Company: BHM
Filing Date: 2025-04-09
Form Type: 424B3
Source: 0001104659-25-033384
Chunk: 151

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-04-09
Form: 424B3
Chunk 151
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 benefits
from the entity that potentially could be significant to the entity. Variable interests in a VIE are contractual, ownership, or other
financial interests in a VIE that change in value with changes in the fair value of the VIE’s net assets. We continuously re-assess
at each level of the investment whether (i) the entity is a VIE, and (ii) we are the primary beneficiary of the VIE. If it
was determined that an entity in which we hold an interest qualified as a VIE and we are the primary beneficiary, the entity would be
consolidated.

If, after consideration
of the VIE accounting literature, we have determined that an entity is not a VIE, we assess the need for consolidation under all other
provisions of ASC 810. These provisions provide for consolidation of majority-owned entities through a majority voting interest held
by the company providing control.

In assessing whether we
are in control of and requiring consolidation of the limited liability company and partnership venture structures, we evaluate the respective
rights and privileges afforded each member or partner (collectively referred to as “member”). Our member would not be deemed
to control the entity if any of the other members has either (i) substantive kickout rights providing the ability to dissolve (liquidate)
the entity or otherwise remove the managing member or general partner without cause or (ii) substantive participating rights in
the entity. Substantive participating rights (whether granted by contract or law) provide for the ability to effectively participate
in significant decisions of the entity that would be expected to be made in the ordinary course of business.

We analyze each investment
that involves real estate acquisition, development, and construction to consider whether the investment qualifies as an investment in
a real estate acquisition, development, and construction arrangement. We have evaluated our real estate investments as required by 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