Company: BHM
Filing Date: 2025-07-08
Form Type: DRS
Source: 0001104659-25-066400
Chunk: 156

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-07-08
Form: DRS
Chunk 156
---
 not have the positive intent to hold all the
securities to maturity. As such, we have reclassified all our 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, we have concluded that the characteristics and
the facts and circumstances indicate that loan accounting treatment is appropriate. We recognize interest income on our 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 our notes receivable are deferred and amortized using the effective interest method over the
term of the related note receivable. We evaluate the collectability of each loan investment and estimate a provision for credit loss,
as applicable.

<div align='center'>74</div>

Income Taxes

For the three months ended
March 31, 2025, we recorded current income tax expense of approximately $0.2 million and state income tax expense of $0.1 million,
which is included in income tax expense on our consolidated statements of operations and comprehensive income. No income tax
expense was recorded in 2024.

Interim Financial Information

Our accompanying unaudited
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the Unites States
of America (“GAAP”) for interim financial reporting, and the instructions to Form 10-Q and Article 10-1 of Regulation
S-X. Accordingly, the financial statements for interim reporting do not include all the information and notes or disclosures required
by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered
necessary for a fair presentation have been included. Operating results for interim periods should not be considered indicative of the
operating results for a full year.

The balance sheet at December 31,
2024 has been derived from the audited financial statements at that date but does not include all the information and disclosures required
by GAAP for complete financial statements. It is suggested that these condensed financial statements be read in conjunction with the financial
statements and notes thereto included in our audited consolidated financial statements for the year ended December 31, 2024 contained
in the Annual Report on Form 10-K as filed with the SEC on March 20, 2025.

Use of Estimates

The preparation of the financial
statements in conformity with GAAP requires management to make estimates and assumptions