Funk rolled in birdie putts at the second, third and fourth holes on the Broadmoor Golf Club's East Course -- site of Jack Nicklaus' first U.S. Amateur title 49 years ago.
Despite a bogey at the final hole, Funk had a one-shot lead over British Senior Open runner-up John Cook.
Tied for third at 67 were Morris Hatalsky, Eduardo Romero, Juan Quiros and Tom Kite, who is trying to become the eighth player to add a U.S. Senior Open crown to a U.S. Open triumph. That list includes Arnold Palmer, Billy Casper, Gary Player, Orville Moody, Lee Trevino, Nicklaus and Hale Irwin.
Tom Watson, a challenger last week at the British Senior Open, was among those at 69. Greg Norman, who at age 53 almost became the oldest major champion in history two weeks ago at the British Open, shot a 70.
Bernhard Langer, the leading money winner on the Champions Tour this year, settled for a 72.