To obtain employer certification for a mortgage application, a borrower must first request a certification form from their mortgage lender or use a standardized template provided by agencies like Fannie Mae or Freddie Mac. The borrower completes the form with their employer’s details, including job title, income, and employment start date. The employer then verifies the information by signing the form, confirming the borrower’s current employment status and salary. The borrower submits the certified document to the lender for underwriting.

Employer certification is critical to assessing a borrower’s ability to repay a mortgage. According to a 2023 report by the Consumer Financial Protection Bureau (CFPB), 18% of mortgage applications were denied due to employment-related issues, such as insufficient income documentation or unstable employment history. Lenders rely on employer certification to verify income stability, which reduces default risk. For example, Fannie Mae’s guidelines mandate employer verification for loans it purchases, as this helps ensure the borrower’s debt-to-income ratio meets qualified mortgage standards. Data from the Urban Institute (2022) shows that loans with verified employer certification have a 30% lower default rate compared to those without. This process also aligns with federal regulations under the Secure and Fair Enforcement (SAFE) Act, which requires lenders to confirm a borrower’s employment to mitigate predatory lending practices. Ultimately, employer certification safeguards both lenders and borrowers by providing transparent, reliable income validation.