diff --git a/fundingmanager.go b/fundingmanager.go
index 4614c18b0..d3440b699 100644
--- a/fundingmanager.go
+++ b/fundingmanager.go
@@ -689,21 +689,40 @@ func (f *fundingManager) CancelPeerReservations(nodePub [33]byte) {
 }
 
 // failFundingFlow will fail the active funding flow with the target peer,
-// identified by its unique temporary channel ID. This method is send an error
-// to the remote peer, and also remove the reservation from our set of pending
-// reservations.
+// identified by its unique temporary channel ID. This method will send an
+// error to the remote peer, and also remove the reservation from our set of
+// pending reservations.
 //
 // TODO(roasbeef): if peer disconnects, and haven't yet broadcast funding
 // transaction, then all reservations should be cleared.
 func (f *fundingManager) failFundingFlow(peer *btcec.PublicKey,
-	tempChanID [32]byte, msg []byte) {
+	tempChanID [32]byte, fundingErr error) {
+
+	// We only send the exact error if it is part of out whitelisted set of
+	// errors (lnwire.ErrorCode or lnwallet.ReservationError).
+	var msg lnwire.ErrorData
+	switch e := fundingErr.(type) {
+
+	// Let the actual error message be sent to the remote.
+	case lnwallet.ReservationError:
+		msg = lnwire.ErrorData(e.Error())
+
+	// Send the status code.
+	case lnwire.ErrorCode:
+		msg = lnwire.ErrorData{byte(e)}
+
+	// We just send a generic error.
+	default:
+		msg = lnwire.ErrorData("funding failed due to internal error")
+	}
 
 	errMsg := &lnwire.Error{
 		ChanID: tempChanID,
 		Data:   msg,
 	}
 
-	fndgLog.Errorf("Failing funding flow: %v", spew.Sdump(errMsg))
+	fndgLog.Errorf("Failing funding flow: %v (%v)", fundingErr,
+		spew.Sdump(errMsg))
 
 	if _, err := f.cancelReservationCtx(peer, tempChanID); err != nil {
 		fndgLog.Errorf("unable to cancel reservation: %v", err)
@@ -819,8 +838,7 @@ func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 	if len(f.activeReservations[peerIDKey]) >= cfg.MaxPendingChannels {
 		f.failFundingFlow(
 			fmsg.peerAddress.IdentityKey, fmsg.msg.PendingChannelID,
-			lnwire.ErrorData{byte(lnwire.ErrMaxPendingChannels)},
-		)
+			lnwire.ErrMaxPendingChannels)
 		return
 	}
 
@@ -834,8 +852,7 @@ func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 		}
 		f.failFundingFlow(
 			fmsg.peerAddress.IdentityKey, fmsg.msg.PendingChannelID,
-			lnwire.ErrorData{byte(lnwire.ErrSynchronizingChain)},
-		)
+			lnwire.ErrSynchronizingChain)
 		return
 	}
 
@@ -844,8 +861,7 @@ func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 	if msg.FundingAmount > maxFundingAmount {
 		f.failFundingFlow(
 			fmsg.peerAddress.IdentityKey, fmsg.msg.PendingChannelID,
-			lnwire.ErrorData{byte(lnwire.ErrChanTooLarge)},
-		)
+			lnwire.ErrChanTooLarge)
 		return
 	}
 
@@ -871,7 +887,7 @@ func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 	if err != nil {
 		fndgLog.Errorf("Unable to initialize reservation: %v", err)
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			msg.PendingChannelID, []byte(err.Error()))
+			msg.PendingChannelID, err)
 		return
 	}
 
@@ -890,10 +906,9 @@ func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 		msg.MaxValueInFlight, msg.HtlcMinimum, msg.ChannelReserve,
 	)
 	if err != nil {
-		f.failFundingFlow(
-			fmsg.peerAddress.IdentityKey, fmsg.msg.PendingChannelID,
-			[]byte(fmt.Sprintf("Unacceptable channel "+
-				"constraints: %v", err)),
+		fndgLog.Errorf("Unaccaptable channel constraints: %v", err)
+		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
+			fmsg.msg.PendingChannelID, err,
 		)
 		return
 	}
@@ -951,9 +966,8 @@ func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 	err = reservation.ProcessSingleContribution(remoteContribution)
 	if err != nil {
 		fndgLog.Errorf("unable to add contribution reservation: %v", err)
-		// TODO(roasbeef): verify only sending sane info over
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			msg.PendingChannelID, []byte(err.Error()))
+			msg.PendingChannelID, err)
 		return
 	}
 
