done using software (QuickBooks, Xero, FreshBooks, etc.)
What the CPA Letter Cannot Confirm
Under AICPA Professional Ethics and state board rules, CPAs cannot:
- Guarantee future income
- Estimate projected revenue
- Confirm income accuracy without performing a formal engagement
- Provide “assurances” similar to an audit
Documents CPAs Typically Review Before Issuing a Letter
Most accounting firms will reference internal workpapers or existing client files. Common sources include:
Tax & Financial Documents
- IRS Tax Returns / Tax Transcripts
- Profit & Loss (P&L) Statement
- Balance Sheet
- Business Bank Accounts
- Personal Bank Accounts
Business Activity Records
- Bookkeeping Records
- Invoices & Receipts
- Merchant Accounts (PayPal, Stripe, Square, Shopify, etc.)
- Digital Advertising Accounts (CPC, CPM, CPA-based income)
Business Formation Documents
- Business Licenses
- Articles of Incorporation / Organization
- Ownership Verification Documents
Professional Standards CPAs Must Follow
AICPA and State Board Guidelines
CPAs must comply with:
- AICPA Code of Professional Conduct
- State Board of Accountancy regulations
- Firm quality-control policies
- Documentation requirements for financial records review
Disclaimers and Limitations Required
A proper how to ask your cpa for a mortgage letter always includes disclaimers such as:
- No assurance is provided
- This is not an audit, review, or compilation
- Information is based solely on records provided by the client
- The letter is for lender use only
How Mortgage Lenders Use CPA Letters During Underwriting
Clarifying Business Stability
Underwriters use the letter to validate:
- Business activity
- Ownership structure
- Continuity of operations
Supporting Income Trends
A CPA letter may help when:
- Income fluctuates year-to-year
- Merchant processor statements show seasonal patterns
- Tax returns alone don’t reflect current operations
Satisfying Automated Underwriting Conditions
Both Fannie Mae and Freddie Mac Automated Underwriting Systems (DU and LPA) may flag a loan for:
- Self-employed income validation
- Business stability documentation
- Verification of financial records preparation
How to ask your CPA for a Mortgage Letter (Sample Text)
Below is a compliant, professional sample that accountants and brokers can adapt. This is written in standard firm-letterhead format.
Sample How to ask your CPA for a Mortgage Letter
[CPA Firm Letterhead]
[Address] | [Phone] | [Email] | [Website]
Date: [MM/DD/YYYY]
To: [Mortgage Lender / Loan Officer Name]
Re: Verification of Business Information for [Borrower Name]
Dear [Lender/MLO],
I am a Certified Public Accountant licensed in the state of [State], and I provide tax and accounting services to [Borrower / Client Name] and their business, [Business Name] (“the Company”). This letter is provided at the request of the borrower to assist in their mortgage application.
Business Information
- The borrower has been self-employed through the Company since approximately [Year].
- The business operates as a [entity type: LLC, Corporation, Sole Proprietor, etc.], and the borrower owns approximately [ownership %].
- Based on our records, including prior year IRS tax returns, bookkeeping records, and financial statements, the business is currently active.
Financial Records & Basis of Information
The information in this letter is based solely on:
- IRS Tax Returns / Tax Transcripts prepared or reviewed by our firm
- Profit & Loss statements and Balance Sheets maintained in [Accounting Software]
- Business bank statements and related financial documents
- Bookkeeping records, invoices, receipts, and merchant processor statements
Limitations & Disclaimers
This letter does not constitute an audit, review, or compilation, and no assurance is provided regarding the accuracy of financial information. We express no opinion on the borrower’s ability to repay any loan. This letter is intended solely for the lender’s use in connection with the borrower’s mortgage application.
If you require additional documentation, please contact our office.
Sincerely,
[CPA Name], CPA / EA
[Firm Name]
[State Board License Number]
[Signature]
Best Practices for Accountants and Mortgage Professionals
For CPAs
- Never estimate future income
- Avoid subjective wording (“financially stable,” “low risk”)
- Include required legal disclaimers
- Keep documentation in the client file
For Mortgage Brokers & MLOs
- Request only factual business verification
- Avoid asking CPAs to confirm income projections
- Provide borrowers with a clear checklist
- Ensure the letter aligns with AUS (DU or LPA) conditions
