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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~July~~January 31, ~~2025~~2026

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 1-8551

Hovnanian Enterprises, Inc. (Exact Name of Registrant as Specified in Its Charter)

Delaware (State or Other Jurisdiction of Incorporation or Organization)

22-1851059 (I.R.S. Employer Identification No.)

90 Matawan Road, 5th Floor, Matawan, NJ 07747 (Address of Principal Executive Offices)

732-747-7800 (Registrant’s Telephone Number, Including Area Code)

N/A (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share	HOV	New York Stock Exchange
Preferred Stock Purchase Rights(1)	N/A	New York Stock Exchange
Depositary Shares each representing 1/1,000th of a share of 7.625% Series A Preferred Stock	HOVNP	The Nasdaq Stock Market LLC

(1) Each share of Common Stock includes an associated Preferred Stock Purchase Right. Each Preferred Stock Purchase Right initially represents the right, if such Preferred Stock Purchase Right becomes exercisable, to purchase from the Company one ten-thousandth of a share of its Series B Junior Preferred Stock for each share of Common Stock. The Preferred Stock Purchase Rights currently cannot trade separately from the underlying Common Stock.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒☐ Accelerated Filer ☐☒ Nonaccelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 5,~~131~~153,~~747~~480 shares of Class A Common Stock and ~~760~~784,~~387~~714 shares of Class B Common Stock were outstanding as of ~~August~~February 2625, ~~2025~~2026.

Table of Contents

HOVNANIAN ENTERPRISES, INC.

FORM 10-Q

INDEX	PAGE NUMBER
PART I. Financial Information
Item l. Financial Statements:
Condensed Consolidated Balance Sheets (unaudited) as of July 31, 2025 and October 31, 2024	3
Condensed Consolidated Balance Sheets (unaudited) as of January 31, 2026 and October 31, 2025	3
Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended July 31, 2025 and 2024	4
Condensed Consolidated Statements of Operations (unaudited) for the three months ended January 31, 2026 and 2025	4
Condensed Consolidated Statements of Changes in Equity (unaudited) for the three and nine months ended July 31, 2025 and 2024	5
Condensed Consolidated Statements of Changes in Equity (unaudited) for the three months ended January 31, 2026 and 2025	5
Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended July 31, 2025 and 2024	7
Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended January 31, 2026 and 2025	7
Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk	4745
Item 4. Controls and Procedures	4745
PART II. Other Information	4846
Item 1. Legal Proceedings	4846
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	4846
Item 5. Other Information	4846
Item 6. Exhibits	4947
Signatures	5149

Table of Contents

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

	July 31,			October 31,
	January 31,			October 31,
	2025			2024
	2026			2025
ASSETS
Homebuilding:
Cash and cash equivalents	$	~~146~~339,~~592~~910		$	~~209~~272,~~976~~772
Restricted cash and cash equivalents		129,~~155~~661			712,~~875~~608
Inventories:
Sold and unsold homes and lots under development		1,~~192~~154,~~251~~723			1,~~195~~132,~~318~~798
Land and land options held for future development or sale		~~171~~169,~~030~~029			~~238~~171,~~499~~793
Consolidated inventory not owned		~~329~~324,~~651~~218			~~210~~332,~~987~~879
Total inventories		1,~~692~~647,~~932~~970			1,~~644~~637,~~804~~470
Investments in and advances to unconsolidated joint ventures		~~218~~146,~~356~~631			~~142~~163,~~910~~469
Receivables, deposits and notes, net		2940,~~233~~192			2926,~~400~~454
Property and equipment, net		5156,~~573~~611			4350,~~431~~539
Prepaid expenses and other assets		83,916			82,525
Goodwill		31,705			-
Total homebuilding		2,234,757			2,160,921
Prepaid expenses and other assets		115,256			89,773
Financial services		173,775			203,589
Total homebuilding		2,387,936			2,253,085
Deferred tax assets, net		220,820			241,064
Financial services		123,957			151,211
Total assets	$	2,629,352		$	2,605,574
Deferred tax assets, net		222,783			229,617
Total assets	$	2,734,676		$	2,633,913
LIABILITIES AND EQUITY
Homebuilding:
Nonrecourse mortgages secured by inventory, net of debt issuance costs	$	5328,~~524~~548		$	9029,~~675~~494
Accounts payable and other liabilities		~~425~~420,~~683~~443			~~433~~438,~~273~~698
Customers’ deposits		35176,~~480~~847			4146,~~639~~376
Liabilities from inventory not owned, net of debt issuance costs		~~236~~235,~~644~~945			~~140~~244,~~298~~723
Senior notes and credit facilities (net of discounts, premiums and debt issuance costs)		~~861~~901,~~922~~307			~~896~~900,~~218~~718
Accrued interest		2830,~~361~~116			1411,~~508~~874
Total homebuilding		1,~~641~~793,~~614~~206			1,~~616~~671,~~611~~883
Financial services		~~152~~102,~~375~~627			~~183~~130,~~135~~873
Income taxes payable		-1,209			~~5,479~~222
Total liabilities		1,~~793~~897,~~989~~042			1,~~805~~802,~~225~~978
Stockholders' equity:
Equity:
Preferred stock, $0.01 par value - authorized 100,000 shares; issued and outstanding 5,600 shares with a liquidation preference of $140,000 at July 31, 2025 and October 31, 2024		135,299			135,299
Preferred stock, $0.01 par value - authorized 100,000 shares; issued and outstanding 5,600 shares with a liquidation preference of $140,000 at January 31, 2026 and October 31, 2025		135,299			135,299
Common stock, Class A, $0.01 par value - authorized 16,000,000 shares; issued 6,479,719 shares at July 31, 2025 and 6,415,794 shares at October 31, 2024		65			64
Common stock, Class A, $0.01 par value - authorized 16,000,000 shares; issued 6,586,810 shares at January 31, 2026 and 6,503,722 shares at October 31, 2025		66			65
Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) - authorized 2,400,000 shares; issued 788,056 shares at July 31, 2025 and 757,023 shares at October 31, 2024		8			8
Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) - authorized 2,400,000 shares; issued 812,387 shares at January 31, 2026 and 812,410 shares at October 31, 2025		8			8
Paid in capital - common stock		~~758~~753,~~542~~004			~~749~~757,~~752~~391
Retained earnings		~~130~~145,~~661~~516			74127,~~136~~326
Treasury stock - at cost – 1,348,087 shares of Class A common stock at July 31, 2025 and 1,090,179 shares at October 31, 2024; 27,669 shares of Class B common stock at July 31, 2025 and October 31, 2024		(189,212	)		(158,910	)
Treasury stock - at cost – 1,433,485 shares of Class A common stock at January 31, 2026 and 1,348,087 shares at October 31, 2025; 27,669 shares of Class B common stock at January 31, 2026 and October 31, 2025		(198,154	)		(189,154	)
Total stockholders’ equity		835,363			800,349
Total Hovnanian Enterprises Inc. stockholders’ equity		835,739			830,935
Total liabilities and equity	$	2,629,352		$	2,605,574
Noncontrolling interest		1,895			-
Total equity		837,634			830,935
Total liabilities and equity	$	2,734,676		$	2,633,913

See notes to condensed consolidated financial statements (unaudited).

Table of Contents

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended July 31,						Nine Months Ended July 31,
	Three Months Ended January 31,
	2025			2024			2025		2024
	2026			2025
Revenues:
Homebuilding:
Sale of homes	$	~~769~~575,~~050~~759		$	~~687~~646,~~424~~914		$	~~2,066,278~~	$	~~1,947,989~~
Land sales and other revenues		237,~~967~~185			169,~~392~~767			~~27,573~~		~~25,968~~
Total homebuilding		~~772~~612,~~017~~944			~~703~~656,~~816~~681			~~2,093,851~~		~~1,973,957~~
Financial services		2819,~~566~~008			1816,~~888~~942			~~66,826~~		~~51,323~~
Total revenues		~~800~~631,~~583~~952			~~722~~673,~~704~~623			~~2,160,677~~		~~2,025,280~~
Expenses:
Homebuilding:
Cost of sales, excluding interest		~~636~~509,~~256~~631			~~547~~533,~~332~~290			~~1,712,835~~		~~1,528,047~~
Cost of sales interest		2616,~~868~~591			2219,~~316~~356			~~66,162~~		~~63,757~~
Inventory impairments and land option write-offs		162,~~045~~359			31,~~099~~040			~~20,141~~		~~3,638~~
Total cost of sales		~~679~~528,~~169~~581			~~572~~553,~~747~~686			~~1,799,138~~		~~1,595,442~~
Selling, general and administrative		5550,~~770~~281			5054,~~989~~253			~~161,087~~		~~146,415~~
Total homebuilding expenses		~~734~~578,~~939~~862			~~623~~607,~~736~~939			~~1,960,225~~		~~1,741,857~~
Financial services		1413,~~715~~235			1213,~~362~~437			~~41,043~~		~~35,856~~
Corporate general and administrative		3533,~~029~~718			3832,~~480~~692			~~97,221~~		~~108,130~~
Other interest		712,~~149~~158			69,~~262~~517			~~25,811~~		~~25,682~~
Other expense (income), net (1)		460			(44,707	)		(19,660)		(47,284	)
Other (income) expense, net (1)		(31,283	)		(20,620	)
Total expenses		~~792~~606,~~292~~690			~~636~~642,~~133~~965			~~2,104,640~~		~~1,864,241~~
Gain on extinguishment of debt, net		-			-			399		1,371
Income from unconsolidated joint ventures		3,440			9,205
Income from unconsolidated joint ventures		15,511			10,698			33,759		36,814
Income before income taxes		28,702			39,863
Income before income taxes		23,802			97,269			90,195		199,224
State and federal income tax provision:
State and federal income tax provision:
State		1,205			2,049
State		3,310			5,896			7,170		13,333
Federal		6,638			9,623
Federal		3,877			18,454			18,493		38,232
Total income taxes		7,843			11,672
Total income taxes		7,187			24,350			25,663		51,565
Net income		20,859			28,191
Net income		16,615			72,919			64,532		147,659
Less: preferred stock dividends		2,669			2,669
Less: preferred stock dividends		2,669			2,669			8,007		8,007
Net income available to common stockholders	$	18,190		$	25,522
Net income available to common stockholders	$	13,946		$	70,250		$	56,525	$	139,652
Per share data:
Per share data:
Basic:
Basic:
Net income per common share	$	2.80		$	3.88
Net income per common share	$	2.14		$	10.61		$	8.55	$	20.85
Weighted-average number of common shares outstanding		6,490			6,517
Weighted-average number of common shares outstanding		6,399			6,474			6,442		6,476
Assuming dilution:
Assuming dilution:
Net income per common share	$	2.62		$	3.58
Net income per common share	$	1.99		$	9.75		$	7.94	$	19.15
Weighted-average number of common shares outstanding		6,950			7,071
Weighted-average number of common shares outstanding		6,887			7,048			6,936		7,048

See notes to condensed consolidated financial statements (unaudited).

(1) Includes $26.8 million gain on ~~contribution~~consolidation of ~~assets to a~~ joint ~~venture of $22.7 million~~ ventures for the three ~~nine~~ months ended ~~July~~January 31, ~~2025~~2026, and ~~includes~~$22.7 million gain on ~~consolidation~~contribution of assets to a joint venture ~~of $45.7 million~~ for the three ~~and nine~~ months ended ~~July~~January 31, ~~2024~~2025 (see note 18).

Table of Contents

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

THREE ~~AND NINE~~ MONTH ~~PERIODS~~PERIOD ENDED ~~JULY~~ JANUARY 31, ~~2025~~2026

(In thousands, except share data)

(Unaudited)

	A Common Stock					B Common Stock					Preferred Stock
	Shares					Shares					Shares
	Issued and					Issued and					Issued and				Paid-In			Retained			Treasury			Noncontrolling
	Outstanding			Amount		Outstanding			Amount		Outstanding		Amount		Capital			Earnings			Stock			~~Total~~Interest			Total
Balance, October 31, 2024		5,325,615		$	64		729,354		$	8		5,600	$	135,299	$	749,752		$	74,136		$	(158,910	)	$	800,349
Balance, October 31, 2025		5,155,635		$	65		784,741		$	8		5,600	$	135,299	$	757,391		$	127,326		$	(189,154	)	$	-		$	830,935
Stock options, amortization and issuances		476																							-
Preferred dividend declared ($476.56 per share)																			(2,669	)								(2,669	)
Preferred dividend declared ($476.56 per share)																			(2,669	)					(2,669	)
Restricted stock amortization, issuances and forfeitures		83,065			1											(4,387	)											(4,386	)
Restricted stock amortization, issuances and forfeitures		666														3,605									3,605
Conversion of Class B to Class A common stock		23					(23	)																				-
Conversion of Class B to Class A common stock		5					(5	)																	-
Changes in noncontrolling interest																									1,895			1,895
Share repurchases, including excise taxes		(131,460	)																			(18,050	)		(18,050	)
Share repurchases		(85,398	)																			(9,000	)					(9,000	)
Net income																			2820,~~191~~859						~~28,191~~			20,859
Balance, January 31, 2025		5,195,302		$	64		729,349		$	8		5,600	$	135,299	$	753,357		$	99,658		$	(176,960	)	$	811,426
Balance, January 31, 2026		5,153,325		$	66		784,718		$	8		5,600	$	135,299	$	753,004		$	145,516		$	(198,154	)	$	1,895		$	837,634
Stock options, amortization and issuances																									-
Preferred dividend declared ($476.56 per share)																			(2,669	)					(2,669	)
Restricted stock amortization, issuances and forfeitures																4,233									4,233
Conversion of Class B to Class A common stock		4					(4	)																	-
Share repurchases, including excise taxes		(126,448	)																			(12,346	)		(12,346	)
Net income																			19,726						19,726
Balance, April 30, 2025		5,068,858		$	64		729,345		$	8		5,600	$	135,299	$	757,590		$	116,715		$	(189,306	)	$	820,370
Stock options, amortization and issuances		1,179														25									25
Preferred dividend declared ($476.56 per share)																			(2,669)						(2,669)
Restricted stock amortization, issuances and forfeitures		61,595			1		31,042									927									928
Share repurchases, including excise taxes		-																				94			94
Net income																			16,615						16,615
Balance, July 31, 2025		5,131,632		$	65		760,387		$	8		5,600	$	135,299	$	758,542		$	130,661		$	(189,212	)	$	835,363

See notes to condensed consolidated financial statements (unaudited).

Table of Contents

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

THREE ~~AND NINE~~ MONTH ~~PERIODS~~PERIOD ENDED ~~JULY~~ JANUARY 31, ~~2024~~ 2025

(In thousands, except share data)

(Unaudited)

	A Common Stock						B Common Stock						Preferred Stock
	Shares						Shares						Shares
	Issued and						Issued and						Issued and				Paid-In			~~Accumulated~~Retained			Treasury			~~Noncontrolling~~
	Outstanding				Amount		Outstanding			Amount			Outstanding		Amount		Capital			~~Deficit~~Earnings			Stock			~~Interest~~	Total		~~Total~~
Balance, October 31, 2023		5,345,929			$	62		749,081		$	8			5,600	$	135,299	$	735,946		$	(157,197	)	$	(132,382	)	$	53		$	581,789
Balance, October 31, 2024		5,325,615			$	64		729,354		$	8			5,600	$	135,299	$	749,752		$	74,136		$	(158,910	)	$	800,349
Stock options, amortization and issuances		~~615~~476																46									-			46
Preferred dividend declared ($476.56 per share)																					(2,669	)					(2,669	)		~~(2,669~~	)
Restricted stock amortization, issuances and forfeitures		666																43,~~071~~605									3,605			~~4,071~~
Conversion of Class B to Class A common stock		165						(165	)																		-			-
Changes in noncontrolling interest in consolidated joint ventures																											(53	)		(53	)
Share repurchases		(131,460	)																					(18,050	)		(18,050	)
Net income																					2328,~~904~~191						28,191			~~23,904~~
Balance, January 31, 2024		5,346,560			$	62		749,065		$	8			5,600	$	135,299	$	740,063		$	(135,962	)	$	(132,382	)	$	-		$	607,088
Balance, January 31, 2025		5,195,302			$	64		729,349		$	8			5,600	$	135,299	$	753,357		$	99,658		$	(176,960	)	$	811,426
Stock options, amortization and issuances		120																(4	)											(4	)
Preferred dividend declared ($476.56 per share)																					(2,669	)								(2,669	)
Restricted stock amortization, issuances and forfeitures																		6,942												6,942
Conversion of Class B to Class A common stock		40,141				1		(40,141	)		(1	)																		-
Share repurchases, including excise taxes		(106,047	)																					(15,147	)					(15,147	)
Net income																					50,836									50,836
Balance, April 30, 2024		5,280,774			$	63		708,924		$	7			5,600	$	135,299	$	747,001		$	(87,795	)	$	(147,529	)	$	-		$	647,046
Stock options, amortization and issuances		4,767																268												268
Preferred dividend declared ($476.56 per share)																					(2,669	)								(2,669	)
Restricted stock amortization, issuances and forfeitures		85,021				1		53,250			1							(2,790	)											(2,788	)
Conversion of Class B to Class A common stock		32,771						(32,771	)																					-
Share repurchases, including excise taxes		(82,753	)																					(11,392	)					(11,392	)
Net income																					72,919									72,919
Balance, July 31, 2024		5,320,580		$		64		729,403		$	8			5,600	$	135,299	$	744,479		$	(17,545	)	$	(158,921	)	$	-		$	703,384

See notes to condensed consolidated financial statements (unaudited).

Table of Contents

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended
	Three Months Ended
	July 31,
	January 31,
	2025			2024
	2026			2025
Cash flows from operating activities:
Net income	$	6420,~~532~~859		$	~~147~~28,~~659~~191
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		83,~~513~~271			52,~~679~~298
Stock-based compensation		141,~~124~~579			203,~~208~~649
Amortization of debt discounts, premiums and deferred financing costs		(12,~~777~~374	)		(~~366~~772	)
Gain on sale of property and assets		(~~951~~25	)		(~~941~~778	)
Gain on consolidation of joint venture		-			(45,653	)
Gain on consolidation of joint ventures		(26,830	)		-
Gain on inventory contributed to joint venture		~~(22,683~~-	)		-(22,683	)
Income from unconsolidated joint ventures		(333,~~759~~440	)		(369,~~814~~205	)
Distributions of earnings from unconsolidated joint ventures		~~3,460~~-			31,~~170~~700
Gain on extinguishment of debt		(399	)		(1,371	)
Inventory impairments and land option write-offs		2,359			1,040
Inventory impairments and land option write-offs		20,141			3,638
Decrease (increase) in assets:
(Increase) decrease in assets:
Inventories		180,663			(43	)
Inventories		(45,586	)		(181,270	)
Receivables, deposits and notes		(12,207	)		(41,934	)
Receivables, deposits and notes		(2,163	)		(25,138	)
Origination of mortgage loans		(336,756	)		(379,898	)
Origination of mortgage loans		(1,279,416	)		(1,083,465	)
Sale of mortgage loans		357,659			412,670
Sale of mortgage loans		1,297,796			1,065,098
Deferred tax assets		6,834			10,937
Deferred tax assets		20,244			44,924
Decrease in liabilities:
(Decrease) increase in liabilities:
Accounts payable, accrued interest and other liabilities		(52,017	)		(62,842	)
Accounts payable, accrued interest and other liabilities		(8,328	)		3,819
Customers’ deposits		(4,478	)		912
Customers’ deposits		(6,159	)		(9,146	)
State income tax payable		1,041			879
State income tax payable		(8,384	)		(2,215	)
Net cash provided by (used in) operating activities		140,886			(55,879	)
Net cash provided by (used in) operating activities		19,205			(92,184	)
Cash flows from investing activities:
Proceeds from sale of property and assets		~~1,523~~33			~~951~~882
Purchase of property, equipment, and other fixed assets		(178,~~011~~768	)		(133,~~437~~685	)
Investment in and advances to unconsolidated joint ventures, net of reimbursements		(4951,~~572~~903	)		(3226,~~162~~088	)
Distributions of capital from unconsolidated joint ventures		~~4,425~~-			43,~~353~~825
Net cash used in investing activities		(60,635	)		(40,295	)
Acquisitions of business, net of cash acquired		31,517			-
Net cash used in investing activities		(29,121	)		(25,066	)
Cash flows from financing activities:
Proceeds from mortgages and notes		~~152~~20,~~747~~413			~~227~~58,~~612~~171
Payments related to mortgages and notes		(~~191~~26,~~384~~628	)		(~~241~~61,~~496~~587	)
Proceeds from model sale leaseback financing programs		367,~~978~~440			2518,~~619~~492
Payments related to model sale leaseback financing programs		(134,~~806~~832	)		(172,~~728~~785	)
Proceeds from land bank financing programs		~~159~~12,~~819~~831			7514,~~969~~896
Payments related to land bank financing programs		(8524,~~117~~964	)		(7214,~~132~~103	)
Net (payments) proceeds related to mortgage warehouse lines of credit		(21,504	)		23,688
Net payments related to mortgage warehouse lines of credit		(24,832	)		(32,789	)
Payments related to senior notes, senior secured notes and senior unsecured term loan		(26,588	)		(145,000	)
Preferred dividends paid		(2,669	)		(2,669	)
Preferred dividends paid		(8,007	)		(8,007	)
Treasury stock purchases		(9,000	)		(18,050	)
Treasury stock purchases		(30,302	)		(26,539	)
Deferred financing costs from land banking financing programs and note issuances		(384	)		(1,151	)
Deferred financing costs from land banking financing programs and note issuances		(3,353	)		(3,155	)
Net cash used in financing activities		(52,625	)		(41,575	)
Net cash used in financing activities		(30,517	)		(161,169	)
Net increase (decrease) in cash and cash equivalents, and restricted cash and cash equivalents		59,140			(122,520	)
Net decrease in cash and cash equivalents, and restricted cash and cash equivalents		(71,947	)		(293,648	)
Cash and cash equivalents, and restricted cash and cash equivalents balance, beginning of period		318,647			266,761
Cash and cash equivalents, and restricted cash and cash equivalents balance, beginning of period		266,761			477,519
Cash and cash equivalents, and restricted cash and cash equivalents balance, end of period	$	377,787		$	144,241
Cash and cash equivalents, and restricted cash and cash equivalents balance, end of period	$	194,814		$	183,871
Reconciliation of Cash, cash equivalents and restricted cash
Homebuilding: Cash and cash equivalents	$	~~146~~339,~~592~~910		$	~~122~~94,~~036~~258
Homebuilding: Restricted cash and cash equivalents		129,~~155~~661			98,~~615~~449
Financial Services: Cash and cash equivalents, included in financial services assets		54,~~228~~071			54,~~847~~529
Financial Services: Restricted cash and cash equivalents, included in financial services assets		3024,~~839~~145			4637,~~373~~005
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	~~194~~377,~~814~~787		$	~~183~~144,~~871~~241

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HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands - Unaudited)

(Continued)

Supplemental disclosure of non-cash ~~operating,~~ investing and financing activities:

In the ~~third~~first quarter of fiscal ~~2024~~2026, we consolidated the remaining assets and liabilities of one of our unconsolidated joint ventures, resulting in a ~~$33.1 million reduction~~decrease in our investment inof ~~the~~$72.2 ~~joint~~million ~~venture,~~ and ~~increases~~an increase of $~~123~~87.7 9 million to inventory, $72.0 7 million to other assets, $814.8 0 million to accounts payable, $62.5 6 million to customer deposits, ~~and~~ $365.6 2 million to nonrecourse mortgages and notes, net of debt issuance costs and $0.4 million of liabilities from inventory not owned.

In the ~~third~~first quarter of fiscal ~~2024~~2026, K. ~~Hovnanian exchanged~~we ~~$64.0~~acquired ~~million aggregate~~a ~~principal~~controlling ~~amount~~financial ofinterest ~~13.5%~~in ~~Senior~~a ~~Notes due~~previously ~~February~~unconsolidated 1,joint ~~2026 (~~venture in the Kingdom of Saudi Arabia ("~~13.5% Notes~~KSA")~~, $65~~.2 ~~million~~As ~~aggregate~~part ~~principal amount~~ of ~~5.0%~~the ~~Senior~~transaction, ~~Notes~~we ~~due~~consolidated ~~February~~the 1assets and liabilities, ~~2040~~resulting ~~and~~in ~~all~~an increase of ~~its~~ $3988.63 million ~~aggregate~~to ~~principal~~inventory, ~~amount~~$24.0 ofmillion ~~loans~~to ~~under the~~other ~~Senior Unsecured Term Loan Credit Facility due February 1~~assets, ~~2027 (the~~$0.5 ~~"Unsecured~~million ~~Term~~to ~~Loan")~~property and anequipment, ~~aggregate cash payment of~~ $31132.54 million into ~~respect~~customer ofdeposits ~~the 13.5% Notes~~ and ~~Unsecured Term Loan for an additional~~ $9328.5 4 million ~~aggregate~~to ~~principal~~accounts ~~amount~~payable, ofalong ~~loans~~with ~~under the Senior Secured~~ $1.759 ~~Lien Term~~million ~~Loan~~in ~~Credit Facility due January 31, 2028~~noncontrolling interest.

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HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

1.	Basis of Presentation

Hovnanian Enterprises, Inc. (“HEI”) conducts all of its homebuilding and financial services operations through its subsidiaries (references herein to the “Company,” “we,” “us” or “our” refer to HEI and its consolidated subsidiaries and should be understood to reflect the consolidated business of HEI’s subsidiaries).

The accompanying unaudited Condensed Consolidated Financial Statements include HEI's accounts and those of all of its consolidated subsidiaries after elimination of all intercompany balances and transactions. Noncontrolling interest represents the proportionate equity interest in a consolidated ~~joint~~subsidiary ~~venture~~ that is not 100% owned by the Company directly or indirectly. On January 1, ~~which~~2026, we ~~sold~~acquired ~~our~~a ~~membership~~controlling interest in ~~during~~a previously unconsolidated joint venture in the Kingdom of Saudi Arabia ("KSA"), that operates and markets itself under the trade name HOV Global. Beginning in the first quarter of fiscal ~~2024~~2026, the results from KSA are included in our consolidated financial statements.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2024~~2025. In the opinion of management, all adjustments for interim periods presented have been made, which include normal recurring accruals and deferrals necessary for a fair presentation of our condensed consolidated financial position, results of operations and cash flows. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and these differences could have a significant impact on the Condensed Consolidated Financial Statements. Results for interim periods are not necessarily indicative of the results which might be expected for a full year.

