UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
FORM 10-K



( X )ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934 (FEE REQUIRED)

      For the twelve months ended OCTOBER 31, 2002

(    )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

Commission file number:  1-8551

Hovnanian Enterprises, Inc.
(Exact name of registrant as specified in its charter)
Delaware                                           22-1851059
(State or other jurisdiction of                   (I. R. S. Employer
incorporation or organization)                    Identification No.)

10 Highway 35, P.O. Box 500, Red Bank, N. J.  07701
(Address of principal executive offices)

732-747-7800
(Registrant's telephone number, including area code)

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

                                              Name of Each Exchange on
Title of Each Class                           Which Registered
- --------------------                          ------------------------
Class A Common Stock, $.01 par value          New York Stock Exchange
 per share

Securities registered pursuant to Section 12(g) of the Act  -  None

Indicate by check mark whether the registrant (l) 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.       ( X )Yes
(   ) No

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.

Indicate by check mark whether the regisrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).  Yes ( X )  No (   )

State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of
such common equity as of April 30, 2002 was $450,643,000.

As of the close of business on January 6, 2003, there were outstanding
23,228,281 shares of the Registrant's Class A Common Stock and 7,439,742
shares of its Class B Common Stock.


Documents Incorporated by Reference:

Part III - Those portions of registrant's definitive proxy statement to
be filed pursuant to Regulation l4A in connection with registrant's
annual meeting of shareholders to be held on March 7, 2003 which are
responsive to Items l0, ll, l2 and l3.

HOVNANIAN ENTERPRISES, INC.
FORM 10-K
TABLE OF CONTENTS

Item 							             Page
PART I

1 and 2	        	Business and Properties......................   4
   3			Legal Proceedings............................  15
   4			Submission of Matters to a Vote of
			  Security Holders...........................  15
			Executive Officers of the Registrant.........  15

PART II

   5			Market for the Registrant's Common Equity
			  and Related Stockholder Matters............  15

   6			Selected Consolidated Financial Data.........  17

   7			Management's Discussion and Analysis of
			  Financial Condition and Results of
			  Operations.................................  19

   7A			Quantitative and Qualitative Disclosures About
			  Market Risk................................  38

   8			Financial Statements and Supplementary
			  Data.......................................  39
   9			Changes in and Disagreements with
			  Accountants on Accounting and Financial
			  Disclosure.................................  39

PART III

  10			Directors and Executive Officers of the
			  Registrant.................................  40

			Executive Officers of the Registrant.........  40

  11			Executive Compensation.......................  42

  12			Security Ownership of Certain Beneficial
			  Owners and Management and Related
                        Stockholder Matters........................  42

  13			Certain Relationships and Related
			  Transactions...............................  43

  14			Controls and Procedures......................  43

PART IV

  15			Exhibits, Financial Statement Schedules and
			   Reports on Form 8-K.......................  44

			Signatures...................................  46

			Certifications...............................  47


PART I

ITEMS 1 AND 2 - BUSINESS AND PROPERTIES

BUSINESS OVERVIEW

	We design, construct and market high quality single-family detached
homes and attached condominium apartments and townhouses in planned
residential developments in the Northeast (New Jersey, southern New York
state, and eastern Pennsylvania), North Carolina, South Carolina, Metro
D.C. (northern Maryland and Virginia), California, Texas, and the Mid
South (Tennessee, Alabama, and Mississippi).  During the year ended
October 31, 2002, we liquidated substantially all of our operations in
the Mid-South.  We market our homes to first-time buyers, first-time and
second-time move-up buyers, luxury buyers, active adult buyers and empty
nesters.  We offer a variety of homestyles in the United States at base
prices ranging from $42,000 to $933,000 with an average sales price in
fiscal 2002 of $279,000.  We are currently offering homes for sale in 196
communities.  Since the incorporation of our predecessor company in 1959,
we have delivered in excess of 134,000 homes, including 9,514 homes in
fiscal 2002.  In addition, we provide financial services (mortgage loans
and title insurance) to our homebuilding customers.

