4. MORTGAGES RECEIVABLE

The Company offers loans to purchasers in connections with the sale of real estate lots. The loans bear interest at 7.2% per annum and terms generally range from eight to ten years. The loans are secured by a first mortgage lien on the property purchased by the borrower. Mortgages receivable includes the related interest receivable and are presented at amortized cost, less bad debt allowances, in the consolidated financial statements.

Management evaluates each loan individually on a quarterly basis, to assess collectability and estimate a reserve for past due amounts. The total allowance for uncollectable mortgages as of December 31, 2022 and 2021 was $196,550 and $203,995, respectively. Past due principal amounts of $254,683 and $143,152 are included in mortgages receivable, current as of December 31, 2022 and 2021, respectively, in accordance with the mortgages’ contractual terms. In the case of each of the past due loans, the Company believes that the value of the collateral exceeds the outstanding balance on the loan, plus accrued interest.

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following represents the maturities of mortgages receivable as of December 31, 2021.

 SCHEDULE OF MATURITIES OF MORTGAGES RECEIVABLE

As of December 31, 2022 and 2021, no single borrower had loans outstanding representing more than 10% of the total balance of mortgages receivable.

The Company recorded interest income of $142,746 and $26,587 for years ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and December 31, 2021, there is $185,197 and $60,843, respectively, of interest receivable included in mortgages receivable on the accompanying consolidated balance sheets.