2.	Stock Compensation

During the first quarter of fiscal ~~2025~~2026, the Board of Directors (the "Board") approved certain grants under a new Long-Term Incentive Program (the "~~2025~~2026 LTIP") that contain performance-based vesting conditions. The performance period for the ~~2025~~2026 LTIP commenced on November 1, ~~2024~~2025 and will end on October 31, ~~2027~~2028. At the end of the performance period, 100% of the awards, if any, are payable in shares of Company stock, subject to a mandatory two-year post-vesting hold period. During the third quarter of fiscal 2025, the Board approved certain grants under a new Performance Stock Units Program (the "2025 PSUs") that also contain performance-based vesting conditions. The performance period for the 2025 PSUs commenced on May 1, 2025 and will end on April 30, 2026. Upon vesting, approximately 50% of the awards, if any, are payable in shares of Company stock, subject to a mandatory two-year post-vesting hold period and approximately 50% of the awards, if any, are paid in cash based on the earned phantom stock units.

For the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026, stock-based compensation expense was $61.26 million ($41.41 million net of tax) ~~and $14~~.1 ~~million ($10.1 million net of tax), respectively.~~ For the three ~~and nine~~ months ended ~~July~~January 31, ~~2024~~2025, stock-based compensation expense was $93.26 million ($62.16 million net of tax) ~~and $20~~.~~2 million ($13.2 million net of tax), respectively.~~

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Interest

Interest costs incurred, expensed and capitalized were as follows:

	Three Months Ended						~~Nine Months Ended~~
	July 31,						July 31,
	January 31,
(In thousands)	~~2025~~2026			~~2024~~2025			~~2025~~				~~2024~~
Interest capitalized at beginning of period	$	5343,~~633~~263		$	5257,~~222~~671			$	~~57,671~~		$	~~52,060~~
Plus interest incurred(1)		2829,~~523~~567			2829,~~087~~855				~~88,210~~			~~94,578~~
Less cost of sales interest expensed		(2616,~~868~~591	)		(2219,~~316~~356	)			~~(66,162~~	)		~~(63,757~~	)
Less other interest expensed(2)		(712,~~149~~158	)		(69,~~262~~517	)			~~(25,811~~	)		~~(25,682~~	)
Less interest contributed to unconsolidated joint venture(3)		-			-				(5,769	)		(5,468	)
Less interest contributed to unconsolidated joint ventures(3)		(1,109	)		(5,769	)
Plus interest acquired from unconsolidated joint venture(4)		-			2,861				-			2,861
Plus interest acquired from unconsolidated joint ventures(4)		425			-
Interest capitalized at end of period(5)	$	4843,~~139~~397		$	5452,~~592~~884			$	~~48,139~~		$	~~54,592~~

(1)

Data does not include interest incurred by our mortgage and finance subsidiaries.

(2)

During the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026 and ~~2024~~2025, respectively, our inventory under development exceeded our debt, therefore, all of the related interest incurred qualified for interest capitalization. Other interest ~~also~~ includes interest on completed homes, land in planning and fully developed lots without homes under construction, ~~along with financing programs,~~ which does not qualify for capitalization, and therefore, is expensed as incurred. This component of other interest was $7.1 million and $6.3 million for the three months ended July 31, 2025 and 2024, respectively, and $25.8 million and $25.7 million for the nine months ended July 31, 2025 and 2024, respectively.

(3)	Represents capitalized interest which was included as part of the assets contributed to joint ventures, as discussed in Note 18. There was no impact to the Condensed Consolidated Statement of Operations as a result of these capitalized interest transactions.
(4)	Represents capitalized interest which was included as part of the assets acquired from joint ventures, as discussed in Note 18. There was no impact to the Condensed Consolidated Statement of Operations ~~resulting~~as ~~therefrom~~a result of these capitalized interest transactions.
(5)	Capitalized interest amounts are shown gross before allocating a portion of impairments, if any, to capitalized interest.

4.	Reduction of Inventory to Fair Value

We had ~~452~~ 431 and ~~448~~477 communities under development and held for future development or sale at ~~July~~January 31, ~~2025~~2026 and ~~2024~~2025, respectively, which we evaluated for impairment indicators (i.~~e.,~~ ~~those~~We ~~with~~did anot ~~projected~~identify ~~operating loss). We identified~~ impairment indicators ~~in one community~~for inany ~~our~~community ~~Northeast segment and three communities in our West segment with an aggregate carrying value of $35.9 million~~ during the three months ended ~~July~~January 31, ~~2025,~~2026 and ~~two communities~~ ~~in our Northeast segment and three communities in our West segment with an aggregate carrying value of $41.3 million during the nine months ended July 31,~~ 2025. These impairment analyses resulted in impairments of $7.6 million and $8.8 million during the three and nine months ended July 31, 2025, respectively, included with "Inventory impairments and land option write-offs" in the Condensed Consolidated Statement of Operations and deducted from inventory. We identified an impairment indicator related to an offer received on a parcel of land with a carrying value of $15.2 million for one community in our West segment during both the three and nine months ended July 31, 2024. The impairment analysis resulted in an impairment charge of $2.7 million during the periods.

Write-offs of options, engineering and capitalized interest costs are recorded in "Inventory impairments and land option write-offs" when we redesign communities, abandon certain engineering costs or do not exercise options in various locations because the pro forma profitability is not projected to produce adequate returns on investment commensurate with the risk. Total aggregate write-offs related to these items were $82.4 million and $01.40 million for the three months ended ~~July~~January 31, ~~2025~~2026 and ~~2024, respectively, and $11.3 million and $0.9 million for the nine months ended July 31,~~ 2025 ~~and 2024~~, respectively. The number of lots walked away from during the three months ended ~~July~~January 31, ~~2025~~2026 and ~~2024~~2025 were ~~4,059~~735 and ~~1,277, respectively, and 8,956 and~~ 2,~~547 during the nine months ended July 31~~434, ~~2025 and 2024,~~ respectively. The walk-aways during the first ~~three~~quarter ~~quarters~~ of fiscal ~~2025~~2026 and ~~2024~~2025 occurred across each of our reportable segments.

We sell and lease back certain of our model homes with the right to participate in the potential profit when each home is sold to a third-party at the end of the respective lease. As a result of our continued involvement and the ability to repurchase model homes with below market options, for accounting purposes in accordance with ASC 606, these sale and leaseback transactions are considered a financing rather than a sale. Our Condensed Consolidated Balance Sheets as of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, included inventory of $6577.94 million and $4674.13 million, respectively, recorded to “Consolidated inventory not owned” with a corresponding amount of $6878.76 million (net of debt issuance costs) and $4675.26 million, respectively, recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.

We have land banking arrangements, whereby we sell our land parcels to a land banker and they provide us an option to purchase back finished lots on a predetermined schedule. Because of our options to repurchase these parcels, for accounting purposes in accordance with ASC 606, these transactions are considered a financing rather than a sale. Our Condensed Consolidated Balance Sheets as of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, included inventory of $~~263~~246.8 million and $~~164~~258.96 million, respectively, recorded to “Consolidated inventory not owned” with a corresponding amount of $~~167~~157.93 million (net of debt issuance costs) and $94169.1 million, respectively, recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.

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5.	Variable Interest Entities

WeASC ~~enter~~810 ~~into~~requires ~~land~~the ~~and~~assessment ~~lot~~of ~~option~~whether ~~purchase~~an ~~contracts~~entity tois ~~procure~~a ~~land~~variable orinterest ~~lots~~entity ~~for~~("VIE") ~~the~~and, ~~construction~~if ofso, ~~homes.~~if ~~Under~~we ~~these~~are ~~contracts,~~ the ~~Company~~primary ~~will~~beneficiary ~~fund~~at athe ~~stated~~inception ~~deposit~~of inthe ~~consideration~~entity ~~for~~or ~~the~~at ~~right,~~a ~~but~~reconsideration ~~not~~event. ~~the~~We ~~obligation,~~are required to ~~purchase~~consolidate ~~land~~a orVIE ~~lots~~if atwe determine that we have a ~~future~~controlling ~~point~~financial interest in ~~time~~the ~~with~~VIE. ~~predetermined~~Controlling ~~terms.~~financial ~~Under~~interests ~~the~~will ~~terms~~have both of the ~~option~~following ~~purchase~~characteristics: ~~contracts,~~(a) ~~many~~the ofpower to direct the ~~option~~activities ~~deposits~~of ~~are~~a ~~not~~VIE ~~refundable~~that atmost significantly impact the ~~Company~~VIE's economic ~~discretion.~~performance ~~Under~~and (b) the ~~requirements~~obligation to absorb losses of ~~ASC~~the ~~810,~~VIE ~~certain~~that ~~option~~could ~~purchase~~potentially ~~contracts~~be ~~may~~significant ~~result~~to inthe VIE or the ~~creation~~right ofto areceive ~~Variable~~benefits ~~Interest~~from ~~Entity~~the ("VIE") that ~~owns~~could potentially be significant to the VIE. Our variable interest in VIEs are in the form of joint ventures and land ~~parcel~~and ~~under~~lot option purchase contracts.

~~Although~~We ~~the~~examine ~~Company~~specific ~~does~~criteria ~~not~~and ~~have~~use ~~legal~~our ~~title~~judgement towhen ~~the~~determining ~~underlying~~if ~~land,~~ we ~~analyze~~are ~~our option purchase contracts to determine whether~~ the ~~corresponding~~primary ~~land~~beneficiary ~~and~~of ~~lot~~a ~~sellers~~VIE ~~are VIEs~~ and, ifhave ~~so,~~a ~~whether~~controlling wefinancial ~~are the primary beneficiary~~interest. The significant factors we consider in determining ifwhether ~~the~~we ~~power~~are ~~to direct~~ the ~~activities~~primary ofbeneficiary ainclude ~~VIE~~risk ~~that~~and ~~most~~reward ~~significantly~~sharing, ~~impact~~experience ~~the~~and ~~VIE's~~financial ~~economic~~condition ~~performance~~of ~~are~~other ~~shared include~~partner(s), ~~among~~voting ~~other things~~rights, ~~our~~involvement ~~ability~~ in ~~determining~~day-to-day orcapital ~~limiting~~and ~~the~~operating ~~scope~~decisions, orrepresentation ~~purpose~~on ofa ~~the~~ VIE's executive committee, ~~selling~~existence orof ~~transferring~~unilateral ~~property~~kick-out ~~owned~~rights or ~~controlled~~voting ~~by the VIE~~rights, ~~changing~~level ~~the terms~~ of ~~the~~economic ~~contract~~disproportionality orbetween ~~arranging~~us ~~financing~~and ~~for~~ the ~~VIE.~~other Aspartner(s) aand ~~result~~contracts ofto ~~our~~purchase ~~analyses,~~property wefrom ~~have concluded, there are no VIEs that required consolidation at either July 31, 2025 or October 31, 2024 because we are not~~ the ~~primary beneficiary of the land or lots under option purchase contracts~~VIEs.

We ~~will~~also ~~continue~~enter tointo ~~secure~~ land and ~~lots~~lot ~~using~~option ~~options,~~purchase ~~some~~contracts ofto ~~which~~procure ~~are~~land ~~with~~or ~~VIEs where~~lots wefor ~~have~~the ~~determined~~construction ~~power~~of ishomes. ~~shared~~Under ~~among~~these contracts, the ~~partners~~Company ~~and~~will wefund ~~do not have~~ a ~~controlling~~stated ~~financial~~deposit ~~interest.~~in ~~Including~~consideration ~~deposits~~for onthe ~~our unconsolidated VIEs~~right, ~~at July~~but ~~31,~~not ~~2025 and~~the ~~October 31~~obligation, ~~2024, we had total cash deposits amounting~~ to ~~$312.1 million~~purchase ~~and~~land ~~$264.8~~or ~~million,~~lots ~~respectively,~~at toa ~~purchase~~future ~~land~~point ~~and~~in ~~lots~~time with apredetermined ~~total~~terms. ~~purchase~~Under ~~price~~the terms of ~~$3.4 billion~~the ~~and~~option ~~$3.0~~purchase ~~billion~~contracts, ~~respectively.~~many ~~The~~of ~~maximum~~the ~~exposure~~option todeposits ~~loss~~are ~~with~~not ~~respect~~refundable toat ~~our~~the ~~land~~Company's ~~and~~discretion. ~~lot~~Under ~~options~~the isrequirements ~~limited~~of toASC ~~the~~810, ~~deposits~~certain ~~plus~~option ~~any~~purchase ~~pre-development~~contracts ~~costs~~may ~~invested~~result in the ~~property,~~creation ~~although~~of ~~some~~a ~~deposits~~VIE ~~are~~that ~~refundable~~owns atthe ~~our~~land ~~request~~parcel orunder ~~if certain conditions are met~~option.

As a result of our analyses, we have concluded we are not the primary beneficiary and do not have a controlling financial interest of any of the land or lots under option purchase contracts at either January 31, 2026 or October 31, 2025.

At January 31, 2026 and October 31, 2025, we had total cash deposits amounting to $332.9 million and $333.2 million, respectively, to purchase land and lots with a total purchase price of $3.3 billion and $2.8 billion, respectively. The maximum exposure to loss with respect to our land and lot options is limited to the deposits plus any pre-development costs invested in the property. On rare occasions some deposits are refundable at our request or refundable if certain conditions are not met.

Our investments in homebuilding and land development joint ventures consist of equity interests that, in total, provide us with partner investment returns and management fees. All major decision making in our joint ventures is shared among all partner(s). In particular, business plans and budgets are generally required to be unanimously approved by all partner(s). Usually, management and other fees earned by us are nominal and believed to be at market and there is no significant economic disproportionality between us and our partner(s). As a result of our analyses, we have concluded we are not the primary beneficiary and do not have a controlling financial interest of any of our homebuilding and land development joint ventures at either January 31, 2026 or October 31, 2025.

6.	Warranty Costs

We accrue for warranty costs that are covered under our existing general liability and construction defect policy as part of our general liability insurance deductible. For homes to be delivered in fiscal ~~2025~~2026 and previously delivered in ~~2024~~2025, our annual deductible under our general liability insurance is or was $40.0 million and $30.0 million, ~~annually~~respectively, aggregated for construction defect and warranty claims. For bodily injury claims, our deductible per occurrence in fiscal ~~2025~~ 2026 is $0.5 million and ~~2024~~in isfiscal or2025 was $0.25 million, ~~and~~with $0.5 million for action over claims, ~~both~~and ~~with~~ a $30.0 million limit in both fiscal 2026 and 2025. In addition, we establish a warranty accrual for lower cost-related issues to cover home repairs, community amenities and land development infrastructure that are not covered under our general liability and construction defect policy. We accrue an estimate for these warranty costs at the time each home is closed and control is transferred to the homebuyer. Additions, charges and changes in the warranty reserve and general liability reserve for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~ 2026 and ~~2024~~ 2025 were as follows:

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
(In thousands)	2025			2024			2025				2024
Balance, beginning of period	$	91,800		$	85,177			$	89,391		$	98,919
Additions – Selling, general and administrative		2,818			2,262				7,912			6,850
Additions – Cost of sales		2,294			2,787				6,512			7,637
Charges incurred during the period (1)		(2,417	)		(2,546	)			(8,772	)		(28,139	)
Changes to pre-existing reserves		1,955			418				1,407			2,831
Balance, end of period	$	96,450		$	88,098			$	96,450		$	88,098

(1) The majority of the charges incurred during the first nine months of fiscal 2024 represented a payment for construction defects related to the settlement of a litigation matter.

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	Three Months Ended
	January 31,
(In thousands)	2026			2025
Balance, beginning of period	$	103,824		$	89,391
Additions – Selling, general and administrative		2,039			2,547
Additions – Cost of sales		1,373			2,102
Charges incurred during the period		(3,426	)		(2,876	)
Changes to pre-existing reserves (1)		1,672			(374	)
Balance, end of period	$	105,482		$	90,790

(1) Includes reserve balances acquired from unconsolidated joint ventures, as discussed in Note 18.

7.	Commitments and Contingent Liabilities

We are involved in litigation, claims and other proceedings arising in the ordinary course of business,. ~~none~~The ofsignificant ~~which~~majority isof ~~expected to have a material adverse effect on~~ our ~~financial~~litigation ~~position,~~matters ~~results of operations or cash flows, and we~~ are ~~subject~~related to ~~extensive~~construction ~~and~~defect ~~complex~~claims. ~~laws~~Our ~~and~~estimated ~~regulations~~losses ~~that~~from ~~affect~~construction ~~the~~defect ~~development~~litigation ~~of land and home building~~matters, ~~sales~~if ~~and customer financing processes~~any, ~~including~~are ~~zoning,~~included ~~density,~~in ~~building~~our ~~standards~~construction ~~and~~defect ~~mortgage financing~~reserves. ~~These~~While ~~laws~~the ~~and~~outcome ~~regulations~~of ~~often~~such ~~provide~~contingencies ~~broad~~cannot ~~discretion~~be topredicted ~~the~~with ~~administering~~certainty, ~~governmental~~we ~~authorities. This~~do ~~can~~not ~~delay~~believe orthat ~~increase~~ the ~~cost~~resolution of ~~development~~such ~~or homebuilding. The significant majority of our litigation~~ matters ~~are~~will ~~related~~have toa ~~construction~~material ~~defect~~adverse ~~claims.~~impact ~~Our~~on ~~estimated~~our ~~losses~~results ~~from~~of ~~construction~~financial ~~defect litigation matters~~position, ifresults ~~any,~~of ~~are~~operations ~~included~~or incash ~~our construction defect reserves~~flows.

WeIn ~~also~~December ~~are~~2020, ~~subject~~the toNew aJersey ~~variety~~Department of ~~local,~~Environmental ~~state,~~Protection ~~federal~~(“NJDEP”) and ~~foreign~~the ~~laws~~Administrator ~~and~~of ~~regulations~~the ~~concerning~~New ~~protection~~Jersey ofSpill ~~health~~Compensation ~~and~~Fund (the ~~environment,~~“Spill ~~including~~Fund”) ~~those~~filed ~~regulating~~a ~~the~~lawsuit ~~emission~~in orthe ~~discharge~~Superior Court of ~~materials~~New ~~into~~Jersey, ~~the~~Law ~~environment~~Division, ~~the~~Union ~~management~~County ofagainst ~~storm~~Hovnanian ~~water~~Enterprises, ~~runoff~~Inc., atin ~~construction~~addition ~~sites,~~to ~~the~~other ~~handling,~~unrelated ~~use~~parties, ~~storage~~in ~~and~~connection ~~disposal~~with ofcontamination ~~hazardous~~at ~~substances~~Hickory Manor, ~~impacts~~a toresidential ~~wetlands~~condominium ~~and~~development. ~~other~~Alleged ~~sensitive~~predecessors ~~environments,~~of ~~and~~certain defendants had used the ~~remediation~~Hickory ofManor ~~contamination~~property atfor ~~properties~~decades ~~that~~for wemanufacturing ~~have~~purposes. In 1998 (when ~~owned~~one orof ~~developed~~our oraffiliates ~~currently~~purchased ~~own~~the orproperty ~~are~~and ~~developing~~began ~~(“environmental~~conducting ~~laws”~~the remediation)~~. The~~, ~~particular~~NJDEP ~~environmental~~confirmed ~~laws~~ that ~~apply~~groundwater toat athis site ~~may~~was ~~vary~~impacted ~~greatly~~from ~~according~~an tooff-site ~~the~~source. ~~community~~The site, ~~for~~was ~~example~~later remediated, ~~due~~resulting toin the ~~community,~~NJDEP ~~the~~issuing ~~environmental~~an ~~conditions~~unconditional atsite-wide orNo ~~near~~Further ~~the~~Action ~~site,~~(“NFA”) determination letter and ~~the~~Covenant ~~present~~Not ~~and~~to ~~former~~Sue ~~uses~~in 1999. Subsequently, one of our affiliates was involved in redeveloping the ~~site. These~~property ~~environmental~~as ~~laws~~a ~~may~~residential ~~result~~community. inThe ~~delays,~~complaint ~~may~~asserts ~~cause~~claims usunder tothe ~~incur~~New ~~substantial~~Jersey ~~compliance,~~Spill ~~remediation~~Act and~~/or~~ other ~~costs,~~state law claims and ~~can~~alleges ~~prohibit~~that the orNJDEP ~~severely~~and ~~restrict~~the ~~development~~Spill ~~and~~Fund ~~homebuilding~~have ~~activity~~incurred over $5.3 million since In2009 to ~~addition,~~investigate ~~noncompliance~~vapor ~~with~~intrusion ~~these~~at ~~laws~~the development and ~~regulations~~to ~~could~~install ~~result~~vapor inmitigation ~~fines~~systems. ~~and~~Among ~~penalties~~other things, ~~obligations~~the tocomplaint ~~remediate~~seeks orrecovery ~~take~~of ~~corrective~~the ~~action~~costs incurred, ~~permit~~an ~~revocations~~order orthat ~~other~~defendants ~~sanctions;~~perform ~~and~~additional ~~contamination~~required orremediation ~~other~~and ~~environmental~~disgorgement ~~conditions~~of atprofits oron inour ~~the~~affiliate’s ~~vicinity~~sales of ~~our~~the ~~developments~~homes ~~may result~~ in ~~claims~~the ~~against~~development. usDiscovery ~~for~~has ~~personal~~commenced. Hovnanian ~~injury~~Enterprises, ~~property~~Inc. ~~damage~~intends orto ~~other~~defend ~~losses~~these claims vigorously.

We anticipate that increasingly stringent requirements will continue to be imposed on developers and homebuilders in the future. In addition, some of these laws and regulations that significantly affect how certain properties may be developed are contentious, attract intense political attention, and may be subject to significant changes over time. For example, regulations governing wetlands permitting under the federal Clean Water Act have been the subject of extensive rulemakings for many years, resulting in several major joint rulemakings by the EPA and the U.S. Army Corps of Engineers that have expanded and contracted the scope of wetlands subject to regulation; and such rulemakings have been the subject of many legal challenges, some of which remain pending. It is unclear how these and related developments, including at the state or local level, ultimately may affect the scope of regulated wetlands where we operate. Although we cannot reliably predict the extent of any effect these developments regarding wetlands, or any other requirements that may take effect, may have on us, they could result in time-consuming and expensive compliance programs and in substantial expenditures, which could cause delays and increase our cost of operations. In addition, our ability to obtain or renew permits or approvals and the continued effectiveness of permits already granted or approvals already obtained is dependent upon many factors, some of which are beyond our control, such as changes in policies, rules and regulations and their interpretations and application.

In December 2020, the New Jersey Department of Environmental Protection ("NJDEP") and the Administrator of the New Jersey Spill Compensation Fund (the “Spill Fund”) filed a lawsuit in the Superior Court of New Jersey, Law Division, Union County against Hovnanian Enterprises, Inc., in addition to other unrelated parties, in connection with contamination at Hickory Manor, a residential condominium development. Alleged predecessors of certain defendants had used the Hickory Manor property for decades for manufacturing purposes. In 1998, the NJDEP confirmed that groundwater at this site was impacted from an off-site source. The site was later remediated, resulting in the NJDEP issuing an unconditional site-wide No Further Action determination letter and Covenant Not to Sue in 1999. Subsequently, one of our affiliates was involved in redeveloping the property as a residential community. The complaint asserts claims under the New Jersey Spill Act and other state law claims and alleges that the NJDEP and the Spill Fund have incurred over $5.3 million since 2009 to investigate vapor intrusion at the development and to install vapor mitigation systems. Among other things, the complaint seeks recovery of the costs incurred, an order that defendants perform additional required remediation and disgorgement of profits on our affiliate’s sales of the units in the development. Discovery has commenced. Hovnanian Enterprises, Inc. intends to defend these claims vigorously.

8.	Cash Equivalents, Restricted Cash and Customers' Deposits

Cash equivalents include certificates of deposit, U.S. Treasury bills and government money–market funds with maturities of 90 days or less when purchased. Our cash balances are held at a few financial institutions and may, at times, exceed insurable amounts. We believe we help to mitigate this risk by depositing our cash in major high credit quality financial institutions. As of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, $129.54 million and $1311.69 million, respectively, of our total cash and cash equivalents was in cash equivalents and restricted cash equivalents.

Homebuilding "Restricted cash and cash equivalents" on the Condensed Consolidated Balance Sheets totaled $129.27 million and $712.96 million as of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, respectively, which primarily consists of cash collateralizing our letter of credit agreements and facilities (see Note 12).

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Financial services restricted cash and cash equivalents, which are included in "Financial services" assets on the Condensed Consolidated Balance Sheets, totaled $3024.81 million and $4227.37 million as of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, respectively. Included in these balances were (1) financial services customers’ deposits of $2721.09 million and $3925.24 million at ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, respectively, which are subject to restrictions on our use, and (2) restricted cash under the terms of our mortgage warehouse lines of credit of $32.82 million and $32.13 million at ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, respectively.

Homebuilding "Customers' deposits" are shown as a liability on the Condensed Consolidated Balance Sheets. These liabilities are significantly more than the applicable periods’ restricted cash balances because in some states the deposits are not restricted from use and, in other states, we are able to release the majority of these customer deposits to cash by pledging letters of credit or surety bonds.

9.	Leases

We rent certain office space for use in our operations. Our lease population at ~~July~~January 31, ~~2025~~2026 is comprised of operating leases where we are the lessee, primarily for our corporate office and division offices.

Lease costs are included in our Condensed Consolidated Statements of Operations, primarily in "Selling, general and administrative" homebuilding expenses, and payments on our lease liabilities are presented in the table below.

