Company: BHM
Filing Date: 2025-11-18
Form Type: S-11/A
Source: 0001104659-25-113674
Chunk: 164

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-11-18
Form: S-11/A
Chunk 164
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 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 CECL and our provision for credit losses.

Prior to the fourth quarter
2024, we 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 September 30, 2025, 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 will evaluate the characteristics and the
facts and circumstances to determine if loan accounting treatment is appropriate. If loan accounting treatment is deemed 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.

In circumstances where we
do have significant influence in the investment, however we determine that the investment does not meet the criterial of a security under
ASC 320 Investments – Debt Securities and that loan