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Living Rent Free Letter for Mortgage

Reviewed by: David Naimey

Approved by: Chad Turner


  • First-time homebuyers need to submit identification documents.
  • If there are discrepancies, a letter of explanation and supporting documentation may be required.
  • Verification of rent is crucial for renters, confirming on-time payments.
  • Renters unable to obtain verification may provide a leasing agreement and 12 months of rent checks.
  • Additional assurance may be needed to confirm the borrower can handle mortgage payments.

For the third and final part of this blog, we’ll be discussing some more documents as well as giving additional tips that may help the first time home buyer speed up the mortgage-lending process. In the last blog update, we talked a bit about some additional income documentation that will be needed if the first time home buyer has pay stubs and W-2 forms, as well as sources from third parties like Social Security Administration income, or Pensions. We also spoke about the opposite, when there are garnishments or liens against the borrower. This section will be about other items that will be needed to be resolved, or documented prior to closing.

Identification Documents: What’s Needed?

The first time buyer can be required to send in quite a few documents for submission.  These documents include a copy of the first time home buyer’s Driver’s License, Social Security Card, verification of rent, verification of employment, and Consumer Explanation Letters. 

For the identification items, a clear copy of the first time home buyer’s Driver’s License and Social Security Card will be needed. Keep in mind that a copy of each identification card will be needed for all borrowers on the loan. The underwriter mainly checks the Driver’s License of the first time home buyer to make sure it’s not expired, but also confirms the name, as well as address listed on the Driver’s License. If the first time home buyer has a different last name than what was put on the loan application, this may prompt the underwriter to ask for confirmation. This confirmation can be a letter of explanation from the first time home buyer, and a copy of the divorce decree, birth certificate, or other proof of name change documentation. These will need to be submitted with the file so the underwriter can confirm that the identification used and the first time home buyer on the loan application are one and the same. Consequently, if the first time home buyer’s driver’s license has a different address than what is listed as their current on the loan application, a letter of explanation will need to be sent to the underwriter as just explaining why there is a difference.

More Documents: Verification Needed

The first time home buyer will need to provide verification of rent and verification of employment. For verification of rent, this is usually for first time home buyer’s who are currently renting from a landlord, either private or through a leasing company. This verification of rent is to confirm that the first time home buyer does not have any late payments in paying rent. If there are difficulties with getting the verification of rent front the landlord, the borrower can provide a copy of the leasing agreement and copies of the last 12 months of rent checks. If the first time home buyer is not currently paying rent, the underwriter will be looking for something called a Rent Free Letter. This letter basically indicates that the first time home buyer is currently living rent free. The underwriter may need to request an additional letter that indicates that the borrower will be fine with “payment shock,” or the introduction of a mortgage into the monthly budget.

For the next section we will be talking about a few more documents, closing out the series. 


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