EMD Funding vs. Transactional Funding: What’s the Difference (and Which Do You Need)?

Minimalist illustration of a real estate contract, escrow deposit, house icon, and emerald green funding checkmark

If you have a property under contract, the funding you need depends on the stage of the transaction.

  • EMD funding covers the earnest money deposit required to secure your contract.
  • Transactional funding covers the purchase price for the A-B leg of a double close.
  • Double close funding helps you purchase and resell a property through the same or different title companies.

The difference is straightforward. EMD funding supports the contract stage. Transactional funding supports the closing stage.

Quick Comparison

Funding Type What It Covers When You Use It Typical Transaction
EMD Funding Earnest money deposit When placing a property under contract Assignment or future closing
Transactional Funding Purchase price for the A-B transaction When completing a double close A-B and B-C closings
Stack Method Funding Layered financing When combining funding sources Seller carryback, DSCR, or other financing

Your first decision is simple:

Do you need money to secure the contract, or money to complete the purchase?

What Is EMD Funding?

Earnest money deposit funding provides the deposit required by the purchase contract.

The earnest money deposit shows the seller that you are proceeding with the transaction. The amount and deadline are set by the contract. Depending on the deal, the deposit may be a few thousand dollars or substantially more.

EMD funding helps you meet that requirement without using your own working capital.

EMD Funding At A Glance

  • Purpose: Secure a property under contract
  • Funding amount: The required earnest money deposit
  • Timing: At contract execution or before the deposit deadline
  • Repayment: Typically at closing, assignment, or another agreed transaction point
  • Best for: Wholesalers, investors, and acquisition companies

The funds are generally sent to the title or escrow company handling the transaction. The deposit may later be applied to the purchase price or returned according to the contract and closing structure.

EMD funding can help you preserve cash for:

  • Marketing
  • Due diligence
  • Inspections
  • Contractor deposits
  • Additional acquisitions
  • Business operations

Minimalist illustration of earnest money deposit funding moving from a wallet into a title company with a contract and house icon

What Is Transactional Funding?

Transactional funding real estate is short-term capital used to complete the purchase side of a double close.

A double close involves two connected transactions:

  1. A-B transaction: You purchase the property from the original seller.
  2. B-C transaction: You resell the property to your end buyer.

Transactional funding provides the funds needed for the A-B purchase. The B-C transaction then supplies the repayment source.

This structure is often used when an assignment is not available, not preferred, or not accepted by the end buyer or closing parties.

Transactional Funding At A Glance

  • Purpose: Complete the purchase in a double close
  • Funding amount: The A-B purchase price and approved closing requirements
  • Timing: At or immediately before the first closing
  • Repayment: From the B-C closing proceeds
  • Best for: Wholesalers and dealmakers completing double closes

Transactional funding is usually short term. The two closings may occur on the same day or within a short period, depending on the title companies, documents, buyer readiness, and transaction structure.

The lender typically needs to see a clear path from the A-B purchase to the B-C resale. That may include:

  • Executed purchase contract
  • Executed resale contract
  • Closing statements or estimated settlement statements
  • End-buyer information
  • Proof of funds
  • Title company details
  • Closing dates

Requirements vary by deal. Submit the transaction details early so the funding structure can be reviewed before closing.

Minimalist illustration of transactional funding moving through seller A, investor B, and end buyer C across two closing tables

EMD Funding vs. Transactional Funding

The primary difference is the transaction stage.

EMD Funding

EMD funding helps you get the deal under contract.

You have identified a property and negotiated terms. The seller requires earnest money. You need capital to keep the contract active.

Transactional Funding

Transactional funding helps you complete the purchase.

You have a purchase contract and an end buyer. You plan to purchase and resell the property through a double close. You need capital for the A-B closing.

The Practical Difference

Question EMD Funding Transactional Funding
Are you securing the contract? Yes Not usually
Are you purchasing the property? Not necessarily Yes
Is an end buyer required? Not always Usually
Does it support a double close? It can be part of the structure Yes
Is the funding short term? Yes Yes
Is the amount limited to the deposit? Yes No

If you only need to deliver the deposit, apply for EMD funding.

If you need the funds to purchase the property before reselling it, apply for transactional funding or double close funding.

Can You Use Both?

Yes. Some transactions use both types of funding.

