Company: BHM
Filing Date: 2025-07-08
Form Type: DRS
Source: 0001104659-25-066400
Chunk: 35

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-07-08
Form: DRS
Chunk 35
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 which would be costly.

A significant number of our
properties are located within HOAs, which are private entities that regulate the activities of owners and occupants of, and levy assessments
on, properties in a residential subdivision. The HOAs in which we own our properties may have enacted or may from time to time enact
onerous or arbitrary rules that restrict our ability to restore, market, lease, or operate our properties in accordance with our
investment strategy, or require us to restore or maintain such properties at standards or costs that are in excess of our planned budgets.
Some HOAs impose limits on the number of property owners who may lease their properties, which, if met or exceeded, would cause us to
incur additional costs to sell the property and opportunity costs from lost rental revenue. Furthermore, we may have residents who violate
HOA rules and incur fines for which we may be liable as the property owner and for which we may not be able to obtain reimbursement
from the resident. Additionally, the governing bodies of the HOAs in which we own property may not make important disclosures about the
properties or may block our access to HOA records, initiate litigation, restrict our ability to sell our properties, impose assessments,
or arbitrarily change the HOA rules. We may be unaware of or unable to review or comply with HOA rules before purchasing a property,
and any such excessively restrictive or arbitrary regulations may cause us to sell such property at a loss, prevent us from leasing such
property, or otherwise reduce our cash flow from such property, which would have an adverse effect on our returns on these properties.
Several states have enacted laws that provide that a lien for unpaid monies owed to an HOA may be senior to our ownership interests and/or
the priority of mortgage liens on properties, which, if not cured, may give rise to events of default under certain of our indebtedness
or which otherwise could have a material adverse impact on us.

<div align='center'>19</div>

Increasing property taxes, HOA fees, and insurance costs may negatively affect our financial results.

As a result of our substantial
real estate holdings, the cost of property taxes and insuring our properties is a significant component of our expenses. Our properties
are subject to real and personal property taxes that may increase as tax rates change and as the real properties are assessed or reassessed
by taxing authorities. As the owner of our properties, we are ultimately responsible for payment of the taxes to the applicable government
authorities. If real property taxes