Company: BHM
Filing Date: 2025-11-18
Form Type: S-11/A
Source: 0001104659-25-113674
Chunk: 72

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-11-18
Form: S-11/A
Chunk 72
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 property. Similarly, due-on-encumbrance
clauses allow a mortgage lender to demand full repayment if the borrower uses the real estate securing the mortgage loan as security for
another loan. In such event, we may be required to sell our properties on an all-cash basis, which may make it more difficult to sell
the property or reduce the selling price.

Lenders may be able to recover against our other properties under our mortgage loans.

In financing our property
acquisitions, we will seek to obtain secured nonrecourse loans. However, only recourse financing may be available, in which event, in
addition to the property securing the loan, the lender would have the ability to look to our other assets for satisfaction of the debt
if the proceeds from the sale or other disposition of the property securing the loan are insufficient to fully repay it. Also, in order
to facilitate the sale of a property, we may allow the buyer to purchase the property subject to an existing loan whereby we remain responsible
for the debt.

If we are required to make payments under any “bad boy” carve-out guaranties that we may provide in connection with certain mortgages and related loans, our business and financial results could be materially adversely affected.

In obtaining certain nonrecourse
loans, we may provide standard carve-out guaranties. These guaranties are only applicable if and when the borrower directly, or indirectly
through agreement with an affiliate, joint venture partner or other third party, voluntarily files a bankruptcy or similar liquidation
or reorganization action or takes other actions that are fraudulent or restricted (commonly referred to as “bad boy” guaranties).
Although we believe that “bad boy” carve-out guaranties are not guaranties of payment in the event of foreclosure or other
actions of the foreclosing lender that are beyond the borrower’s control, some lenders in the real estate industry have recently
sought to make claims for payment under such guaranties. In the event such a claim were made against us under a “bad boy”
carve-out guaranty following a foreclosure, and such claim were successful, our business and financial results could be materially adversely
affected.

Interest-only indebtedness may increase our risk of default and ultimately may reduce our funds available for distribution to our stockholders.

We may finance our property
acquisitions using interest-only mortgage indebtedness. During the interest-only period, the amount of each scheduled payment will be
less than that of a traditional amortizing mortgage