Letters of explanation

Letter of Explanation Template

One letter of explanation template, five sentences long, that adapts to any condition you have been asked to explain. Fill it in below and the generator produces the full letter, a short single-question version, and the covering email it travels in.

See the Letter of Explanation Kit Jump to the free generator

The structure

A letter of explanation is a short signed statement answering one specific question a reviewer has raised about your file, structured as five parts: the condition being answered, what happened and when, why it happened, what the current position is, and the documents attached that support all of it.

The structure matters more than the wording, because a reviewer is not reading for persuasion. They have a condition to clear, and they are looking for the four facts that let them clear it. A letter that buries those facts in a paragraph of context takes three readings; a letter that puts them in order takes one.

Working generator

Fill in the template

The five parts, as fields. The generator produces the full letter, a short single-question version for a reviewer who wants two lines, and the covering email that carries it.

Runs entirely in this browser tab.

Everything you type stays on this device. ApprovalPrep does not send, store, or receive the names, dates, addresses, or amounts you enter here — the page holds the templates and does the substitution locally.

Step 2

Copy your draft.

Document

The five parts in order. Sign it, date it, and attach the documents in the order they are listed — a reviewer working down the list should never have to search for the next one.

Fill in the form and choose Build my draft. Your finished text appears here, ready to copy.

Next step

Letter of Explanation Kit

The generator above is free and always will be. The paid kit is a direct download: a PDF guide plus editable DOCX versions of this document and the related letters, so you can keep and re-edit them outside the browser.

Key facts

Know the boundary before drafting.

One letter answers one condition. If the reviewer raised three, send three letters — a single letter covering all three gets cleared on none of them until the reviewer has separated them for you.
Quote the condition back in the first line, in the reviewer's own words. That is what lets a processor match your letter to the open item without reading the rest of it.
The letter is corroboration, not evidence. It is the attachments that clear the condition; the letter tells the reviewer what the attachments show and in what order to read them.
Never explain something that has not been asked about. Volunteering a second issue opens a second condition, and reviewers are required to document what they learn.
Sign and date it. An unsigned letter of explanation is treated as a draft in most underwriting and benefits workflows, and gets returned rather than read.

Fields to collect

Build the factual record.

The exact wording of the condition, as the reviewer sent it
The reviewer's name, organization, and the file, loan, or case number
What happened, in one sentence, with no adjectives
The dates the event began and ended
The reason, stated plainly and only as far as you can support it
What the position is today, and whether it is resolved
The list of documents attached, with dates, in the order the reviewer should read them
Your full legal name as it appears on the application, and the date you signed

Exact sequence

Prepare it step by step.

1. Copy the condition into a blank document first. The letter is built around it, and paraphrasing the condition is the fastest way to answer a question nobody asked.
2. Write the four facts as four separate lines before you write any prose: what, when, why, where it stands now.
3. Gather the documents that prove each of those four lines. A fact with nothing behind it either gets removed or gets an explicit note that no document exists for it.
4. Assemble the five parts in order and stop. Do not add background, apology, or anything about how the application matters to you.
5. Read it once for anything that could open a new question. Delete that sentence.
6. Sign it, date it, list the attachments by name and date, and send it by the route the reviewer specified.

Decision table

How the same template changes shape by who is reading it

The five parts stay the same. What varies is how much of each part the reader needs, and what would be a mistake to include.

Reader	What clears the condition	Length that works	Common overshare	Attach
Mortgage underwriter	The condition wording quoted back, the dates, and the documents that reconcile	5 to 7 sentences	Financial context nobody asked for, which opens new conditions	Statements covering the dated period, plus any third-party letter
Auto or personal lender	A plain cause and the current status	3 to 5 sentences	Comparisons to other lenders or other applications	The most recent statement showing the account current
Landlord or leasing office	What happened and that it is over	3 to 4 sentences	Details about health, family, or a former landlord dispute	Proof of the resolution — a paid receipt, a release, a payment record
Bank or account review team	Where the money came from, and from whom	4 to 6 sentences	Speculation about why the review was triggered	The transfer record on both sides, plus the sender's own confirmation
Benefits or agency caseworker	Dates and amounts matching the period under review	4 to 6 sentences	Anything about a different benefit or a different period	Pay records and any notice you received, with dates

Copyable template

The template, as a skeleton to copy

[Date]

[Reviewer name and organization]
Re: [file / loan / case number] — Letter of explanation

This letter responds to the following condition on my file:

  "[paste the condition in the reviewer's own words]"

What happened: [one sentence, no adjectives]. This began on [date] and ended on [date].

Why it happened: [the plain reason, only as far as you can support it].

Where it stands now: [resolved / current / ongoing, and what the position is today].

