CPA Letters for Banks and Lenders
Sometimes lenders ask clients to provide a “CPA letter” (also called a comfort letter) when applying for a mortgage or business loan. These requests are common, but there’s often confusion about what’s required and what a CPA can actually provide.
Are CPA letters required?
Nope! These letters are not required by Fannie Mae, Freddie Mac, FHA, VA, HUD, or GNMA. If a lender asks for one, it’s usually an internal underwriting preference and not a government-backed requirement. In other words, they are trying to create less work for themselves by pushing the burden onto you and your CPA. You are free to push back and ask them to rely on standard documents like tax returns and financial statements instead.
Why CPAs can’t “verify” income or repayment ability
Under AICPA professional standards, CPAs cannot provide assurance about:
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The accuracy of your income without an audit or review engagement
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The future stability of your business
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Your ability to repay a loan
These kinds of guarantees would amount to an audit-level opinion, which requires a formal engagement that goes far beyond a simple letter request.
What a CPA can do
A CPA can:
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Confirm that they prepared your tax return(s)
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Provide copies of filed tax returns (with your authorization)
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Provide a letter that summarizes information you supplied, with clear disclaimers that the CPA has not audited or verified the data and cannot provide any assurance of its accuracy or completeness
Due to the volume of requests and the careful wording required, the fee for this letter is $100.
Bottom line
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These letters are not legally required for government-backed loans.
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If a lender insists, your CPA can provide a limited letter with disclaimers, but it will not (and cannot) guarantee your income or repayment ability.
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In most cases, your tax returns and financial statements should be enough to satisfy underwriting requirements.