Company: BHM
Filing Date: 2025-07-08
Form Type: DRS
Source: 0001104659-25-066400
Chunk: 55

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-07-08
Form: DRS
Chunk 55
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 Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing,
reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding
40% of the value of the issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis,
which we refer to as the 40% test. Excluded from the term “investment securities,” among other things, are U.S. government
securities and securities issued by majority owned subsidiaries that are not themselves investment companies and are not relying on the
exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment
Company Act. We believe that we, our Operating Partnership and most of the subsidiaries of our Operating Partnership will not fall within
this definition of investment company as we invest primarily in real property, through our wholly or majority owned subsidiaries, the
majority of which we expect to have at least 60% of their assets in real property or in entities that they manage or co-manage that own
real property. Both we and our Operating Partnership intend to conduct our operations so that they comply with the 40% test. We will
monitor our holdings to ensure continuing and ongoing compliance with this test.

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In the event that the value
of investment securities held by the subsidiaries of our Operating Partnership were to exceed 40%, we expect our subsidiaries to be able
to rely on the exclusion from the definition of “investment company” provided by Section 3(c)(5)(C) of the Investment
Company Act. Section 3(c)(5)(C), as interpreted by the staff of the SEC, requires each of our subsidiaries relying on this exception
to invest at least 55% of its portfolio in “mortgage and other liens on and interests in real estate,” which we refer to
as “qualifying real estate assets” and maintain at least 70% to 90% of its assets in qualifying real estate assets or other
real estate-related assets. The remaining 20% of the portfolio can consist of miscellaneous assets.

What we buy and sell is therefore
limited to these criteria. How we determine to classify our assets for purposes of the Investment Company Act will be based in large
measure upon no-action letters issued by the SEC staff in the past and other SEC interpretive guidance.