The following documents are attached in support:

  1. [document name], dated [date]
  2. [document name], dated [date]

Everything stated above is true to the best of my knowledge.

Signed ______________________  Date ____________
[Your full legal name, as it appears on the application]

Second tool

When you have been asked to explain three things at once

Send three letters, not one, and one covering email.

Subject: [file number] — three letters of explanation, conditions [ref], [ref], [ref]

[Reviewer name],

Three conditions were raised on this file. Each is answered in its own signed letter, attached separately so they can be cleared independently:

  Letter 1 — [condition wording]
            Attachments: [document], [document]

  Letter 2 — [condition wording]
            Attachments: [document]

  Letter 3 — [condition wording]
            Attachments: [document], [document]

Nothing in one letter depends on another. If two can be cleared and one cannot, please clear the two and tell me what the third still needs.

[Your name], [file number], [phone]

Avoid

Common mistakes

Paraphrasing the condition instead of quoting it. A processor matching your letter to an open item cannot match a paraphrase, and the letter sits unread.
Covering several conditions in one letter. Each condition is cleared separately in the reviewer's system, and a combined letter blocks all of them until someone unpicks it.
Explaining something nobody asked about. Reviewers are required to document what they learn, so a volunteered issue becomes a new condition.
Sending the letter without the documents named in it, or naming documents that are not attached. Both produce the same result: the condition stays open.
Writing at length. A letter of explanation that runs past a page reads as an argument, and an argument invites scrutiny of what is being argued around.

Self-service boundary

ApprovalPrep does not write your explanation, contact a reviewer, decide what your documents show, or clear a condition. The generator assembles your own words in your browser. You state only facts you can support, you sign it yourself, and you send it yourself.

Primary sources

Check the current instructions.

Consumer Financial Protection Bureau — Owning a Home

Open official or primary source →

Fannie Mae — Selling Guide

Open official or primary source →

Freddie Mac — Single-Family Seller/Servicer Guide

Open official or primary source →

Questions

Before you buy

What should a letter of explanation template include?

Five parts, in order: the condition quoted in the reviewer's own words, what happened and when, why it happened, where the matter stands today, and the documents attached in support. Plus your legal name, the file number, a signature, and a date.

How long should a letter of explanation be?

Five to seven sentences for most conditions, and three or four for a narrow one. If it runs past a page, that is usually a sign it is answering more than one condition and should be split.

Can one letter cover more than one condition?

It can, but it should not. Conditions are cleared one at a time in the reviewer's system, so a combined letter stays open on all of them until someone separates it. Three conditions means three signed letters and one covering email.

Does a letter of explanation need to be signed?

Yes. Most underwriting and benefits workflows treat an unsigned letter as a draft and return it rather than reading it. Sign it, date it, and use the legal name that appears on the application.

What if I cannot document part of the explanation?

Say so in the letter, name what does not exist, and offer whatever stands in its place. A reviewer told about a gap in advance treats it as a fact of the case; a reviewer who finds it treats it as a gap.

Do I have to use a template at all?

No, but the structure is doing the work. The reviewer is not reading for persuasion — they have one condition to clear and four facts to find. A letter that puts those four facts in a predictable order gets read once.

Next step

Keep the editable version: Letter of Explanation Kit.

You need one downloadable kit with multiple explanation-letter templates for credit, income, employment, address, rental, late-payment, bank-statement, life-event, or general application questions.

Everything on this page is free to use and copy. The kit is the paid, downloadable version at $39, paid once: a PDF guide plus editable DOCX files you keep, covering 9 named documents including credit explanation letter, income gap explanation letter, employment gap explanation letter.

Compare all kits

Trust boundary:

No fake documents, no credit repair, no legal or financial advice, no third-party contact, and no approval promise.

Data boundary:

ApprovalPrep does not store customer letter answers, completed drafts, uploaded documents, or personal application packets.

Letter of Explanation Template

Fill in the template

Fill in the facts you can verify.

Copy your draft.

Letter of Explanation Kit

Know the boundary before drafting.

Build the factual record.

Prepare it step by step.

How the same template changes shape by who is reading it

The template, as a skeleton to copy

When you have been asked to explain three things at once

Common mistakes

Check the current instructions.

Consumer Financial Protection Bureau — Owning a Home

Fannie Mae — Selling Guide

Freddie Mac — Single-Family Seller/Servicer Guide

Before you buy

What should a letter of explanation template include?

How long should a letter of explanation be?

Can one letter cover more than one condition?

Does a letter of explanation need to be signed?

What if I cannot document part of the explanation?

Do I have to use a template at all?

Keep the editable version: Letter of Explanation Kit.

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