What is transactional funding?

Short term capital that funds the first leg of a double closing. The lender covers the A to B purchase, the B to C sale closes shortly after, and the loan is repaid from those proceeds. The hold is usually same day.

When do you need a double closing instead of an assignment?

When the seller or their lender prohibits assignment, when the property is bank owned with deed restrictions, or when you do not want the end buyer to see your spread. Some title companies also decline to close large assignments.

Do you need proof of funds for transactional funding?

Yes, and the lender normally provides a proof of funds letter for the A to B contract once the file is approved. It is one of the main practical reasons wholesalers use it.

What does transactional funding cost?

It is priced as a flat fee rather than an annual rate, because the hold is measured in hours. Cost is driven by the size of the A to B purchase, not by how long the money is out.

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Transactional funding: how a double closing actually gets paid for

Transactional funding covers the A to B purchase so a wholesaler can close without an assignment. Here is how it works and what it requires.

August 11, 2026 · 4 min read

Most wholesale deals close as an assignment. You put a property under contract, assign that contract to an end buyer for a fee, and never take title.

Sometimes you cannot. Transactional funding exists for those deals.

The two closings

A double closing is two separate transactions on the same property, usually the same day.

A to B. The original seller sells to you. You take title. This is the leg that needs funding, because you are actually buying the property.

B to C. You sell to your end buyer. Their funds arrive and the transactional loan is repaid out of the proceeds. Your spread is what remains.

The lender is exposed for the gap between the two, which is often a matter of hours. That is why the product is priced as a flat fee rather than an annual interest rate. An annual percentage on a four hour loan is not a meaningful number.

When you need it

Assignment is prohibited. Bank owned and HUD contracts frequently forbid assignment outright, sometimes with a deed restriction on resale within a set period. Read the addendum before you market the deal, not after.

The spread is large. A $60,000 assignment fee on a settlement statement can blow up a deal that would close without comment as two transactions. Some title companies also decline to handle large assignments as a matter of policy.

You do not want the spread visible. In an assignment, the end buyer sees what you paid. Some buyers walk on principle. A double closing keeps the two contracts separate.

Your end buyer's lender objects. Some lenders will not finance the purchase of an assigned contract, and some appraisers flag the A to B price as a transaction concern.

What a lender needs to see

The underwriting is unusual because the lender is not underwriting a hold. They are underwriting whether the B to C closing is real.

Both contracts. A to B and B to C, executed.
Proof the end buyer can close. Their proof of funds, or a lender commitment letter if they are financed. This is the file's central risk.
A title company that will handle a double closing. Not all will, and not all states treat them the same way. Confirm before you contract.
Both closings scheduled. Ideally same day, and in the right order.

The end buyer is the whole file. If their financing collapses, you own a property you were never planning to keep, funded by a loan that expects repayment immediately. Verify their proof of funds yourself. A screenshot is not verification.

The proof of funds letter

There is a practical benefit that gets overlooked. Once a transactional lender approves the file, they will normally issue a proof of funds letter you can present with the A to B offer.

For a wholesaler making offers on bank owned inventory, where a POF is required up front, that letter is frequently the reason the offer is accepted at all.

What it costs, and how to price it

Transactional funding is quoted as a flat fee against the A to B purchase price. Because the hold is same day, the fee does not scale with time.

Price the deal as: B to C price, minus A to B price, minus the funding fee, minus both sets of closing costs, minus any recording or transfer taxes that apply twice. Transfer taxes are the item most often missed, and in some jurisdictions they are charged on both legs, which can consume a thin spread entirely.

If what remains is not worth the execution risk, take the assignment where you can get it.

Practical sequence

Get the A to B property under contract, and read the assignment clause.
Confirm a title company that will close both legs.
Find the end buyer and execute the B to C contract.
Verify the end buyer's funds or lender commitment independently.
Submit both contracts for transactional funding.
Schedule both closings, same day, correct order.
A to B funds, B to C funds, loan repaid, spread released.

Where it fits

Transactional funding is a narrow instrument. It solves exactly one problem: you need to take title briefly and you do not want to use your own capital to do it.

If you are holding the property for any length of time, even a few weeks, this is the wrong product and a short term bridge loan is the right one. The requirements for that are different, because the lender is then underwriting a hold and an exit rather than a same day payoff.

If you have both contracts in hand, send the deal over. Terms inside 24 to 48 hours.

Common questions

What is transactional funding?: Short term capital that funds the first leg of a double closing. The lender covers the A to B purchase, the B to C sale closes shortly after, and the loan is repaid from those proceeds. The hold is usually same day.
When do you need a double closing instead of an assignment?: When the seller or their lender prohibits assignment, when the property is bank owned with deed restrictions, or when you do not want the end buyer to see your spread. Some title companies also decline to close large assignments.
Do you need proof of funds for transactional funding?: Yes, and the lender normally provides a proof of funds letter for the A to B contract once the file is approved. It is one of the main practical reasons wholesalers use it.
What does transactional funding cost?: It is priced as a flat fee rather than an annual rate, because the hold is measured in hours. Cost is driven by the size of the A to B purchase, not by how long the money is out.

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