Company: BHM
Filing Date: 2025-08-13
Form Type: 424B3
Source: 0001104659-25-077615
Chunk: 75

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-08-13
Form: 424B3
Chunk 75
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 each AFS debt security that has an unrealized loss recorded at the reporting date for a provision
for credit loss, as applicable. Refer to the Current Expected Credit Losses (“CECL”) section of this Note for further information
regarding CECL and the Company’s provision for credit losses.

Prior
to the fourth quarter 2024, the Company classified its preferred equity investments as held-to-maturity debt securities as the investments
met the criteria of a security under ASC 320 Investments – Debt Securities. As of June 30, 2025,
the Company does not have the positive intent to hold all the securities to maturity. As such, the Company has reclassified all its previously
held-to-maturity debt securities to AFS debt securities.

For
investments that do not meet the criteria of a security under ASC 320 Investments – Debt Securities,
the Company will evaluate the characteristics and the facts and circumstances to determine if loan accounting treatment is appropriate.
If loan accounting treatment is deemed appropriate, the Company recognizes interest income on its notes receivable on the accrual method
unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected.
Costs incurred to originate its notes receivable are deferred and amortized using the effective interest method over the term of the related
note receivable.

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In
circumstances where the Company does have significant influence in the investment, however the Company determines that the investment
does not meet the criterial of a security under ASC 320 Investments – Debt Securities and that
loan accounting treatment is not appropriate, the Company generally accounts for these investments under the equity method. The equity
method of accounting requires these investments to be initially recorded at cost and subsequently increased (decreased) for the Company’s
share of net income (loss), and increased (decreased) for contributions (distributions). The proportionate share of the results of operations
of these investments is recognized on a one-quarter lag and is recorded in the Company’s earnings or losses.

Income Taxes

For
the three and six months ended June 30, 2025, the Company recorded current income tax expense of approximately $0.5 million and $0.8 million,
respectively, and state income tax expense of $0.1 million and $0.2 million, respectively, related to income earned in certain taxable
REIT subsidiaries. The Company records these amounts in income tax expense on the Company