A Proof of Funds Letter is an official financial document certifying that an individual, institution, or corporation has sufficient funds to complete a transaction. Proof of funds letter (POF) is generally required by a seller who needs to verify that the purchasing party is financially capable of producing the funds required to buy from them. These are commonly used to verify that a home-buyer can afford to purchase a home. Home sellers often require this document from potential buyers before they will hold the home while the sale is pending.
Your financial institution will provide a Proof of Funds letter at your request. It may take up to a week for your bank to prepare this document, so plan ahead. You should have this letter available before you make an offer on a home. It is given to the seller either when making the offer or within 36 hours after making an offer.
What to Include in a Proof of Funds Letter
Here is what needs to be included in this financial document:
- Date
- Bank name
- Bank address
- Name of buyer
- The combined amount of available funds from:
- Checking Account
- Signature of the authorized bank employee
- Bank contact information
Important: A Proof of Funds letter is not a pre-approval letter. A pre-approval letter is a lender commitment to provide a loan to a home buyer. A proof of funds letter certifies that the buyer has the financial ability to pay closing costs and a down payment on a home. Buyers need both of these documents when making an offer on a home.
Proof of Funds Letter Format
Here is a basic format for a Proof of Funds Letter.
{Date}
{Bank Name}
{Bank Address}
{Bank Phone Number}
To whom it may concern:
This letter is to certify that {Buyer Name} has available the sum of {combined funds} as of this date.
If you require further verification or have any questions, please contact us at {Phone Number} or {email Address}.
Sincerely,
{Signature of authorized employee}
{Name of authorized employee}
{Title of authorized employee}
Sample Letter
Here is a sample letter based on the above basic format.
January 24, 2028
Superior Banking Services
2000 West E Street
Maples, MI 39446
(924) 678-2445
To whom it may concern:
This letter is to certify that Dianna Hines has available the sum of $24,698.00 as of this date.
If you require further verification or have any questions, please contact us at (924) 678-2445, ext. 268 or jonesadam @ superiorbank . com.
Sincerely,
Adam Jones
Adam Jones
Account Manager, Superior Banking Services
Every bank needs a basic format for providing proof of funds documentation. Using a consistent format ensures quality control over the documents, your bank or financial institution provides its customers. The format above and the sample letter demonstrating its use are freely available for you to adapt and modify. They can help you produce official documents easily and efficiently.
Instant Proof of Funds Letter
An Instant Proof of Funds Letter is a formal financial document that certifies the available amount of funds a buyer has deposited in a bank. Proof of funds letters should be obtained before they are needed, although some banks will provide a letter on demand.
Commercial Proof of Funds Letter
A Commercial Proof of Funds Letter is a formal document verifying the sum of funds available to a commercial customer. These can be used as proof of the ability to pay for items a company wishes to purchase. These letters differ from private individual customer letters only in the name of the account holder.
Proof of Funds Letter from Bank
A Proof of Funds Letter from a Bank is a formal financial document that certifies a buyer has the available funds to pay for items purchased. The proof of funds letter basic format above works for individual, corporate, and institutional buyers. A proof of funds letter should always have a contact name and number in case there are questions or further verification is needed.
Proof of Funds Letter from Private Lender
A Proof of Funds Letter from a Private Lender is a letter is a statement signed that informs the seller of the buyer’s ability to fund the purchase. These are issued by hard money lenders such as Asset Based Lending, rather than the more commonly used pre-approval letter from a mortgage company. These are not like the Proof of Funds letters from your banking institution, which verify your immediate cash assets.
When purchasing a home, you need both a Proof of Funds letter verifying the amount of available cash you can bring to closing and a pre-approval letter from a mortgage lender. Your Proof of Funds letter from your bank should contain your name, the total of your available funds, the signature of an authorized bank employee, and their contact information. If you are financing through an Asset Based Lending fund, you will receive a proof of funds from them, which is much like a mortgage pre-approval.
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