Three Months Ended

~~Nine Months Ended~~

July 31,

January 31,

(In thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Operating lease costs

2,~~876~~873

2,~~743~~995

~~8,708~~

~~8,131~~

Cash payments on lease liabilities

2,~~520~~829

2,~~224~~831

~~8,092~~

~~6,604~~

Operating right-of-use lease assets ("ROU assets") are included in "Prepaid expenses and other assets" on our Condensed Consolidated Balance Sheets, while lease liabilities are included in "Accounts payable and other liabilities"." During the ~~nine~~three months ended ~~July~~January 31, ~~2025~~2026, we had an increase to ROU assets of $10.9 million and an increase to lease liabilities of $813.37 million primarily as a result of new leases and lease renewals, adjusted for lease incentives, that commenced during the period. WeDuring ~~also~~the ~~modified~~three amonths ~~lease~~ended January 31, 2026, we recognized $4.9 million of income included in "Other (income) expense, net" in our ~~Northeast~~Condensed ~~segment~~Consolidated toStatements ~~shorten~~of ~~the~~Operations, ~~term~~due ~~during~~to the ~~nine~~receipt ~~months~~of ~~ended~~an ~~July~~early ~~31,~~termination ~~2025,~~fee ~~which~~to ~~resulted~~leave office space in athe ~~decrease to~~Northeast ~~ROU~~segment ~~assets~~before ~~and~~the lease ~~liabilities~~maturity ~~of $7~~date.7 ~~million.~~ The following table contains additional information about our leases:

(In thousands)	~~July~~January 31, ~~2025~~2026			October 31, ~~2024~~2025
ROU assets	$	2234,~~654~~587		$	2823,~~765~~671
Lease liabilities	$	2540,~~874~~814		$	3027,~~868~~090
Weighted-average remaining lease term (in years)		35.68			43.65
Weighted-average discount rate		108.21	%		108.31	%

Maturities of our operating lease liabilities as of ~~July~~January 31, ~~2025~~2026 are as follows:

Fiscal Year Ending October 31,	(In thousands)
2025 (excluding the nine months ended July 31, 2025)	$	2,501
2026 (excluding the three months ended January 31, 2026)	$	8,751
2026		10,356
2027		10,881
2027		8,155
2028		7,938
2028		4,900
2029		6,950
2029		3,022
2030		5,265
2030 and thereafter		2,109
2031 and thereafter		12,048
Total operating lease payments (1)		31,043
Total operating lease payments		51,833
Less: imputed interest		(511,~~169~~019	)
Present value of operating lease liabilities	$	2540,~~874~~814

(1) Lease payments include options to extend lease terms that are reasonably certain of being executed and exclude $11.5 million of legally binding minimum lease payments for office leases signed but not yet commenced as of July 31, 2025. The related ROU assets and operating lease liabilities are not reflected on the Company's Condensed Consolidated Balance Sheets.

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10.	Mortgage Loans Held for Sale

Our wholly owned mortgage banking subsidiary, K. Hovnanian American Mortgage, LLC (“K. Hovnanian Mortgage”), originates mortgage loans, primarily from the sale of our homes. Such mortgage loans and related servicing rights are generally sold in the secondary mortgage market within a short period of time offrom origination. Mortgage loans held for sale are collateralized by the underlying property. Loans held for sale are recorded at fair value with changes in the value recognized in the Condensed Consolidated Statements of Operations in “Financial services” revenue. ~~We use forward sales of mortgage-backed securities (“MBS”), interest rate commitments from borrowers and~~ forward commitments to sell loans to third parties to protect us from interest rate fluctuations. These short-term instruments do not require any payments to be made to the counterparty or purchaser in connection with the execution of the commitments.

As of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, $~~128~~84.90 million and $~~145~~107.76 million, respectively, of mortgages held for sale were pledged against our mortgage warehouse lines of credit (see Note 11). We may incur losses with respect to mortgages that were previously sold that are delinquent and which had underwriting defects, but only to the extent the losses are not covered by mortgage insurance or the resale value of the home. The reserves for these estimated losses are included in “Financial services” liabilities on the Condensed Consolidated Balance Sheets. At both ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, we had specific reserves for 9 ~~and 10~~ identified mortgage loans, ~~respectively,~~ as well as reserves for an estimate of future losses on mortgages sold but not yet identified to us.

The activity in our loan origination reserves during the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026 and ~~2024~~2025 were as follows:

Three Months Ended

~~Nine Months Ended~~

July 31,

January 31,

(In thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Loan origination reserves, beginning of period

2,~~738~~016

2,~~034~~520

~~2,520~~

~~2,013~~

Provisions for estimated losses during the period

~~195~~69

~~216~~145

~~452~~

~~629~~

Payments/settlements

~~(44~~-

)

(~~156~~39

)

~~(83~~

)

~~(548~~

)

Loan origination reserves, end of period

2,~~889~~085

2,~~094~~626

~~2,889~~

~~2,094~~

11.

Mortgages

Nonrecourse

We had nonrecourse mortgage loans for certain communities totaling $5328.5 million and $9029.75 million, net of debt issuance costs, as of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, respectively, which are secured by the related real property, including any improvements, with an aggregate book value of $~~123~~77.82 million and $~~249~~113.79 million, respectively. The weighted-average interest rate on these obligations was 87.14% ~~and 8.7%~~ as of both ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024, respectively,~~2025 and the mortgage loan payments primarily correspond to home deliveries.

Mortgage Loans

K. Hovnanian Mortgage finances the origination of mortgage loans through various master repurchase agreements, which are recorded in "Financial services" liabilities on the Condensed Consolidated Balance Sheets.

Our secured Master Repurchase Agreement with JPMorgan Chase Bank, N.A. (“Chase Master Repurchase Agreement”), ~~which was amended on July 31, 2025 to extend the maturity date to April 1, 2026,~~ is a short-term borrowing facility that provides up to $50.0 million through its maturity on April 1, 2026. The loan is secured by the mortgages held for sale and is repaid when we sell the underlying mortgage loans to permanent investors. Interest is payable monthly on outstanding advances at an adjusted Secured Overnight Financing Rate ("SOFR"), plus an applicable margin of 2.00% to 2.25%. As of ~~July~~ both January 31, ~~2025~~2026 and October 31, ~~2024,~~2025 ~~the~~there ~~aggregate~~were ~~principal~~no ~~amount of all~~ borrowings outstanding under the Chase Master Repurchase Agreement ~~was $9~~.0 ~~million and $7.3 million, respectively.~~

K. Hovnanian Mortgage has another secured Master Repurchase Agreement with Customers Bank (“Customers Master Repurchase Agreement”), which is a short-term borrowing facility that provides up to $100.0 million through its maturity on March 4, 2026. The loan is secured by the mortgages held for sale and is repaid when we sell the underlying mortgage loans to permanent investors. Interest is payable daily or as loans are sold to permanent investors on outstanding advances at the current Bloomberg Short Term Bank Yield Index ("BSBY") rate or SOFR, plus an applicable margin ranging from 2.125% to 4.5% based on the type of loan and the number of days outstanding on the warehouse line. As of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, the aggregate principal amount of all borrowings outstanding under the Customers Master Repurchase Agreement was $5518.57 million and $7817.68 million, respectively.

K. Hovnanian Mortgage has another secured Master Repurchase Agreement with Hinsdale Bank & Trust Company, N.A. ("Hinsdale Master Repurchase Agreement") which is a short-term borrowing facility that provides up to $50.0 million through its maturity on July 13, 2026. The loan is secured by the mortgages held for sale and is repaid when we sell the underlying mortgage loans to permanent investors. Interest is payable monthly on outstanding advances at the One-Month Term SOFR, plus an applicable margin of 1.75% subject to a floor of 2.75%. As of January 31, 2026 and October 31, 2025, the aggregate principal amount of all borrowings outstanding under the Hinsdale Master Repurchase Agreement was $45.3 million and $35.9 million, respectively.

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K. Hovnanian Mortgage has another secured Master Repurchase Agreement with ~~Hinsdale~~ PlainsCapital Bank ~~& Trust Company, N.A.~~ ("~~Hinsdale~~ PlainsCapital Master Repurchase Agreement"),. ~~which was amended on July 14, 2025 to extend the maturity date to July 13, 2026, and is a~~ The short-term borrowing facility ~~that~~ provides up to $5075.0 million through its maturity on May 31, 2026. The loan is secured by the mortgages held for sale and is repaid when we sell the underlying mortgage loans to permanent investors. Interest is payable ~~monthly~~daily or as loans are sold to permanent investors on outstanding advances at the ~~One-Month~~Daily ~~Term~~ SOFR, plus an applicable margin of 12.75125% subject to a floor of 25.755%. As of ~~both July~~January 31, ~~2025~~ 2026 and October 31, ~~2024~~2025, the aggregate principal amount of all borrowings outstanding under the ~~Hinsdale~~ PlainsCapital Master Repurchase Agreement was $455.5 million and $40.6 million, respectively.

OnThe ~~June~~Chase 6,Master ~~2025~~Repurchase Agreement, K.Customers ~~Hovnanian Mortgage~~Master ~~entered~~Repurchase ~~into~~Agreement, aHinsdale ~~new secured~~ Master Repurchase Agreement ~~with~~and PlainsCapital ~~Bank~~Master ~~("PlainsCapital~~Repurchase Agreement (together, the “Master Repurchase ~~Agreement"~~Agreements”). ~~The short-term~~require ~~borrowing~~K. ~~facility~~Hovnanian ~~provides~~Mortgage up to ~~$75.0~~satisfy ~~million~~and ~~through~~maintain ~~its~~specified ~~maturity~~financial onratios ~~May~~and ~~31,~~other ~~2026~~financial condition tests. ~~The~~Because ~~loan~~of isthe ~~secured~~extremely short period of time mortgages are held by K. Hovnanian Mortgage before the mortgages ~~held~~are ~~for~~sold ~~sale~~to ~~and~~investors is(generally ~~repaid~~a ~~when~~period weof ~~sell~~a ~~the~~few ~~underlying~~weeks), ~~mortgage~~the ~~loans~~immateriality to ~~permanent~~us ~~investors.~~on ~~Interest~~a isconsolidated ~~payable~~basis, ~~daily~~the orsize asof ~~loans~~the ~~are~~Master ~~sold~~Repurchase toAgreements, ~~permanent~~the ~~investors~~levels required by these financial covenants, our ability based on ~~outstanding~~our ~~advances~~immediately atavailable ~~the~~resources ~~30-Day~~to ~~SOFR~~contribute sufficient capital to cure any default, ~~plus~~were ansuch ~~applicable~~conditions ~~margin~~to ofoccur, ~~2.125%~~and our right to ~~9.0%~~cure any conditions of default based ~~upon~~on the ~~number~~terms of ~~days~~the ~~outstanding~~applicable ~~with~~agreement, ~~the~~we ~~warehouse~~do ~~line,~~not ~~subject~~consider any of these covenants to abe ~~floor~~substantive ofor 5material.~~5%.~~ As of ~~July~~January 31, ~~2025~~2026, ~~there~~we believe we were noin ~~borrowings~~compliance ~~outstanding~~with the covenants under the ~~PlainsCapital~~ Master Repurchase ~~Agreement~~Agreements.

The Chase Master Repurchase Agreement, Customers Master Repurchase Agreement, Hinsdale Master Repurchase Agreement and PlainsCapital Master Repurchase Agreement (together, the “Master Repurchase Agreements”) require K. Hovnanian Mortgage to satisfy and maintain specified financial ratios and other financial condition tests. Because of the extremely short period of time mortgages are held by K. Hovnanian Mortgage before the mortgages are sold to investors (generally a period of a few weeks), the immateriality to us on a consolidated basis, the size of the Master Repurchase Agreements, the levels required by these financial covenants, our ability based on our immediately available resources to contribute sufficient capital to cure any default, were such conditions to occur, and our right to cure any conditions of default based on the terms of the applicable agreement, we do not consider any of these covenants to be substantive or material. As of July 31, 2025, we believe we were in compliance with the covenants under the Master Repurchase Agreements.

12.	Senior Notes and Credit Facilities

Senior notes and credit facilities balances as of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, were as follows:

	July 31,			October 31,
	January 31,			October 31,
(In thousands)	~~2025~~2026			~~2024~~2025
Senior Secured Notes:
8.0% Senior Secured 1.125 Lien Notes due September 30, 2028	$	225,000		$	225,000
11.75% Senior Secured 1.25 Lien Notes due September 30, 2029		430,000			430,000
Total Senior Secured Notes	$	655,000		$	655,000
Senior Notes:
13.5% Senior Notes due February 1, 2026	$	-		$	26,588
8.0% Senior Notes due April 1, 2031	$	450,000		$	450,000
8.375% Senior Notes due October 1, 2033		450,000			450,000
5.0% Senior Notes due February 1, 2040		24,968			24,968
Total Senior Notes	$	24924,968		$	51924,~~556~~968
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028	$	175,000		$	175,000
Senior Secured Revolving Credit Facility (1)	$	-		$	-
Subtotal senior notes and credit facilities	$	~~854~~924,968		$	~~881~~924,~~556~~968
Net premiums (discounts)	$	9,141		$	17,340
Net (discounts) premiums	$	(10,971	)	$	(11,051	)
Unamortized debt issuance costs	$	(212,~~187~~690	)	$	(213,~~678~~199	)
Total senior notes and credit facilities, net of discounts, premiums and unamortized debt issuance costs	$	~~861~~901,~~922~~307		$	~~896~~900,~~218~~718

(1) At ~~July~~January 31, ~~2025~~2026, provides for up to $125.0 million in aggregate amount of senior secured first lien revolving loans. The revolving loans ~~thereunder~~under the revolving credit facility have a maturity of June 30, ~~2026~~2028 and borrowings bear interest, at K. Hovnanian’s option, at either (i) a term SOFR (subject to a floor of 3.00%) plus an applicable margin of 4.50% or (ii) an alternate base rate (subject to a floor of 43.00%) plus an applicable margin of 3.50%. In addition, K. Hovnanian will pay an unused commitment fee on the undrawn revolving commitments at a rate of 1.00% per annum.

General

Except for K. Hovnanian, the issuer of the notes and borrower under the credit ~~agreements~~agreement governing our ~~term~~secured ~~loans and~~ revolving credit facility ~~facilities~~ (~~collectively,~~ the "“Secured Credit ~~Facilities"~~Facility”), our home mortgage subsidiaries, certain of our title insurance subsidiaries, joint ventures and subsidiaries holding interests in our joint ventures, we and each of our subsidiaries are guarantors of the Secured Credit ~~Facilities,~~Facility ~~the senior secured notes~~ and senior notes outstanding at ~~July~~January 31, ~~2025~~2026 (collectively, the "“Notes Guarantors"”).

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The credit ~~agreements~~agreement governing the Secured Credit ~~Facilities~~ Facility and the indentures governing the senior ~~secured and senior~~ notes (together, the "Debt Instruments") outstanding at ~~July~~January 31, ~~2025~~2026, do not contain any financial maintenance covenants, but do contain restrictive covenants that limit, among other things, the ability of HEI and certain of its subsidiaries, including K. Hovnanian, to incur (including through ~~exchange~~exchanges or certain other types of transactions) indebtedness, pay dividends and make distributions on common and preferred stock, repay/repurchase certain indebtedness prior to its respective stated maturity, repurchase common and preferred stock, make other restricted payments (including investments), sell certain assets (including in certain land banking transactions), incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of their assets and enter into certain transactions with affiliates. The Debt Instruments also contain customary events of default which would permit the lenders or holders thereof to exercise remedies with respect to the collateral (as applicable), declare the loans (the "“Secured ~~Term~~Revolving Loans"”) made under the ~~Senior~~Credit ~~Secured~~Agreement, ~~1.75~~dated ~~Lien~~as ~~Term~~of ~~Loan~~October ~~Credit~~31, ~~Facility~~2019, ~~due~~as ~~January 31~~amended, ~~2028~~by ~~(the~~and ~~"Secured~~among ~~Term~~K. ~~Loan~~Hovnanian, ~~Facility")~~the ~~and~~Company, ~~loans (~~the ~~"Secured~~other ~~Revolving~~guarantors ~~Loans")~~party ~~made~~thereto, ~~under~~Wilmington ~~the~~Trust, ~~Senior~~National ~~Secured~~Association, ~~Revolving~~as ~~Credit~~administrative ~~Agreement~~agent, ~~due~~and ~~June~~the ~~30,~~lenders ~~2026~~party thereto (the "Secured Credit Agreement") or notes to be immediately due and payable if not cured within applicable grace periods, including the failure to make timely payments on the Secured ~~Term Loans, Secured~~ Revolving Loans or notes or other material indebtedness, cross default to other material indebtedness, the failure to comply with agreements and covenants and specified events of bankruptcy and insolvency and, with respect to the Secured ~~Term Loans and Secured~~ Revolving Loans, material inaccuracy of representations and warranties ~~and with respect to the Secured Term Loans and Secured Revolving Loans~~, a change of control, ~~and, with respect to~~ the ~~Secured Term Loans, Secured Revolving Loans and senior secured notes, the~~ failure of the documents granting security for the obligations under the ~~secured~~Secured ~~Debt~~Credit ~~Instruments~~Agreement to be in full force and effect, and the failure of the liens on any material portion of the collateral securing the obligations under the ~~secured~~Secured ~~Debt~~Credit ~~Instruments~~Agreement to be valid and perfected. As of ~~July~~January 31, ~~2025~~2026, we believe we were in compliance with the covenants of the Debt Instruments.

Under the terms of our Debt Instruments, we have the right to make certain redemptions and prepayments and, depending on market conditions, our strategic priorities and covenant restrictions, may do so from time to time. We also continue to ~~actively~~ analyze and evaluate our capital structure and explore transactions to ~~simplify our capital structure and to~~ strengthen our balance sheet, including those that reduce leverage, interest rates and/or extend maturities, and will seek to do so ~~in the near term~~ with the right opportunity. We may also continue to make debt or equity purchases and/or exchanges from time to time through tender offers, exchange offers, redemptions, open market purchases, private transactions, or otherwise, or seek to raise additional debt or equity capital, depending on market conditions and covenant restrictions.

Fiscal ~~2025~~2026

OnThere ~~April~~were ~~30,~~no ~~2025, K. Hovnanian redeemed the remaining~~transactions ~~$26.6 million~~related ~~aggregate~~to ~~principal~~our ~~amount of its 13.5% Senior Notes due 2026 for a redemption price of $27.5 million, which included accrued and unpaid interest. This redemption resulted in a gain on extinguishment of~~ debt ofsecurities ~~$0.4 million for the nine months ended July 31, 2025, including the write-off of unamortized premiums, debt issuance costs and fees. The gain from the redemption is included~~ in the ~~Condensed~~first ~~Consolidated~~quarter ~~Statement~~ of ~~Operations~~fiscal ~~as "Gain on extinguishment of debt, net"~~2026.

Secured Obligations

The Secured Credit Agreement provides for up to $125.0 million in aggregate amount of Secured Revolving Loans to be used for general corporate purposes, upon the terms and subject to the conditions set forth therein. Secured Revolving Loans are to be borrowed by K. Hovnanian and guaranteed by the Notes Guarantors. The revolving loans under the Secured Credit Agreement have a maturity of June 30, 2026 and borrowings bear interest, at K. Hovnanian’s option, at either (i) SOFR (subject to a floor of 3.00%) plus an applicable margin of 4.5% or (ii) an alternate base rate (subject to a floor of 4.0%) plus an applicable margin of 3.5%. In addition, K. Hovnanian pays an unused commitment fee on the undrawn revolving commitments at a rate of 1.0% per annum.

The 8.0% Senior Secured 1.125 Lien Notes due 2028 (the "New 1.125 Lien Notes") have a maturity of September 30, 2028 and bear interest at a rate of 8.0% per annum payable semi-annually on March 30 and September 30 of each year to holders of record at the close of business on March 15 and September 15, as the case may be, immediately preceding such interest payment dates. The New 1.125 Lien Notes are redeemable in whole or in part at K. Hovnanian’s option at any time prior to September 30, 2025 at a redemption price equal to 100% of their principal amount plus an applicable "Make Whole Amount". K. Hovnanian may also redeem some or all of the New 1.125 Lien Notes at 104.0% of their principal amount commencing on September 30, 2025, at 102.0% of their principal amount commencing on September 30, 2026 and at 100.0% of their principal amount commencing September 30, 2027. In addition, K. Hovnanian may also redeem up to 35.0% of the aggregate principal amount of New 1.125 Lien Notes prior to September 30, 2025 with the net cash proceeds from certain equity offerings at 108.0% of their principal amount.

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~~The 11.75% Senior~~ Secured 1.25 Lien Notes due 2029 (the "New 1.25 Lien Notes") have a maturity of September 30, 2029 and bear interest at a rate of 11.75% per annum payable semi-annually on March 30 and September 30 of each year to holders of record at the close of business on March 15 and September 15, as the case may be, immediately preceding such interest payment dates. The New 1.25 Lien Notes are redeemable in whole or in part at K. Hovnanian’s option at any time prior to March 30, 2026 at a redemption price equal to 100% of their principal amount plus an applicable “Make Whole Amount”. K. Hovnanian may also redeem some or all of the New 1.25 Lien Notes at 105.875% of their principal amount commencing on March 30, 2026, at 102.9375% of their principal amount commencing on September 30, 2027 and at 100.0% of their principal amount commencing on September 30, 2028. In addition, K. Hovnanian may also redeem up to 35.0% of the aggregate principal amount of New 1.25 Lien Notes prior to March 30, 2026, with the net cash proceeds from certain equity offerings at 111.75% of their principal amount.Obligations

The Secured ~~Term~~Credit ~~Loans~~Agreement ~~bear~~provides ~~interest~~for atup ~~a rate equal~~ to 10$125.0% ~~per~~million ~~annum (provided~~in ~~that~~aggregate ~~the~~amount ~~interest~~of ~~rate on all then outstanding~~ Secured ~~Term~~Revolving Loans ~~shall~~to be ~~increased~~used infor ~~certain~~general ~~circumstances~~corporate ~~when~~purposes, ~~certain~~upon ~~priority~~the ~~secured~~terms ~~debt~~and issubject ~~issued,~~ to athe ~~weighted~~conditions ~~average~~set ~~rate~~forth ~~that~~therein. ~~results~~Secured ~~from~~Revolving ~~applying~~Loans ~~(x)~~are anto 11be borrowed by K.~~75%~~ ~~per~~Hovnanian ~~annum~~and ~~rate~~guaranteed toby the ~~principal~~Notes ~~amount~~Guarantors. ofThe revolving loans under the Secured ~~Term~~Credit ~~Loans~~Agreement ~~equal~~have to a ~~specified~~maturity ~~aggregate principal amount~~ of ~~such~~June ~~priority~~30, ~~secured~~2028 ~~debt~~ and ~~(y)~~borrowings abear ~~10.0%~~interest, ~~per~~at ~~annum~~K. ~~rate~~Hovnanian’s onoption, ~~the~~at ~~remaining~~either ~~principal~~(i) ~~amount~~SOFR of(subject ~~the~~to ~~Secured~~a ~~Term~~floor ~~Loans~~of 3.00%) ~~and~~ ~~will~~plus ~~mature~~an onapplicable ~~January~~margin ~~31,~~of ~~2028,~~4.5% ~~with~~or ~~interest~~(ii) ~~payable~~an inalternate ~~arrears~~base onrate ~~the~~(subject ~~last~~to ~~business~~a ~~day~~floor of ~~each fiscal quarter~~3.00%) Atplus ~~any~~an ~~time~~applicable ~~and~~margin ~~from~~of ~~time~~3.5%. toIn ~~time after November 15~~addition, ~~2023,~~ K. Hovnanian ~~may~~pays ~~voluntarily~~an ~~prepay~~unused ~~some~~commitment orfee ~~all~~on of the ~~Secured~~undrawn ~~Term~~revolving ~~Loans~~commitments at a ~~prepayment~~rate ~~price~~of ~~equal to 100~~1.0% ofper ~~their principal amount~~annum.

~~Each~~As ~~series~~ of January ~~secured~~31, ~~notes and the guarantees thereof~~2026, the ~~Secured~~collateral ~~Term~~securing ~~Loans and~~ the ~~guarantees thereof and the~~ Secured Credit Agreement ~~and~~included ~~the~~(1) ~~guarantees thereof are secured by the same assets~~$301.4 ~~Among~~million ~~the~~of ~~secured~~cash ~~debt~~and ~~(in~~cash ~~each case~~equivalents, ~~with~~which ~~respect~~included to$6.5 ~~the~~million ~~assets~~of ~~securing~~restricted ~~such~~cash ~~debt):~~collateralizing ~~the~~certain ~~liens~~letters ~~securing~~of ~~the~~credit ~~Secured~~(subsequent ~~Credit~~to ~~Agreement~~such ~~are~~date, ~~senior~~fluctuations toas ~~the~~a ~~liens~~result ~~securing all~~ of K.cash ~~Hovnanian’s~~uses ~~other~~include ~~secured~~general ~~notes~~business operations and ~~the~~real ~~Secured~~estate ~~Term Loans; the liens securing the New 1.125 Lien Notes are senior to the liens securing the New 1.25 Lien Notes, the Secured Term Loans~~ and ~~any~~ other ~~future~~investments ~~secured~~along ~~obligations that are junior in priority~~ with ~~respect~~cash toinflow ~~the~~primarily ~~assets~~from ~~securing~~deliveries); ~~the~~(2) ~~New 1~~$635.~~125~~5 ~~Lien~~million ~~Notes;~~aggregate ~~the~~book ~~liens~~value ~~securing~~of ~~the~~real ~~New~~property, ~~1.25~~which ~~Lien~~does ~~Notes~~not ~~are~~include ~~senior to~~ the ~~liens~~impact ~~securing~~of ~~the~~inventory ~~Secured~~investments, ~~Term~~home ~~Loans~~deliveries ~~and~~or ~~any~~impairments ~~other~~thereafter ~~future~~and ~~secured~~which ~~obligations~~may ~~that~~differ ~~are~~from ~~junior in priority with respect to~~ the ~~assets~~value ~~securing~~if ~~the~~it ~~New~~were ~~1.25 Lien Notes~~appraised; and ~~the~~(3) ~~liens~~equity ~~securing~~interests ~~the~~in ~~Secured~~joint ~~Term~~venture ~~Loans~~holding ~~are~~companies ~~senior to any other future secured obligations that are junior in priority~~ with ~~respect~~an toaggregate ~~the~~book ~~assets~~value ~~securing~~of ~~the~~$144.2 ~~Secured Term Loans~~million.

As of July 31, 2025, the collateral securing the Secured Credit Agreement, the Secured Term Loan Facility and the senior secured notes included (1) $156.0 million of cash and cash equivalents, which included $6.3 million of restricted cash collateralizing certain letters of credit (subsequent to such date, fluctuations as a result of cash uses include general business operations and real estate and other investments along with cash inflow primarily from deliveries); (2) $738.6 million aggregate book value of real property, which does not include the impact of inventory investments, home deliveries or impairments thereafter and which may differ from the value if it were appraised; and (3) equity interests in joint venture holding companies with an aggregate book value of $216.4 million.

