CPA letter
A signed statement from a licensed CPA confirming business type, continuity of operation, or ownership percentage. Used in mortgage applications to lower the expense factor on a bank statement loan, confirm a self-employed business is actively operating, or verify ownership share for income attribution on a partnership return.
How it works in practice
Lenders ask CPAs to confirm facts underwriting can't read off a return: that the business remains actively operating (continuity), what percentage of it you own (income attribution from a K-1), how long you've been self-employed, or — on bank statement programs — what your actual expense ratio is, which can lower the expense factor and raise qualifying income materially.
Expect professional caution on the other side of the request. Accountants sign statements of fact they can verify from your books; they decline forward-looking comfort language ("the withdrawal won't harm the business", "income will continue") because their liability insurers tell them to. The productive approach is precision: tell the CPA exactly which facts the lender needs attested, provide the lender's wording early, and keep the statement to verifiable history. A one-line license-verified letter that says the true thing beats a florid one the CPA won't sign.
Two logistics notes: lenders independently verify the preparer's license, so the letter must come from a credentialed professional actually familiar with your books — not a letterhead favor; and requirements vary by program, with some accepting enrolled agents or licensed tax preparers where others insist on CPAs. Brief your accountant at pre-approval, not the week conditions are due; a rushed CPA is a conservative CPA.
Common questions
My CPA refuses to write the letter — now what?
Usually they're refusing the wording, not the task. Narrow the request to verifiable facts (return preparation, business existence, ownership share) and most will sign. If the lender demands assurances no professional will give, that's a lender problem — other programs phrase requirements more reasonably.
Does a CPA letter replace tax returns?
No — it supplements. On full-doc loans it corroborates continuity or ownership alongside returns; on P&L programs the CPA-prepared statement is itself the income document; on bank statement loans it can justify a lower expense factor. In each case it's evidence, not a substitute for the program's core documentation.
Related terms
- LTV (Loan-to-Value Ratio) — Loan amount divided by the appraised property value. A $320,000 loan on a $400,000 home is 80% LTV. Lower LTV…
- CLTV (Combined LTV) — Total of all liens on the property (first mortgage + any HELOCs or second mortgages) divided by property value…
- Pre-approval — A conditional commitment from a lender based on a full review of your income documents, assets, debt obligatio…
- Pre-qualification — A preliminary, informal estimate of how much you might borrow, usually based on self-reported information with…
- Underwriting — The lender’s detailed verification and risk assessment of your application. An underwriter reviews income, ass…
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Educational definition only — not financial, legal, or tax advice. Programs and limits change; verify current terms with a licensed professional.