Company: BHM
Filing Date: 2025-10-08
Form Type: S-11
Source: 0001104659-25-097905
Chunk: 158

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-10-08
Form: S-11
Chunk 158
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the VIE accounting literature, we have determined that an entity is not a VIE, we assess the need for consolidation under all other provisions
of ASC 810. These provisions provide for consolidation of majority-owned entities through a majority voting interest held by the company
providing control.

In assessing whether we are
in control of and requiring consolidation of the limited liability company and partnership venture structures, we evaluate the respective
rights and privileges afforded each member or partner (collectively referred to as “member”). Our member would not be deemed
to control the entity if any of the other members has either (i) substantive kickout rights providing the ability to dissolve (liquidate)
the entity or otherwise remove the managing member or general partner without cause or (ii) substantive participating rights in the
entity. Substantive participating rights (whether granted by contract or law) provide for the ability to effectively participate in significant
decisions of the entity that would be expected to be made in the ordinary course of business.

We analyze each investment
that involves real estate acquisition, development, and construction to consider whether the investment qualifies as an investment in
a real estate acquisition, development, and construction arrangement. We have evaluated our real estate investments as required by ASC
310-10 Receivables and concluded that no investments are considered an investment in a real estate acquisition, development, or
construction arrangement. As such, we next evaluate if these investments are considered a security under ASC 320 Investments – Debt Securities.

For investments that meet
the criteria of a security under ASC 320 Investments – Debt Securities, we classify each investment as an available-for-sale
(“AFS”) debt security as we do not have the positive intent to hold all investments to maturity. We account for these investments
as preferred equity investments in our consolidated balance sheets, and we earn a fixed return on these investments which is included
within 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 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 below for further information regarding