Unsecured Obligations

The 58.0% Senior Notes due ~~2040~~2031 (the “5"2031 Notes") bear interest at 8.0% ~~2040~~per annum and mature on April 1, 2031. The 8.375% Senior Notes” due 2033(the "2033 Notes") bear interest at 58.0375% per annum and mature on ~~February~~October 1, ~~2040~~2033. Interest on both of the ~~5.0%~~2031 ~~2040~~Notes and 2033 Notes iswill be payable semi-annually on ~~February~~April 1 and ~~August~~October 1 of each year, beginning on April 1, 2026, to holders of record of the applicable series of notes at the close of business on ~~January~~March 15 or ~~July~~September 15, as the case may be, immediately preceding each such interest payment date. AtThe 2031 Notes are redeemable, in whole or in part, at K. Hovnanian’s option at any time prior to April 1, 2028 at 100.0% of their principal amount plus an applicable “make-whole” amount. K. Hovnanian may also redeem some or all of the 2031 Notes at 104.0% of their principal amount commencing on April 1, 2028, at 102.0% of their principal amount commencing on April 1, 2029 and at 100.0% of their principal amount commencing April 1, 2030. In addition, K. Hovnanian may also redeem up to 40.0% of the aggregate principal amount of 2031 Notes prior to April 1, 2028 with the net cash proceeds from certain equity offerings at 108.0% of their principal amount. The 2033 Notes are redeemable, in whole or in part, at K. Hovnanian’s option at any time prior to ~~time~~October 1, 2028 at 100.0% of their principal amount plus an applicable “make-whole” amount. K. Hovnanian may also redeem some or all of the 52033 Notes at 104.0188% ~~2040~~of ~~Notes~~their principal amount commencing on October 1, 2028, at a102.094% ~~redemption~~of ~~price~~their ~~equal~~principal toamount commencing on October 1, 2029 and at 100.0% of their principal amount commencing on October 1, 2030. In addition, K. Hovnanian may also redeem up to 40.0% of the aggregate principal amount of 2033 Notes prior to October 1, 2028 with the net cash proceeds from certain equity offerings at 108.375% of their principal amount.

The 5.0% Senior Notes due 2040 (the “2040 Notes”) bear interest at 5.0% per annum and mature on February 1, 2040. Interest on the 2040 Notes is payable semi-annually on February 1 and August 1 of each year to holders of record at the close of business on January 15 or July 15, as the case may be, immediately preceding each such interest payment date. At any time and from time to time, K. Hovnanian may redeem some or all of the 2040 Notes at a redemption price equal to 100.0% of their principal amount.

Other

We have certain stand-alone cash collateralized letter of credit agreements and facilities under which there was a total of $6.2 4 million and $2.6.2 million letters of credit outstanding at ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, respectively. These agreements and facilities require us to maintain specified amounts of cash as collateral in segregated accounts to support the letters of credit issued thereunder, which is reflected in "Restricted cash and cash equivalents" on the Condensed Consolidated Balance Sheets.

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13.	Per Share Calculation

Basic and diluted earnings per share for the periods presented below were calculated as follows:

Three Months Ended

~~Nine Months Ended~~

July 31,

January 31,

(In thousands, except per share data)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Numerator:

Net income

1620,~~615~~859

7228,~~919~~191

~~64,532~~

~~147,659~~

Less: preferred stock dividends

(2,669

)

(2,669

)

~~(8,007~~

)

~~(8,007~~

)

Less: undistributed earnings allocated to participating securities

~~(233~~-

)

(~~1,548~~209

)

~~(1,428~~

)

~~(4,660~~

)

Numerator for basic earnings per share

1318,~~713~~190

6825,~~702~~313

~~55,097~~

~~134,992~~

Plus: undistributed earnings allocated to participating securities

~~233~~-

~~1,548~~209

~~1,428~~

~~4,660~~

Less: undistributed earnings reallocated to participating securities

~~(234~~-

)

(~~1,556~~209

)

~~(1,435)~~

~~(4,698~~

)

Numerator for diluted earnings per share

1318,~~712~~190

6825,~~694~~313

~~55,090~~

~~134,954~~

Denominator:

Denominator for basic earnings per share – weighted average shares outstanding

6,~~399~~490

6,~~474~~517

~~6,442~~

~~6,476~~

Effect of dilutive securities:

Stock-based payments

~~488~~460

~~574~~554

~~494~~

~~572~~

Denominator for diluted earnings per share – weighted-average shares outstanding

6,~~887~~950

7,~~048~~071

~~6,936~~

~~7,048~~

Basic earnings per share

2.1480

103.6188

~~8.55~~

~~20.85~~

Diluted earnings per share

12.9962

93.7558

~~7.94~~

~~19.15~~

There were no anti-dilutive shares for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026 and ~~2024~~2025.

14.	Preferred Stock

On July 12, 2005, we issued 5,600 shares of 7.625% Series A preferred stock, with a liquidation preference of $25,000 per share. Dividends on Series A preferred stock are not cumulative and are payable at an annual rate of 7.625%. The Series A preferred stock is not convertible into the Company’s common stock and is redeemable in whole or in part at our option at the liquidation preference of the shares. The Series A preferred stock is traded as depositary shares, with each depositary share representing 1/1000th of a share of Series A preferred stock. We paid dividends of $2.7 ~~million and $8.0~~ million on the Series A preferred stock for both of the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026 and ~~2024~~2025.

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15.	Common Stock

Each share of Class A common stock entitles its holder to one vote per share, and each share of Class B common stock generally entitles its holder to ten votes per share. The amount of any regular cash dividend payable on a share of Class A common stock will be an amount equal to 110% of the corresponding regular cash dividend payable on a share of Class B common stock. If a shareholder desires to sell shares of Class B common stock, such stock must be converted into shares of Class A common stock at a one-to-one conversion rate.

On August 4, 2008, the Board adopted a shareholder rights plan (the “Rights Plan”), which was amended on January 11, 2018, January 18, 2021, and January 11, 2024, and which is designed to preserve shareholder value and the value of certain tax assets primarily associated with net operating loss (“NOL”) carryforwards and built-in losses under Section 382 of the Internal Revenue Code. Our ability to use NOLs and built-in losses would be limited if there was an “ownership change” under Section 382. This would occur if shareholders owning (or deemed under Section 382 to own) 5% or more of our stock increase their collective ownership of the aggregate amount of our outstanding shares by more than 50 percentage points over a defined period of time. The Rights Plan was adopted to reduce the likelihood of an “ownership change” occurring as defined by Section 382. Under the Rights Plan, one right was distributed for each share of Class A common Stock and Class B common Stock outstanding as of the close of business on August 15, 2008. Effective August 15, 2008, if any person or group acquires 4.9% or more of the outstanding shares of Class A common stock without the approval of the Board, there would be a triggering event causing significant dilution in the voting power of such person or group. However, existing shareholders who owned, at the time of the Rights Plan’s initial adoption on August 4, 2008, 4.9% or more of the outstanding shares of Class A common stock will trigger a dilutive event only if they acquire additional shares. The approval of the Board’s decision to adopt the Rights Plan may be terminated by the Board at any time prior to the Rights being triggered. The Rights Plan will continue in effect until August 14, 2027, unless it expires earlier in accordance with its terms. The approval of the Board’s decision to initially adopt the Rights Plan and Amendments Nos. 1, 2 and 3 thereto were approved by shareholders. Our shareholders also approved an amendment to our Certificate of Incorporation to restrict certain transfers of Class A common stock in order to preserve the tax treatment of our NOLs and built-in losses under Section 382 of the Internal Revenue Code. Subject to certain exceptions pertaining to pre-existing 5% shareholders and holders of Class B common stock, the transfer restrictions in our Restated Certificate of Incorporation generally restrict any direct or indirect transfer (such as transfers of our stock that result from the transfer of interests in other entities that own our stock) if the effect would be to (i) increase the direct or indirect ownership of our stock by any person (or public group) from less than 5% to 5% or more of our common stock; (ii) increase the percentage of our common stock owned directly or indirectly by a person (or public group) owning or deemed to own 5% or more of our common stock; or (iii) create a new “public group” (as defined in the applicable U.S. Treasury regulations). Transfers included under the transfer restrictions include sales to persons (or public groups) whose resulting percentage ownership (direct or indirect) of common stock would exceed the 5% thresholds discussed above, or to persons whose direct or indirect ownership of common stock would by attribution cause another person (or public group) to exceed such threshold.

On December 18, 2024, the Board authorized an incremental increase to our repurchase program and on April 11, 2025, the Board authorized another increase to our repurchase program, such that, inclusive of any amounts remaining under the existing repurchase authorization, as of April 11, 2025, we were authorized to repurchase up to $30.6 million of our Class A common stock. On February 27, 2026, the Board further authorized an incremental increase of $50.0 million to our repurchase program, such that, inclusive of any amounts remaining under the existing repurchase authorization, as of February 27, 2026, we were authorized to repurchase up to $67.4 million of our Class A common stock. Under the program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual dollar amount repurchased will depend on a variety of factors, including legal requirements, price, future tax implications and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

During the ~~nine~~three months ended ~~July~~January 31, ~~2025~~2026, we repurchased ~~257~~85,~~908~~398 shares under the stock repurchase program, with a market value of $309.1 0 million, or $~~116~~105.7039 per share. During the ~~nine~~three months ended ~~July~~January 31, ~~2024~~2025, we repurchased ~~188~~131,~~800~~460 shares under the stock repurchase program, with a market value of $2617.59 million, or $~~140~~135.3195 per share. The repurchased shares were added to "Treasury stock" on the Condensed Consolidated Balance Sheets. As of ~~July~~January 31, ~~2025~~2026, $2617.4 million of our Class A common stock was available to be purchased under the stock repurchase program.

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16.	Income Taxes

For the three ~~and nine~~ months ended ~~July~~January 31, 2026 and 2025, we recorded income tax expense of $7.28 million and $2511.7 million, respectively~~, and $24~~.~~4 million~~ ~~and~~In ~~$51.6 million for the same periods in the prior year, respectively. For~~ both the ~~three~~current and ~~nine months ended July 31, 2025, and both~~ prior year periods, the expense was primarily driven by federal and state tax expense on income before income taxes and permanent differences, partially offset by the generation of energy home credits. The federal tax expense is not paid in cash as it is offset by the use of our existing NOL carryforwards.

OnThe Company ~~July~~recognizes 4,deferred ~~2025,~~income ~~the~~taxes ~~One~~for ~~Big~~deferred ~~Beautiful~~tax ~~Bill~~benefits ~~Act~~arising ~~("OBBBA")~~from NOL ~~was~~carryforwards ~~enacted~~and temporary differences between book and ~~signed~~tax ~~into~~income ~~U.S.~~which will ~~law.~~be ~~The~~recognized ~~OBBBA~~in ~~modifies~~future oryears ~~extends~~as ~~provisions~~an ~~enacted~~offset byagainst ~~the~~future ~~2017~~taxable ~~Tax~~income. As ~~Cuts~~part ~~and~~of ~~Jobs~~our ~~Act~~analysis, we considered both positive and ~~introduces~~negative ~~new~~factors ~~provisions~~that impact ~~including~~profitability ~~the~~and ~~repeal~~whether ofthose ~~our~~factors ~~ability~~would lead to ~~claim~~a ~~energy~~change ~~efficient~~in estimate ~~home~~of ~~credits~~our ~~for~~deferred ~~homes~~tax ~~that~~assets ~~close~~(“DTAs”) ~~after~~that ~~June~~may ~~30,~~be ~~2026.~~realized ~~While~~in the future. ~~OBBBA~~At ~~does~~January ~~not~~31, ~~have~~2026, athe ~~material~~Company ~~impact~~has ondetermined ~~our~~that ~~Condensed~~it ~~Consolidated~~is ~~Financial~~more ~~Statements,~~likely than wenot ~~will~~that ~~continue~~sufficient totaxable ~~monitor~~income ~~additional~~will ~~guidance~~be ~~issued~~generated byin the ~~U.S.~~future ~~Treasury~~to realize ~~Department~~its DTAs, ~~the~~net ~~Internal~~of ~~Revenue~~any ~~Service and various~~ state ~~agencies~~valuation allowances.

The Company recognizes deferred income taxes for deferred tax benefits arising from NOL carryforwards and temporary differences between book and tax income which will be recognized in future years as an offset against future taxable income. As part of our analysis, we considered both positive and negative factors that impact profitability and whether those factors would lead to a change in estimate of our deferred tax assets (“DTAs”) that may be realized in the future. At July 31, 2025, the Company has determined that it is more likely than not that sufficient taxable income will be generated in the future to realize its DTAs, net of any state valuation allowances.

17.	Operating and Reporting Segments

HEI’s operating segments are components of the Company’s business for which discrete financial information is available and reviewed regularly by the chief operating decision maker, our Chief Executive Officer, to evaluate performance, ~~and~~ make resource allocations and guide strategic decisions. The Chief Executive Officer uses income (loss) before income taxes as the key operating metric used to measure segment profit or loss. Actual income (loss) before income taxes is reviewed monthly against budgeted amounts from the semi-annual financial plans.

We currently have homebuilding operations in 13 states that are aggregated into reportable segments based primarily upon geographic proximity.

HEI’s reportable segments consist of the following three homebuilding segments and a financial services segment.

Homebuilding:

	(1)	Northeast (Delaware, Maryland, New Jersey, Ohio, Pennsylvania, Virginia and West Virginia)
	(2)	Southeast (Florida, Georgia and South Carolina)
	(3)	West (Arizona, California and Texas)

Operations of the homebuilding segments primarily include the sale and construction of single-family attached and detached homes, attached townhomes and condominiums, urban infill and active lifestyle homes in planned residential developments. In addition, from time to time, operations of the homebuilding segments include sales of land. Operations of the financial services segment include mortgage banking and title services provided to the homebuilding operations’ customers. Our financial services subsidiaries do not typically retain or service mortgages that we originate but sell the mortgages and related servicing rights to investors.

Corporate and unallocated primarily represents operations at our headquarters in New Jersey. This includes our executive offices, information services, human resources, corporate accounting, training, treasury, process redesign, internal audit, construction services, administration of insurance, quality and safety. It also includes interest income and interest expense resulting from interest incurred that cannot be capitalized in inventory in the homebuilding segments, as well as the gains or losses on extinguishment of debt from any debt repurchases or exchanges.

Evaluation of segment performance is based primarily on income (loss) before income taxes. Income (loss) before income taxes for the homebuilding segments consist of revenues generated from the sales of homes and land, income (loss) from unconsolidated entities, management fees and other income, less the cost of homes and land sold, selling, general and administrative expenses and interest expense. Income (loss) before income taxes for the financial services segment consist of revenues generated from mortgage financing, title insurance and closing services, less the cost of such services and corporate general and administrative expenses.

Operational results of each segment are not necessarily indicative of the results that would have occurred had the segment been an independent stand-alone entity during the periods presented.

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Financial information relating to our reportable segments was as follows:

		Three Months Ended							Nine Months Ended
	Three Months Ended January 31, 2026
		July 31,							July 31,
(In thousands)		Northeast				Southeast			West				Financial Services				Total
(In thousands)		2025				2024			2025				2024
Homebuilding revenues	$	239,802			$	74,231		$	261,726			$	-			$	575,759
Revenues:
Financial services revenues		-				-			-				19,008				19,008
Northeast		$	289,180			$	255,332		$	830,209			$	645,859
All other revenues (1)		34,795				61			331				-				35,187
Southeast			104,747				115,964			231,025				350,761
Total		274,597				74,292			262,057				19,008				629,954
West			377,185				330,980			1,029,524				970,671
Cost of sales (2)		214,955				68,416			244,442				-				527,813
Total homebuilding			771,112				702,276			2,090,758				1,967,291
Selling, general and administrative		17,249				8,554			19,966				-				45,769
Financial services			28,566				18,888			66,826				51,323
Financial services expenses		-				-			-				13,235				13,235
Corporate and unallocated			905				1,540			3,093				6,666
Other segment items (3)		(15,370	)			864			9,044				-				(5,462	)
Total revenues		$	800,583			$	722,704		$	2,160,677			$	2,025,280
Total segment profit (loss)	$	57,763			$	(3,542	)	$	(11,395	)		$	5,773			$	48,599
Income (loss) before income taxes:
Corporate and unallocated (4)																	19,897
Northeast		$	41,447			$	40,006		$	112,658			$	107,645
Income before income taxes																$	28,702
Southeast			11,639				20,449			21,752				62,391
West			(6,284	)			21,009			15,275				77,198
Total homebuilding			46,802				81,464			149,685				247,234
Financial services			13,851				6,526			25,783				15,467
Corporate and unallocated (1)			(36,851	)			9,279			(85,273	)			(63,477	)
Income before income taxes		$	23,802			$	97,269		$	90,195			$	199,224

(1) Corporate and unallocated for the three months ended July 31, 2025, included corporate general and administrative expenses of $35.0 million and $1.9 million of other net expenses. Corporate and unallocated for the nine months ended July 31, 2025, included corporate general and administrative expenses of $97.2 million, $11.5 million of other income, and $0.4 million of gain on extinguishment of debt. Corporate and unallocated for the three months ended July 31, 2024, included corporate general and administrative expenses of $38.4 million, a reduction in interest expense of $5.4 million (a component of Other interest in our Condensed Consolidated Statements of Operations) and $42.3 million of other income. Corporate and unallocated for the nine months ended July 31, 2024, included corporate general and administrative expenses of $108.1 million, $43.2 million of other income and $1.4 million of gain on extinguishment of debt.

	Three Months Ended January 31, 2025
(In thousands)		Northeast			Southeast			West		Financial Services		Total
Homebuilding revenues	$	281,648		$	51,437		$	313,829	$	-	$	646,914
Financial services revenues		-			-			-		16,942		16,942
All other revenues (1)		2,100			165			6,125		-		8,390
Total		283,748			51,602			319,954		16,942		672,246
Cost of sales (2)		226,916			46,158			281,015		-		554,089
Selling, general and administrative		16,616			8,516			24,738		-		49,870
Financial services expenses		-			-			-		13,437		13,437
Other segment items (3)		(2,058	)		(9,155	)		11,735		-		522
Total segment profit	$	42,274		$	6,083		$	2,466	$	3,505	$	54,328
Corporate and unallocated (4)												14,465
Income before income taxes											$	39,863

		July 31,		October 31,
(1)	Consists primarily of land sales revenue, interest income, and income from forfeited customer deposits due to contract cancellations.
(In thousands)		2025		2024
(2)	Consists primarily of homebuilding and land sale costs, amortization of capitalized interest, inventory impairments and land option write-offs.
Assets:
(3)	Consists primarily of other interest expensed, and income (loss) from unconsolidated joint ventures.
Northeast		$	699,572	$	664,064
(4)	Consists primarily of corporate costs and shared services functions that are not allocated to the homebuilding or financial services reportable segments.
Southeast			361,570		296,058
West			915,324		889,704
Total homebuilding			1,976,466		1,849,826
Financial services			173,775		203,589
Corporate and unallocated			479,111		552,159
Total assets		$	2,629,352	$	2,605,574

18. Investments in Unconsolidated Homebuilding and Land Development Joint Ventures

We enter into homebuilding and land development joint ventures from time to time as a means of accessing lot positions, expanding our market opportunities, establishing strategic alliances, managing our risk profile, leveraging our capital base and enhancing returns on capital.

During the second quarter of fiscal 2024, we contributed 11 communities we owned, including three active selling communities to a new unconsolidated joint venture for $53.8 million of net cash.

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During the third quarter of fiscal 2024, we assumed control of one of our unconsolidated joint ventures after the partner received their final cash distribution. We consolidated the remaining assets and liabilities that were in the unconsolidated joint venture at fair value on the date of such distribution. Upon consolidation, we recorded a gain of $45.7 million in "Other (income) expense, net" for the three and nine months ended July 31, 2024.

	January 31,		October 31,
(In thousands)	2026		2025

Assets:
Northeast	$	624,970	$	672,021
Southeast		317,180		358,383
West		824,649		829,683
Total homebuilding		1,766,799		1,860,087
Financial services		123,957		151,211
Total assets	$	1,890,756	$	2,011,298

18.

Investments in Unconsolidated Homebuilding and Land Development Joint Ventures

During the first quarter of fiscal 2025, we contributed four active selling communities we owned to one new unconsolidated joint venture for $20.8 million of net cash and a $50.0 million note receivable, resulting in a gain of $22.7 million, which was recorded in “Other (income) expense, net.”

During the ~~third~~ first quarter of fiscal ~~2025~~2026, we assumed ~~contributed~~control ~~two~~of one of ~~communities~~our inunconsolidated ~~planning~~joint toventures aafter ~~new~~the partner received their final cash distribution. We consolidated the remaining assets and liabilities that were in the unconsolidated joint venture ~~for~~at fair value. We also purchased an additional equity stake in one of our unconsolidated joint ventures that gave us a controlling financial interest. The total gain recorded from the two transactions was $226.8 million, ofwhich ~~cash~~was recorded to “Other (income) expense, net."

~~The~~During ~~tables~~the ~~set~~first ~~forth~~quarter ~~below~~of ~~summarize~~fiscal ~~the~~2026, we ~~combined~~contributed twelve communities, ~~financial~~including ~~information~~eleven ~~related~~active selling communities and one community in planning, to ~~our~~a new unconsolidated ~~homebuilding~~joint ~~and~~venture ~~land~~for ~~development~~$134.3 million ~~joint~~of ~~ventures~~net ~~that~~cash. ~~are~~The ~~accounted~~carrying ~~for~~value ~~under~~of the ~~equity~~communities ~~method~~contributed approximated fair value.

	July 31, 2025
				Land
(In thousands)	Homebuilding			Development			Total
Assets:
Cash and cash equivalents	$	127,319		$	-		$	127,319
Inventories		569,264			-			569,264
Other assets		187,959			-			187,959
Total assets	$	884,542		$	-		$	884,542
Liabilities and equity:
Accounts payable and accrued liabilities	$	391,659		$	-		$	391,659
Notes payable		124,621			-			124,621
Total liabilities		516,280			-			516,280
Equity of:
Hovnanian Enterprises, Inc.		216,432			-			216,432
Others		151,830			-			151,830
Total equity		368,262			-			368,262
Total liabilities and equity	$	884,542		$	-		$	884,542
Debt to capitalization ratio		25	%		0	%		25	%

	October 31, 2024
				Land
(In thousands)	Homebuilding			Development			Total
Assets:
Cash and cash equivalents	$	130,532		$	-		$	130,532
Inventories		402,628			-			402,628
Other assets		311,955			-			311,955
Total assets	$	845,115		$	-		$	845,115
Liabilities and equity:
Accounts payable and accrued liabilities	$	469,320		$	-		$	469,320
Notes payable		88,653			-			88,653
Total liabilities		557,973			-			557,973
Equity of:
Hovnanian Enterprises, Inc.		140,540			-			140,540
Others		146,602			-			146,602
Total equity		287,142			-			287,142
Total liabilities and equity	$	845,115		$	-		$	845,115
Debt to capitalization ratio		24	%		0	%		24	%

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AsThe oftables ~~July~~set ~~31,~~forth ~~2025~~below ~~and October~~summarize ~~31,~~the ~~2024,~~combined wefinancial ~~had~~information ~~outstanding~~related ~~advances~~ to ~~unconsolidated joint ventures of $1.9 million and $2.4 million, respectively. These amounts were included in “Accounts payable and accrued liabilities” in the tables above. In some cases,~~ our ~~net investment in~~ unconsolidated homebuilding joint ventures isthat ~~less~~are ~~than~~accounted ~~our~~for ~~proportionate~~under ~~share~~the of equity reflected in the tables above because of differences between asset impairments recorded against our unconsolidated joint venture investments and any impairments recorded in the applicable unconsolidated joint venturemethod. During the ~~nine~~periods ~~months ended July 31~~presented, ~~2025 and 2024,~~ we did not ~~write-down~~have ~~any~~an ofinvestment ~~our~~in ~~unconsolidated~~any ~~joint~~land ~~venture~~development ~~investments~~joint ventures.

	Three Months Ended July 31, 2025
(In thousands)	January 31, 2026			October 31,2025
					Land
Assets:
(In thousands)	Homebuilding				Development		Total
Cash and cash equivalents	$	37,173		$	104,066
Revenues	$	166,887			$	-	$	166,887
Inventories		542,184			487,965
Cost of sales and expenses		(152,679	)			-		(152,679	)
Other assets		12,557			128,385
Joint venture net income	$	14,208			$	-	$	14,208
Total assets	$	591,914		$	720,416
Our share of net income	$	15,511			$	-	$	15,511
Liabilities and equity:
Accounts payable and accrued liabilities	$	68,406		$	305,153
Notes payable		102,153			121,948
Total liabilities		170,559			427,101
Equity of:
Hovnanian Enterprises, Inc.		144,229			160,903
Others		277,126			132,412
Total equity		421,355			293,315
Total liabilities and equity	$	591,914		$	720,416
Debt to capitalization ratio		20	%		29	%

	Three Months Ended July 31, 2024
				Land
(In thousands)	Homebuilding			Development		Total
Revenues	$	155,930		$	-	$	155,930
Cost of sales and expenses		(134,612	)		414		(134,198	)
Joint venture net income	$	21,318		$	414	$	21,732
Our share of net income	$	10,698		$	-	$	10,698

As of January 31, 2026 and October 31, 2025, we had outstanding advances to unconsolidated joint ventures of $2.4 million and $2.6 million, respectively. These amounts were included in “Accounts payable and accrued liabilities” in the tables above. In some cases, our net investment in unconsolidated joint ventures is less than our proportionate share of equity reflected in the tables above because of differences between asset impairments recorded against our unconsolidated joint venture investments and any impairments recorded in the applicable unconsolidated joint venture. During the three months ended January 31, 2026 and 2025, we did not write-down any of our unconsolidated joint venture investments.