	We employed approximately 2,370 full-time associates as of October
31, 2002.  We were incorporated in New Jersey in 1967 and we
reincorporated in Delaware in 1982.

BUSINESS STRATEGIES, OPERATING POLICIES AND PROCEDURES

	Over the past few years, our strategies have included several
initiatives to fundamentally transform our traditional practices used to
design, build and sell homes and focus on "building better."  We believe
that the adoption and implementation of processes and systems
successfully used in other manufacturing industries, such as rapid cycle
times, vendor consolidation, vendor partnering and just-in-time material
procurement, will dramatically improve our business and give us a clear
advantage over our competitors.  Our concentration in selected markets is
a key factor that enables us to achieve powers and economies of scale and
differentiate ourselves from most of our competitors.  These performance
enhancing strategies are designed to achieve operational excellence
through the implementation of standardized and streamlined "best practice
processes."

	Training is designed to provide our associates with the knowledge,
attitudes, skill and habits necessary to succeed at their jobs.  Our
Training Department regularly conducts training classes in sales,
construction, administration, and managerial skills.

	Land Acquisition, Planning and Development - Before entering into a
contract to acquire land, we complete extensive comparative studies and
analyses which assist us in evaluating the economic feasibility of such
land acquisition.  We generally follow a policy of acquiring options to
purchase land for future community developments.  We attempt to acquire
land with a minimum cash investment and negotiate takedown options,
thereby limiting the financial exposure to the amounts invested in
property and predevelopment  costs.  This policy significantly reduces
the risk and generally allows us to obtain necessary development
approvals before acquisition of the land, thereby enhancing the value of
the options and the land eventually acquired.

	Our option and purchase agreements are typically subject to
numerous conditions, including, but not limited to, our ability to obtain
necessary governmental approvals for the proposed community.  Generally,
the deposit on the agreement will be returned to us if all approvals are
not obtained, although predevelopment costs may not be recoverable.  By
paying an additional, nonrefundable deposit, we have the right to extend
a significant number of our options for varying periods of time.  In most
instances, we have the right to cancel any of our land option agreements
by forfeiture of our deposit on the agreement.  In such instances, we
generally are not able to recover any predevelopment costs.

	Our development activities include site planning and engineering,
obtaining environmental and other regulatory approvals and constructing
roads, sewer, water and drainage facilities, and for our residential
developments, recreational facilities and other amenities.  These
activities are performed by our staff, together with independent
architects, consultants and contractors.  Our staff also carries out
long-term planning of communities.

	Design - Our residential communities are generally located in
suburban areas near major highways.  The communities are designed as
neighborhoods that fit existing land characteristics.  We strive to
create diversity within the overall planned community by offering a mix
of homes with differing architecture, textures and colors.  Recreational
amenities such as swimming pools, tennis courts, club houses and tot lots
are frequently included.

	Construction - We design and supervise the development and building
of our communities.  Our homes are constructed according to standardized
prototypes which are designed and engineered to provide innovative
product design while attempting to minimize costs of construction.  We
employ subcontractors for the installation of site improvements and
construction of homes.  Agreements with subcontractors are generally
short term and provide for a fixed price for labor and materials.  We
rigorously control costs through the use of computerized monitoring
systems.  Because of the risks involved in speculative building, our
general policy is to construct an attached condominium or townhouse
building only after signing contracts for the sale of at least 50% of the
homes in that building.  A majority of our single family detached homes
are constructed after the signing of a contract and mortgage approval has
been obtained.

	Materials and Subcontractors - We attempt to maintain efficient
operations by utilizing standardized materials available from a variety
of sources.  In addition, we contract with subcontractors to construct
our homes.  Hovnanian has reduced construction and administrative costs
by consolidating the number of vendors serving markets and by executing
national purchasing contracts with select vendors.  In recent years,
Hovnanian has experienced no significant construction delays due to
shortages of materials or labor.  Hovnanian cannot predict, however, the
extent to which shortages in necessary materials or labor may occur in
the future.

