Funk finished at 12-under 132 after 36 holes -- one stroke better than former Masters champion Larry Mize.
The 56-year-old Funk is seeking his second 2012 Champions Tour victory and his eighth overall on the seniors circuit. His only win this year came at the Insperity Championship in May.
Mize carded 5-under 67 Saturday, finishing alone in second place at 11-under 133.
Defending champion Mark Wiebe (69), Chip Beck (67) and Duffy Waldorf (67) shared third place at 8-under 136.
After turning in the best first round, 65, Dan Forsman stumbled to an even-par 72 Saturday, falling to sixth-place at 7-under.