No, you do not need to be a licensed Certified Public Accountant (CPA) to provide a letter for a P&L statement for a mortgage loan application.
While the letter is commonly referred to as a “CPA letter,” mortgage lenders will generally accept it from the following types of accounting professionals:
- Certified Public Accountant (CPA)
- Enrolled Agent (EA) – An EA is a tax practitioner certified by the IRS
- Independent Accountant
- Self-Employed Tax Preparer
The key requirement is that the letter is provided by an independent third-party accountant or tax preparer who has prepared or reviewed the borrower’s business tax returns and financial statements.
The professional providing the letter should have comprehensive knowledge of accounting principles and practices, as well as experience in preparing and analyzing financial statements and tax returns for businesses.
The letter should be on the accountant’s or tax preparer’s professional letterhead and must include their contact information, credentials (such as CPA, EA, or self-employed tax preparer), and any relevant license or registration numbers.
Even though CPAs are the most widely recognized accounting professionals, mortgage lenders understand that many self-employed borrowers and small business owners may not have formally engaged a CPA. In such cases, they will accept letters from other qualified accounting professionals who have directly worked on the borrower’s financial records.
The most important aspect is that the letter comes from an independent third party who can attest to the accuracy and completeness of the borrower’s reported business income and financial standing based on their professional expertise and review of the financial documents.