	Marketing and Sales - Our residential communities are sold
principally through on-site sales offices.  In order to respond to our
customers' needs and trends in housing design, we rely upon our internal
market research group to analyze information gathered from, among other
sources, buyer profiles, exit interviews at model sites, focus groups and
demographic data bases.  We make use of newspaper, radio, magazine, our
website, billboard, video and direct mail advertising, special
promotional events, illustrated brochures, full-sized and scale model
homes in our comprehensive marketing program.  In addition, we have
opened home design galleries in our Northeast region, Virginia, Maryland,
Texas, North Carolina, and California, which have increased option sales
and profitability in these markets.  We plan to open similar galleries in
each of our markets.

	Customer Service and Quality Control - Associates responsible for
customer service participate in pre-closing quality control inspections
as well as responding to post-closing customer needs.  Prior to closing,
each home is inspected and any necessary completion work is undertaken by
us.  In some of our markets, we are enrolled in a standard limited
warranty program which, in general, provides a homebuyer with a one-year
warranty for the home's materials and workmanship, a two-year warranty
for the home's heating, cooling, ventilating, electrical and plumbing
systems and a ten-year warranty for major structural defects.  All of the
warranties contain standard exceptions, including, but not limited to,
damage caused by the customer.

	Customer Financing - We sell our homes to customers who generally
finance their purchases through mortgages.  During the year ended October
31, 2002, 6.4% of our customers paid in cash and over 71% of our non-cash
customers obtained mortgages originated by one of our wholly-owned
mortgage banking subsidiaries or our mortgage joint venture in
California.  Mortgages originated by our wholly-owned mortgage banking
subsidiaries are sold in the secondary market.


RESIDENTIAL DEVELOPMENT ACTIVITIES

	Our residential development activities include evaluating and
purchasing properties, master planning, obtaining governmental approvals
and constructing, marketing and selling homes.  A residential development
generally includes single family detached homes and/or a number of
residential buildings containing from two to twenty-four individual homes
per building, together with amenities such as recreational buildings,
swimming pools, tennis courts and open areas.

	We attempt to reduce the effect of certain risks inherent in the
housing industry through the following policies and procedures:

 - Through our presence in multiple geographic markets, our goal is
to reduce the effects that housing industry cycles, seasonality and
local conditions in any one area may have on our business.  In
addition, we plan to achieve a significant market presence in each
of our markets in order to obtain powers and economies of scale.

 - We typically acquire land for future development principally
through the use of land options which need not be exercised before
the completion of the regulatory approval process.  We structure
these options in most cases with flexible take down schedules
rather than with an obligation to take down the entire parcel upon
approval.  Additionally, we purchase improved lots in certain
markets by acquiring a small number of improved lots with an option
on additional lots.  This allows us to minimize the economic costs
and risks of carrying a large land inventory, while maintaining our
ability to commence new developments during favorable market
periods.

- - We generally begin construction on an attached condominium or
townhouse building only after entering into contracts for the sale
of at least 50% of the homes in that building.  A majority of our
single family detached homes are started after a contract is signed
and mortgage approvals obtained.  This limits the build-up of
inventory of unsold homes and the costs of maintaining and carrying
that inventory.

 - We offer a broad product array to provide housing to a wide
range of customers.  Our customers consist of first-time buyers,
first- and second-time move-up buyers, luxury buyers, active adult
buyers and empty nesters.

 - We offer a wide range of customer options to satisfy individual
customer tastes.  We have large regional home design galleries in
New Jersey, Virginia, Maryland, North Carolina, Texas, and
California.

	Current base prices for our homes in contract backlog at October
31, 2002 (exclusive of upgrades and options) range from $42,000 to
$900,000 in our Northeast Region, from $119,000 to $700,000 in Metro
D.C., from $97,000 to $405,000 in North Carolina, from $132,000 to
$580,000 in Texas, and from $120,000 to $933,000 in California.  Closings
generally occur and are typically reflected in revenues from two to nine
months after sales contracts are signed.

