How to Get a CPA Letter for a Bank Statement Select-Industry Factor

The Quick Read: Get the lender’s wording and credential list first, then have a licensed CPA, enrolled agent, or other accepted tax preparer certify your actual expense ratio for the same period as your statements, signed, dated, and license-verified. The letter is optional on most files and only helps when your real overhead runs below the factor the program assigns. It never guarantees approval, because the lender sets the final factor.

• The letter replaces a lender’s default assumption with a documented, business-specific ratio.
• The borrower cannot self-certify. A licensed third party must sign.
• It matters on owner-occupied bank statement files, where qualifying income drives purchase capacity.
• On a DSCR rental purchase it is usually irrelevant, because the property’s rent is the qualifier.
• Whether it moves the factor at all depends on the program’s floor and rules.

“Select-industry factor” is a working label, not a published industry standard. Across the wholesale network, it describes a pattern: some programs start from a flat default expense factor, and others adjust that starting point for higher-expense industries like restaurants, retail, or trades. This article walks through how that works and how to get the letter that may change it.

What Is the Select-Industry Factor and Why Do Lenders Apply It?

A bank statement loan is reviewed on documented income under the applicable program, subject to lender guidelines. The underwriter averages eligible business deposits over 12 months of statements, removes a percentage for operating costs, and treats the rest as income. That percentage is the expense factor.

The mechanics run in a set order:

1. Transfers, loan proceeds, and other non-income credits come out of the deposits first.

2. The remaining deposits are scaled by your ownership percentage.

3. The program’s expense factor is applied.

4. The result is averaged over the statement period.

Most programs start with a flat default. Some tier it by industry, headcount, or premises type. Exact tiers vary by lender program sheet, and a loan officer should confirm them before you spend money on anything. Personal-statement programs usually apply no factor at all, so a CPA letter changes nothing there.

Key Terms Defined

Expense factor: the percentage of business deposits a lender treats as operating cost rather than income.

CPA letter: a signed statement from a qualified preparer that certifies the business’s actual expense-to-revenue ratio.

Enrolled agent (EA): a federally credentialed tax professional with unlimited IRS representation rights, who must hold a PTIN. Some programs accept EAs and some do not.

Non-attest: the letter explains a ratio. It does not audit your deposits or guarantee approval.

Select-industry factor: a working label for an industry-adjusted starting expense assumption. It is not a regulated term.

Does a CPA Letter Actually Change the Factor?

Sometimes. It depends on the program, the industry, and how your real costs compare to the assigned number. Here is the decision as it plays out on files.

Two honest warnings. First, if your CPA’s true number comes out higher than the lender’s default, the letter hurts you, so ask the CPA for a rough ratio before anyone submits anything. Second, programs commonly set a minimum certifiable ratio. A letter claiming a very lean business may be capped at that floor regardless of what the CPA writes.

The regulatory backdrop is brief. The CFPB’s ability-to-repay assessment report describes the standard as a reasonable, good-faith determination based on verified, documented information. How a non-QM lender gets there is its own call. Borrower-specific, third-party figures are easier to defend than generic estimates. That is why a signed letter carries weight with underwriters.

Who Can Sign, and How Do Lenders Verify Them?

Which credentials count is set by each program. Some accept only a CPA. Others accept a CPA, an enrolled agent, or a tax preparer. A few accept a bookkeeping company for expense statements. Ask before you hire anyone.

CPAs are licensed by state boards of accountancy, not a national body, per the AICPA-CIMA license verification checklist. That page also says to confirm on the issuing board’s own site when a national search returns nothing, since not every jurisdiction participates. NASBA’s CPAverify is a free national lookup fed by state boards, and it carries disciplinary markers. Run your own preparer through it before you submit. An underwriter may do the same.

Enrolled agents hold a federal credential, per the NAEA. The preparer needs a license or PTIN number on the letter either way. A missing ID is one of the most common reasons letters get returned.

