What Is Funding?

Funding is the step where your lender wires the loan proceeds to the closing agent or title company after you have signed all closing documents and every condition has been met. In most states, funding happens the same day as closing or within 24 hours. Until the loan is funded, the transaction is not complete and the seller does not receive payment.

For example, on a $325,000 mortgage, the lender wires $325,000 to the title company after verifying all signed documents. The closing agent then disburses funds to the seller, pays off any existing liens, and distributes closing costs to the appropriate parties—real estate agents, insurers, and tax authorities. In “dry funding” states like California, Alaska, and Arizona, there may be a 1–2-day gap between signing and actual disbursement.

Key Facts

• Timing: Same day as closing in most states; 1–2 days later in dry-funding states
• Disbursed by: The lender wires funds to the title company or closing agent
• Verification: Lender confirms all documents are properly signed and conditions met before releasing funds
• Dry vs. wet funding: Wet-funding states disburse same day; dry-funding states may delay 1–2 business days
• Final step: Funding completes the financial transaction and triggers deed recording

Frequently Asked Questions

What is the difference between wet funding and dry funding?

In wet-funding states, the lender disburses loan proceeds on the same day you sign your closing documents. In dry-funding states—like California, Arizona, and Alaska—there is typically a 1–2-day delay between signing and the lender releasing funds while final document review occurs.

Can funding be delayed after I sign?

Yes, though it is uncommon. Delays can occur if the lender identifies a documentation error, a wire transfer issue arises, or the closing agent has questions about signed documents. Most funding delays are resolved within 24 hours.

When do I officially own the home?

You officially own the home once the deed is recorded with the county, which happens after funding. In wet-funding states this is typically the same day you sign. In dry-funding states, ownership may transfer 1–2 business days after your closing appointment.