4. MORTGAGES RECEIVABLE

The Company offers loans to purchasers in connection 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. Principal and interest for each loan is billed and receivable on a monthly basis. The loans are secured by a first mortgage lien on the property purchased by the borrower. Mortgages receivable include the related interest receivable and are presented at amortized cost less an allowance for expected credit losses, 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, 2023 and December 31, 2022 was $1,436,981 and $196,550, respectively. Past due principal amounts of $497,588 and $254,683 are included in mortgages receivable, current as of December 31, 2023 and December 31, 2022, respectively.

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following represents the maturities of mortgages receivable as of December 31, 2023:

 SCHEDULE OF MATURITIES OF MORTGAGES RECEIVABLE

As of December 31, 2023 and December 31, 2022, two borrowers had loans outstanding representing 11% and 10%, respectively, of the total balance of mortgages receivable.

The Company recorded interest income from its mortgages receivable of $62,824 and $142,746 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and December 31, 2022, there is $190,967 and $185,197, respectively, of interest receivable included in mortgages receivable on the accompanying consolidated balance sheets.