Money Market Fund shares are non-marginable and have a 100% requirement for the first 30 Days. Money Market Funds held less than 30 days can be used to meet margin requirement, but they cannot be used to extend credit. To comply with this requirement, IBKR will reject a Money Market Fund Buy order that would result in a negative cash balance since you can't buy Money Market Fund shares on credit. Once a Money Market Fund position has been established and is held past 30 days, IBKR does not restrict purchases of other securities if those purchases result in a negative cash balance. The purchases of other securities will be allowed, but IBKR will then liquidate part of the Money Market Fund shares to cover the negative cash balance. This is done once a day, one minute before the deadline for submitting mutual fund orders. Once the Money Market Fund shares are held more than 30 days they will have a 5% margin requirement.
For more information, please visit the IBKR Mutual Fund Margin page.