A CPA letter for a mortgage, sometimes called a comfort letter, is a short document your accountant writes to confirm to a lender that you are self-employed, that you own the share of the business you claim, and that your reported income is consistent with the tax returns on file. Mortgage underwriters ask for it because self-employment income is harder to verify than a paycheck, and a licensed accountant’s confirmation gives them a professional check on the numbers. If you own your business and are applying for a conventional or government-backed loan, expect this request during underwriting.
When Underwriters Ask for One
The trigger is simple: your income comes from a business you own rather than from W-2 wages. Fannie Mae generally requires a two-year history of self-employment income to show that the earnings are likely to continue.1Fannie Mae. Underwriting Factors and Documentation for a Self-Employed Borrower Freddie Mac similarly requires two years of personal and business tax returns along with a signed CPA statement.2Freddie Mac. Qualifying for a Mortgage When You’re Self-Employed
The letter is meant to answer a few underwriting questions in one place. Is the business real and operating right now? Is the income likely to continue after you take on a mortgage payment? Would pulling money out for a down payment put the business at risk? A short professional statement from your accountant gives the underwriter something firmer than tax returns alone.
What the Letter Has to Say
Lenders generally want the letter to cover five things:3CPAI. Third Party Verification Letters
- Confirmation that you are currently self-employed and active in the business.
- A statement about your income from the business, consistent with what was reported on your tax returns.
- Your exact ownership percentage.
- A general assessment of whether the business appears profitable and likely to continue operating.
- Whether withdrawing funds for the down payment would threaten the business’s ability to stay solvent.
Many lenders send their own questionnaire for the CPA to complete. Those forms may also ask when the business started, whether you participate in day-to-day operations, and whether revenue has dropped meaningfully since the last tax filing. Your CPA fills those fields from the records they already keep.
A common feature of these letters is a disclaimer noting that the CPA has not audited the business and that the letter is not an opinion on your creditworthiness.3CPAI. Third Party Verification Letters That language is normal and does not weaken the letter in the underwriter’s eyes.
What Your CPA Will Review
Before writing anything, your accountant pulls the tax forms tied to how your business is set up. Fannie Mae lists them by entity type:4Fannie Mae. Business Structures
- Sole proprietorship: Form 1040 with Schedule C.
- Partnership: Form 1065, with each partner’s income share on Schedule K-1.
- S corporation: Form 1120-S, with each shareholder’s income share on Schedule K-1.
Your CPA will also want a year-to-date profit-and-loss statement and a current balance sheet to show the business is still healthy. Lenders sometimes ask for proof the business exists and is active: a business license, articles of incorporation, an IRS EIN confirmation letter, or a partnership agreement.1Fannie Mae. Underwriting Factors and Documentation for a Self-Employed Borrower
Getting the Letter: Cost, Timing, and Submission
Start by calling your accountant. If your lender gave you a specific form or list of questions, forward it before the meeting. Bring your last two years of tax returns, current financial statements, and any business formation documents.
Most CPAs charge a flat fee for a comfort letter, commonly $150 to $500, depending on the complexity of your finances and the firm’s pricing. Turnaround is usually a few business days once your accountant has what they need.
Once signed, the letter typically goes to the lender through their secure mortgage portal. Underwriting reviews it alongside the rest of your file. If anything looks inconsistent with your tax returns or your loan application, expect the underwriter to come back with follow-up questions for your CPA before the file can move toward closing.
If Your CPA Declines
Not every accountant will write one, and a refusal is not a sign that your finances are weak. CPAs carry real professional and legal risk when they put their name on a document a lender will rely on. Common reasons for declining:
- Professional liability. If a statement in the letter turns out to be wrong, the lender can sue the CPA, arguing it relied on the letter to approve the loan.3CPAI. Third Party Verification Letters
- Solvency opinions. Professional standards discourage CPAs from opining on whether a business is solvent, yet many lender forms ask precisely that.
- Confidentiality rules. Sharing client financial information with a third party without proper written consent can run afoul of Internal Revenue Code Section 7216 and other ethical rules.
- Regulatory discipline. A letter that drifts into territory reserved for audit or attestation work, without those procedures being performed, can draw discipline from the state board of accountancy.
Ask whether a more limited letter, sticking to verifiable facts like ownership percentage and the fact that the business exists and is active, is something the CPA can provide. If not, a few loan products are built to work without one.
Bank Statement Loans
Bank statement loans qualify self-employed borrowers using deposit records rather than tax returns or a CPA letter. Lenders usually want 12 to 24 months of personal or business bank statements and calculate income by analyzing deposits, sometimes applying an industry-based expense factor. These are non-qualified mortgage products, so rates run higher and down payment and credit requirements are stricter, often at least 10 percent down with a credit score around 620 or higher and a debt-to-income ratio near 45 percent or lower.
DSCR Loans for Investment Property
If you are buying an investment property rather than a primary residence, a Debt Service Coverage Ratio loan qualifies you based on whether the property’s rental income covers the mortgage payment, not on your personal income. Because the personal income documentation is minimal, a CPA letter is generally not required. Down payments typically run 10 to 20 percent.
A Different CPA
You can also hire a different accountant to review your records and write the letter. A new CPA will need time to get familiar with your financial history, which adds cost and can slow things down. Clean, organized records, including two years of tax returns and current financial statements, shorten that ramp.
Never Send a Letter That Isn’t True
Inflating income, misrepresenting ownership, or submitting a fabricated CPA letter to a mortgage lender is a federal crime. Under 18 U.S.C. ยง 1014, knowingly making a false statement to influence a federally connected lending institution can bring a fine of up to $1,000,000, a prison sentence of up to 30 years, or both.5Office of the Law Revision Counsel. 18 U.S. Code 1014 – Loan and Credit Applications Generally The statute reaches banks, credit unions, the FHA, and effectively any entity making federally related mortgage loans.
The exposure runs in both directions. A borrower who pressures an accountant to overstate income or backdate documents faces prosecution under this statute. A CPA who knowingly signs a false letter faces the same criminal exposure plus loss of license and civil claims from the lender. If underwriting spots a discrepancy between the comfort letter and your filed returns, the near-certain outcome is a denied loan, and a possible one is a referral for investigation.