		Nine Months Ended July 31, 2025
	Three Months Ended January 31,
						Land
(In thousands)			2026				2025
(In thousands)		Homebuilding				Development				Total
Revenues			$	73,710			$	133,913
Revenues		$	446,939			$	-			$	446,939
Cost of sales and expenses				(69,278	)			(120,258	)
Cost of sales and expenses			(406,894	)			-				(406,894	)
Joint venture net income			$	4,432			$	13,655
Joint venture net income		$	40,045			$	-			$	40,045
Our share of net income			$	3,440			$	9,205
Our share of net income		$	33,759			$	-			$	33,759

	Nine Months Ended July 31, 2024
				Land
(In thousands)	Homebuilding			Development		Total
Revenues	$	406,399		$	-	$	406,399
Cost of sales and expenses		(354,388	)		414		(353,974	)
Joint venture net income	$	52,011		$	414	$	52,425
Our share of net income	$	36,814		$	-	$	36,814

The reason “Our share of net income” in homebuilding joint ventures is higher or lower than the “Joint venture net income” in the tables above is a result of our varying ownership percentages in each investment. For the three and nine months ended July 31, 2025 and 2024, respectively, we had investments in eight and seven unconsolidated joint ventures, respectively, and our ownership in these joint ventures ranged from 20% to over 50% for both periods. Therefore, depending on mix, if the unconsolidated joint ventures in which we have higher sharing percentages are more profitable than our other unconsolidated joint ventures, that results in us having a higher overall percentage of income in the aggregate than would occur if all joint ventures had the same sharing percentage; conversely, if the unconsolidated joint ventures in which we have lower sharing percentages are more profitable than our other unconsolidated joint ventures, that results in us having a lower overall percentage of income in the aggregate than would occur if all joint ventures had the same sharing percentage. For the three months ended July 31, 2025, “Our share of net income” was greater than the "Joint venture net income" due to one unconsolidated joint venture with increased income during the period for which we currently recognize a higher profit sharing percentage based on the joint venture agreement and one unconsolidated joint venture with increased losses during the period for which the book value of our investment is zero and therefore we did not recognize our share of the losses. For the nine months ended July 31, 2025, “Our share of net income” was less than the "Joint venture net income" due to two unconsolidated joint ventures with increased income during the period for which we currently recognize a lower profit sharing percentage based on the joint venture agreements, partially offset by one unconsolidated joint venture with increased losses during the period for which the book value of our investment is zero and therefore we did not recognize our share of the losses.

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ToThe ~~compensate~~reason us“Our ~~for~~share of net income” in homebuilding joint ventures is higher or lower than the ~~administrative~~“Joint ~~services~~venture wenet ~~provide~~income” asin the ~~manager~~tables above is a result of ~~certain~~our varying ownership percentages in each investment. For the three months ended January 31, 2026 and 2025, respectively, we had investments in five and seven unconsolidated joint ventures, werespectively, ~~receive~~and aour ~~management~~ownership ~~fee~~in ~~based~~these joint ventures ranged from 20% to 50% for both periods. Therefore, depending on mix, if the unconsolidated joint ventures in which we have higher sharing percentages are more profitable than our other unconsolidated joint ventures, that results in us having a higher overall percentage of income in the ~~applicable~~aggregate ~~unconsolidated~~than would occur if all joint ventures' ~~revenues.~~had ~~These~~the ~~management~~same ~~fees~~sharing percentage; conversely, if the unconsolidated joint ventures in which ~~totaled~~we ~~$6.7~~have ~~million~~lower ~~and~~sharing ~~$5.5~~percentages ~~million~~are ~~for~~more profitable than our other unconsolidated joint ventures, that results in us having a lower overall percentage of income in the ~~three~~aggregate than would occur if all joint ventures had the same sharing percentage. For the three months ended ~~July~~January 31, ~~2025 and 2024~~2026, ~~respectively,~~“Our ~~and~~share ~~$18.1~~of net income” ~~million~~was ~~and~~less ~~$14.0~~than the "Joint venture net income" due to two ~~million~~unconsolidated joint ventures with increased losses during the period for which we currently recognize a higher sharing percentage of the ~~nine~~ ~~months~~losses ~~ended~~based ~~July~~on 31the joint venture agreements, ~~2025~~slightly offset by ~~and 2024,~~one ~~respectively,~~unconsolidated ~~are~~joint ~~recorded~~venture inwith ~~“Selling,~~increased ~~general~~income ~~and~~during ~~administrative”~~the ~~homebuilding~~period ~~expenses~~for inwhich we currently recognize a higher profit sharing percentage based on the ~~Condensed~~joint venture ~~Consolidated~~agreement ~~Statements~~and by the recognition of ~~Operations~~income from one unconsolidated joint venture that was dissolved in first quarter of fiscal 2026.

~~Our~~To ~~unconsolidated~~compensate ~~joint~~us ~~ventures~~for ~~may~~the ~~obtain~~administrative ~~separate~~services ~~project~~we ~~specific~~provide ~~mortgage~~as ~~financing.~~the ~~Any~~manager of certain unconsolidated joint ~~venture~~ventures, ~~financing~~we isreceive on a ~~nonrecourse~~management ~~basis,~~fee ~~with~~based ~~guarantees~~on ~~from~~a uspercentage ~~limited~~of ~~only~~the toapplicable ~~performance~~unconsolidated ~~and~~joint ~~completion~~ventures' ofrevenues. ~~development,~~These ~~environmental~~management ~~warranties and indemnification~~fees, ~~standard~~which ~~indemnification~~totaled ~~for~~$2.9 ~~fraud,~~million ~~misrepresentation~~ and ~~other similar actions, including a voluntary bankruptcy filing~~$5.3 Inmillion ~~some~~for ~~instances,~~ the ~~unconsolidated~~three ~~joint~~months ~~venture~~ended ~~entity~~January is31, ~~considered~~2026 aand ~~VIE~~2025, respectively, ~~due~~are torecorded ~~the returns being capped to the equity holders; however,~~ in ~~these instances~~“Selling, wegeneral ~~have~~and ~~determined~~administrative” ~~that~~homebuilding weexpenses ~~are~~in ~~not~~ the ~~primary~~Condensed ~~beneficiary,~~Consolidated ~~and~~Statements ~~therefore~~of ~~we do not consolidate these entities~~Operations.

Acquisition of KSA

On January 1, 2026, we acquired an additional 40% equity interest in KSA, which was previously an unconsolidated joint venture in which we had a 50% ownership interest. We accounted for our investment in KSA as an equity method investment as we had significant influence through our interest but not control. We purchased the additional 40% interest in KSA from another joint venture partner for total cash consideration of $7.6 million, which included $1.5 million to pay off an outstanding loan balance.

As of January 1, 2026, the date of acquisition, we accounted for KSA on a consolidated basis and derecognized it as an equity method investment. We remeasured our previously held equity method investment as of the acquisition date to a fair value of $9.5 million, determined using the implied fair value from the transaction price, and recorded a gain of $9.5 million as our carrying value was $0. The gain is included in “Other income (expense), net” in the Condensed Consolidated Statements of Operations.

In accordance with ASC 805, the following fair values were assigned to assets acquired and liabilities assumed based on management’s estimates and assumptions. The purchase price allocation presented in our Condensed Consolidated Balance Sheets was as follows:

(In thousands)		January 1, 2026
Cash, cash equivalents and restricted cash	$	35,300
Property and equipment, net		469
Sold and unsold homes and lots under development		82,887
Land and land options held for future development or sale		5,379
Receivables, deposits and notes, net		16,315
Prepaid expenses and other assets		7,682
Accounts payable and account liabilities		(28,430	)
Customers' deposits		(132,357	)
Net liabilities assumed		(12,755	)
Goodwill		31,704
Noncontrolling interests		(1,895	)
Gain on consolidation		(9,474	)
Purchase price consideration	$	7,580

The excess of purchase consideration over the fair value of the net liabilities acquired was recorded as goodwill, which is primarily attributed to the assembled workforce of KSA, and is not deductible for income tax purposes.

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19.	Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within the segment measure of profit or loss. This guidance will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024. We are currently evaluating the potential impact, but we do not expect the adoption of this guidance to have a material impact on our Condensed Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures related to the rate reconciliation and information on income taxes paid. This guidance will be applied prospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2024. We are currently evaluating the potential impact the adoption of this guidance will have on our Condensed Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses” (“ASU 2024-03”). ASU 2024-03 requires disclosure of additional information about specific cost and expense categories in the notes to the financial statements. This guidance will be applied either prospectively or retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2026, and interim reporting periods in fiscal years beginning after December 15, 2027. We are currently evaluating the potential impact the adoption of this guidance will have on our Condensed Consolidated Financial Statements.

In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (ASU 2025-06”). ASU 2025-06 modernizes the accounting for the costs of internal-use software by removing all references to software development project stages so that the guidance is neutral to different software development methods. This guidance is effective for fiscal years beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. Early adoption is permitted and the amendments in this update may be applied on a retrospective, modified transition, or prospective basis. We are currently evaluating the potential impact that the adoption of this guidance will have on our Condensed Consolidated Financial Statements.

20.	Fair Value of Financial Instruments

We use a fair-value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Level 1:

Fair value determined based on quoted prices in active markets for identical assets.

Level 2:

Fair value determined using significant other observable inputs.

Level 3:

Fair value determined using significant unobservable inputs.

2425

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Our financial instruments measured at fair value on a recurring basis are summarized below:

		Fair Value at		Fair Value at
	Fair Value	~~July~~January 31,		October 31,
(In thousands)	Hierarchy	~~2025~~2026		~~2024~~2025
Mortgage loans held for sale (1)	Level 2	$	~~130~~90,~~545~~727	$	~~148~~111,~~925~~631

(1) The aggregate unpaid principal balance was $~~132~~91.02 million and $~~149~~112.41 million at ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, respectively.

Fair value of mortgage loans held for sale is based on independent quoted market prices, where available, or the prices for other mortgage loans with similar characteristics.

The financial services segment had a pipeline of loan applications in process of $~~487~~470.71 million at ~~July~~January 31, ~~2025~~2026. Loans in process for which interest rates were committed to the borrowers totaled $6042.64 million as of ~~July~~January 31, ~~2025~~2026. Substantially all of these commitments were for periods of 60 days or less. Since a portion of these commitments are expected to expire without being exercised by the borrowers, the total commitments do not necessarily represent future cash requirements.

In addition, the financial services segment uses investor commitments and forward sales of mandatory MBS to hedge its mortgage-related interest rate exposure. These instruments involve, to varying degrees, elements of credit and interest rate risk. Credit risk is managed by entering into MBS forward commitments, option contracts with investment banks, federally regulated bank affiliates and loan sales transactions with permanent investors meeting the segment’s credit standards. Our risk, in the event of default by the purchaser, is the difference between the contract price and fair value of the MBS forward commitments and option contracts. At ~~July~~January 31, ~~2025~~2026, we had no open mandatory investor commitments to sell MBS.

Changes in fair value that are included in income are shown by financial instrument and financial statement line item, below:

Three Months Ended July 31, 2025

Three Months Ended January 31, 2026

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Change in fair value included in financial services revenue

(~~644~~728

)

Three Months Ended July 31, 2024

Three Months Ended January 31, 2025

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Change in fair value included in financial services revenue

~~598~~(735

)

Nine Months Ended July 31, 2025

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Change in fair value included in financial services revenue

(1,554

)

We did not have any assets measured at fair value on a nonrecurring basis during the three months ended January 31, 2026 and 2025, respectively.

Nine Months Ended July 31, 2024

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Change in fair value included in financial services revenue

1,482

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Assets measured at fair value on a nonrecurring basis are those assets for which we have recorded valuation adjustments and write-offs during the three and nine months ended July 31, 2025, respectively. The assets measured at fair value on a nonrecurring basis are all within our homebuilding operations and are summarized below:

Three Months Ended July 31, 2025

Fair

Value

Pre-Impairment

Total

Fair

(In thousands)

Hierarchy

Amount

Losses

Value

Land and land options held for future development or sale

Level 3

35,879

(7,630

)

28,249

Three Months Ended July 31, 2024

Fair

Value

Pre-Impairment

Total

Fair

(In thousands)

Hierarchy

Amount

Losses

Value

Land and land options held for future development or sale

Level 3

15,245

(2,653

)

12,592

Nine Months Ended July 31, 2025

Fair

Value

Pre-Impairment

Total

Fair

(In thousands)

Hierarchy

Amount

Losses

Value

Land and land options held for future development or sale

Level 3

41,276

(8,846

)

32,430

Nine Months Ended July 31, 2024

Fair

Value

Pre-Impairment

Total

Fair

(In thousands)

Hierarchy

Amount

Losses

Value

Land and land options held for future development or sale

Level 3

15,245

(2,653

)

12,592

We recorded inventory impairments, which are included in the Condensed Consolidated Statements of Operations as "Inventory impairments and land option write-offs" and deducted from inventory of $7.6 million and $8.8 million for the three and nine months ended July 31, 2025, respectively. We recorded an inventory impairment, which is included in the Condensed Consolidated Statements of Operations as "Inventory impairments and land option write-offs" and deducted from inventory of $2.7 million for both the three and nine months ended July 31, 2024, respectively.

The fair value of our cash equivalents, restricted cash and cash equivalents and customers' deposits approximates their carrying amount, based on Level 1 inputs.

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The fair value of each series of our ~~Notes~~notes and ~~Credit~~credit ~~Facilities~~facilities are listed below. Level 2 measurements are estimated based on recent trades or quoted market prices for the same issues or based on recent trades or quoted market prices for our debt of similar security and maturity to achieve comparable yields. Level 3 measurements are estimated based on third-party broker quotes or management’s estimate of the fair value based on available trades for similar debt instruments. As shown in the table below, our 8.0% Senior ~~Secured 1.125 Lien~~ Notes due ~~2028~~2031 and 118.75375% Senior ~~Secured~~Notes 1due 2033 were a Level 2 measurement at January 31, 2026 due to recent trades for the same notes, and our 5.250% ~~Lien~~Senior Notes due ~~2029~~ 2040 were a Level 23 measurement at ~~July~~January 31, ~~2025~~2026 due to ~~recent~~no active trades for the same notes.

Fair Value as of ~~July~~January 31, ~~2025~~2026

(In thousands)	Level 1		Level 2		Level 3		Total
Senior Secured Notes:
8.0% Senior Secured 1.125 Lien Notes due September 30, 2028	$	-	$	227,070	$	-	$	227,070
11.75% Senior Secured 1.25 Lien Notes due September 30, 2029		-		465,062		-		465,062
Senior Notes:
5.0% Senior Notes due February 1, 2040		-		-		15,595		15,595
8.0% Senior Notes due April 1, 2031		-		461,115		-		461,115
Senior Credit Facilities:
8.375% Senior Notes due October 1, 2033		-		460,278		-		460,278
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028		-		-		184,571		184,571
5.0% Senior Notes due February 1, 2040		-		-		16,502		16,502
Total fair value	$	-	$	~~692~~921,~~132~~393	$	~~200~~16,~~166~~502	$	~~892~~937,~~298~~895

Fair Value as of October 31, ~~2024~~2025

(In thousands)	Level 1		Level 2		Level 3		Total
Senior Secured Notes:
8.0% Senior Secured 1.125 Lien Notes due September 30, 2028	$	-	$	231,068	$	-	$	231,068
11.75% Senior Secured 1.25 Lien Notes due September 30, 2029		-		474,561		-		474,561
Senior Notes:
13.5% Senior Notes due February 1, 2026		-		-		27,020		27,020
8.0% Senior Notes due April 1, 2031		-		459,972		-		459,972
5.0% Senior Notes due February 1, 2040		-		11,485		-		11,485
8.375% Senior Notes due October 1, 2033		-		461,192		-		461,192
Senior Credit Facilities:
5.0% Senior Notes due February 1, 2040		-		16,492		-		16,492
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028		-		-		190,041		190,041
Total fair value	$	-	$	937,656	$	-	$	937,656
Total fair value	$	-	$	717,114	$	217,061	$	934,175

The Senior Secured Revolving Credit Facility is not included in the above tables because there were no borrowings outstanding thereunder at ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025.

21.

Transactions with Related Parties

From time to time, an engineering firm owned by Tavit Najarian, a relative of Ara K. Hovnanian, our Chairman and Chief Executive Officer, ~~provides~~and ~~services~~Alexander ~~to the Company. During the three months ended July 31~~Hovnanian, ~~2025~~our ~~and 2024~~President, ~~the~~provides services ~~provided by such engineering firm~~ to the Company ~~totaled $0~~.~~1 million~~ ~~and~~During ~~$0.3~~each ~~million,~~of ~~respectively. During~~ the ~~nine~~ three months ended ~~July~~January 31, ~~2025~~ 2026 and ~~2024~~ 2025, the services provided by such engineering firm to the Company totaled $0.52 million ~~and $0~~.9 ~~million, respectively.~~ Neither the Company nor Mr Messrs. Hovnanian have ~~has~~ a financial interest in the relative’s company from whom the services were provided.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Key Performance Indicators

The following key performance indicators are commonly used in the homebuilding industry and by management as a means to better understand our operating performance and trends affecting our business and compare our performance with the performance of other homebuilders. We believe these key performance indicators also provide useful information to investors in analyzing our performance:

●

Net contracts is a volume indicator which represents the number of new contracts executed during the period for the purchase of homes, less cancellations of contracts in the same period. The dollar value of net contracts represents the dollars associated with net contracts executed in the period. These values are an indicator of potential future revenues;

● Contract backlog is a volume indicator which represents the number of homes that are under contract, but not yet delivered as of the stated date. The dollar value of contract backlog represents the dollar amount of the homes in contract backlog. These values are an indicator of potential future revenues;

●

Active selling communities is a volume indicator which represents the number of communities which are open for sale with ten or more home sites available as of the end of a period. We identify communities based on product type; therefore, at times there are multiple communities at one land site. These values are an indicator of potential revenues;

●

Net contracts per active selling community is used to indicate the pace at which homes are being sold (put into contract) in active selling communities and is calculated by dividing the number of net contracts in a period by the number of active selling communities in the same period. Sales pace is an indicator of market strength and demand; and

●

Contract cancellation rates is a volume indicator which represents the number of sales contracts cancelled in the period divided by the number of gross sales contracts executed during the period. Contract cancellation rates as a percentage of backlog is calculated by dividing the number of cancelled contracts in the period by the contract backlog at the beginning of the period. Cancellation rates as compared to prior periods can be an indicator of market strength or weakness.

On January 1, 2026, we acquired a controlling interest in a previously unconsolidated joint venture in the Kingdom of Saudi Arabia ("KSA"), that operates and markets itself under the trade name HOV Global. Beginning in the first quarter of fiscal 2026, the results from KSA are included in our consolidated financial statements. Consistent with our historical presentation, we will continue to exclude the results of our KSA operations from these key performance indicators generally (unless otherwise indicated) because such operations are not expected to have a material impact on our financial results for fiscal 2026. Where we have excluded the KSA operations, we refer to such metrics as being for our “domestic” operations.

Overview

Market Conditions and Operating Results

The demand for new and existing homes is dependent on a variety of demographic and economic factors, including job and wage growth, household formation, consumer confidence, mortgage financing, interest rates, inflation and overall housing affordability.

During fiscal ~~2024~~2025 and continuing through the first ~~nine months~~quarter of fiscal ~~2025~~2026, mortgage rates have fluctuated but still remain at a persistently high level. As a result, affordability generally remains challenging for homebuyers. We have stayed aggressive in our pricing, incentives and concessions in order to align with the current market.

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We continue to use our increased inventory of quick move-in homes ("QMI homes") to help meet buyers’ needs for more affordable housing in the existing uncertain interest rate environment. The time between contract signing and closing is shorter with a QMI home as compared to a to be built home, which provides customers with more certainty on their mortgage pricing. The availability of QMI homes also allows us to offer mortgage interest rate buydown assistance, which is a tool we offer through our wholly-owned mortgage banking subsidiary ("K. Hovnanian Mortgage"), to help ease the impact of higher monthly payments from rising interest rates. We pay the cost of interest rate buydowns for customers that qualify through K. Hovnanian Mortgage and decide to use the program. The level of interest rate based incentives utilized differs across our markets and is one of several available options we use to drive sales and close homes.

~~Although~~ Our ~~the~~emphasis ~~long-term~~on ~~fundamentals~~maintaining ofsales ~~the new~~pace ~~home market remain favorable~~versus price, ~~during~~resulted ~~the first~~in ~~nine~~domestic ~~months~~net ofcontracts ~~fiscal~~increasing ~~2025,~~by ~~volatility~~3.1% in the first ~~broader~~quarter ~~economy~~of ~~and~~fiscal ~~affordability~~2026 ~~constraints~~compared ~~caused many consumers~~ to ~~delay~~the ~~purchasing~~prior ayear ~~new~~first ~~home~~quarter. Although ~~As a result of this more difficult sales environment,~~ we ~~experienced~~are aoff ~~decrease in net contracts compared~~ to ~~the first~~a ~~nine~~better ~~months~~start ofthan ~~fiscal 2024~~last year, ~~although~~ net contracts ~~for~~fluctuated ~~the~~from ~~third~~month ~~quarter~~to ofmonth, ~~fiscal~~reflecting ~~2025~~ongoing ~~increased~~shifts in ~~from~~market ~~the~~conditions and ~~prior~~consumer ~~year period~~sentiment. Even aswith ~~mortgage~~the ~~rates~~volatility ~~increased~~in ~~and~~the webroader ~~focused~~economy onand ~~increasing~~affordability ~~sales pace versus price~~constraints, we were ~~still~~ able to raise net prices in approximately 4032%, ~~31% and 21%~~ of our domestic communities during the first~~, second and third~~ ~~quarters~~ quarter of fiscal ~~2025, respectively~~2026.

~~There~~While the long-term fundamentals of the new home market remain favorable, there remains a great degree of uncertainty due to inflation, tariffs, the continued possibility of an economic recession, employment risk and the potential for further mortgage rate increases. While we continue to experience some supply chain issues, we remain focused on continuing to shorten our construction cycle times and building on our national initiatives to drive down costs with our material providers and trade partners. The changing conditions in the housing market, and in the general economy, makes it difficult to predict how strongly our business will be impacted by these external factors over ~~the remainder of~~ fiscal ~~2025~~ 2026 and beyond.

During the ~~nine~~three months ended ~~July~~January 31, ~~2025~~2026, our cash position allowed us to spend $~~660~~180.07 million on domestic land purchases and land development for long-term growth, ~~redeem~~and ~~$26.6 million of senior notes,~~ repurchase $309.1 0 million of our common stock, and still have total liquidity of $~~277~~471.94 million, including $~~146~~339.69 million of homebuilding cash and cash equivalents and $125.0 million of borrowing capacity under our senior secured revolving credit facility as of ~~July~~January 31, ~~2025~~2026.

Information on our operating results for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026 are as follows:

● Sale of homes revenues ~~increased~~decreased to $~~769~~575.18 million for the three months ended ~~July~~January 31, ~~2025~~2026 from $~~687~~646.49 million for the three months ended ~~July~~January 31, ~~2024, and increased to $2.1 billion for the nine months ended July 31,~~ 2025 ~~from $1~~.9 ~~billion for the nine months ended July 31, 2024.~~ There was a 1412.04% ~~and~~decrease ~~10.2% increase~~ in the number of home deliveries for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026, compared to the same ~~periods~~period of the prior year, partially offset by aan ~~decrease~~increase in average price of 1.96% ~~and 3.8%~~ for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026, compared to the same ~~periods~~period of the prior year. The increase in deliveries was primarily the result of an increase in our backlog conversion ratio, while the decrease in average price was the result of the geographic and community mix of our deliveries.

● Gross margin dollars decreased 3140.36% ~~and 24.8%~~ for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026, as compared to the same ~~periods~~period of the prior year,. ~~while~~Gross ~~gross~~ margin percentage decreased to 1110.71% ~~and 13.5%~~ for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025, respectively,~~ 2026 from 1915.12% ~~and~~ ~~18.9%~~ for the three ~~and nine~~ months ended ~~July~~January 31, ~~2024, respectively~~2025. Gross margin percentage, before cost of sales interest expense and land charges, decreased to 1713.34% for the three months ended ~~July~~January 31, ~~2025~~2026 from 2218.13% for the three months ended ~~July~~January 31, ~~2024, and decreased to 17.6% for the nine months ended July 31,~~ 2025 ~~from 22~~.~~2% for the~~ ~~nine months ended July 31, 2024.~~ The decrease in gross margin percentage was primarily due to increased use of incentives and concessions, including additional mortgage interest rate buydowns, to make our homes more affordable. In the current homebuilding environment, we remain focused on driving financial performance by increasing our sales pace versus achieving a higher gross margin.

● Selling, general and administrative costs (including corporate general and administrative expenses) ("Total SGA") was $84.0 million, or 13.3% of total revenues, in the three months ended January 31, 2026 compared with $86.9 million, or 12.9% of total revenues, in the three months ended January 31, 2025. The increase in Total SGA percentage is primarily due to the decrease in sale of homes revenue for the period.

● Income before income taxes decreased to $28.7 million for the three months ended January 31, 2026 from $39.9 million for the three months ended January 31, 2025. Net income decreased to $20.9 million for the three months ended January 31, 2026 from $28.2 million for the three months ended January 31, 2025. Included in income before income taxes for the three months ended January 31, 2026 and 2025 was a $26.8 million gain on consolidation of joint ventures and a $22.7 million gain on the contribution of assets to a new joint venture, respectively. Earnings per share, basic and diluted, decreased to $2.80 and $2.62, respectively, for the three months ended January 31, 2026 compared to $3.88 and $3.58, respectively, for the three months ended January 31, 2025.

● Net domestic contracts increased 3.1% for the three months ended January 31, 2026 compared to the same period of the prior year. The increase for the three months ended is primarily due to our current strategy of using increased incentives to drive sales pace.

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● ~~Income before~~Net ~~income~~domestic ~~taxes decreased to~~contracts ~~$23.8 million~~per ~~for~~active ~~the three~~selling ~~months~~community ~~ended July 31, 2025 from $97.3 million for the three months ended July 31, 2024, and~~ decreased to ~~$90.2 million~~slightly ~~for the nine months ended July 31, 2025 from $199.2 million for the nine months ended July 31, 2024. Net income decreased~~ to ~~$16.6 million for the three months ended July 31, 2025 from $72.~~9 ~~million for the three months ended July 31, 2024, and decreased to $64~~.5 ~~million~~ for the ~~nine~~ ~~months ended July 31, 2025~~three ~~from $147.7 million for the nine~~ months ~~ended July 31, 2024.~~ ~~Included in income before income taxes for the nine months~~ ended ~~July~~January 31, ~~2025 was a gain of $22.7 million related to the contribution of assets to a new joint venture. For the nine months ended July 31~~2026, ~~2024, income before taxes included a gain of $45.7 million related to the consolidation of a joint venture. Earnings per share, basic and diluted, decreased to $2.14 and $1.99,~~ respectively, ~~for the three months ended July 31, 2025~~ compared to ~~$10.61~~ ~~and $~~9.~~75, respectively, for the~~6 ~~three~~in ~~months ended July 31, 2024. Earnings per share, basic and diluted, decreased to $8.55 and $7.94, respectively, for~~ the ~~nine~~ ~~months~~same ~~ended~~period ~~July~~of ~~31, 2025 compared to $20.85 and $19.15, respectively, for~~ the ~~nine~~ ~~months~~prior ~~ended July 31, 2024~~year.