@@ -985,7 +999,7 @@ func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 	if err != nil {
 		fndgLog.Errorf("unable to send funding response to peer: %v", err)
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			msg.PendingChannelID, []byte(err.Error()))
+			msg.PendingChannelID, err)
 		return
 	}
 }
@@ -1028,11 +1042,9 @@ func (f *fundingManager) handleFundingAccept(fmsg *fundingAcceptMsg) {
 		msg.MaxValueInFlight, msg.HtlcMinimum, msg.ChannelReserve,
 	)
 	if err != nil {
-		f.failFundingFlow(
-			fmsg.peerAddress.IdentityKey, fmsg.msg.PendingChannelID,
-			[]byte(fmt.Sprintf("Unacceptable channel "+
-				"constraints: %v", err)),
-		)
+		fndgLog.Warnf("Unacceptable channel constraints: %v", err)
+		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
+			fmsg.msg.PendingChannelID, err)
 		return
 	}
 
@@ -1070,7 +1082,7 @@ func (f *fundingManager) handleFundingAccept(fmsg *fundingAcceptMsg) {
 		fndgLog.Errorf("Unable to process contribution from %v: %v",
 			fmsg.peerAddress.IdentityKey, err)
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			msg.PendingChannelID, []byte(err.Error()))
+			msg.PendingChannelID, err)
 		resCtx.err <- err
 		return
 	}
@@ -1115,7 +1127,7 @@ func (f *fundingManager) handleFundingAccept(fmsg *fundingAcceptMsg) {
 	if err != nil {
 		fndgLog.Errorf("Unable to parse signature: %v", err)
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			msg.PendingChannelID, []byte(err.Error()))
+			msg.PendingChannelID, err)
 		resCtx.err <- err
 		return
 	}
@@ -1123,7 +1135,7 @@ func (f *fundingManager) handleFundingAccept(fmsg *fundingAcceptMsg) {
 	if err != nil {
 		fndgLog.Errorf("Unable to send funding complete message: %v", err)
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			msg.PendingChannelID, []byte(err.Error()))
+			msg.PendingChannelID, err)
 		resCtx.err <- err
 		return
 	}
@@ -1177,7 +1189,7 @@ func (f *fundingManager) handleFundingCreated(fmsg *fundingCreatedMsg) {
 		// TODO(roasbeef): better error logging: peerID, channelID, etc.
 		fndgLog.Errorf("unable to complete single reservation: %v", err)
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			pendingChanID, []byte(err.Error()))
+			pendingChanID, err)
 		return
 	}
 
@@ -1218,7 +1230,7 @@ func (f *fundingManager) handleFundingCreated(fmsg *fundingCreatedMsg) {
 	if err != nil {
 		fndgLog.Errorf("unable to parse signature: %v", err)
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			pendingChanID, []byte(err.Error()))
+			pendingChanID, err)
 		deleteFromDatabase()
 		return
 	}
@@ -1230,7 +1242,7 @@ func (f *fundingManager) handleFundingCreated(fmsg *fundingCreatedMsg) {
 	if err := f.cfg.SendToPeer(peerKey, fundingSigned); err != nil {
 		fndgLog.Errorf("unable to send FundingSigned message: %v", err)
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			pendingChanID, []byte(err.Error()))
+			pendingChanID, err)
 		deleteFromDatabase()
 		return
 	}
@@ -1332,11 +1344,12 @@ func (f *fundingManager) handleFundingSigned(fmsg *fundingSignedMsg) {
 	delete(f.signedReservations, fmsg.msg.ChanID)
 	f.resMtx.Unlock()
 	if !ok {
-		err := fmt.Sprintf("Unable to find signed reservation for "+
+		err := fmt.Errorf("Unable to find signed reservation for "+
 			"chan_id=%x", fmsg.msg.ChanID)
-		fndgLog.Warnf(err)
+		fndgLog.Warnf(err.Error())
+		// TODO: add ErrChanNotFound?
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			pendingChanID, []byte(err))
+			pendingChanID, err)
 		return
 	}
 
@@ -1346,8 +1359,9 @@ func (f *fundingManager) handleFundingSigned(fmsg *fundingSignedMsg) {
 	if err != nil {
 		fndgLog.Warnf("Unable to find reservation (peerID:%v, chanID:%x)",
 			peerKey, pendingChanID[:])
+		// TODO: add ErrChanNotFound?
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			pendingChanID, []byte(err.Error()))
+			pendingChanID, err)
 		return
 	}
 
@@ -1369,7 +1383,7 @@ func (f *fundingManager) handleFundingSigned(fmsg *fundingSignedMsg) {
 		fndgLog.Errorf("Unable to complete reservation sign complete: %v", err)
 		resCtx.err <- err
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
-			pendingChanID, []byte(err.Error()))
+			pendingChanID, err)
 		return
 	}