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For CPAs asked to write to a lender

A CPA letter for a mortgage that confirms facts, not income

The lender wants comfort. What a tax preparer can honestly give is a short list of facts: who the client is, which returns you prepared, and that the numbers in them came from the client.

A CPA letter is a short letter from a client's accountant to a lender or another third party, confirming facts the accountant knows from their own work for the client. A self-employed client applying for a mortgage often comes back from the lender with a request for a CPA letter for the mortgage, sometimes with the wording already drafted. The drafted wording usually asks you to confirm that the income is accurate, that the business will stay profitable, or that taking the down payment out of the business will not hurt it. The AICPA's guidance steers a tax preparer away from all three.

Last reviewed against 6 primary sources.

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CPA letter to a mortgage lender

A self-employment verification letter that confirms what you know and disclaims what you do not, ready for your letterhead. In Word and PDF.

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No email required.

Next step: send it to the client through FirmHello, where it stays on their record beside everything else they send you.

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The reason is the difference between facts and assurance. You prepared the returns from information the client gave you, and Circular 230 and the AICPA's Statements on Standards for Tax Services let you rely on it in good faith without verifying it. That is far short of an attest engagement. A lender that reads your letter as assurance and later loses money on the loan may say you gave it. On solvency, the attestation standards (AT-C section 105, Interpretation No. 1) prohibit any level of assurance that an entity is, or will continue to be, solvent or able to make debt service payments.

Two things come before the letter. The client signs a written consent under section 7216, because the letter discloses tax return information to someone who is not your client. See the Form 7216 consent template. Then ask what the lender is actually trying to verify: the AICPA's column calls that the first step, and the answer can be narrower than the lender's form. The CPA letter template below is for when a letter is still wanted.

What the letter can confirm, and what it should not

The first three are facts from your own records. The last three are the requests the AICPA's guidance says to decline, however the lender words them.

  1. 1

    Confirm: the relationship

    That the borrower is your client, and since when. Name the taxpayer exactly as on the returns, and the business as it appears on Schedule C or the entity return.

  2. 2

    Confirm: the returns you prepared

    The forms and tax years you prepared, and that the returns reported self-employment income from the named business. If you did not file them, say "prepared", not "filed".

  3. 3

    Confirm: the basis

    That the returns were prepared from information the client provided, and that you did not audit, review or otherwise verify it. This one sentence does most of the work of protecting you.

  4. 4

    Decline: that the income is accurate

    Accuracy is an attest conclusion. Offer instead a copy of the returns as filed, with the statement that the figures came from the client and carry no assurance.

  5. 5

    Decline: anything about the future

    Future income, continued profitability, and whether the business can carry the loan are predictions. They are not facts a preparer holds, and debt-service capacity is squarely what AT-C 105 prohibits assuring.

  6. 6

    Decline: the effect of withdrawing funds

    "The withdrawal of the down payment will not adversely affect the business" is the sentence lenders ask for most. The Journal of Accountancy's view is that it could be construed as a comment on solvency, which the standards prohibit.

The letter

Written for United States. The downloads are the same text, in Word and PDF, for your letterhead. Send it only once the client's signed section 7216 consent is on file.

[Firm letterhead]

[Date]

[Lender name]
[Attention: loan officer or underwriter]
[Address]

Re: [Borrower name(s)], loan application [reference]

Dear [Name],

Purpose

At the request of our client, [Client name], and with their written consent, we confirm the following information for use in connection with the loan application referenced above.

What we can confirm

[Client name] has been a client of [Firm name] since [year].

We prepared [Client name]'s federal income tax returns, Form 1040, for the tax years [year] and [year]. [Where applicable: We also prepared the [Form 1065 / Form 1120-S] returns of [Business name] for the same years.]

Those returns reported self-employment income from [Business name], [described as: [nature of business]], on [Schedule C / Schedule E and Schedule K-1].

[Where true and known to you: As of the date of this letter, we are engaged to prepare the returns for the [year] tax year.]

The basis of this letter

We prepared these returns from information provided by [Client name]. We did not audit, review or otherwise verify that information, and we express no opinion or any other form of assurance on it, on the returns, or on any financial statement.

