Transactional funding
Wet vs dry funding states: the full list, and why it decides your double close
Every state, wet or dry, where the lists disagree, and what a gap between signing and funding does to a same day A to B and B to C.
The short answer
In a wet funding state the lender’s money is at the closing when the documents are signed, while in a dry funding state the signed documents go back to the lender for review and the money follows, often a business day or more later. The states most often listed as dry funding are Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, Oregon and Washington, and Florida is a wet funding state.
Wet and dry funding, defined
A wet funding state is one where the lender has its money at the closing when the loan documents are signed, so the closing agent can pay out that day. Some lenders call it table funding: the funds are on the table while the ink is still wet.
A dry funding state is one where the signed documents go back to the lender first, a funder reviews the package, and only then does the lender release the money to escrow. That review is commonly quoted at about one to four days, depending on the lender and the file, with the next business day the usual case.
For a double close, the difference is not a technicality. It decides whether the end buyer’s money, which repays everyone, arrives on the day you sign or days later.
- Wet funding, when the money arrives: at or before the signing.
- Wet funding, what the lender reviews after signing: nothing that holds up the money; its conditions are cleared before the table.
- Wet funding, when the seller is paid: on or shortly after the closing day.
- Dry funding, when the money arrives: after the lender reviews the signed package.
- Dry funding, what the lender reviews after signing: the signed documents and any remaining conditions, before it releases funds.
- Dry funding, when the seller is paid: once the lender’s money is in escrow and the documents record, which can be days after signing.
Is your state wet or dry? The full list
The table gives the usual answer. Dry means the published lists agree the money follows the signing, and Utah is the one state they split on. The closing agent in the county decides any specific deal.
| State | Funding | Note |
|---|---|---|
| Alabama | Wet | Not on the dry lists; wet by general practice |
| Alaska | Dry | Dry, except loans of $25,000 or less, which one compliance matrix marks wet |
| Arizona | Dry | On every major dry list |
| Arkansas | Wet | Not on the dry lists; wet by general practice |
| California | Dry | On every major dry list |
| Colorado | Wet | Not on the dry lists; wet by general practice |
| Connecticut | Wet | Not on the dry lists; wet by general practice |
| Delaware | Wet | Not on the dry lists; wet by general practice |
| District of Columbia | Wet | Disbursement of Settlement Proceeds law |
| Florida | Wet | Title agents pay out collected funds only |
| Georgia | Wet | Not on the dry lists; wet by general practice |
| Hawaii | Dry | On every major dry list |
| Idaho | Dry | On most dry lists; escrow pays out collected funds only |
| Illinois | Wet | Not on the dry lists; wet by general practice |
| Indiana | Wet | Not on the dry lists; wet by general practice |
| Iowa | Wet | Not on the dry lists; wet by general practice |
| Kansas | Wet | Not on the dry lists; wet by general practice |
| Kentucky | Wet | Not on the dry lists; wet by general practice |
| Louisiana | Wet | Not on the dry lists; wet by general practice |
| Maine | Wet | Funded Settlement Act |
| Maryland | Wet | Wet Settlement Procedure Act, consumer purchase loans |
| Massachusetts | Wet | Not on the dry lists; wet by general practice |
| Michigan | Wet | Not on the dry lists; wet by general practice |
| Minnesota | Wet | Not on the dry lists; wet by general practice |
| Mississippi | Wet | Not on the dry lists; wet by general practice |
| Missouri | Wet | Not on the dry lists; wet by general practice |
| Montana | Wet | Not on the dry lists; wet by general practice |
| Nebraska | Wet | Not on the dry lists; wet by general practice |
| Nevada | Dry | On every major dry list |
| New Hampshire | Wet | Not on the dry lists; wet by general practice |
| New Jersey | Wet | Not on the dry lists; wet by general practice |
| New Mexico | Dry | On every major dry list |
| New York | Wet | Not on the dry lists; wet by general practice |
| North Carolina | Wet | Good Funds Settlement Act |
| North Dakota | Wet | Not on the dry lists; wet by general practice |
| Ohio | Wet | Not on the dry lists; wet by general practice |
| Oklahoma | Wet | Not on the dry lists; wet by general practice |
| Oregon | Dry | On every major dry list |
| Pennsylvania | Wet | Not on the dry lists; wet by general practice |
| Rhode Island | Wet | Not on the dry lists; wet by general practice |
| South Carolina | Wet | Not on the dry lists; wet by general practice |
| South Dakota | Wet | Not on the dry lists; wet by general practice |
| Tennessee | Wet | Not on the dry lists; wet by general practice |
| Texas | Wet | Not on the dry lists; wet by general practice |
| Utah | Disputed | Dry on two lists, wet on one lender’s sheet; ask the closing agent |
| Vermont | Wet | Not on the dry lists; wet by general practice |
| Virginia | Wet | Wet Settlement Act |
| Washington | Dry | On every major dry list; closing is the recording date |
| West Virginia | Wet | Good Funds Settlement Act |
| Wisconsin | Wet | Not on the dry lists; wet by general practice |
| Wyoming | Wet | Not on the dry lists; wet by general practice |
The dry funding states
Nine states appear on most published lists: several mortgage lenders’ guides name the same nine, and a 2012 state-by-state compliance matrix from a mortgage document provider marks them dry, with notes on each. Every other state is treated as wet.
