Funding conditions-

Every wonder why a home-loan closes later than expected even after the buyer has signed their loan docs?

The answer is simple… funding conditions.

Funding conditions are generally check-the-box items the lender must clear up before they will release the loan proceeds to an escrow or title company.

Funding conditions can be items that the client hadn’t yet provided to the lender but are not required for loan approval.  They can be items still outstanding from the title and escrow company, such as an updated HUD-1 or title supplement.  Or they can be items still outstanding from the the agents involved in the transaction, like a signed FHA addendum.

Often in the rush to “get loan docs”, lenders will move several conditions of the loan to Prior To Funding (PTF).  At that point it is important for all parties in the transaction (agents, buyer, seller, loan officer, funder, escrow officer) to identify what these funding conditions are and work together to turn in required conditions so that the loan can close.