This letter does not address [Client name]'s creditworthiness, the future income or profitability of [Business name], its ability to meet debts or other obligations, or the effect on the business of any withdrawal of funds. You should not rely on it for any of those matters, and it is not a substitute for your own underwriting.

Use of this letter

This letter is provided solely for your use in evaluating the loan application referenced above. It speaks only as of its date, and we undertake no obligation to update it.

Yours sincerely,
[Name], CPA
[Firm name]

cc: [Client name]

Before you use this

Supplied as-is, with no guarantee. These templates are general information, not legal advice, and not a substitute for it. Have your own legal adviser review and adapt one to your practice and your jurisdiction before you put it in front of a client. FirmHello accepts no responsibility or liability for any use made of them.

Where CPA letters for mortgages go wrong

Signing the lender's script

A pre-written letter drafted by the lender is written for the lender. The Journal of Accountancy said it plainly: such a letter could transfer some of the potential liability to the CPA if the loan defaults, and signing it is not recommended.

Sending before the consent

The letter discloses tax return information. Without a signed section 7216 consent that names this lender and this purpose, the disclosure is exactly what the statute penalizes, however helpful the letter. Once the consent is signed, deliver the letter through a channel you control, such as a secure client portal for accountants the client downloads it from, rather than as an email attachment.

The word "verify"

"We have verified the income" tells the lender you performed procedures you did not perform. Say what you prepared and where the information came from, and let the lender draw its own conclusions.

Other letters a firm sends

Tax preparation Tax preparation What it is Engagement letters Accounting Accounting Compilation Compilation

Questions about CPA letters for mortgages

Does Fannie Mae require a CPA letter for self-employed borrowers?

Not as such. Its Selling Guide asks the lender to verify that the business exists within 120 calendar days before the note date, from a third party such as a CPA, a regulatory agency or the licensing bureau if possible, or by checking a phone listing and address. Income is documented from the borrower's signed returns or IRS-issued transcripts, generally for two years, and the lender does the analysis. Not every loan is sold to Fannie Mae, so ask the lender which rule it is applying.

Can I just send the client their returns instead?

Yes, and it is often the simplest answer. The AICPA's Tax Adviser suggests sending the information to the client, who is free to pass it to anyone. Nothing leaves your firm for a third party, so there is no disclosure to consent to. A client portal for accountants such as FirmHello puts the filed returns in the client's own vault, so they can download them when the lender asks.

What if the lender insists on more?

Then it wants more than facts, and more than facts is an engagement: an audit, review or compilation of financial statements, or agreed-upon procedures, each under its own standards, its own letter and its own fee, and none of them reporting on solvency. Start with a compilation engagement letter if a compilation is what the lender will accept.

Is a self-employment verification letter the same thing?

Usually. Lenders, insurers, employers and government agencies use "self-employment verification letter", "CPA letter for self-employed" and "comfort letter" for the same request. The same limits apply to each: confirm facts from your records, and nothing about accuracy or the future.

Should we have this template reviewed?

Yes. It is supplied as-is. The Journal of Accountancy suggests asking your errors and omissions insurer about the content of any such letter you plan to use in your practice.

Sources

The primary sources this page is written against, last read against it on . Check them before relying on a detail; rules and thresholds change.

  1. The Tax Adviser (AICPA) The Tax Adviser (AICPA), "Third-party verification requests", Tax Practice Management…
  2. Journal of Accountancy (AICPA) Journal of Accountancy (AICPA), "Concerns About CPA Letters to Third Parties", March 2009
  3. Fannie Mae Fannie Mae Selling Guide B3-3.1-07 (announcement SEL-2026-02, 2026-03-04)
  4. Fannie Mae Fannie Mae Selling Guide B3-3.2-01 (12/13/2023)
  5. Fannie Mae Fannie Mae Selling Guide B3-4.2-02 (12/14/2022)
  6. Cornell Law School LII 26 CFR 301.7216-3 and Rev. Proc. 2013-14

What changed

  • Added an editable Word (.docx) copy of the letter beside the PDF.

Let the client fetch their own returns

Most lenders ask for the filed returns. With them in the client's own vault, the client can download them the day the lender asks, without a call to your office.

No card and no sales call. If you would rather tell us about your firm first, use the longer form.