A proof of funds letter is a dated statement from a bank or brokerage confirming that a named buyer holds a stated amount in their accounts. Sellers accept it with a cash offer as evidence the buyer can close. Mortgage lenders usually do not accept it alone, because it shows a balance but not where the money came from.
What must a proof of funds letter show?
A proof of funds letter must show who holds the money, how much is there, where it is held and when that was checked. A seller's agent reads it for those four facts. Anything vague on one of them, such as a missing date or a balance described as "sufficient", invites a request for a better letter.
Field checklist
- Institution's name, address and phone number, on its letterhead
- Account holder's full legal name, matching the name on the offer
- Available balance, or a statement that the balance is at least a stated amount
- Account type, such as checking, savings, money market or brokerage
- Date the balance was verified, ideally within a few days of the offer
- Name, title and signature of the bank officer who issued it
- At most the last four digits of the account number, never the full number
The same fields as an example
| Field | Example value |
|---|---|
| Issuer | Example Community Bank, branch letterhead |
| Account holder | Jordan Example |
| Balance stated | At least $425,000 in available funds |
| Account types | Checking and money market |
| Verified on | 2026-10-14 |
| Signed by | Branch manager, with phone number |
These values are invented to show the layout.
Who can issue a proof of funds letter?
A proof of funds letter can be issued by the bank, credit union or brokerage that holds the money. The letter carries weight because a third party with access to the account wrote it. Letters written by the buyer, by the buyer's agent or by a relative do not prove anything, because none of them can see the balance.
Brokerage and retirement accounts
A brokerage firm can issue a letter for a taxable investment account. Sellers sometimes discount it, since securities must be sold before closing and prices move. When the purchase depends on selling holdings, it helps to sell early and move the cash. The post on selling assets for a down payment shows how lenders trace the proceeds of a sale.
Business accounts
If the money sits in a company account, the letter names the business, not the buyer. A seller may question whether the buyer can spend it. A self-employed buyer who also needs a mortgage should expect the lender to check ownership as well, which the post on verifying self-employment for a bank statement loan describes.
Proof of funds letter versus bank statements for the lender
A proof of funds letter and bank statements answer different questions. The letter says the money is there today. Statements show how it got there, month by month. A seller needs only the first answer. A mortgage lender needs both, so it asks for statements even when the buyer already has a letter.
Fannie Mae's verification of deposits and assets topic, B3-4.2-01 shows the gap. It asks for statements that identify the institution and the account holder, cover a stated period, list all deposits and withdrawals and show the ending balance. A one-page balance letter has no deposits and no period. It cannot show a large deposit that needs sourcing, so it cannot replace the statements.
Where the two meet
The same topic says that when the latest statement is more than 45 days older than the application, the lender should ask for a more recent bank-generated form showing the balance, the date and at least the last four digits of the account number. A bank's balance letter can fill that role. It updates the statements; it does not replace them.
Once the statements are in, TrueBankFlow can line up the months and flag large deposits with their statement lines, so a lender can see in one view whether the balance on the letter was built gradually or arrived all at once.
When cash buyers attach a proof of funds letter to an offer
Cash buyers attach a proof of funds letter when they submit the offer, because there is no loan pre-approval to show the seller. Without it, a seller cannot compare a cash offer to a financed one. Some listing agents also ask for a fresh letter before accepting a counteroffer or during a multiple-offer round.
Financed buyers sometimes need one too
A buyer with a mortgage pre-approval may still be asked to show the down payment and closing costs. A short letter covering that amount, together with the pre-approval, answers the question. Cash kept at home cannot be shown this way; the post on cash on hand for a down payment explains why lenders resist it and what to do instead.
Showing the right amount
Asking the bank to state "at least" the purchase price plus estimated costs keeps the full balance private. Sellers rarely need the exact figure.
Proof of funds letters a seller's agent sends back
A seller's agent sends back proof of funds letters that are stale, unsigned, issued to the wrong name or worded so loosely that they confirm nothing. Fixing these takes a phone call to the bank, but it can cost the buyer a day in a competitive deal.
Common rejections
- Too old. A letter dated weeks before the offer suggests the money may have moved.
- Name mismatch. The letter names a trust or business while the offer names a person, or the reverse.
- No signer. A printout with no officer's name or signature looks like something anyone could produce.
- Vague amount. "Funds sufficient for the purchase" without a figure.
- Too much information. A full account number or transaction list, which the buyer should not be sharing.
Ask the bank to fix the flaw and reissue on letterhead. If the deal later turns into a financed purchase, the lender will still want statements, and TrueBankFlow turns those months into a report a reviewer can check.