Company: BHM
Filing Date: 2025-04-09
Form Type: 424B3
Source: 0001104659-25-033384
Chunk: 29

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-04-09
Form: 424B3
Chunk 29
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 of operations, including potential liability under environmental and other laws and other unforeseen events,
many of which are discussed elsewhere in the following risk factors. Any or all of these factors could materially adversely affect our
results of operations through decreased revenues or increased costs.

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Many of our costs, such as operating expenses and general and administrative expenses, interest expense and real estate acquisition and construction costs, could be adversely impacted by periods of heightened inflation.

Inflation in the United States
remained elevated throughout 2023 and 2024 and may continue to remain high in the future. While inflation has shown signs of moderating,
it remains uncertain whether substantial inflation in the United States will be sustained over an extended period of time or have a significant
effect on the United States or other economies. Rising inflation could have an adverse impact on our operating expenses as well as our
general and administrative expenses. For example, it is possible that the impact of the rate of inflation may not be adequately offset
by annual rent escalations or the resetting of rents from our renewal and re-leasing activities, which may adversely affect our business,
financial condition, results of operations, and cash flows. Compensation costs and professional service fees are also subject to the impact
of inflation and are expected to increase proportionately with increasing market prices for such services. Consequently, inflation may
increase our general and administrative expenses over time and may adversely impact our results of operations and cash flows.

While the Federal Reserve
held rates steady between July 2023 and September 2024 and reduced interest rates by 50-basis points in September 2024,
25-basis points in November 2024 and 25-basis points in December 2024, there can be no assurances that interest rates will not
rise again. Our exposure to increases in interest rates in the short term is limited to our variable-rate borrowings. As of December 31,
2024, we had interest rate caps and swaps which effectively limit our exposure to interest rate risk by providing a ceiling on the underlying
floating interest rate for $155.6 million of our floating rate debt. However, the effect of inflation on interest rates could increase
our financing costs over time, either through borrowings on floating-rate lines of credit or refinancing of our existing borrowings that
may incur higher interest expenses related to the issuance of new debt.

Additionally, inflationary
pricing may have a negative effect on the construction costs necessary to complete our development projects, including, but not