Under what circumstance must a borrower provide business tax returns?

A borrower must provide business tax returns when they own more than 25% of a company because ownership at this level indicates a significant stake in the enterprise, which can impact the borrower's financial stability and ability to repay a mortgage loan. Lenders assess the borrower's financial situation alongside the business's performance, as income derived from the business or any potential liabilities could directly affect the borrower's personal finances.

This requirement ensures the lender has a complete understanding of the borrower's financial background and the income generated from the business, which is crucial for assessing risk and making informed lending decisions. The more substantial the ownership, the more likely the borrower's financial health is tied to the success of the business. Thus, providing tax returns allows for a thorough evaluation of this relationship.