Company: BHM
Filing Date: 2025-11-06
Form Type: 424B3
Source: 0001104659-25-107769
Chunk: 20

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-11-06
Form: 424B3
Chunk 20
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 debt securities are carried at fair value in the Company’s consolidated balance
sheets, and any unrealized gains or losses on AFS debt securities are reported as a component of accumulated other comprehensive income
on its consolidated balance sheets, and as a component of other comprehensive income on its consolidated statements of operations and
comprehensive income. The Company evaluates 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 of this Note for further information
regarding CECL and the Company’s provision for credit losses.

Prior
to the fourth quarter 2024, the Company classified its 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, the Company does not have the positive intent to hold all the securities to maturity. As such, the Company has reclassified all
its 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,
the Company will evaluate the characteristics and the facts and circumstances to determine if loan accounting treatment is appropriate.
If loan accounting treatment is deemed appropriate, the Company recognizes interest income on its 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 its notes receivable are deferred and amortized using the effective interest method over the term of the related
note receivable.

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Table of Contents

In
circumstances where the Company does have significant influence in the investment, however the Company determines that the investment
does not meet the criterial of a security under ASC 320 Investments – Debt Securities and that
loan accounting treatment is not appropriate, the Company generally accounts for these investments under the equity method. The equity
method of accounting requires these investments to be initially recorded at cost and subsequently increased (decreased) for the Company’s
share of net income (loss), and increased (decreased) for contributions (distributions). The proportionate share of the results of operations
of these investments is recognized on a one-quarter lag and is recorded in the Company’s earnings or losses.

Income Taxes

For
the three and nine months ended September 30, 2025, the