Company: BHM
Filing Date: 2025-04-09
Form Type: 424B3
Source: 0001104659-25-033384
Chunk: 152

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-04-09
Form: 424B3
Chunk 152
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 income from preferred equity investments in our consolidated statements of operations and comprehensive income. AFS debt securities
are carried at fair value in our consolidated balance sheets, and any unrealized gains or losses on AFS debt securities are reported
as a component of accumulated other comprehensive income in our consolidated balance sheets, and as a component of other comprehensive
income in our consolidated statements of operations and comprehensive income. We evaluate the collectability of each preferred equity
investment and estimate a provision for credit loss, as applicable. Refer to the Current Expected Credit Losses (“CECL”)
section below for further information regarding CECL and our provision for credit losses.

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We previously classified
our 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 December 31, 2024, we do not have the positive intent to hold all the securities
to maturity. As such, we have reclassified all our 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, we have concluded that the characteristics
and the facts and circumstances indicate that loan accounting treatment is appropriate. We recognize interest income on our 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 our notes receivable are deferred and amortized using the effective interest method
over the term of the related note receivable. We evaluate the collectability of each loan investment and estimate a provision for credit
loss, as applicable.

Real Estate Assets

Real Estate Purchase Price Allocations

Upon acquisition, we evaluate our acquired residential properties for purposes of determining whether a transaction should be accounted for as an asset acquisition or business combination.Purchases of residential properties are treated as asset acquisitions and, as
such, are recorded at their purchase price, including acquisition costs, which is allocated to land and building based upon their relative
fair values at the date of acquisition. Acquisition costs typically include legal fees, broker commissions and title fees, as well as
other closing costs. In making estimates of fair values for purposes of allocating the purchase price of acquired properties, we utilize
various sources including our own market knowledge obtained from historical transactions, published market data, and independent appraisers.
In this regard, we also utilize information obtained from county tax assessment records