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Transactional Funding vs Hard Money

Q: Do I need a down payment or credit for transactional funding?

Neither. Transactional funding covers up to 100% of the purchase price on the A-to-B leg, priced as a flat fee rather than a rate, with no credit check and no appraisal. It works that way because the money is only in the deal for the length of the closing. Hard money is different: it is a real underwritten loan against the asset, and you bring equity to it.

Q: Can my end buyer use an FHA loan on a same-day double close?

No, not on that timeline. HUD's rule makes a property ineligible for FHA-insured financing when the resale contract is executed 90 days or less after the seller's own acquisition date (24 CFR 203.37a). A same-day double close puts that gap at zero, so the C side cannot close on FHA financing that day. If your buyer needs FHA, you're looking at hard money to hold the property until the timeline clears, not transactional funding.

Q: Will my end buyer's lender see what I paid for the property?

On a conventional loan, yes. Fannie Mae's appraisal forms require the appraiser to report the subject property's three-year sales history, and the lender has to separately confirm who actually owns the property being sold. A double close keeps the two legs on separate settlement statements; it doesn't hide the chain of title from the C side's underwriter.

Q: What happens if my end buyer doesn't close on time?

Transactional funding has no exit if that happens, because it's repaid only by the simultaneous resale. Hard money is built for that risk instead: you take title and carry the property for a stated term, so a buyer falling through doesn't leave the loan unpaid. That's the real tradeoff between the two, not the fee.

The buyer on your C side decides which one you need.

Both fund a purchase you don't plan to keep long, but they solve different exits. Transactional funding covers the A-to-B leg and gets repaid the same day, out of the simultaneous B-to-C resale, so it only works if your end buyer's money lands today. Hard money, which on our side is the fix and flip program rather than a product literally named 'hard money,' carries the property for a stated term instead, so the exit can happen on your schedule. The product that fits often comes down to who is buying from you and how they're paying, not how long you plan to hold.

Transactional Funding

A-to-B leg funding

Hard Money

Acquisition plus rehab

What it funds

The A-to-B leg

Purchase plus rehab

Hold period

Days, not weeks

6-month term

Pricing basis

Flat fee

Interest-only, from 9.99%*

Underwriting

No credit or appraisal

Property and exit driven

Repayment source

Simultaneous resale

Sale or refinance

Simultaneous

5-7 days typical

Bottom line

Transactional funding only works when your end buyer's money lands the same day, since the simultaneous resale is the entire repayment plan. Hard money is the answer the moment that exit stops being simultaneous: your buyer's financing won't close today, the property needs work first, or you'd rather own it than lose the contract. The rate shown on the hard money side is a starting rate, subject to underwriting.

Rates and terms shown are typical figures, subject to underwriting and market conditions. Not a commitment to lend.

Common questions

Do I need a down payment or credit for transactional funding?

Neither. Transactional funding covers up to 100% of the purchase price on the A-to-B leg, priced as a flat fee rather than a rate, with no credit check and no appraisal. It works that way because the money is only in the deal for the length of the closing. Hard money is different: it is a real underwritten loan against the asset, and you bring equity to it.

What happens if my end buyer falls through?

That is the risk transactional funding does not cover, and it is the reason to be certain of the B-to-C before you use it. The structure assumes both legs close together. If the end buyer does not fund, you are holding a property you financed at 100% of purchase with no long-term loan behind it. A hard money loan, which is underwritten to a longer horizon, is the safer instrument when the resale is not yet papered and funded.

Is a double close legal everywhere?

It is a normal transaction structure, but the rules genuinely vary by state and some of them changed recently. Several states have added wholesaler disclosure or cancellation requirements in the last few years, and at least one sets a statutory waiting period that determines when the first leg can close. We underwrite to whatever your state requires rather than around it. Check your own state's current rule with a real estate attorney there before you build a process on it.

Can my end buyer use an FHA loan on a same-day double close?

No, not on that timeline. HUD's rule makes a property ineligible for FHA-insured financing when the resale contract is executed 90 days or less after the seller's own acquisition date (24 CFR 203.37a). A same-day double close puts that gap at zero, so the C side cannot close on FHA financing that day. If your buyer needs FHA, you're looking at hard money to hold the property until the timeline clears, not transactional funding.

Will my end buyer's lender see what I paid for the property?

On a conventional loan, yes. Fannie Mae's appraisal forms require the appraiser to report the subject property's three-year sales history, and the lender has to separately confirm who actually owns the property being sold. A double close keeps the two legs on separate settlement statements; it doesn't hide the chain of title from the C side's underwriter.

What happens if my end buyer doesn't close on time?

Transactional funding has no exit if that happens, because it's repaid only by the simultaneous resale. Hard money is built for that risk instead: you take title and carry the property for a stated term, so a buyer falling through doesn't leave the loan unpaid. That's the real tradeoff between the two, not the fee.

Related comparisons

Hard Money vs Private MoneySame asset-based idea, different source and flexibility.Hard Money vs Conventional LoanSpeed and flexibility versus the lowest-cost long-term money.Assignment vs Double CloseThe real question is whether assignment is even open to you.

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