Verification of Employment for Self Employed Borrowers - update March 5, 2019

Self Employed Borrowers: you no longer have to obtain a letter from your CPA confirming the existence of your business.

Self Employed Borrowers have always needed to provide proof of their business when making application for a Conventional Mortgage. This hasn’t changed, but the rules did just get a little easier to satisfy.

For many years, part of this verification of a business’s existence involved picking up the phone, calling your CPA and asking them to draft a letter stating the existence of the business and how long it has been operational.

Sometimes this guideline became a real sticking point. With the rise of more sophisticated tax and accounting software, many self employed sole proprietors and small businesses were no longer using Certified Public Accountants (CPAs). Sometimes these small companies would use an accountant but the the accountant did not have the CPA designation. When this occurred, self employed borrowers had to hope for an exception.

Fannie Mae, the Agency that backs up Conventional Mortgages, has updated the guideline for verification of employment for Self Employed Borrower. The letter from a CPA will still satisfy the verification of employment requirement but now other methods will also satisfy the requirement.

Self Employed Borrowers: How to document existence of your business for your Mortgage Approval

(Just one of these items is needed)

• CPA Letter stating existence of the business

• Proof from a regulatory agency or appropriate licensing bureau

• Verification of a phone listing and address through the phone book

• Verification of a phone listing and address through an active online directory (such as yellowpages.com, Google business, Yahoo business, etc