● ~~Net~~Domestic ~~contracts~~contract ~~increased~~backlog decreased from 1~~.6%~~,598 homes ~~for~~at ~~the~~January ~~three months ended July~~ 31, 2025 ~~and~~ ~~decreased 0.4%~~to ~~for~~1,335 ~~the~~homes ~~nine months~~at ~~ended~~January ~~July~~ 31, ~~2025~~2026, ~~compared~~and to the ~~same~~dollar ~~periods~~value of ~~the~~domestic ~~prior~~contract ~~year. The~~backlog ~~increase~~decreased ~~for the three months ended is primarily due~~ to ~~our current strategy of using increased incentives to drive sale pace~~$782. ~~During~~7 ~~the third quarter of fiscal 2025~~million, ~~incentives~~ ~~were~~a 1116.60% ofdecrease ~~the~~in ~~average~~dollar ~~sales~~value ~~price,~~compared ~~which~~to ~~is up 3.9% from~~ the ~~same~~ ~~period of the~~ prior year, ~~and~~as our updomestic backlog ~~1.1%~~conversion ~~from~~ratio ~~the~~has ~~second~~increased ~~quarter~~from ~~of fiscal 2025. The slight decrease in net contracts for~~ the ~~nine~~prior ~~months~~year ~~ended~~period ~~July 31, 2025 is~~ due to ~~continued~~increased ~~macroeconomic~~sales ~~uncertainty that~~of ~~permeated~~QMI ~~throughout the period leading to low consumer confidence~~homes.

● Net contracts per active selling community increased to 9.8 and 30.8 for the three and nine months ended July 31, 2025, respectively, compared to 9.5 and 30.4 in the same periods of the prior year, primarily due to our focus on sales pace over price.

● Contract backlog decreased from 2,041 homes at July 31, 2024 to 1,491 homes at July 31, 2025, and the dollar value of contract backlog decreased to $838.8 million, a 27.6% decrease in dollar value compared to the prior year, as our backlog conversion ratio has increased from the prior year period due to our having more QMI homes available to sell and deliver.

Results of Operations

Total Revenues

Compared to the same period in the prior year, revenues ~~increased~~ (decreased) increased as follows:

	Three Months Ended
	July 31,		July 31,			Dollar			Percentage
			Variance
(Dollars in thousands)	2025		2024			Change			Change
			2026
Homebuilding:
	January 31,		Compared			January 31,
Sale of homes	$	769,050	$	687,424		$	81,626			11.9	%
(Dollars in thousands)	2026		to 2025			2025
Land sales and other revenues		2,967		16,392			(13,425	)		(81.9)	%
Homebuilding:
Financial services		28,566		18,888			9,678			51.2	%
Sale of homes	$	575,759	$	(71,155	)	$	646,914
Total revenues	$	800,583	$	722,704		$	77,879			10.8	%
Land sales		34,712		27,886			6,826
Other revenues		2,473		(468	)		2,941
Financial services		19,008		2,066			16,942
Total change	$	631,952	$	(41,671	)	$	673,623
Total revenues percent change				(6.2)	%

	Nine Months Ended
	July 31,		July 31,		Dollar		Percentage
(Dollars in thousands)	2025		2024		Change		Change
Homebuilding:
Sale of homes	$	2,066,278	$	1,947,989	$	118,289		6.1	%
Land sales and other revenues		27,573		25,968		1,605		6.2	%
Financial services		66,826		51,323		15,503		30.2	%
Total revenues	$	2,160,677	$	2,025,280	$	135,397		6.7	%

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Homebuilding: Sale of Homes

For the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026, sale of homes revenues ~~increased~~decreased 11.90% ~~and 6.1%~~, respectively, compared to the same ~~periods~~period in the prior year. The sale of homes revenue ~~increased~~decreased due to a ~~14.0%~~ ~~and 10~~12.24% decrease ~~increase~~ in homes delivered, ~~respectively,~~ partially offset by a 1.96% ~~and~~ ~~3.8%~~increase ~~decrease~~ in the average price per home for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025, respectively,~~ 2026 compared with the prior year ~~periods~~period. The average price per home ~~decreased~~increased to $~~537~~523,~~421~~894 in the three months ended ~~July~~January 31, ~~2025~~2026 from $~~547~~515,~~748~~880 in the three months ended ~~July~~January 31, ~~2024. The average price per home decreased to $520,473 in the nine months ended July 31,~~ 2025 ~~from $540,958 in the nine months ended July 31, 2024~~. The increase in ~~deliveries was primarily the result of an increase in our backlog conversion ratio. The decrease in~~ average price was the result of the geographic and community mix of our deliveries. For further detail on changes in segment revenues see “Homebuilding: Operations by Segment” below. For further detail on land sales and other revenues, see “Homebuilding: Land Sales and Other Revenues” below.

Information on the sale of homes is set forth in the table below:

Three Months Ended July 31,

Nine Months Ended July 31,

Three Months Ended January 31,

(Dollars in thousands, except average sales price)

~~2025~~2026

~~2024~~2025

~~% Change~~

~~2025~~

~~2024~~

~~% Change~~

Consolidated total:

Housing revenues

~~769~~575,~~050~~759

~~687~~646,~~424~~914

~~11.9~~

~~2,066,278~~

~~1,947,989~~

~~6.1~~

Homes delivered

1,~~431~~099

1,~~255~~254

~~14.0~~

~~3,970~~

~~3,601~~

~~10.2~~

Average sales price

~~537~~523,~~421~~894

~~547~~515,~~748~~880

~~(1.9)~~

~~520,473~~

~~540,958~~

~~(3.8)~~

Unconsolidated joint ventures: (1)

Housing revenues

~~165~~72,~~148~~391

~~151~~131,~~443~~776

~~9.0~~

~~441,419~~

~~396,901~~

~~11.2~~

Homes delivered

~~246~~118

~~227~~197

~~8.4~~

~~650~~

~~615~~

~~5.7~~

Average sales price

~~671~~613,~~333~~481

~~667~~668,~~150~~914

~~0.6~~

~~679,106~~

~~645,367~~

~~5.2~~

(1) Represents housing revenues and home deliveries for our unconsolidated homebuilding joint ventures for the period. We provide this data as a supplement to our consolidated results as an indicator of the volume managed in our unconsolidated joint ventures. See Note 18 to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for a further discussion of our unconsolidated joint ventures.

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Homebuilding: Land Sales and Other Revenues

Land sales and other revenues ~~decreased~~increased $1327.4 million for the three months ended ~~July~~January 31, ~~2025~~2026 ~~and increased $1.6 million for the nine months ended July 31, 2025,~~ compared to the same ~~periods~~period in the prior year. Revenue associated with land sales can vary significantly due to the mix of land parcels sold. There ~~were~~was one ~~two and five~~ land ~~sales~~sale during ~~the~~both the three ~~and nine~~ months ended ~~July~~January 31, ~~2025, respectively, and~~2026 ~~one~~ and ~~two~~ ~~land sales in the three and nine months ended July 31, 2024, respectively~~2025. Land sales revenues ~~decreased $13.0 million and~~ increased $427.89 million during the three ~~and nine~~ months ended ~~July~~January 31, ~~2025, respectively,~~ 2026 compared to the same ~~periods~~period in the prior year. Other revenues, which includes interest income, decreased due to lower rates on our cash and cash equivalent accounts during the first three quarters of fiscal 2025, partially offsetting the increase in land sales revenues for the nine months ended July 31, 2025.

Homebuilding: Cost of Sales

Cost of sales includes expenses for ~~homebuilding~~consolidated housing and land and lot sales, including inventory impairments and land option write-offs (defined as “land charges” in the tables below). A breakout of such expenses for homebuilding and land and lot sales and the gross margins for each is set forth below.

Homebuilding gross margin, before cost of sales interest expense and land charges, is a non-GAAP financial measure. This measure should not be considered as an alternative to homebuilding gross margin determined in accordance with U.S. GAAP as an indicator of operating performance.

Management believes this non-GAAP measure enables investors to better understand our operating performance. This measure is also useful internally, helping management evaluate our operating results on a consolidated basis and relative to other companies in our industry. In particular, the magnitude and volatility of land charges for the Company, and for other homebuilders, have been significant and, as such, have made comparable financial analysis of our industry more difficult. Homebuilding metrics excluding land charges, as well as interest amortized to cost of sales, and other similar presentations prepared by analysts and other companies are frequently used to assist investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies’ respective levels of impairments and debt.

Three Months Ended

~~Nine Months Ended~~

July 31,

January 31,

(Dollars in thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Sale of homes

~~769~~575,~~050~~759

~~687~~646,~~424~~914

~~2,066,278~~

~~1,947,989~~

Cost of sales, excluding interest expense and land charges

~~636~~498,~~015~~413

~~535~~528,~~425~~745

~~1,702,360~~

~~1,515,258~~

Homebuilding gross margin, before cost of sales interest expense and land charges

~~133~~77,~~035~~346

~~151~~118,~~999~~169

~~363,918~~

~~432,731~~

Cost of sales interest expense, excluding land sales interest expense

2616,~~868~~567

2018,~~351~~738

~~65,544~~

~~61,792~~

Homebuilding gross margin, after cost of sales interest expense, before land charges

~~106~~60,~~167~~779

~~131~~99,~~648~~431

~~298,374~~

~~370,939~~

Land charges

162,~~045~~359

~~446~~1,040

~~20,141~~

~~985~~

Homebuilding gross margin

9058,~~122~~420

~~131~~98,~~202~~391

~~278,233~~

~~369,954~~

Homebuilding gross margin percentage

1110.71

1915.12

~~13.5~~

~~18.9~~

Homebuilding gross margin percentage, before cost of sales interest expense and land charges

1713.34

2218.13

~~17.6~~

~~22.2~~

Homebuilding gross margin percentage, after cost of sales interest expense, before land charges

1310.86

1915.24

~~14.4~~

~~19.0~~

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Cost of sales as a percentage of consolidated home sales revenues are presented below:

	Three Months Ended						~~Nine Months Ended~~
	July 31,						July 31,
	January 31,
	2025			2024			2025			2024
	2026			2025
Sale of homes		100.0	%		100.0	%		~~100.0~~	%		~~100.0~~	%
Cost of sales, excluding interest expense and land charges:
Housing, land and development costs		7174.0	%		6971.12	%		~~71.1~~	%		~~68.3~~	%
Commissions		3.2	%		3.01	%		~~3.2~~	%		~~3.3~~	%
Financing concessions		4.40	%		23.2	%		~~3.8~~	%		~~2.3~~	%
Overheads		45.15	%		34.62	%		~~4.3~~	%		~~3.9~~	%
Total cost of sales, excluding interest expense and land charges		8286.7	%		7781.97	%		~~82.4~~	%		~~77.8~~	%
Cost of sales interest		32.58	%		2.9	%		~~3.2~~	%		~~3.2~~	%
Land charges		20.14	%		0.12	%		~~0.9~~	%		~~0.1~~	%
Homebuilding gross margin percentage		1110.71	%		1915.12	%		~~13.5~~	%		~~18.9~~	%
Homebuilding gross margin percentage, before cost of sales interest expense and land charges		1713.34	%		2218.13	%		~~17.6~~	%		~~22.2~~	%
Homebuilding gross margin percentage, after cost of sales interest expense, before land charges		1310.86	%		1915.24	%		~~14.4~~	%		~~19.0~~	%

We sell a variety of home types in various communities, each yielding a different gross margin. As a result, depending on the mix of communities delivering homes, consolidated gross margin may fluctuate up or down. Total homebuilding gross margin percentage decreased to 1110.71% ~~and 13.5%~~ for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026, compared to 1915.12% ~~and 18.9%~~ for the prior year ~~periods~~period. Total homebuilding gross margin percentage, before cost of sales interest expense and land charges decreased to 1713.34% ~~and~~ ~~17.6%~~ for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026, compared to 2218.13% ~~and~~ ~~22.2%~~ for the three ~~and nine~~ months ended ~~July~~January 31, ~~2024~~2025. The decrease in gross margin percentage for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026 was primarily due to increased use of incentives and concessions, including additional mortgage interest rate buydowns, to make our homes more affordable.

Land and lot sale expenses and gross margins are set forth below:

Three Months Ended

~~Nine Months Ended~~

July 31,

January 31,

(In thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Land and lot sales

134,~~193~~712

146,~~230~~826

~~20,623~~

~~15,783~~

Cost of sales, excluding interest

~~241~~11,218

114,~~907~~545

~~10,475~~

~~12,789~~

Land and lot sales gross margin, excluding interest

~~952~~23,494

2,~~323~~281

~~10,148~~

~~2,994~~

Land and lot sales interest expense

-24

~~1,965~~618

~~618~~

~~1,965~~

Land and lot sales gross margin, including interest

~~952~~23,470

~~358~~1,663

~~9,530~~

~~1,029~~

Land sales are ancillary to our homebuilding operations and are expected to continue in the future but may fluctuate significantly.

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Homebuilding: Inventory Impairments and Land Option Write-Offs

Inventory impairments and land option write-offs reflects certain inventories we have either written off or written down to their estimated fair value totaling $162.04 million and $3.1.0 million in expense for the three months ended ~~July~~January 31, ~~2025~~2026 and ~~2024~~2025, respectively~~, and $20~~.1 ~~million~~There ~~and~~were ~~$3.6 million~~no ~~during~~inventory ~~the nine months ended July 31, 2025 and 2024, respectively. Inventory~~ impairments ~~amounted to $7.6 million and $8.8 million~~ during ~~the three and nine months ended July 31, 2025, respectively, and $2.7 million during~~ both the three ~~and nine~~ months ended ~~July~~January 31, ~~2024.~~2026 ~~The impairments recorded for fiscal 2025 were for two communities in the Northeast segment~~ and ~~three communities in the West segment~~2025. ~~The~~ ~~impairment recorded for fiscal 2024 was for one community in the West segment.~~ We wrote-off residential land option, approval and engineering costs across each of our segments during the first ~~three~~ quarters of both fiscal ~~2025~~2026 and ~~2024~~ 2025.

Homebuilding: Selling, General and Administrative

Homebuilding selling, general and administrative (“SGA”) expenses ~~increased~~decreased $4.80 million to $5550.83 million for the three months ended ~~July~~January 31, ~~2025~~2026 ~~and increased $14.7 million to $161.1 million for the nine months ended July 31, 2025~~ compared to the same ~~periods~~period in the prior year. The ~~increase~~decrease for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026 compared to the same ~~periods~~period in the prior year was primarily due to ana ~~increase~~decrease in ~~selling overhead from higher advertising costs and an increase in total~~ compensation expense as a result of anestimating ~~increase~~lower infiscal ~~headcount~~2026 ~~from~~bonuses, ~~opening~~partially ~~more~~offset ~~communities~~by ~~along with~~ the cost of annual merit increases.

Homebuilding: Key Performance Indicators

Net Domestic Contracts Per Active Selling Community

Net domestic contracts per active selling community for the three ~~and nine~~ months ended ~~July~~January 31, ~~2025~~2026 were 9.85 ~~and 30.8, respectively,~~ compared to 9.56 ~~and 30.4~~ for the same ~~periods~~period in the prior year~~, respectively~~. Our reported level of domestic sales contracts (net of cancellations) ~~was~~continues ~~impacted~~to be driven by ~~increasing~~customer ~~incentives~~demand ~~and~~for ~~concessions~~our toavailable ~~drive~~QMI ~~customer~~homes. This ~~demand~~approach ~~for~~of offering a strong selection of QMI homes allows customers to take advantage of available incentives and purchase homes quickly and affordably.

Domestic Contract Cancellation Rates

The following table provides historical quarterly cancellation rates, which represents the number of cancelled domestic contracts in the quarter divided by the number of gross domestic sales contracts executed in the quarter, excluding unconsolidated joint ventures:

Quarter	~~2025~~2026		~~2024~~2025			~~2023~~2024			~~2022~~2023			~~2021~~2022
First	1614	%	1416		%	3014		%	1430		%	1714		%
Second	15	%	1415		%	1814		%	1718		%	1617		%
Third	19	%	1719		%	1617		%	2716		%	1627		%
Fourth				1817	%		2518	%		4125	%		1541	%

34 The following table provides quarterly domestic contract cancellations as a percentage of the beginning domestic backlog, excluding unconsolidated joint ventures:

Quarter	2026		2025			2024			2023			2022
First	16	%	14		%	10		%	16		%	8		%
Second			15		%	13		%	16		%	9		%
Third			17		%	12		%	12		%	8		%
Fourth				17	%		15	%		13	%		13	%

Most cancellations occur within the legal rescission period, which varies by state but is generally less than two weeks after the signing of the contract. Cancellations also occur as a result of a buyer’s failure to qualify for a mortgage, which generally occurs during the first few weeks after signing. Due to our solid backlog position, our cancellation rate as a percentage of beginning backlog for the first quarter of fiscal 2026 was 16%, which approximates our historical normal rate. Generally, when sales pace is increasing, the cancellation rate as a percentage of beginning backlog tends to lag the changes seen in our cancellation rate as a percentage of gross sales. Market conditions still remain uncertain and it is difficult to predict what cancellation rates will be in the future.

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The following table provides quarterly contract cancellations as a percentage of the beginning backlog, excluding unconsolidated joint ventures:

Quarter	2025		2024			2023			2022			2021
First	14	%	10		%	16		%	8		%	11		%
Second	15	%	13		%	16		%	9		%	9		%
Third	17	%	12		%	12		%	8		%	6		%
Fourth				15	%		13	%		13	%		6	%

Most cancellations occur within the legal rescission period, which varies by state but is generally less than two weeks after the signing of the contract. Cancellations also occur as a result of a buyer’s failure to qualify for a mortgage, which generally occurs during the first few weeks after signing. Due to our solid backlog position, our cancellation rate as a percentage of beginning backlog for the third quarter of fiscal 2025 was 17%, which approximates our historical normal rate. When sales pace is increasing, the cancellation rate as a percentage of beginning backlog tends to lag the changes seen in our cancellation rate as a percentage of gross sales. Market conditions still remain uncertain and it is difficult to predict what cancellation rates will be in the future.

Contract Backlog

Our consolidated sales contracts and homes in contract backlog, excluding unconsolidated joint ventures, ~~by segment~~ is set forth below:

Net Contracts for the

~~Net Contracts for the~~

Three Months Ended

~~Nine~~Contract ~~Months~~Backlog ~~Ended~~as of

~~Contract Backlog as of~~

July 31,

January 31,

(Dollars in thousands)

~~2025~~2026

~~2024~~2025

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Northeast:

Dollars

226,~~020~~460

~~260~~251,~~081~~636

~~739~~368,~~452~~397

~~835~~501,~~809~~469

~~444,862~~

~~617,520~~

Number of homes

~~416~~412

~~414~~440

~~1,353~~622

~~1,346~~777

~~761~~

~~898~~

Southeast:

Dollars

7991,~~267~~340

6376,~~990~~099

~~239~~111,~~237~~874

~~206~~146,~~722~~636

~~130,678~~

~~147,268~~

Number of homes

~~157~~182

~~114~~136

~~461~~195

~~388~~251

~~228~~

~~316~~

West (1):

Dollars

~~314~~347,~~349~~035

~~321~~315,~~722~~532

~~990~~302,~~833~~384

1283,~~013,424~~816

~~263,272~~

~~393,980~~

Number of homes

~~638~~648

~~664~~629

~~2,000~~518

~~2,097~~570

~~502~~

~~827~~

Total (1):

Domestic subtotal:

Dollars

~~619~~664,~~636~~835

~~645~~643,~~793~~267

1782,~~969,522~~655

2931,~~055,955~~921

~~838,812~~

~~1,158,768~~

Number of homes

1,~~211~~242

1,~~192~~205

31,~~814~~335

31,~~831~~598

~~1,491~~

~~2,041~~

KSA:

Dollars

181,467

Number of homes

746

Consolidated total (1):

Dollars

664,835

643,267

964,122

931,921

Number of homes

1,242

1,205

2,081

1,598

(1) ~~Reflects~~ ~~the reclassification of~~ Excludes eight consolidated homes and $5.0 million of contract backlog ~~as of January 31, 2025, from the West segment to an unconsolidated joint venture. This is~~ related to the assets and liabilities contributed tofrom the West segment to a joint venture we entered into during the three months ended January 31, 2025.

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Domestic contract backlog dollars decreased 16.0% as of January 31, 2026 compared to January 31, 2025, and the number of homes in domestic backlog decreased 16.5% for the same period. The decrease in domestic contract backlog dollars and number of homes as of January 31, 2026 compared to January 31, 2025, was primarily driven by an increase in sales of QMI homes and improved domestic contract backlog conversion.

Homebuilding: Results by Reportable Segment

Financial information relating to our homebuilding operations by reportable segment was as follows:

	Three Months Ended January 31,

(Dollars in thousands, except average sales price)	2026			2025		Variance			Variance %
Northeast
Homebuilding revenue	$	274,597		$	283,748	$	(9,151	)		(3.2)	%
Income before income taxes	$	57,763		$	42,274	$	15,489			36.6	%
Homes delivered		417			445		(28	)		(6.3)	%
Average sales price	$	575,065		$	632,917	$	(57,852	)		(9.1)	%

Southeast
Homebuilding revenue	$	74,292		$	51,602	$	22,690			44.0	%
(Loss) income before income taxes	$	(3,542	)	$	6,083	$	(9,625	)		(158.2)	%
Homes delivered		158			124		34			27.4	%
Average sales price	$	469,816		$	414,814	$	55,002			13.3	%

West
Homebuilding revenue	$	262,057		$	319,954	$	(57,897	)		(18.1)	%
(Loss) income before income taxes	$	(11,395	)	$	2,466	$	(13,861	)		(562.1)	%
Homes delivered		524			685		(161	)		(23.5)	%
Average sales price	$	499,477		$	458,145	$	41,332			9.0	%

Northeast - Homebuilding revenue decreased 3.2% for the three months ended January 31, 2026 compared to the same period in the prior year. The decrease for the three months ended January 31, 2026 was attributed to a 6.3% decrease in homes delivered and a 9.1% decrease in average sales price. The decrease in average sales price was the result of new communities delivering lower priced, smaller single family homes, townhomes and affordable-housing homes in lower-end submarkets of the segment for the three months ended January 31, 2026 compared to some communities delivering higher priced, larger single family homes and townhomes in higher-end submarkets of the segment for the three months ended January 31, 2025, which were no longer delivering in the first quarter of the current year.

Income before income taxes increased $15.5 million to $57.8 million for the three months ended January 31, 2026 as compared to the same period in the prior year. This was primarily due to a $37.6 million increase in land sales and other revenue, partially offset by a decrease in gross margin percentage. For a discussion of gross margin see “Homebuilding: Cost of Sales” above.

Southeast – Homebuilding revenue increased 44.0% for the three months ended January 31, 2026 compared to the same period in the prior year. The increase for the three months ended January 31, 2026 was attributed to a 27.4% increase in homes delivered and a 13.3% increase in average sales price. The increase in average sales price was the result of new communities delivering higher priced, larger single family homes in higher-end submarkets of the segment for the three months ended January 31, 2026 compared to some communities delivering lower priced, smaller single family homes and build-for-rent homes in lower-end submarkets of the segment for the three months ended January 31, 2025, which were no longer delivering in the current year.

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~~Contract~~Income ~~backlog~~before ~~dollars~~income taxes decreased 27$9.6% asmillion to a loss of ~~July~~$3.5 ~~31,~~million ~~2025~~for ~~compared~~the tothree ~~July~~months ended January 31, ~~2024,~~2026 ~~and~~compared to the ~~number~~same ofperiod ~~homes~~ in ~~backlog~~the ~~decreased~~prior 26year.9% This ~~for~~was ~~the~~primarily ~~same~~due ~~period~~to a $3.3 ~~The~~million decrease in ~~contract~~income ~~backlog~~from ~~dollars~~unconsolidated ~~and~~joint ~~number~~ventures, ofa ~~homes~~$1.3 asmillion ofincrease ~~July~~in ~~31,~~inventory ~~2025~~impairments ~~compared~~and toland ~~July~~option 31write-offs, ~~2024,~~and ~~was~~a ~~primarily~~decrease ~~driven~~in bygross anmargin ~~increase~~percentage. inFor ~~sales~~a discussion of ~~QMI~~gross ~~homes~~margin ~~and~~see ~~improved~~“Homebuilding: ~~contract~~Cost ~~backlog~~of ~~conversion.~~Sales” above.

West – Homebuilding: ~~Operations~~revenue decreased 18.1% for the three months ended January 31, 2026 compared to the same period in the prior year. The decrease was due to a 23.5% decrease in homes delivered, partially offset by ~~Segment~~a 9.0% increase in average sales price. The increase in average sales price was the result of new communities delivering higher priced, larger single family homes in higher-end submarkets of the segment for the three months ended January 31, 2026 compared to some communities delivering lower priced, smaller single family homes and townhomes in lower-end submarkets of the segment for the three months ended January 31, 2025, which were no longer delivering in the current year.

~~Financial~~Income ~~information~~before ~~relating~~income taxes decreased $13.9 million to ~~our~~a ~~homebuilding~~loss ~~operations~~of by$11.4 ~~segment~~million for the three months ended January 31, 2026 compared to the same period in the prior year. This was asprimarily ~~follows~~due to the decrease in homebuilding revenue discussed above, a $3.5 million decrease in income from unconsolidated joint ventures and a significant decrease in gross margin percentage. For a discussion of gross margin see “Homebuilding: Cost of Sales” above.

