Patrick's Quick Answer
A proof of funds letter is a document from your bank confirming you have the cash on hand to close, and in Texas it is basically required when you submit an all-cash offer. It is different from a pre-approval: a pre-approval proves you can borrow, a proof of funds letter proves you have the money. Most sellers want the letter dated within 30 days, and the money has to sit in your own account, not in a shoebox.
Do I need a proof of funds letter to buy a home? If your offer is all cash, yes, and most Texas listing agents will not even present the offer without it. If you are financing, you attach a pre-approval letter and show that the down payment, closing costs, and earnest money are on hand. Either way, sellers want evidence that the money you claim is real and available.
What a proof of funds letter actually is
A proof of funds letter is a document issued by a bank or financial institution verifying that you have enough liquid money to complete a purchase, typically the down payment, closing costs, and earnest money. It is not a loan document. A mortgage pre-approval verifies your creditworthiness for a loan, while a proof of funds letter verifies available cash, which is why the two travel together on financed offers and why cash offers live or die on the letter alone.
Acceptable funds are liquid money: checking, savings, money market accounts, matured CDs, Treasury bills, or brokerage funds you can liquidate. Physical cash is not acceptable, because the seller cannot verify it. The money must be in your name, or in the name of a qualified gift donor if someone is helping you.
What the letter includes, and what it never should
A proper letter from your bank names the account holder exactly as it appears on the account, lists the bank's name, address, and contact information, shows the account number (often partially redacted), and states the available balance as of a specific date with the date the letter was issued. It is signed by an authorized bank official, so the seller has someone to call.
Most sellers want the letter dated within 30 days of the offer, with some accepting up to 60. Ask your agent what the specific seller expects, because the freshness requirement is a seller preference, not a law.
When you need one in a Texas home purchase
In a competitive market like San Antonio, the all-cash offer is a real weapon, but only if it is documented. Texas sellers and listing agents typically will not present or consider a cash offer without proof of funds, because the whole point of a cash offer is that the deal is not at risk of falling apart over financing.
For financed offers, Texas buyers are generally expected to attach a lender pre-approval letter plus proof that the earnest money and down payment are on hand. The strongest offers in a multiple-offer situation pair a clean pre-approval with a recent asset statement, so the seller sees both borrowing power and cash.
The Texas timeline: earnest money within 3 days
Under the TREC-promulgated One to Four Family Residential Contract, the earnest money and option fee must be delivered to the title or escrow company within 3 days after the contract's effective date. That deadline is why the money has to be in place before you write the offer, not after. Your proof of funds letter shows the funds exist today, and the earnest money amount and option fee are wired from that same verified account.
How sellers and lenders verify it
Sellers and listing agents verify a proof of funds letter by checking the letterhead, formatting, dates, and that the account holder's name matches the buyer on the contract, then calling the bank on the listed number to confirm the account exists and the funds are available. Blurry numbers, inconsistent bank branding, or a name that does not match the contract are the red flags that get an offer set aside.
Your lender verifies funds separately through underwriting. Fannie Mae guidelines typically ask for asset statements dated no more than about 45 days before application and covering roughly the most recent 60 days, about two statements. So keep the same accounts clean and documented through closing, because the underwriting check is stricter than the seller's.
Cash offer vs financed offer: what changes
| Detail | All-cash offer | Financed offer |
|---|---|---|
| Required with the offer | Proof of funds letter, effectively mandatory | Pre-approval letter plus proof of funds for earnest money and down payment |
| What the seller sees | Cash to close the whole deal | Borrowing power plus cash on hand |
| Main risk for the seller | Low, if the funds verify | Financing falls through before closing |
Because I work as both your buyer's agent and your loan officer, I know before we write the offer whether your file will close cleanly. That means the pre-approval, the asset statements, and the earnest money timing are handled as one conversation, so nothing about your money is a surprise at contract time.
Get your pre-approval and know exactly what to show the seller.
I will walk you through the pre-approval, the asset documentation, and the earnest money timing so your offer arrives complete and competitive.
Frequently Asked Questions
Do I need a proof of funds letter if I am getting a mortgage? Tap to expand
How recent does a proof of funds letter need to be? Tap to expand
Can I use a bank statement instead of a proof of funds letter? Tap to expand
What counts as acceptable proof of funds? Tap to expand
When do I need proof of funds in a Texas home purchase? Tap to expand
About Patrick Kevin Fagan, REALTOR®
Patrick Kevin Fagan is a Texas Real Estate Sales Agent (#454749) with AXEN Realty LLC and a Senior Loan Officer (NMLS ID #877741) with NEXA Mortgage, LLC (NMLS #1660690). He brings 23+ years in mortgage lending and 19 years in real estate, serving homebuyers, homeowners, and sellers across Greater San Antonio and the Texas Hill Country.
Full credentials on the About page · Text or call 210-317-6514
Sincerely,
Patrick Kevin Fagan
Timing and content details drawn from standard real estate practice references reviewed October 26, 2026. The 3-day earnest money and option fee deadline comes from the TREC-promulgated One to Four Family Residential Contract (Paragraph 5), and the asset statement guidance follows Fannie Mae underwriting guidelines. Seller preferences on letter freshness and format vary, so confirm the exact expectation with your agent for your transaction.
