Loan points are one of the most common upfront costs in real estate investment lending, and how they are structured can affect your out-of-pocket expenses at closing. AHL offers both 0-point and deferred point options across several loan programs, giving borrowers flexibility in how they manage upfront costs. As a result, understanding how AHL pricing flexibility works helps you choose the pricing structure that best fits your project and cash flow plan.
What Loan Points Are #
Loan points are fees paid to the lender as part of the cost of obtaining the loan. One point equals one percent of the loan amount. Points are typically collected at closing and are separate from interest, processing fees, and third-party costs.
For example, two points on a $300,000 loan equals $6,000.
Points compensate the lender for originating the loan and are factored into the overall pricing of the deal.
How AHL’s 0-Point Option Works #
AHL offers a 0-point option on certain loan programs. With this structure, the borrower does not pay any origination points at closing. Specifically, key features of the 0-point option include:
- No origination points collected at closing or payoff
- Reduces upfront cash requirements
- Available on select loan programs including bridge and build to rent
- May come with a slightly higher interest rate to offset the waived points
This option is particularly useful for borrowers who want to minimize their initial cash outlay or preserve capital for renovation and carrying costs. Additionally, the 0 point program saves the investor money on their overall cost of capital when the project is completed quickly. By never paying points and only paying a slightly higher interest rate during the duration of the loan, speed saves borrower money.
How AHL Deferred Points Work #
In addition to the 0-point option, AHL offers a deferred point structure on certain programs. With deferred points, the origination fee is not collected at closing. Instead, it is deferred into the loan and paid at the time of payoff. Key features of the deferred point structure include:
- Points are not due at closing
- The cost is paid when the loan is repaid, either through a sale or refinance
- Deferred points involve premium pricing, meaning the overall cost of the loan may be slightly higher
- This option allows borrowers to preserve more cash upfront for the project and only pay the points cost on exit – typically the same time when profit is being realized.
As a result, deferred points are especially helpful for investors managing tight budgets on renovation-heavy projects or new construction deals.
Which AHL Loan Programs Offer These Options #
AHL’s 0-point and deferred point options are available across multiple loan products, though specific terms and eligibility may vary. For example, programs that offer point flexibility include:
- Bridge loans: Deferred point options with no prepayment penalty
- Build to rent loans: 0-point and deferred point programs available
- Fix and flip loans: 0-point and deferred point programs available
- New construction loans: 0-point and deferred point programs available.
Borrowers should confirm the specific point structure and pricing for their loan type during the application process, as terms may differ based on deal characteristics and current program guidelines.
How to Decide Between 0 Points and AHL Deferred Points #
Choosing between paying points at closing, choosing the 0-point option, or deferring points depends on your project budget and cash flow priorities.
Consider the 0-point option if:
- You want the lowest possible upfront cost
- You have a short hold period where the slightly higher rate has minimal impact
- You need to preserve cash for renovation or construction costs
In contrast, consider deferred points if:
- You want to reduce closing costs without a rate adjustment
- You are comfortable paying the origination fee at payoff
- The project timeline supports the premium pricing at exit
Alternatively, consider paying points at closing if:
- You have available capital and want the lowest possible rate
- The hold period is long enough that a lower rate saves more than the upfront cost
There is no single correct answer. The right choice depends on how the pricing structure fits into your overall deal economics.
Summary #
AHL offers both 0-point and deferred point programs across several loan types, giving borrowers flexibility in how they manage upfront costs. Deferred points shift the origination fee to loan payoff, while the 0-point option eliminates it entirely. In short, understanding how these pricing structures work helps you choose the approach that aligns best with your project budget, timeline, and exit strategy.