	Three Months Ended July 31,
(Dollars in thousands, except average sales price)	2025			2024		Variance			Variance %
Northeast
Homebuilding revenue	$	289,180		$	255,332	$	33,848			13.3	%
Income before income taxes	$	41,447		$	40,006	$	1,441			3.6	%
Homes delivered		479			404		75			18.6	%
Average sales price	$	601,269		$	630,653	$	(29,384	)		(4.7)	%
Southeast
Homebuilding revenue	$	104,747		$	115,964	$	(11,217	)		(9.7)	%
Income before income taxes	$	11,639		$	20,449	$	(8,810	)		(43.1)	%
Homes delivered		195			231		(36	)		(15.6)	%
Average sales price	$	535,862		$	501,316	$	34,546			6.9	%
West
Homebuilding revenue	$	377,185		$	330,980	$	46,205			14.0	%
(Loss) income before income taxes	$	(6,284	)	$	21,009	$	(27,293	)		(129.9)	%
Homes delivered		757			620		137			22.1	%
Average sales price	$	497,423		$	511,026	$	(13,603	)		(2.7)	%

Financial Services

	Nine Months Ended July 31,
(Dollars in thousands, except average sales price)	2025		2024		Variance			Variance %
Northeast
Homebuilding revenue	$	830,209	$	645,859	$	184,350			28.5	%
Income before income taxes	$	112,658	$	107,645	$	5,013			4.7	%
Homes delivered		1,374		1,067		307			28.8	%
Average sales price	$	601,216	$	602,138	$	(922	)		(0.2)	%
Southeast
Homebuilding revenue	$	231,025	$	350,761	$	(119,736	)		(34.1)	%
Income before income taxes	$	21,752	$	62,391	$	(40,639	)		(65.1)	%
Homes delivered		472		672		(200	)		(29.8)	%
Average sales price	$	488,417	$	520,537	$	(32,120	)		(6.2)	%
West
Homebuilding revenue	$	1,029,524	$	970,671	$	58,853			6.1	%
Income before income taxes	$	15,275	$	77,198	$	(61,923	)		(80.2)	%
Homes delivered		2,124		1,862		262			14.1	%
Average sales price	$	475,364	$	513,269	$	(37,905	)		(7.4)	%

Financial services consists primarily of originating mortgages from our home buyers, selling such mortgages in the secondary market, and title insurance activities. We use mandatory investor commitments and forward sales of mortgage-backed securities (“MBS”) to hedge our mortgage-related interest rate exposure on agency and government loans. For the three months ended January 31, 2026 and 2025, Federal Housing Administration and Veterans Administration (“FHA/VA”) loans represented 39.4% and 41.1%, respectively, of our total loans. For the three months ended January 31, 2026 compared to the same period in the prior year, our conforming conventional loan originations as a percentage of our total loans increased from 58.4% to 59.2%. The origination of loans which exceed conforming conventions increased from 0.5% to 1.4% for the three months ended January 31, 2026 compared to the same period in the prior year.

During the three months ended January 31, 2026 and 2025, financial services provided $5.8 million and $3.5 million of income before income taxes, respectively. The increase in financial services income before income taxes for the three months ended January 31, 2026 compared to the same periods in the prior year was primarily due to an increase in the basis point spread between the loans originated and the implied rate from our sale of the loans. In the markets served by our wholly owned mortgage banking subsidiaries, 79.6% and 80.4% of our non-cash homebuyers obtained mortgages originated by these subsidiaries during the three months ended January 31, 2026 and 2025, respectively.

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Homebuilding Results by Segment

Northeast - Homebuilding revenue increased 13.3% for the three months ended July 31, 2025 compared to the same period in the prior year. The increase for the three months ended July 31, 2025 was attributed to a 18.6% increase in homes delivered, partially offset by a 4.7% decrease in average sales price. The decrease in average sales price was the result of new communities delivering lower priced, smaller single family homes and townhomes in lower-end submarkets of the segment for the three months ended July 31, 2025 compared to some communities delivering higher priced, larger single family homes and townhomes in higher-end submarkets of the segment for the three months ended July 31, 2024, which were no longer delivering in the second quarter of the current year.

Income before income taxes increased $1.4 million to $41.4 million for the three months ended July 31, 2025 as compared to the same period in the prior year. This was primarily due to the increase in homebuilding revenue discussed above and a $4.0 million increase in income from unconsolidated joint ventures, partially offset by a slight decrease in gross margin percentage.

Homebuilding revenue increased 28.5% for the nine months ended July 31, 2025 compared to the same period in the prior year. The increase for the nine months ended July 31, 2025 was attributed to a 28.8% increase in homes delivered, while the average sales price was relatively flat with a 0.2% decrease.

Income before income taxes increased $5.0 million to $112.7 million for the nine months ended July 31, 2025 as compared to the same period in the prior year. This was primarily due to the increase in homebuilding revenues discussed above, while gross margin percentage was relatively flat.

Southeast – Homebuilding revenue decreased 9.7% for the three months ended July 31, 2025 compared to the same period in the prior year. The decrease for the three months ended July 31, 2025 was attributed to a 15.6% decrease in homes delivered, partially offset by a 6.9% increase in average sales price. The increase in average sales price was the result of new communities delivering higher priced, larger single family homes and townhomes in higher-end submarkets of the segment for the three months ended July 31, 2025 compared to some communities delivering lower priced, smaller single family homes, townhomes and build-for-rent homes in lower-end submarkets of the segment for the three months ended July 31, 2024, which were no longer delivering in the current year.

Income before income taxes decreased $8.8 million to $11.6 million for the three months ended July 31, 2025 compared to the same period in the prior year. This was primarily due to the decrease in homebuilding revenue discussed above and a significant decrease in gross margin percentage. For a discussion of gross margin see “Homebuilding: Cost of Sales” above.

Homebuilding revenue decreased 34.1% for the nine months ended July 31, 2025 compared to the same period in the prior year. The decrease was due to a 29.8% decrease in homes delivered and a 6.2% decrease in average sales price. The decrease in average sales price was the result of new communities delivering lower priced, smaller single family homes in lower-end submarkets of the segment for the nine months ended July 31, 2025 compared to some communities delivering higher priced, larger single family homes and townhomes in mid to higher-end submarkets of the segment for the nine months ended July 31, 2024, which were no longer delivering in the current year.

Income before income taxes decreased $40.6 million to $21.8 million for the nine months ended July 31, 2025 compared to the same period in the prior year. This was primarily due to the decrease in homebuilding revenue discussed above and a significant decrease in gross margin percentage. For a discussion of gross margin see “Homebuilding: Cost of Sales” above.

West – Homebuilding revenue increased 14.0% for the three months ended July 31, 2025 compared to the same period in the prior year. The increase was due to a 22.1% increase in homes delivered, partially offset by a 2.7% decrease in average sales price and a $13.5 million decrease in land sales and other revenue. The decrease in average sales price was the result of new communities delivering lower priced, smaller single family homes in lower-end submarkets of the segment for the three months ended July 31, 2025 compared to some communities delivering higher priced, larger single family homes in higher-end submarkets of the segment for the three months ended July 31, 2024, which were no longer delivering in the current year.

Income before income taxes decreased $27.3 million to a loss of $6.3 million for the three months ended July 31, 2025 compared to the same period in the prior year. This was primarily due to a $2.3 million increase in SGA, an $8.6 million increase in inventory impairments and land option write-offs and a significant decrease in gross margin percentage. For a discussion of gross margin see “Homebuilding: Cost of Sales” above.

Homebuilding revenue increased 6.1% for the nine months ended July 31, 2025 compared to the same period in the prior year. The increase was due to a $4.9 million increase in land sales and other revenue and a 14.1% increase in homes delivered, partially offset by a 7.4% decrease in average sales price. The decrease in average sales price was the result of new communities delivering lower priced, smaller single family homes in lower-end submarkets of the segment for the nine months ended July 31, 2025 compared to some communities delivering higher priced, larger single family homes in higher-end submarkets of the segment for the nine months ended July 31, 2024, which were no longer delivering in the current year.

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Income before income taxes decreased $61.9 million to $15.3 million for the nine months ended July 31, 2025 compared to the same period in the prior year. This is primarily due to a $9.3 million increase in SGA, a $9.5 million increase in inventory impairments and land option write-offs and a significant decrease in gross margin percentage. For a discussion of gross margin see “Homebuilding: Cost of Sales” above.

Financial Services

Financial services consists primarily of originating mortgages from our home buyers, selling such mortgages in the secondary market, and title insurance activities. We use mandatory investor commitments and forward sales of mortgage-backed securities (“MBS”) to hedge our mortgage-related interest rate exposure on agency and government loans. For the nine months ended July 31, 2025 and 2024, Federal Housing Administration and Veterans Administration (“FHA/VA”) loans represented 41.0% and 34.1%, respectively, of our total loans. For the nine months ended July 31, 2025 compared to the same period in the prior year, our conforming conventional loan originations as a percentage of our total loans decreased from 65.3% to 58.0%. The origination of loans which exceed conforming conventions increased from 0.6% to 1.0% for the nine months ended July 31, 2025 compared to the same period in the prior year.

During the three and nine months ended July 31, 2025 and 2024, financial services provided $13.9 million and $25.8 million of income before income taxes compared to $6.5 million and $15.5 million for the same periods in the prior year. The increase in financial services income before income taxes for the three and nine months ended July 31, 2025 compared to the same periods in the prior year was primarily due to an increase in the amount of loans closed during the period and an increase in the basis point spread between the loans originated and the implied rate from our sale of the loans. In the markets served by our wholly owned mortgage banking subsidiaries, 80.9% and 81.4% of our non-cash homebuyers obtained mortgages originated by these subsidiaries during the three months ended July 31, 2025 and 2024, respectively, and 79.9% and 79.7% of our non-cash homebuyers obtained mortgages originated by these subsidiaries during the nine months ended July 31, 2025 and 2024, respectively.

Corporate General and Administrative

Corporate general and administrative expenses include operations at our headquarters in New Jersey. These expenses include payroll, stock compensation, facility costs and rent and other costs associated with our executive offices, legal expenses, information services, human resources, corporate accounting, training, treasury, process redesign, internal audit, national and digital marketing, construction services and administration of insurance, quality and safety. Corporate general and administrative expenses ~~decreased~~remained torelatively flat at $3533.07 million for the three months ended ~~July~~January 31, ~~2025~~2026 compared to $3832.57 million for the three months ended ~~July~~January 31, ~~2024 and decreased to $97.2 million for the nine months ended July 31,~~ 2025 ~~compared to $108~~.1 million for the nine months ended July 31, 2024. The decrease was primarily due to lower stock compensation expense compared to the same periods in the prior year. During the nine months of fiscal 2024, we had additional expense related to finalizing the value of phantom stock awards granted under our 2019 long-term incentive plan as a result of an increase to our stock price. In addition, for the nine months of fiscal 2025, we recorded a benefit related to our 2024 and 2023 long-term incentive plan phantom stock awards, as a result of a decrease in our stock price during the period.

Income from Unconsolidated Joint Ventures

Income from unconsolidated joint ventures consists of our share of the earnings or losses of our unconsolidated joint ventures. Income from unconsolidated joint ventures ~~increased~~decreased $45.8 million to $153.54 million for the three months ended ~~July~~January 31, ~~2025~~2026 ~~and decreased $3.1 million to $33.8 million for the nine months ended July 31, 2025~~ compared to the same ~~periods in the prior year. The increase for the three months ended July 31, 2025 compared to the same~~ period of the prior year was primarily due to the recognition of additional income from two unconsolidated joint ventures; because the joint venture partner achieved certain return hurdles, the Company was able to recognize a higher share of the unconsolidated joint ventures' income than it had in the prior year. The decrease ~~for the nine months ended July 31, 2025 compared to the same period of the prior year~~ was primarily due to ~~the~~less ~~recognition~~open offor ~~losses~~sale ~~from two~~ unconsolidated joint ventures in which one just started delivering homes in the second quarter of fiscal 2025 and the other is not currently delivering any homes. In addition, we recognized income in the first nine months of the prior year from a joint venture ~~that~~communities ~~was~~leading ~~subsequently~~to ~~consolidated in fiscal 2024~~fewer deliveries.

38Other Interest

~~Table~~ Other interest increased $2.6 million to $12.2 million for the three months ended January 31, 2026 compared to the same period of ~~Contents~~the prior year. The increase in Other interest was primarily due to an increase in communities in planning, along with an increase in model lease financing activities during the period.

Income Taxes

For the three ~~and nine~~ months ended ~~July~~January 31, 2026 and 2025, we recorded income tax expense of $7.28 million and $2511.7 million, respectively~~, and $24~~.~~4 million and $51.6 million for the same periods in the prior year, respectively.~~ In both the current and prior year periods, the expense was primarily driven by federal and state tax expense on income before income taxes and permanent differences, partially offset by the generation of energy home credits. The federal tax expense is not paid in cash as it is offset by the use of our existing NOL carryforwards.

Capital Resources and Liquidity

Overview

Our total liquidity at ~~July~~January 31, ~~2025~~2026 was $~~277~~471.9 4 million, including $~~146~~339.69 million in homebuilding cash and cash equivalents and $125.0 million of borrowing capacity under our senior secured revolving credit facility. We believe that our cash on hand together with available borrowings on our senior secured revolving credit facility will be sufficient for at least the next 12 months to finance our working capital requirements.

We have historically funded our homebuilding and financial services operations with cash flows from operating activities, borrowings under our credit facilities, the issuance of new debt and equity securities, and other financing activities. We may not be able to obtain desired financing even if market conditions, including then-current market available interest rates (in recent years, we have not been able to access the traditional capital and bank lending markets at competitive interest rates due to our highly leveraged capital structure), would otherwise be favorable, which could impact our ability to grow our business.

Operating, Investing and Financing Cash Flow Activities

We spent $~~660~~180.07 million on land and land development during the first ~~three~~quarter ~~quarters~~ of fiscal ~~2025~~2026. After land and land development spending and all other operating activities, including revenue received from deliveries, cash from operations was $19140.29 million. During the first ~~three~~quarter ~~quarters~~ of fiscal ~~2025~~2026, cash used in investing activities was $6029.61 million, primarily due to a new joint ~~ventures~~venture entered into during the first quarter of fiscal ~~2025~~2026, along with spending on capitalized software, partially offset by ~~distributions~~net ofcash ~~capital~~acquired ~~from~~through ~~existing unconsolidated joint ventures~~acquisitions. Cash used in financing activities was $3052.56 million during the first ~~three~~quarter ~~quarters~~ of fiscal ~~2025~~2026, primarily due to ~~the redemption of our 13.5% Senior Notes, along with~~ net payments for our mortgage warehouse lines of credit, net payments for nonrecourse mortgage financings, net payments for land banking financings, treasury stock purchases and payments of preferred dividends, partially offset by net proceeds for ~~land banking financings and~~ model sale leaseback financings. We intend to continue to use nonrecourse mortgages, model sale leasebacks, joint ventures, and, subject to covenant restrictions in our debt instruments, land banking programs as our business needs dictate.

Our cash uses during the ~~nine~~three months ended ~~July~~January 31, ~~2025~~2026 and ~~2024~~2025 were for operating expenses, land purchases, land deposits, land development, construction spending, ~~investments~~model insale ~~unconsolidated joint ventures~~leasebacks, land banking transactions, state income taxes, ~~debt reductions,~~ interest payments, preferred dividends, ~~treasury~~equity ~~stock~~repurchases, investments ~~purchases~~in ~~and~~unconsolidated ~~litigation~~joint ~~matters~~ventures and acquisitions. During these periods, we provided for our cash requirements from available cash on hand, ~~housing~~home and land sales, nonrecourse mortgage transactions, income from unconsolidated joint ventures, financial service revenues and other revenues.

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Our net income historically does not approximate cash flow from operating activities. The difference between net income and cash flow from operating activities is primarily caused by changes in inventory levels together with changes in receivables, prepaid expenses and other assets, mortgage loans held for sale, accrued interest, deferred income taxes, accounts payable and other liabilities, and noncash charges relating to depreciation, stock compensation and impairments. When we are expanding our operations, inventory levels, prepaid expenses and other assets increase causing cash flow from operating activities to decrease. Certain liabilities also increase as operations expand and partially offset the negative effect on cash flow from operations caused by the increase in inventory, prepaid expenses and other assets. Similarly, as our mortgage operations expand, net income from these operations increases, but for cash flow purposes, net income is partially offset by the net change in mortgage assets and liabilities. The opposite is true as our investment in new land purchases and development of new communities decrease, causing us to generate positive cash flow from operations.

Debt Transactions

Senior notes and credit facilities balances as of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, were as follows:

	July 31,			October 31,
	January 31,			October 31,
(In thousands)	~~2025~~2026			~~2024~~2025
Senior Secured Notes	$	655,000		$	655,000
Senior Notes	$	924,968		$	924,968
Senior Notes		24,968			51,556
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028		175,000			175,000
Senior Secured Revolving Credit Facility (1)		-			-
Less: Net (discounts), premiums and unamortized debt issuance costs		6(23,~~954~~661	)		14(24,~~662~~250	)
Total senior notes and credit facilities, net of discounts, premiums and unamortized debt issuance costs	$	~~861~~901,~~922~~307		$	~~896~~900,~~218~~718

(1) At ~~July~~January 31, ~~2025~~2026, provides for up to $125.0 million in aggregate amount of senior secured first lien revolving loans. The revolving loans ~~thereunder~~under the revolving credit facility have a maturity of June 30, ~~2026~~2028 and borrowings bear interest, at K. Hovnanian’s option, at either (i) a term secured overnight financing rate (subject to a floor of 3.00%) plus an applicable margin of 4.50% or (ii) an alternate base rate (subject to a floor of 43.00%) plus an applicable margin of 3.50%. In addition, K. Hovnanian will pay an unused commitment fee on the undrawn revolving commitments at a rate of 1.00% per annum.

Except for K. Hovnanian, the issuer of the notes and borrower under the credit agreements governing our ~~term~~secured ~~loans and~~ revolving credit ~~facilities~~ facility (~~collectively,~~ the "Secured Credit ~~Facilities~~Facility"), our home mortgage subsidiaries, certain of our title insurance subsidiaries, joint ventures and subsidiaries holding interests in our joint ventures, we and each of our subsidiaries are guarantors of the Secured Credit ~~Facilities,~~Facility ~~the senior secured notes~~ and senior notes outstanding at ~~July~~January 31, ~~2025~~2026 (collectively, the “Notes Guarantors”).

The credit agreements governing the Secured Credit ~~Facilities~~Facility and the indentures governing the senior ~~secured and senior~~ notes (together, the “Debt Instruments”) outstanding at ~~July~~ January 31, ~~2025~~ 2026 do not contain any financial maintenance covenants, but do contain restrictive covenants that limit, among other things, the ability of HEI and certain of its subsidiaries, including K. Hovnanian, to incur (including through ~~exchange~~exchanges or certain other types of transactions) indebtedness, pay dividends, and make distributions on common and preferred stock, repay/repurchase certain indebtedness prior to its respective stated maturity, repurchase common and preferred stock, make other restricted payments (including investments), sell certain assets (including in certain land banking transactions), incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of their assets and enter into certain transactions with affiliates. The Debt Instruments also contain customary events of default which would permit the lenders or holders thereof to exercise remedies with respect to the collateral (as applicable), declare the loans (the "“Secured ~~Term~~Revolving Loans"”) made under the ~~Senior~~Credit ~~Secured~~Agreement, ~~1.75~~dated ~~Lien~~as of ~~Term~~October ~~Loan~~31, ~~Credit~~2019, ~~Facility~~as ~~due~~amended, ~~January~~by ~~31,~~and ~~2028~~among K. Hovnanian, ~~and~~the ~~loans~~Company, (the ~~"Secured~~other ~~Revolving~~guarantors ~~Loans")~~party ~~made~~thereto, ~~under~~Wilmington ~~the~~Trust, ~~Senior~~National Association, ~~Secured~~as ~~Revolving~~administrative ~~Credit~~agent, ~~Agreement~~and ~~due~~the ~~June~~lenders ~~30,~~party ~~2026,~~thereto (the “Secured Credit Agreement”) or notes to be immediately due and payable if not cured within applicable grace periods, including the failure to make timely payments on the Secured ~~Term Loans, Secured~~ Revolving Loans or notes or other material indebtedness, cross default to other material indebtedness, the failure to comply with agreements and covenants and specified events of bankruptcy and insolvency and, with respect to the Secured ~~Term Loans and Secured~~ Revolving Loans, material inaccuracy of representations and warranties ~~and with respect to the Secured Term Loans and Secured Revolving Loans~~, a change of control, ~~and, with respect to~~ the ~~Secured Term Loans, Secured Revolving Loans and senior secured notes, the~~ failure of the documents granting security for the obligations under the ~~secured~~Secured ~~Debt~~Credit ~~Instruments~~Agreement to be in full force and effect, and the failure of the liens on any material portion of the collateral securing the obligations under the ~~secured~~Secured ~~Debt~~Credit ~~Instruments~~Agreement to be valid and perfected. As of ~~July~~January 31, ~~2025~~2026, we believe we were in compliance with the covenants of the Debt Instruments.

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Any liquidity-enhancing or other capital raising or refinancing transaction will depend on identifying counterparties, negotiation of documentation and applicable closing conditions and any required approvals. Due to covenant restrictions in our Debt Instruments, we ~~are~~may ~~currently~~be limited in the amount of debt we can incur, even if market conditions, including then-current market available interest rates (inprior ~~recent~~to ~~years~~the fourth quarter of fiscal 2025, we ~~have~~had not been able to access the traditional capital and bank lending markets at competitive interest rates for some time due to our highly leveraged capital structure), would otherwise be favorable, which could also impact our ability to grow our business.

See Note 12 to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for a further discussion of K. Hovnanian’s Debt ~~Credit Facilities~~Instruments, ~~senior secured notes and senior notes,~~ including information with respect to the collateral securing our ~~secured~~Secured ~~Debt~~Credit ~~Instruments~~Agreement.

Mortgages and Notes Payable

We had nonrecourse mortgage loans for certain communities totaling $5328.5 million and $9029.75 million, net of debt issuance costs, atas ~~July~~of January 31, ~~2025~~2026 and October 31, ~~2024~~2025, respectively, which are secured by the related real property, including any improvements, with an aggregate book value of $~~123~~77.82 million and $~~249~~113.79 million, respectively. The weighted-average interest rate on these obligations was 8 7.14% ~~and 8.7%~~ at ~~July~~both January 31, ~~2025~~2026 and October 31, ~~2024~~2025, respectively, and the mortgage loan payments ~~on each community~~ primarily correspond to home deliveries.

Our wholly owned mortgage banking subsidiary, K. Hovnanian Mortgage, originates mortgage loans primarily from the sale of our homes. Such mortgage loans and related servicing rights are sold in the secondary mortgage market within a short period of time. K. Hovnanian Mortgage finances the origination of mortgage loans through various master repurchase agreements, which are recorded in "Financial services" liabilities on the Condensed Consolidated Balance Sheets. The loans are secured by the mortgages held for sale and are repaid when we sell the underlying mortgage loans to permanent investors. As of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, we had an aggregate of $~~110~~69.05 million and $~~131~~94.4 3 million, respectively, outstanding under several of K. Hovnanian Mortgage’s short-term borrowing facilities.

See Note 11 to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for a further discussion of these agreements.

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Equity

On December 18, 2024, our Board of Directors (the "Board") authorized an incremental increase to our repurchase program and on April 11, 2025, the Board authorized another increase to our repurchase program, such that, inclusive of any amounts remaining under the existing repurchase authorization, as of April 11, 2025, we were authorized to repurchase up to $30.6 million of our Class A common stock. Subsequent to quarter end, on February 27, 2026, our Board further authorized an incremental increase of $50.0 million to our repurchase program, such that, inclusive of any amounts remaining under the existing repurchase authorization, as of February 27, 2026, we were authorized to repurchase up to $67.4 million of our Class A common stock. Under the program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual dollar amount repurchased will depend on a variety of factors, including legal requirements, price, future tax implications and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

During the ~~nine~~three months ended ~~July~~January 31, ~~2025~~2026, we repurchased ~~257~~85,~~908~~398 shares under the stock repurchase program, with a market value of $309.10 million, or $~~116~~105.70 39 per share. During the ~~nine~~ three months ended January ~~July~~ 31, ~~2024~~2025, we repurchased ~~188~~131,~~800~~ 460 shares under the stock repurchase program, with a market value of $2617.5 9 million, or $~~140~~135.31 95 per share. As of ~~July~~January 31, ~~2025~~2026, $2617.4 million of our Class A common stock was available to be purchased under the stock repurchase program.

On July 12, 2005, we issued 5,600 shares of 7.625% Series A preferred stock, with a liquidation preference of $25,000 per share. Dividends on the Series A preferred stock are not cumulative and are payable at an annual rate of 7.625%. The Series A preferred stock is not convertible into the Company’s common stock and is redeemable in whole or in part at our option at the liquidation preference of the shares. The Series A preferred stock is traded as depositary shares, with each depositary share representing 1/1000th of a share of Series A preferred stock. We paid dividends of $2.7 million ~~and $8.0 million~~ on the Series A preferred stock for ~~the~~each ~~three~~of ~~and~~the ~~nine~~three months ended ~~July~~January 31, ~~2025~~2026 and ~~2024, respectively~~2025.

Unconsolidated Joint Ventures

We have investments in unconsolidated joint ventures in various markets where our homebuilding operations are located. Investments in and advances to unconsolidated joint ventures ~~increased~~decreased $7516.48 million to $~~218~~146.46 million at ~~July~~January 31, ~~2025~~2026 compared to October 31, ~~2024~~2025. The ~~increase~~decrease was primarily due tothe ~~new~~consolidation ~~joint~~of ~~ventures~~a ~~entered~~previously ~~into~~unconsolidated joint venture during the ~~first~~period and ~~third~~an ~~quarters of fiscal 2025, along with increases~~ increase in our share of ~~income~~losses recognized for ~~two~~an ~~of our~~ existing unconsolidated joint ~~ventures~~venture, partially offset by a new joint venture entered into during the ~~period,~~first ~~partially~~quarter ~~offset~~of byfiscal 2026, along with an increase in our share of ~~loss~~income recognized for ~~one~~ two of our existing unconsolidated joint ventures~~, and~~ ~~partner~~during ~~distributions~~the period. As of ~~July~~January 31, ~~2025~~2026 and October 31, ~~2024~~2025, we had investments in ~~eight~~five and six unconsolidated homebuilding joint ventures, respectively. We have no guarantees associated with our unconsolidated joint ventures, other than guarantees limited to performance and completion of development activities, environmental indemnification and standard warranty and representation against fraud, misrepresentation and similar actions, including a voluntary bankruptcy.