What Must the Letter Contain?

Most programs want the same core elements. Use the lender’s wording where they supply it.

How to Get the Letter, Step by Step

1. Ask the loan officer first. Confirm whether the program accepts a letter, which credentials count, the exact wording, and any minimum ratio.

2. Decide if it is worth it. Compare your real overhead to the program’s assigned factor. If it is not lower, stop here.

3. Pick the preparer. The best choice is the professional who prepared or filed your return. A CPA who did not prepare the return may refuse to certify.

4. Send a briefing packet. Include the lender’s wording, the statement period, the business name and EIN, and the tax return and P&L the CPA will need to tie the number out.

5. Let the CPA calculate the ratio. The figure should reconcile with the return. Owner pay, depreciation, and pass-through costs are where numbers drift.

6. Check the draft before it is signed. Compare names, EIN, period, and credential against the lender’s list.

7. Submit it with the statements. The underwriter checks the letter against the deposits and any P&L or tax data, and may verify the license.

A short request to the accountant works: “My lender needs a signed letter certifying my business’s expense ratio for the same months as my bank statements. Here is their required wording and credential list. Can you review my records and tell me the ratio first?”

CPAs often decline broad assurances. The letter is non-attest: per a CPA firm’s explainer, it does not audit income or guarantee approval. Keep the request narrow and it gets signed more easily. Cost is modest next to the income at stake. Start well before contract deadlines, since it takes coordination.

Where the General Rule Breaks

Several edge cases come up on real files.

• Higher-expense industries. A program may assign restaurants, retail, e-commerce, or trades a factor above its default. A letter cannot lower that unless the program allows it. It may support a figure the program already permits.
• Platform deposits. Short-term rental platform income, gig income, and similar flows need separate handling. The letter has to reflect the true cost structure.
• Partial ownership. Income is scaled by ownership percentage. A letter does not fix a minority stake.
• Stale or mismatched letters. Letters generally must be recent and cover the same period as the statements. Windows vary by lender.
• Mixed or misclassified industries. If your business spans two categories, raise it with the loan officer early. Documentation, not argument, settles it.
• Plausibility. An underwriter compares a claimed ratio against what is normal for the industry. An outlier needs support.

Why Letters Get Rejected

What Does This Mean for an Investor?

Occupancy decides which path you are on. An owner-occupied file, meaning a primary residence or second home, is a consumer mortgage, and the expense factor directly sets qualifying income. On primary-residence purchase and rate-term files, select lenders in the network go up to 90% LTV. Owner-occupied cash-out tops out around 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio, by loan size and credit. That 75% figure is where the letter’s value shows up in structure. Loan amounts generally run $125,000 to $3,500,000, with reserves commonly around six months of the housing payment, subject to lender guidelines.

A bank statement loan on a non-owner-occupied rental, including a short-term rental, is business-purpose. Investment cash-out on this documentation tops out around 75% LTV. Investment purchase leverage varies by lender.

For a pure rental purchase, most investors never need the letter. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, so business expense factors do not enter the file. Lendmire’s complete DSCR loans guide covers that side. Some investors use both products in different transactions and prepare the letter only where a bank statement loan is the real path. For a closer look at how the choice differs by borrower type, see Lendmire’s piece Expense Factor vs CPA Letter on a Bank Statement Loan for a 1099 Earner.

Programs below 1.00 coverage exist through select lenders on the DSCR side, with adjusted LTV and terms. Tax treatment varies; consult a qualified professional.

Not a commitment to lend.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage brokerage focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 41 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Scotsman Guide Top Mortgage Workplace in both 2025 and 2026.

References

1. CFPB: CFPB Ability to Repay Qualified Mortgage Assessment Report

2. AICPA-CIMA – CPA License Verification Checklist

3. NASBA – All About CPAverify

4. NAEA – What is an Enrolled Agent?

5. Concepts CPA – CPA Letter for Non-QM