Company: BHM
Filing Date: 2025-04-09
Form Type: 424B3
Source: 0001104659-25-033384
Chunk: 104

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-04-09
Form: 424B3
Chunk 104
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 those transactions may not be treated as qualifying income for purposes of the REIT gross income tests,
and might also give rise to an asset that does not qualify for purposes of the REIT asset tests.

Our ability to provide certain services to our tenants may be limited by the REIT rules or may have to be provided through a TRS.

As a REIT, we generally will
not be able provide services to our tenants other than those that are customarily provided by landlords, nor will we be able to derive
income from a third party that provides such services. If we forego providing such services to our tenants, we may be at a disadvantage
to competitors that are not subject to the same restrictions. However, we can provide such non-customary services to tenants and share
in the revenue from such services if we do so through a TRS, though income earned by such TRS will be subject to U.S. federal corporate
income tax.

Any ownership of a TRS will
be subject to limitations, and our transactions with a TRS will cause us to be subject to a 100% penalty tax on certain income or deductions
if those transactions are not conducted on arm’s-length terms.

Overall, no more than 20%
of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. A TRS will be subject to applicable U.S.
federal, state and local corporate income tax on its taxable income, and its after-tax net income will be available for distribution to
us but is not required to be distributed to us. In addition, the Code limits the deductibility of interest paid or accrued by a TRS to
its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation and, in certain circumstances, other limitations
on deductibility may apply. The Code also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are
not conducted on an arm’s-length basis. We will monitor the value of our respective investments in any TRS for the purpose of ensuring
compliance with TRS ownership limitations and will structure our transactions with any TRS on terms that we believe are arm’s-length
to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the 20%
limitation or to avoid application of the 100% excise tax.

The prohibited transactions tax may