- Alaska
- Arizona
- California
- Hawaii
- Idaho
- Nevada
- New Mexico
- Oregon
- Washington
Where the lists disagree
The lists disagree at the edges, and the edges matter if you work there. That compliance matrix also marks Utah dry, and splits Alaska by loan size, treating small loans of $25,000 or less as wet. One lender’s wet and dry sheet puts Utah in the wet column. A 2025 brokerage guide lists Utah as dry and does not mention Idaho.
None of these lists is a statute. For many states, the matrix’s own notes say there is no law requiring funds at closing and that wet or dry is simply the general practice, shaped by each state’s escrow rules. The closing agent in the county where the property sits is the authority on how your deal will actually fund, so ask them rather than a list.
Florida is a wet funding state
Florida is on the wet side of every list checked for this article. In practice the lender’s money is in the closing agent’s trust account when the parties sign.
The rule that governs the money is Florida’s title escrow rule. A title agent may disburse only collected funds, meaning funds finally settled and credited to its trust account, or deposits in listed forms such as cashier’s checks and loan proceeds checks from licensed lenders. A personal check qualifies only up to $500.
For a double close, wet funding is the easy case. The transactional lender wires on the day, the end buyer’s funds arrive the same day, and both legs can sign, fund and pay out in one afternoon if the closing agent is organized.
Why dry funding makes a same day double close harder
A double close depends on order. The A to B leg has to fund and record before the B to C leg can record, and the transactional lender is repaid out of the end buyer’s funds at the B to C closing. In a wet state all of that fits in one day because every party’s money is in the room.
In a dry state the end buyer’s lender does not fund when the end buyer signs. It funds when its funder has reviewed the signed package. Your seller wants to be paid and your transactional lender wants to be repaid, and the one party whose money repays everyone is the one whose money arrives last.
So same day in a dry state means the same recording day, not the same signing day. If the transactional money lands in escrow when you sign and the end buyer’s lender funds two days later, that money sits for two days. If the A to B leg records and the B to C leg slips, you own the property over a weekend with a loan that was never underwritten as a hold.
A cash end buyer removes most of the problem. A wire from a cash buyer is available the day it lands, so the lag comes from the end buyer’s lender, not from the state.
Washington, precisely
Washington is on every dry list checked for this article, and the difference shows in the standard contract. The residential purchase and sale agreement published by the Northwest Multiple Listing Service defines closing as the date on which all documents are recorded and the sale proceeds are available to the seller, not the date anyone signs.
Signing usually comes first. One Washington title company tells agents that clients sign two to three days before closing day so the documents can go back to the lender for review and funding authorization, that the lender funds the same day or the next business day after signing, and that recording happens the same day the loan funds if conditions are met before the county recorder closes.
According to the 2012 compliance matrix, no Washington law requires a lender to fund at the signing, but the law does control when escrow may pay out. A licensed escrow agent, and under a parallel statute a title insurance company or title agent, may not disburse until the next business day after funds are deposited unless the deposit is cash, an interbank electronic transfer, or a form that converts to cash the same day (RCW 18.44.400 and RCW 48.29.190).
- Wire the transactional funds. A deposit that is not cash, a wire or convertible to cash that day cannot be paid out until the next business day.
- Schedule the transactional wire for the day the end buyer’s lender funds, not the day you sign.
- Ask the escrow officer what time the end buyer’s lender usually funds and when the county stops recording for the day.