Example:

  1. You sign a contract to purchase a property.
  2. You use EMD funding to deliver the required deposit.
  3. You locate an end buyer.
  4. You structure a double close.
  5. You use transactional funding for the A-B purchase.
  6. The B-C closing repays the transactional funding and other approved costs.
  7. Your remaining proceeds are distributed according to the closing statement.

This structure allows you to secure the opportunity first and solve the larger purchase funding requirement later.

The transaction must support the funding structure. Title coordination, contract terms, closing timelines, buyer readiness, and repayment must all be reviewed.

Same Title Company Or Different Title Companies?

Big Wallet Lending supports both common double-close structures:

Double Close : Same Title Company

The A-B and B-C transactions close through the same title company.

This structure can simplify coordination because one title company manages both sides of the transaction.

Double Close : Different Title Companies

The A-B and B-C transactions close through different title companies.

This structure may require additional coordination between the title companies, funding provider, buyer, and seller. Closing instructions and timing must be confirmed in advance.

Both structures can qualify for transactional funding depending on the deal details.

Which Funding Do You Need?

Use this decision guide.

Choose EMD Funding If:

  • You need to secure a property under contract.
  • The seller requires an earnest money deposit.
  • You want to preserve your operating cash.
  • You plan to assign the contract or close later.
  • You do not need the full purchase price today.

Choose Transactional Funding If:

  • You plan to complete a double close.
  • You have an end buyer for the property.
  • The A-B purchase requires short-term capital.
  • Assignment is not available or not preferred.
  • Your A-B and B-C closings are scheduled through the same or different title companies.

Choose Stack Method Funding If:

  • The transaction uses multiple funding sources.
  • The seller is carrying back part of the financing.
  • DSCR financing is part of the structure.
  • The deal requires layered capital rather than one funding source.

If your structure does not fit these categories, use the Other Deal Funding option to submit the details for review.

The Big Wallet Lending Process

The process is designed to move from submission to funding without unnecessary steps.

Minimalist four-step funding workflow showing submit deal, approval, contracts and fees, and funded status

1. Submit The Deal

Select the funding type and provide the property, contract, closing, and buyer details.

2. Receive Funding Approval

The deal is reviewed based on the transaction structure, documents, repayment plan, and closing requirements.

3. Complete Contracts And Fees

Review the required agreements and applicable fees before funding.

4. Get Funded

Complete the funding requirements and coordinate the funds with the appropriate title or escrow company.

That is the full process. Submit the deal, receive approval, complete the required items, and get funded.

What Information Should You Prepare?

To reduce delays, have the following information available:

  • Property address
  • Purchase price
  • Resale price, if applicable
  • Earnest money amount
  • Purchase contract
  • Resale contract, if applicable
  • End-buyer details
  • Closing date
  • Title company information
  • Requested funding amount
  • Required funding date
  • Documents related to seller financing or DSCR financing

The more complete the submission, the faster the funding request can be evaluated.

See Active Deal Activity

Big Wallet Lending displays live deal activity, including funding categories, requested amounts, and update times.

The website currently shows recent requests across:

  • Earnest Money Deposit
  • Double Closing
  • Stack Method

Visit the Big Wallet Lending funding page to review the current process and submit a request.

Frequently Asked Questions

Is EMD funding the same as transactional funding?

No. EMD funding covers the earnest money deposit. Transactional funding covers the purchase price for the A-B side of a double close.

Can wholesalers use EMD funding?

Yes. Transactional funding for wholesalers is commonly used to secure contracts, preserve cash, and complete double-close transactions. The correct funding type depends on the stage and structure of the deal.

Does transactional funding cover the entire purchase?

Transactional funding is designed to support the A-B purchase in a double close. The approved amount, closing costs, and transaction requirements depend on the deal.

Can Big Wallet Lending fund double closes through different title companies?

Yes. Submit the deal as Double Close : Different Title Companies with the information for both closing parties.

Are fees disclosed before funding?

The process includes reviewing required contracts and applicable fees before funding. Submit the deal to receive the details for your transaction.

Choose The Right Funding Type

The decision comes down to one point:

  • Securing the contract: Choose EMD funding.
  • Completing the purchase and resale: Choose transactional funding.
  • Combining multiple capital sources: Choose Stack Method funding.

Have a property under contract? Start with the funding request, select the deal type, and provide the transaction details.

SUBMIT FUNDING REQUEST

Sources And Further Reading