Which Financial Statements Does Your Mortgage Company Need?
Compiled, Reviewed, or Audited? We'll guide you to the right standard—and help you understand the compliance and cost differences.
Understanding the Three Levels
Mortgage companies need financial statements for state licensing, NMLS compliance, lender qualification, and investor confidence. But not all statements are created equal. The level of assurance you need depends on what you're using them for and where you're trying to operate.
Compiled
SSARS (Statements on Standards for Accounting and Review Services)
Level of Assurance
No assurance provided
The CPA organizes and presents your financial data in standard format, but does not audit or verify the underlying information. A compiled statement says: "Here's what the client gave us, formatted correctly."
Typical Cost
$7,000 - $10,000
Common Use Cases
- State licensing renewals (basic applications)
- NMLS filing (initial or renewal)
- Mortgage broker qualification
- Basic lender inquiries
- Internal financial planning
Reviewed
SSARS (Statements on Standards for Accounting and Review Services)
Level of Assurance
Limited assurance
The CPA performs analytical procedures and inquiries to verify reasonableness of the financial statements. A reviewed statement says: "We asked questions and tested key items—nothing looked wrong."
Typical Cost
$7,000 - $10,000
Common Use Cases
- NMLS renewal (multi-state)
- Mortgage correspondent lender qualification
- State licensing (some states require)
- Lender due diligence
- Company growth/institutional credibility
Audited
GAAS (Generally Accepted Auditing Standards)
Level of Assurance
Reasonable/high assurance
The CPA performs detailed testing of transactions, accounts, and internal controls. An audited statement says: "We independently verified that these statements are fairly presented according to GAAP."
Typical Cost
$15,000 - $25,000
Common Use Cases
- FHA Lender approval
- Ginnie Mae certification
- Fannie Mae/Freddie Mac seller-servicer programs
- Warehouse lender credit lines ($500K+)
- Investor funding or institutional partnerships
- Mortgage servicer platforms
Independence Rules
Under professional standards, a CPA firm cannot prepare the financial statements they are also auditing. If you need both preparation and audit services, the preparation must be handled by one firm and the audit by another—or the engagement must be structured to maintain independence. We can advise you on the best approach for your situation.
What Are SSARS and GAAS?
SSARS (Statements on Standards for Accounting and Review Services) applies to compiled and reviewed statements. These statements are less rigorous but faster and cheaper. The CPA doesn't audit you.
GAAS (Generally Accepted Auditing Standards) applies to audited statements. These are the gold standard. The CPA independently tests your records, verifies transactions, and assesses internal controls. Audits take longer and cost more, but they carry the highest level of assurance.
Statement Requirements by Company Type
Use this table to determine which financial statement level your company needs. Remember: if you're licensed in multiple states or pursuing multiple programs, you may need to meet the highest requirement across all of them.
| Company Type | Compiled | Reviewed | Audited | Notes |
|---|---|---|---|---|
| Mortgage Broker (Basic State License) | Common | Optional | Not required | Compiled statement usually sufficient. Some states prefer reviewed. |
| Mortgage Broker (NMLS Renewal) | Acceptable | Common | Not required | Most renewals accept compiled. Reviewed strengthens application. |
| Non-Delegated Correspondent Lender | Not sufficient | Common | Preferred | Usually requires reviewed or audited depending on lender partner. |
| Delegated Correspondent Lender | Not sufficient | Acceptable | Common | Most warehouse lenders require audit or strong reviewed statement. |
| FHA-Approved Lender | Not accepted | Not accepted | Required | $1M net worth, 20% liquidity requirement, audited only. |
| Ginnie Mae Issuer | Not accepted | Not accepted | Required | $2.5M net worth minimum, audited statements required annually. |
| Fannie Mae/Freddie Mac Seller-Servicer | Not accepted | Not accepted | Required | $2.5M+ net worth, formula-based reserve requirements, audits required. |
| Section 184 Lender (Indian Home Loans) | Not sufficient | Acceptable | Preferred | HUD requirements vary. Reviewed minimum, audit recommended. |
| Mortgage Servicer | Not accepted | Not accepted | Required | Fannie/Freddie servicer standards require full audits and net worth. |
FHA, Ginnie Mae, and Fannie Mae/Freddie Mac Requirements
If you're pursuing government-backed lending programs, the requirements are strict and non-negotiable. These are the biggest programs in mortgage lending, and they have the highest standards.
FHA-Approved Lender
Minimum Net Worth
$1,000,000 minimum
Liquidity Requirement
20% of net worth in liquid assets
Financial Statements
Audited statements only
Reserves
Liquid reserves per loan volume
Ginnie Mae Issuer
Minimum Net Worth
$2,500,000 minimum
Liquidity Requirement
25% of net worth in liquid assets
Financial Statements
Audited statements annually
Reserves
Higher per-loan reserve requirements
Fannie Mae/Freddie Mac Seller-Servicer
Minimum Net Worth
$2,500,000 + formula-based
Liquidity Requirement
Formula-based (25%+ typically)
Financial Statements
Audited statements annually
Reserves
Monthly reconciliation, reserve formulas
These Requirements Are Enforced Annually
You must maintain minimum net worth and liquidity every year. If you dip below the threshold, you're out of compliance and may lose your approval. We monitor your financial position and alert you when you're approaching minimums.
Still Not Sure?
Q: Can I start with a compiled statement and upgrade later?
Yes. Many brokers start with compiled statements, then move to reviewed or audited when they scale. Just plan ahead—if you know you'll need an audit in 6 months, we can prepare your books now so the audit goes smoothly.
Q: What's the difference between a review and a preliminary audit?
A review is an independent procedure under SSARS. An audit is a full examination under GAAS. Reviews don't include testing internal controls or confirming third-party transactions the way audits do. Audits are more thorough.
Q: How long does each type take?
Compiled: 1-2 weeks. Reviewed: 2-3 weeks. Audited: 3-6 weeks depending on complexity and whether this is a first-year engagement. These timelines assume your books are clean and organized. If you need bookkeeping help first, add 4-6 weeks.
Q: Do I need the same statement level across all states?
No. You can have one consolidated statement that meets the highest requirement across all your licensed states. For example, if you're licensed in CA (requires compiled) and NY (requires reviewed), you'd get one reviewed statement that covers both.
Not Sure Which Level You Need?
Let's talk through your situation. We'll assess your current licensing, your growth plans, and your lender requirements—then recommend the right statement level to get you approved without overspending.
Schedule Free ConsultationGet the Right Financial Statements for Your Mortgage Company
Whether you need a compiled statement for NMLS renewal or a full audit for investor qualification, we'll prepare and file everything you need.
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