- Have both legs signed in advance, so the only things left on the day are money and recording.
Idaho, precisely
Idaho is on the dry side of most lists, including the compliance matrix and the lender sheet, and its law puts a hard rule in the middle of every closing. An escrow agent may not disburse funds, or deliver documents from an escrow for recording, unless the escrow holds collected funds, other than the agent’s own, sufficient to discharge all monetary conditions of the escrow.
The same rule binds a title agent acting as escrow agent, which may advance no more than $1,000 of its own money for incidental expenses.
Read that against a double close. The A to B deed cannot be delivered for recording until the A to B escrow holds collected funds for the full price, and the B to C deed cannot go until the end buyer’s money is collected. There is no Idaho version of the closing in which the deed records first and the money catches up.
The lender side has a clock too. Idaho’s rules for residential mortgage lenders require them, on a purchase, to disburse immediately upon closing of the loan, and define immediately as no more than 72 hours. That caps the lag; it does not make it zero.
- Expect the end buyer’s lender’s funding, not the signing, to set the recording day.
- Have the transactional wire land the same day as the end buyer’s funds, so both escrows hold collected funds together.
- Confirm with the escrow officer the order in which the two deeds will be delivered for recording.
- If the end buyer’s lender may take up to three days, agree the cost of that with your funder in advance, or close with a cash end buyer.
How investors handle a double close in a dry state
The structures that work all accept the lag rather than fight it. The real choice is who carries the money while the end buyer’s lender funds, and for how long.
- Sign early, fund late: both legs sign in advance, and the transactional wire and the end buyer’s lender’s funds are scheduled for the same recording day.
- Transactional funding over more than one day: agree with the funder beforehand how many days the money may be out and what each extra day costs, rather than finding out when the end buyer’s lender is late.
- A short holding period: close the A to B leg first, own the property for a few days, and sell when the end buyer’s lender funds. That is a bridge loan, underwritten and priced as a hold, not a transactional loan.
- A cash end buyer: a wire is available the day it arrives, so both legs can fund and record together.
- An assignment, where the contract and the seller allow it: no A to B funding is needed at all.
The wet settlement acts
A wet settlement act is a state law that requires the lender to deliver loan funds to the settlement agent at or before closing, and often requires the settlement agent to record and pay out promptly afterward. Several states and the District of Columbia have one, under a few different names.
Several of these laws are limited to consumer, first lien, purchase money or owner-occupied home loans, so a business-purpose transactional loan may sit outside them. What they change is the end buyer’s side: if your end buyer is financing a home in one of these places, their lender’s money has to be at the settlement.
- Virginia: enacted in 1980 as the Wet Settlement Act, now Code of Virginia sections 55.1-900 to 55.1-903. The lender must disburse loan funds to the settlement agent at or before loan closing, and the settlement agent must record and disburse within two business days of settlement, on first lien loans on property of up to four residential units.
- Maryland: the Wet Settlement Procedure Act, Real Property Article section 7-109(b). On a consumer loan secured by a purchase money mortgage or deed of trust, the lender must disburse the proceeds to the settlement agent on or before the closing date, in cash, wired funds or listed forms of check.
- District of Columbia: D.C. Code sections 42-2401 onward, Disbursement of Settlement Proceeds. The lender must disburse loan funds to a settlement agent at or before loan closing on purchase money loans secured by first or second liens on up to four residential units.
- Maine: the Funded Settlement Act, Title 33 section 521 onward. The lender must disburse loan funds to the settlement agent at or before loan closing.
- North Carolina: the Good Funds Settlement Act, Chapter 45A. The settlement agent may not disburse until the closing funds are in its trust or escrow account in a permitted form, and, apart from recording costs, not until the deeds and deeds of trust have recorded.
- West Virginia: the Good Funds Settlement Act, article 46A-6K. The lender must disburse collected funds to the settlement agent at or before loan closing, on loans secured by owner-occupied homes of up to four families.
Questions to ask a closing agent in a dry state
These take ten minutes on the phone and save the week. Ask them before you set a closing date in either contract.
- In this county, how many days before the closing date do parties usually sign?
- When does the end buyer’s lender usually fund after signing, and have you closed with this lender?
- Which forms of funds can you pay out the same day, and which wait a business day?
- What is the county recording cut-off, and do you record electronically?
- In what order will the two deeds be delivered for recording?
- If the end buyer’s lender funds a day late, what happens to transactional funds already in escrow?
