Company: BHM
Filing Date: 2025-03-20
Form Type: 424B3
Source: 0001104659-25-026164
Chunk: 169

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-03-20
Form: 424B3
Chunk 169
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3 million, respectively, which is included in gain on sale and (impairment) of real estate investments, net
in our consolidated statements of operations and comprehensive income.

Revenue Recognition

We
recognize rental revenue on a straight-line basis over the terms of the rental agreements and in accordance with ASC Topic 842 Leases.
Rental revenue is recognized on an accrual basis and when the collectability of the amounts due from tenants is deemed probable. Rental
revenue is included within rental and other property revenues on our consolidated statements of operations and comprehensive income. Amounts
received in advance are recorded as a liability within other accrued liabilities on our consolidated balance sheet.

Other
property revenues are recognized in the period earned.

Current Expected Credit Losses (CECL)

Notes Receivable

We
estimate provision for credit losses on our loan investments (notes receivable) under CECL. This method is based on expected credit losses
for the life of the investment as of each balance sheet date. The method for calculating the estimate of expected credit loss considers
historical experience and current conditions for similar loans and reasonable and supportable forecasts about the future.

We
estimate our provision for credit losses using a collective (pool) approach for investments with similar risk characteristics, such as
collateral and duration of investment. In measuring the CECL provision for investments that share similar characteristics, we apply a
default rate to the investments for the remaining loan investment hold period. As we do not have a significant historical population of
loss data on our loan investments, our default rate utilized for CECL is based on an external historical loss rate for commercial real
estate loans.

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Table of Contents

In addition to analyzing investments as a pool, we perform an individual investment assessment of expected credit losses. If it is determined that the borrower is experiencing financial difficulty, or a foreclosure is probable, or we expect repayment through the sale of the collateral, we calculate expected credit losses based on the value of the underlying collateral as of the reporting date. During this review process, if we determine that it is probable that we will not be able to collect all amounts due for both principal and interest according to the contractual terms of an investment, that loan investment is not considered fully recoverable and a provision for credit loss is recorded. In estimating the value of the underlying collateral when determining if a loan investment is fully recoverable, we evaluate estimated future cash flows to be generated from the collateral underlying the investment. The inputs and assumptions utilized to estimate