Inventories

Total inventory, excluding consolidated inventory not owned, ~~decreased~~increased $7019.62 million to $1.43 billion at ~~July~~January 31, ~~2025~~2026 compared to October 31, ~~2024~~2025. Total inventory, excluding consolidated inventory not owned, ~~decreased~~increased by $6788.1 3 million infrom the ~~Northeast~~acquisition of a controlling interest and resulting consolidation of KSA, partially offset by decreases of $739.4 1 million in the ~~West~~Northeast, ~~partially~~$55.8 ~~offset~~million byin anthe ~~increase~~Southeast ofand $694.92 million in the ~~Southeast~~West. The net decrease in our domestic inventory was primarily attributable to home deliveries, ~~inventory impairments and~~ land option write-offs, land sales, and inventory contributed to new unconsolidated joint ventures during the period, partially offset by new land purchases and land development. Substantially all homes under construction or completed and included in inventory at ~~July~~January 31, ~~2025~~2026 are expected to be delivered during the next six to nine months.

Consolidated inventory not owned, which consists of options related to land banking and model financing, ~~increased~~decreased $~~118~~8.7 million from October 31, ~~2024~~2025 to ~~July~~January 31, ~~2025~~2026. The ~~increase~~decrease was primarily due to ~~increases~~decreases in land banking transactions, ~~along~~offset ~~with~~by an increase in the sale and leaseback of certain model homes during the period. We have land banking arrangements, whereby we sell land parcels to land bankers and they provide us with an option to purchase finished lots on a predetermined schedule. Because of our options to repurchase these parcels, these transactions are considered a financing rather than a sale. Our Condensed Consolidated Balance Sheet, at ~~July~~January 31, ~~2025~~2026, included inventory of $~~263~~246.8 million recorded to “Consolidated inventory not owned,” with a corresponding amount of $~~167~~157.93 million (net of debt issuance costs) recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions. In addition, we sell and lease back certain of our model homes with the right to participate in the potential profit when each home is sold to a third-party at the end of the respective lease. As a result of our continued involvement and the ability to repurchase model homes with below market options, these sale and leaseback transactions are considered a financing rather than a sale. Therefore, our Condensed Consolidated Balance Sheet, at ~~July~~January 31, ~~2025~~2026, included inventory of $6577.94 million recorded to “Consolidated inventory not owned,” with a corresponding amount of $6878.76 million (net of debt issuance costs) recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.

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The following tables summarize home sites included in our total residential real estate. The decrease in total home sites available at ~~July~~January 31, ~~2025~~2026 compared to October 31, ~~2024~~2025 is attributable to delivering homes and terminating certain option agreements, partially offset by acquiring new land parcels during the period.

			Active Selling		Proposed
	Active Selling		Communities		Developable		Total
	Communities(1)		Homes		Homes		Homes
July 31, 2025:
January 31, 2026:
Northeast		3746		4,~~811~~781		1514,~~200~~945		2019,~~011~~726
Southeast		21		21,~~108~~805		4,~~970~~022		75,~~078~~827
West		6664		6,~~614~~616		63,~~556~~399		1310,~~170~~015
Consolidated total		124		13,533		26,726		40,259
Domestic subtotal		131		13,202		22,366		35,568
Unconsolidated joint ventures (2)		26		3,824		852		4,676
KSA		4		1,241		1,827		3,068
Owned				4,063		1,382		5,445
Consolidated total		135		14,443		24,193		38,636
Optioned				9,457		25,344		34,801
Unconsolidated joint ventures (2)		20		2,683		521		3,204
Construction to permanent financing lots				13		-		13
Domestic owned				3,793		1,265		5,058
Consolidated total				13,533		26,726		40,259
Domestic optioned				9,401		21,101		30,502
KSA owned				-		340		340
KSA optioned				1,241		1,487		2,728
Construction to permanent financing lots				8		-		8
Consolidated total				14,443		24,193		38,636

Active Selling

Proposed

Active Selling

Communities

Developable

Total

Communities(1)

Homes

October 31, 2024:

October 31, 2025:

Northeast

4946

4,~~804~~844

14,~~776~~138

1918,~~580~~982

Southeast

1627

12,~~537~~218

53,~~624~~863

76,~~161~~081

West

6567

6,~~005~~853

93,~~149~~969

1510,~~154~~822

Consolidated total

~~130~~140

1213,~~346~~915

2921,~~549~~970

4135,~~895~~885

Unconsolidated joint ventures (2)

1920

23,~~662~~631

12,~~687~~294

45,~~349~~925

Owned

53,~~311~~982

1,~~321~~514

65,~~632~~496

Optioned

79,~~031~~931

2820,~~228~~456

3530,~~259~~387

Construction to permanent financing lots

Consolidated total

1213,~~346~~915

2921,~~549~~970

4135,~~895~~885

	(1)	Active selling communities are open for sale communities with ten or more home sites available. We identify communities based on product type. Therefore, at times there are multiple communities at one land site.

	(2)	Represents active selling communities and home sites for our unconsolidated homebuilding joint ventures for the period. We provide this data as a supplement to our consolidated results as an indicator of the volume managed in our unconsolidated joint ventures. See Note 18 to the Condensed Consolidated Financial Statements for a further discussion of our unconsolidated joint ventures.

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The following table summarizes our started or completed unsold homes and models, excluding unconsolidated joint ventures, in ~~active selling communities and~~ substantially completed communities. The decrease in started or completed unsold homes from October 31, ~~2024~~2025 to ~~July~~January 31, ~~2025~~2026 is due to a concerted effort to ~~align~~manage inventory levels by aligning our starts pace with ~~the~~ sales pace ~~during~~at ~~the~~each ~~third quarter of fiscal 2025~~community.

	July 31, 2025						October 31, 2024
	January 31, 2026						October 31, 2025
	Unsold						Unsold
	Homes		Models		Total		Homes		Models		Total
Northeast		~~222~~194		2614		~~248~~208		~~259~~257		3523		~~294~~280
Southeast		~~145~~114		1413		~~159~~127		~~135~~125		1918		~~154~~143
West		~~649~~434		1923		~~668~~457		~~627~~525		3123		~~658~~548
Total		1,016		59		1,075		1,021		85		1,106
Domestic total (2)		742		50		792		907		64		971
Started or completed unsold homes and models per active selling communities (1)		8.2		0.5		8.7		7.9		0.6		8.5
Started or completed unsold homes and models per domestic active selling communities (1)		5.7		0.3		6.0		6.5		0.4		6.9

(1) ~~Active~~Domestic active selling communities (which are communities that are open for sale with ten or more home sites available) were ~~124~~131 at ~~July~~January 31, ~~2025~~2026 and ~~130~~140 at October 31, ~~2024~~2025. This ratio does not include substantially completed communities, which are communities with less than ten home sites available.

(2)	At January 31, 2026, KSA had no started unsold homes or models.

Other Balance Sheet Fluctuations

Goodwill

Goodwill of $31.7 million was recorded at January 31, 2026 resulting from the acquisition of a controlling interest in KSA in the first quarter of fiscal 2026. See Note 18 to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for further details on the KSA purchase price allocation. There was no goodwill recorded at October 31, 2025.

Customer Deposits

Customer deposits increased $130.5 million to $176.8 million at January 31, 2026 compared to October 31, 2025. The increase was primarily due to KSA stage payments that we receive as a home is constructed and recorded as deferred revenue.

Financial Services Assets and Liabilities

Financial services assets decreased $2927.8 3 million to $~~173~~124.80 million at January ~~July~~ 31, ~~2025~~2026, compared to October 31, ~~2024~~2025. Financial services assets consist primarily of residential mortgage receivables held for sale of which $~~129~~88.4 million and $~~147~~109.2 8 million at January ~~July~~ 31, ~~2025~~ 2026 and October 31, ~~2024~~2025, respectively, were being temporarily warehoused and are awaiting sale in the secondary mortgage market. The decrease in mortgage loans held for sale from October 31, ~~2024~~ 2025 was primarily related to a decrease in the volume of loans originated during the ~~third~~first quarter of fiscal ~~2025~~ 2026 compared to the fourth quarter of fiscal ~~2024~~ 2025, partially offset by an increase in the average loan value.

Financial services liabilities decreased $3028.8 3 million to $~~152~~102.46 million at January ~~July~~ 31, ~~2025~~ 2026 compared to October 31, ~~2024~~2025. The decrease was primarily due to a decrease in amounts outstanding under our mortgage warehouse lines of credit and directly correlates to the decrease in the volume of mortgage loans held for sale during the period.

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Inflation

The annual rate of inflation in the United States was 2.4% in January 2026, as measured by the Consumer Price Index, which is much improved from its peak of 9.1% in June 2022. Inflation has a long-term effect, because higher costs for land, materials and labor results in increasing sales prices of our homes. Historically, these price increases have been commensurate with the general rate of inflation in our housing markets and have not had a significant adverse effect on the sale of our homes. A significant risk faced by the housing industry generally is that rising house construction costs, including land and interest costs, could substantially outpace increases in the income of potential purchasers and therefore limit our ability to raise home sale prices, which may result in lower gross margins.

Inflation has a lesser short-term effect, because we generally negotiate fixed-price contracts with many, but not all, of our subcontractors and material suppliers for the construction of our homes. These prices usually are applicable for a specified number of residential buildings or for a time period of between three to 12 months. Construction costs for residential buildings represented approximately 5047.38% of our homebuilding cost of sales for the ~~nine~~three months ended ~~July~~January 31, ~~2025~~2026.

Critical Accounting Policies

As disclosed in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2024~~2025, our most critical accounting policies relate to inventories, unconsolidated joint ventures, warranty and construction defect reserves and income taxes. Since October 31, ~~2024~~2025, there have been no significant changes to those critical accounting policies.

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Safe Harbor Statement

All statements in this Quarterly Report on Form 10-Q that are not historical facts should be considered as “Forward-Looking Statements” within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such forward-looking statements include but are not limited to statements related to the Company's goals and expectations with respect to its financial results for future financial periods. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are not guarantees of future performance or results and (iii) are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements as a result of a variety of factors. Such risks, uncertainties and other factors include, but are not limited to:

45● Changes in general and local economic, industry and business conditions and impacts of a significant homebuilding downturn; ● Shortages in, and price fluctuations of, raw materials and labor, including due to geopolitical events, changes in trade policies, including the imposition of tariffs and duties on homebuilding materials and products, and related trade disputes with, and retaliatory measures taken by other countries, and changes in immigration laws or the enforcement thereof and trends in labor migration; ● Fluctuations in interest rates and the availability of mortgage financing, including as a result of instability in the banking sector; ● Increases in inflation; ● Adverse weather and other environmental conditions and natural or man made disasters; ● The seasonality of the Company’s business; ● The availability and cost of suitable land and improved lots and sufficient liquidity to invest in such land and lots; ● Reliance on, and the performance of, subcontractors; ● Regional and local economic factors, including dependency on certain sectors of the economy, and employment levels affecting home prices and sales activity in the markets where the Company builds homes; ● Increases in cancellations of agreements of sale; ● Changes in tax laws affecting the after-tax costs of owning a home; ● Legal claims brought against us and not resolved in our favor, such as product liability litigation, warranty claims and claims made by mortgage investors; ● Levels of competition; ● Utility shortages and outages or rate fluctuations; ● Information technology failures and data security breaches; ● Negative publicity; ● Global economic and political instability; ● High leverage and restrictions on the Company’s operations and activities imposed by the agreements governing the Company’s outstanding indebtedness; ● Availability and terms of financing to the Company; ● The Company’s sources of liquidity; ● Changes in credit ratings; ● Government regulation, including regulations concerning the development of land, the home building, sales and customer financing processes, tax laws and environmental, health and safety matters; ● Potential liability as a result of the past or present use of hazardous materials; ● Operations through unconsolidated joint ventures with third parties; ● Significant influence of the Company’s controlling stockholders; ● Availability of net operating loss carryforwards; and ● Loss of key management personnel or failure to attract qualified personnel.

~~Table~~Certain risks, uncertainties and other factors are described in detail in Part I, Item 1 “Business” and Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of ~~Contents~~new information, future events, changed circumstances or any other reason after the date of this Quarterly Report on Form 10-Q.

● Changes in general and local economic, industry and business conditions and impacts of a significant homebuilding downturn; ● Shortages in, and price fluctuations of, raw materials and labor, including due to geopolitical events, changes in trade policies, including the imposition of tariffs and duties on homebuilding materials and products, and related trade disputes with, and retaliatory measures taken by other countries, and because of changes in immigration laws and trends in labor migration; ● Fluctuations in interest rates and the availability of mortgage financing, including as a result of instability in the banking sector; ● Increases in inflation; ● Adverse weather and other environmental conditions and natural disasters; ● The seasonality of the Company’s business; ● The availability and cost of suitable land and improved lots and sufficient liquidity to invest in such land and lots; ● Reliance on, and the performance of, subcontractors; ● Regional and local economic factors, including dependency on certain sectors of the economy, and employment levels affecting home prices and sales activity in the markets where the Company builds homes; ● Increases in cancellations of agreements of sale; ● Changes in tax laws affecting the after-tax costs of owning a home; ● Legal claims brought against us and not resolved in our favor, such as product liability litigation, warranty claims and claims made by mortgage investors; ● Levels of competition; ● Utility shortages and outages or rate fluctuations; ● Information technology failures and data security breaches; ● Negative publicity; ● Global economic and political instability; ● High leverage and restrictions on the Company’s operations and activities imposed by the agreements governing the Company’s outstanding indebtedness; ● Availability and terms of financing to the Company; ● The Company’s sources of liquidity; ● Changes in credit ratings; ● Government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws and the environment; ● Potential liability as a result of the past or present use of hazardous materials; ● Operations through unconsolidated joint ventures with third parties; ● Significant influence of the Company’s controlling stockholders; ● Availability of net operating loss carryforwards; and ● Loss of key management personnel or failure to attract qualified personnel.44

Certain risks, uncertainties and other factors are described in detail in Part I, Item 1 “Business” and Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this Quarterly Report on Form 10-Q.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Substantially all of our long-term debt requires fixed interest payments and we have limited exposure to variable rates. In connection with our mortgage operations, mortgage loans held for sale and the associated mortgage warehouse lines of credit under our Master Repurchase Agreements are subject to interest rate risk; however, such obligations reprice frequently and are short-term in duration. In addition, we ~~are able to~~ hedge the interest rate risk on mortgage loans by obtaining forward commitments from private investors. Accordingly, the interest rate risk from mortgage loans is not significant. We do not use financial instruments to hedge interest rate risk except with respect to mortgage loans. The following table sets forth as of ~~July~~January 31, ~~2025~~2026, our long-term debt obligations, principal cash flows by scheduled maturity, weighted-average interest rates and estimated fair value (“FV”).

	Long-Term Debt as of July 31, 2025 by Fiscal Year of Maturity Date
	Long-Term Debt as of January 31, 2026 by Fiscal Year of Maturity Date
																						FV at
(Dollars in thousands)	~~2025~~2026			~~2026~~2027			~~2027~~2028			~~2028~~2029			~~2029~~2030			Thereafter			Total			71/31/~~2025~~2026
Long term debt(1):
Long term debt(1)(2):
Fixed rate	$	-		$	-		$	-		$	~~400,000~~-		$	~~430,000~~-		$	24924,968		$	~~854~~924,968		$	~~892~~937,~~298~~895
Weighted average interest rate		-	%		-	%		-	%		~~8.88~~-	%		~~11.75~~-	%		58.0010	%		108.2110	%

(1)	Does not include: mortgage warehouse lines of credit made under our Master Repurchase Agreements.
	●	the mortgage warehouse lines of credit made under our Master Repurchase Agreements;
(2)	Does not include $28.5 million of nonrecourse mortgages secured by inventory. These mortgages have various maturities spread over the next two to three years and are paid off as homes are delivered. In addition, it does not include our $125.0 million Secured Credit Facility under which there were no borrowings outstanding as of January 31, 2026. The revolving loans under the Secured Credit Facility have a maturity of June 30, 2028 and borrowings bear interest, at K. Hovnanian’s option, at either (i) a term SOFR (subject to a floor of 3.00%) plus an applicable margin of 4.50% or (ii) an alternate base rate (subject to a floor of 3.00%) plus an applicable margin of 3.50%. In addition, K. Hovnanian pays an unused commitment fee on the undrawn revolving commitments at a rate of 1.00% per annum.
	●	$53.5 million of nonrecourse mortgages secured by inventory, which have various maturities spread over the next two to three years and are paid off as homes are delivered; and
	●	our $125.0 million Secured Credit Facility under which there were no borrowings outstanding as of July 31, 2025.

Item 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of ~~July~~January 31, ~~2025~~2026. Based upon that evaluation and subject to the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the design and operation of the Company’s disclosure controls and procedures are effective to accomplish their objectives.

There was no change in the Company’s internal control over financial reporting that occurred during the quarter ended ~~July~~January 31, ~~2025~~2026, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

For information with respect to our legal proceedings, see Note 7 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Recent Sales of Unregistered Equity Securities

None.

Issuer Purchases of Equity Securities

On December 18, 2024, the Board authorized an incremental increase to our repurchase program and on April 11, 2025, the Board authorized another increase to our repurchase program, such that, inclusive of any amounts remaining under the existing repurchase authorization, as of April 11, 2025, we were authorized to repurchase up to $30.6 million of our Class A common stock. Subsequent to quarter end, on February 27, 2026, our Board further authorized an incremental increase of $50.0 million to our repurchase program, such that, inclusive of any amounts remaining under the existing repurchase authorization, as of February 27, 2026, we were authorized to repurchase up to $67.4 million of our Class A common stock. Under the program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual dollar amount repurchased will depend on a variety of factors, including legal requirements, price, future tax implications and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date. As of ~~July~~January 31, ~~2025~~2026, $2617.4 million of our Class A common stock was available to be purchased under the stock repurchase program.

~~There~~The ~~were~~following notable ~~repurchases~~provides information relating to the company’s repurchase of common stock for the ~~third~~ first quarter of fiscal ~~2025~~2026.

Item 5. OTHER INFORMATION

	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased of Part of Publicly Announced Plans or Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program
November 1, 2025 through November 30, 2025	-	-	-	$26,402,928
December 1, 2025 through December 31, 2025	85,398	$105.39	85,398	$17,402,978
January 1, 2026 through January 31, 2026	-	-	-	$17,402,978

During the three months ended July 31, 2025, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item ~~408(a) of Regulation S-K~~5. OTHER INFORMATION

48During the three months ended January 31, 2026, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

~~Table~~Repurchase ~~of Contents~~Program

Item 6.	EXHIBITS
3(a)	Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on March 29, 2019).
3(b)	Second Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on March 28, 2023).
4(a)	Specimen Class A Common Stock Certificate (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on March 29, 2019).
4(b)	Specimen Class B Common Stock Certificate (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on March 29, 2019).
4(c)	Certificate of Designations, Powers, Preferences and Rights of the 7.625% Series A Preferred Stock of Hovnanian Enterprises, Inc., dated July 12, 2005 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on July 13, 2005).
4(d)	Certificate of Designations of the Series B Junior Preferred Stock of Hovnanian Enterprises, Inc., dated August 14, 2008 (Incorporated by reference to Exhibits to Quarterly Report on Form 10-Q of the Registrant for the quarter ended July 31, 2008).
4(e)	Rights Agreement, dated as of August 14, 2008, between Hovnanian Enterprises, Inc. and National City Bank, as Rights Agent, which includes the Form of Certificate of Designation as Exhibit A, Form of Right Certificate as Exhibit B and the Summary of Rights as Exhibit C (Incorporated by reference to Exhibits to the Registration Statement on Form 8-A of the Registrant filed on August 14, 2008).
4(f)	Amendment No. 1 to Rights Agreement, dated as of January 11, 2018, between Hovnanian Enterprises, Inc. and Computershare Trust Company, N.A. (as successor to National City Bank), as Rights Agent, which includes the amended and restated Form of Rights Certificate as Exhibit 1 and the amended and restated Summary of Rights as Exhibit 2 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on January 11, 2018).
4(g)	Amendment No. 2 to Rights Agreement, dated as of January 18, 2021, between the Company and Computershare Trust Company, N.A. (as successor to National City Bank), as Rights Agent, which includes the amended and restated Form of Rights Certificate as Exhibit 1 and the amended and restated Summary of Rights as Exhibit 2 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed January 19, 2021).
4(h)	Amendment No. 3 to Rights Agreement, dated as of January 11, 2024, between the Company and Computershare Trust Company, N.A. (as successor to National City Bank), as Rights Agent, which includes the amended and restated Form of Rights Certificate as Exhibit 1 and the amended and restated Summary of Rights as Exhibit 2 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed January 11, 2024).
10(a)*	Form of 2025 Associate Performance Share Unit Agreement EBIT Class A.
10(b)*	Form of 2025 Associate Performance Share Unit Agreement EBIT Class B.
10(c)*	Form of 2025 Associate Phantom Performance Share Unit Agreement EBIT.
10(d)*	Form of 2025 Associate Performance Share Unit Agreement EBIT ROI Class A.
10(e)*	Form of 2025 Associate Performance Share Unit Agreement EBIT ROI Class B.
10(f)*	Form of 2025 Associate Phantom Performance Share Unit Agreement EBIT ROI.

On February 27, 2026, our Board of Directors (the "Board") authorized an incremental increase of $50.0 million to our repurchase program, such that, inclusive of any amounts remaining under the existing repurchase authorization, as of February 27, 2026, we were authorized to repurchase up to $67.4 million of our Class A common stock. Under the program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual dollar amount repurchased will depend on a variety of factors, including legal requirements, price, future tax implications and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

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Table of ~~Content~~Contents

31(a)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
Item 6.	EXHIBITS
31(b)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
3(a)	Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on March 29, 2019).
32(a)	Section 1350 Certification of Chief Executive Officer.
3(b)	Second Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on March 28, 2023).
32(b)	Section 1350 Certification of Chief Financial Officer.
4(a)	Specimen Class A Common Stock Certificate (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on March 29, 2019).
101	The following financial information from our Quarterly Report on Form 10-Q for the quarter ended July 31, 2025, formatted in inline Extensible Business Reporting Language (Inline XBRL): (i) the Condensed Consolidated Balance Sheets at July 31, 2025 and October 31, 2024, (ii) the Condensed Consolidated Statements of Operations for the three and nine months ended July 31, 2025 and 2024, (iii) the Condensed Consolidated Statements of Changes in Equity for the three and nine months ended July 31, 2025 and 2024, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended July 31, 2025 and 2024, and (v) the Notes to Condensed Consolidated Financial Statements.
4(b)	Specimen Class B Common Stock Certificate (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on March 29, 2019).
104	Cover Page from our Quarterly Report on Form 10-Q for the three months ended July 31, 2025, formatted in Inline XBRL (and contained in Exhibit 101).
4(c)	Certificate of Designations, Powers, Preferences and Rights of the 7.625% Series A Preferred Stock of Hovnanian Enterprises, Inc., dated July 12, 2005 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on July 13, 2005).
	*Management contracts or compensation plans or arrangements.
4(d)	Certificate of Designations of the Series B Junior Preferred Stock of Hovnanian Enterprises, Inc., dated August 14, 2008 (Incorporated by reference to Exhibits to Quarterly Report on Form 10-Q of the Registrant for the quarter ended July 31, 2008).
4(e)	Rights Agreement, dated as of August 14, 2008, between Hovnanian Enterprises, Inc. and National City Bank, as Rights Agent, which includes the Form of Certificate of Designation as Exhibit A, Form of Right Certificate as Exhibit B and the Summary of Rights as Exhibit C (Incorporated by reference to Exhibits to the Registration Statement on Form 8-A of the Registrant filed on August 14, 2008).
4(f)	Amendment No. 1 to Rights Agreement, dated as of January 11, 2018, between Hovnanian Enterprises, Inc. and Computershare Trust Company, N.A. (as successor to National City Bank), as Rights Agent, which includes the amended and restated Form of Rights Certificate as Exhibit 1 and the amended and restated Summary of Rights as Exhibit 2 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on January 11, 2018).
4(g)	Amendment No. 2 to Rights Agreement, dated as of January 18, 2021, between the Company and Computershare Trust Company, N.A. (as successor to National City Bank), as Rights Agent, which includes the amended and restated Form of Rights Certificate as Exhibit 1 and the amended and restated Summary of Rights as Exhibit 2 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed January 19, 2021).
4(h)	Amendment No. 3 to Rights Agreement, dated as of January 11, 2024, between the Company and Computershare Trust Company, N.A. (as successor to National City Bank), as Rights Agent, which includes the amended and restated Form of Rights Certificate as Exhibit 1 and the amended and restated Summary of Rights as Exhibit 2 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed January 11, 2024).
10(a)*	Form of 2026 Long-Term Incentive Program Award Agreement Class A.
10(b)*	Form of 2026 Long-Term Incentive Program Award Agreement Class B.
10(c)*	Form of 2026 Long-Term Incentive Program Award Phantom Share Agreement.

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SIGNATURES

31(a)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31(b)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32(a)	Section 1350 Certification of Chief Executive Officer.

32(b)	Section 1350 Certification of Chief Financial Officer.

101	The following financial information from our Quarterly Report on Form 10-Q for the quarter ended January 31, 2026, formatted in inline Extensible Business Reporting Language (Inline XBRL): (i) the Condensed Consolidated Balance Sheets at January 31, 2026 and October 31, 2025, (ii) the Condensed Consolidated Statements of Operations for the three months ended January 31, 2026 and 2025, (iii) the Condensed Consolidated Statements of Changes in Equity for the three months ended January 31, 2026 and 2025, (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended January 31, 2026 and 2025, and (v) the Notes to Condensed Consolidated Financial Statements.

104	Cover Page from our Quarterly Report on Form 10-Q for the three months ended January 31, 2026, formatted in Inline XBRL (and contained in Exhibit 101).

	*Management contracts or compensation plans or arrangements.

~~Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~48

~~HOVNANIAN~~Table ~~ENTERPRISES,~~of ~~INC.~~Contents

~~(Registrant)~~SIGNATURES

	DATE:	August 29, 2025
		/s/ ARA K. HOVNANIAN
		Ara K. Hovnanian
		Chairman of the Board, Chief Executive Officer and President
		(Principal Executive Officer)
	DATE:	August 29, 2025
		/s/ BRAD O’CONNOR
		Brad O’Connor
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

51HOVNANIAN ENTERPRISES, INC.

(Registrant)

	DATE:	March 2, 2026
		/s/ ARA K. HOVNANIAN
		Ara K. Hovnanian
		Chairman of the Board, Chief Executive Officer and Director
		(Principal Executive Officer)

	DATE:	March 2, 2026
		/s/ BRAD O’CONNOR
		Brad O’Connor
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

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