- Can one escrow officer close both legs?
Where this leaves a Florida investor
Florida’s wet funding works in your favor on a double close. Both legs can sign, fund and pay out on one day, and the transactional money is out for hours rather than days, provided the closing agent is organized and the end buyer’s funds are real.
Entrusted Capital is a direct lender that funds the A to B leg of Florida double closes the same day, priced per transaction with no credit pulled for that leg, for business-purpose deals only.
Also asked
Related questions
- What are the dry funding states?
- The states most often listed as dry funding are Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, Oregon and Washington. Some lists also include Utah, and at least one splits Alaska by loan size. Every other state is treated as wet, but the closing agent decides a specific deal.
- Is Florida a wet or dry funding state?
- Florida is a wet funding state. The lender’s money is normally with the closing agent when the documents are signed, and Florida title agents may pay out only collected funds or deposits in listed forms such as cashier’s checks. That makes a same day double close simpler to schedule in Florida than in a dry funding state.
- Is Colorado a wet or dry funding state?
- Colorado is a wet funding state. It is not on any of the major dry funding lists, and those lists treat every state they do not name as wet. The money is normally at the closing when the documents are signed.
- Are Michigan, Indiana and Georgia wet funding states?
- Yes. None of the three is on a major dry funding list, so each is treated as wet by general practice. The closing agent on the deal still decides when the money arrives.
- Is Arizona a wet or dry funding state?
- Arizona is a dry funding state and is on every major dry funding list. The parties sign first, the lender reviews the signed package, and the money follows, usually the next business day. Ask the escrow officer when the end buyer’s lender usually funds before you set a double close date.
- Is Oregon a wet or dry funding state?
- Oregon is a dry funding state and is on every major dry funding list. Its mortgage rules treat a lender holding back loan funds for more than one business day after its lien records as a prohibited practice, so the money can follow the recording by a day.
- Is Nevada a wet or dry funding state?
- Nevada is a dry funding state and is on every major dry funding list. Expect the lender’s money to follow the signing rather than arrive with it, and plan a double close around the day the end buyer’s lender funds and both deeds record.
- Is California a wet or dry funding state?
- California is a dry funding state and is on every major dry funding list. The lender funds after it has reviewed the signed documents, often the next business day, so on a double close the recording day, not the signing day, is the one to plan around.
- Is North Carolina a wet or dry funding state?
- North Carolina is a wet funding state with a Good Funds Settlement Act. The settlement agent may not pay out until the closing funds are in its trust account in a permitted form and, apart from recording costs, until the deeds and deeds of trust have recorded.
- Is Virginia a wet funding state?
- Yes. Virginia’s Wet Settlement Act requires the lender to deliver loan funds to the settlement agent at or before closing on first lien loans on up to four residential units, and the agent must record and pay out within two business days of settlement.
- Is Ohio a wet or dry funding state?
- Ohio is a wet funding state. It is not on any major dry funding list, and those lists treat every state they do not name as wet, so the lender’s money is normally at the closing when the documents are signed. Confirm with the title agent on the deal.
- Is Utah a wet or dry funding state?
- The lists disagree. A long-running compliance matrix and a 2025 brokerage guide mark Utah dry, while one lender’s published sheet puts it in the wet column. Treat Utah as possibly dry and ask the title or escrow company whether the lender’s money will be there at signing.
- Is Washington a dry funding state?
- Yes. Washington is on every major dry funding list, and its standard purchase agreement defines closing as the date documents record and the seller can be paid, not the date anyone signs.
- Is Idaho a dry funding state?
- Yes. Idaho is on most dry funding lists, and its law bars an escrow agent from paying out or releasing documents for recording until the escrow holds enough collected funds to meet every monetary condition.
- Can you do a same day double close in a dry funding state?
- Yes, if same day means the same recording day rather than the same signing day. Both legs usually sign in advance, and both legs’ money is scheduled to land on the day the deeds record. A cash end buyer makes this much easier.
- What is a wet settlement act?
- A state law that requires a lender to deliver loan funds to the settlement agent at or before closing. Virginia, Maryland, Maine, North Carolina, West Virginia and the District of Columbia have one, under names that include wet settlement, funded settlement and good funds settlement.
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Published by Entrusted Capital. Nothing here is a commitment to lend or an offer of credit, and every loan described is for business purposes and secured by non owner occupied property. Read it at entrusted-capital.com.