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What is a Proof of Funds Letter (POF)?

A proof of funds letter is a letter from the buyer’s bank to the property seller, showing that the buyer has enough liquid cash to pay a downpayment and other expenses related to closing the deal.

A property seller will feel more secure if you prove you have enough funds to buy their property. 

A proof of funds letter can help you close a real estate deal and outshine other property bidders without a POF letter.

By the end of this post, you’ll learn:

  • Benefits of POF letter 
  • Difference between mortgage preapproval and POF letter 
  • How to get a POF letter
  • A POF letter template

Benefits of a Proof of Funds Letter?

  1. You stand a chance to own the property. Once a seller trusts you from day one, they’ll definitely like to sign property transfer documents together. Let’s say you bid for a property with Ksh. 1M plus a POF letter and someone else bids with only Ksh. 1.2M. The seller might consider you since you have proof you can afford to pay.
  2. If you are using cash to buy a property, you don’t need to provide a mortgage pre-approval letter to the seller.
  3. If you are using a mortgage to buy property, you’ll need a POF to prove to the seller that you have enough funds to foot a down payment of at least 20% of the selling price. In addition, you’ll also need to provide a mortgage pre-approval letter.

Mortgage Pre-approval vs. Proof of Funds Letter: What’s the Difference?

A mortgage pre-approval serves as proof that the lender is willing to give you the loan you applied for after a specific period. In most cases, you must make a cash down payment on the property while waiting for the mortgage funds.

On the other hand, you will need a POF letter when you want to buy the property with cash. The bank states the liquid cash that is available in your account. 

Note that mutual funds, stocks, and bonds don’t count as liquid cash available.

How to Get a POF Letter 

You should visit your bank with your national ID to get a POF letter. If you have other accounts, transfer the money to one account before requesting a POF letter.

Having the money in one account saves you the time moving from one banking institution to another requesting POFs.

After the funds are in one account, request a POF letter from the bank manager. It won’t take more than 24 hours before you have the letter with you.

A Proof of Funds Letter Template 

Here is a template of what to expect inside that envelop: 


Bank Name 



Dear (Property Seller),

RE: Proof of Funds for (Buyer Name)

We hereby certify that (Buyer Name) has been our esteemed customer for the last (no. of years).  

(Buyer Name) has total liquid cash of (Ksh….) in their account in our institution.

Kindly find the attached documents of their bank statements for each account. 

If you need more information concerning (Buyer Name), feel free to contact us via (email/phone number). 



Branch Managers Name 


Always aim to provide a POF letter whenever you are not the only one bidding for a property. Sellers will not waste time going for bidders with no POF letters. Instead, they’ll just come to you directly.

Frequently Asked Questions 

  1. Can I submit several POF letters if I have multiple bank accounts?

This idea will be tiresome since you will spend more time waiting for those letters. Furthermore, moving all the money to one account from one banking institution will be convenient.

  1. When do you need a POF letter?

You’ll need a POF letter when buying a property for cash. The seller will trust you more once you prove your legitimacy through your available funds.

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