	Information on homes delivered by market area is set forth below:

                                     Year Ended
                          ----------------------------------
                           October      October     October
                           31, 2002     31, 2001    31, 2000
                          ----------    --------    --------
                           (Housing Revenue in Thousands)

Northeast Region:
  Housing Revenues........$  660,250  $  570,647  $  561,422
  Homes Delivered.........     2,144       1,860       1,939
  Average Price...........$  307,952  $  306,799  $  289,542

North Carolina(2):
  Housing Revenues........$  264,055  $  255,390  $  126,596
  Homes Delivered.........     1,421       1,449         653
  Average Price...........$  185,823  $  176,253  $  193,868

Metro D.C.(2):
  Housing Revenues........$  396,273  $  310,815  $   66,137
  Homes Delivered.........     1,385       1,294         263
  Average Price...........$  286,118  $  240,197  $  251,471

California(1):
  Housing Revenues........$  852,373  $  280,582  $  143,729
  Homes Delivered.........     3,220         760         480
  Average Price...........$  264,712  $  369,187  $  299,435

Texas:
  Housing Revenues........$  240,181  $  215,045  $  186,294
  Homes Delivered.........     1,033       1,003         914
  Average Price...........$  232,508  $  214,402  $  203,823

Mid-South(2):
  Housing Revenues........$   48,510  $   44,372          --
  Homes Delivered.........       305         290          --
  Average Price...........$  159,049  $  153,007          --

Other:
  Housing Revenues........$      453  $   16,866  $   21,288
  Homes Delivered.........         6         135         118
  Average Price...........$   75,500  $  124,933  $  180,407

Combined Total:
  Housing Revenues........$2,462,095  $1,693,717  $1,105,466
  Homes Delivered........      9,514       6,791       4,367
  Average Price...........$  258,787  $  249,406  $  253,141

(1) October 31, 2002 includes Forecast deliveries beginning on
January 10, 2002.
(2) October 31, 2001 includes Washington Homes deliveries beginning
on January 24, 2001.

	The value of our net sales contracts increased 50.2% to $2,432,000
for the year ended October 31, 2002 from $1,619,000 for the year ended
October 31, 2001.  This increase was the net result of a 39.8% increase
in the number of homes contracted to 9,394 in 2002 from 6,722 in 2001.
By market, on a dollar basis, the Northeast Region increased 13.4%, Metro
D. C. increased 33.1%, Texas increased 8.0%, and California increased
253.9%.  The increases in California and Metro D. C. were due to the
acquisition of the Forecast Group, L.P. on January 10, 2002 and a full
year of operations in Metro D. C. from the merger with Washington Homes
on January 23, 2001.  The increases in the Northeast Region, and Texas
were due to increased sales and increased sales prices. These increases
were slightly offset by a 6.5% decrease in sales in North Carolina due to
continued slow market conditions.

	The following table summarizes our active communities under
development as of October 31, 2002.  The contracted not delivered and
remaining home sites available in our active communities under
development are included in the 53,988 total home lots under the total
residential real estate chart in Item 7 Management's Discussion and
Analysis of Financial Condition and Results of Operations.

                                                         (1)        (2)
			                              Contracted   Remaining
			 Commun-  Approved    Homes      Not       Home Sites
			  ities     Lots    Delivered  Delivered   Available
			 -------  --------  ---------  ---------   ----------

  Northeast Region.     28     9,442      3,743      1,371        4,328
  North Carolina...     64     9,062      3,876        466        4,720
  Metro D.C........     27     5,607      2,425        755        2,427
  California.......     42     9,952      3,978        955        5,019
  Texas............     35     4,459      1,893        277        2,289
  Mid-South........     --       274        245          7           22
                    -------  --------  ---------  ---------   ----------
      Total            196    38,796     16,160      3,831       18,805
                    =======  ========  =========  =========   ==========

(1)  Includes 636 lots under option and excludes 26 lots under our build
     on your own lot program.

(2)  Of the total home sites available, 959 were under construction or
     completed (including 205 models and sales offices), 10,912 were
     under option, and 128 were financed through purchase money
     mortgages.


	The following table summarizes our total started or completed
unsold homes as of October 31, 2002:

                                   Unsold
                                   Homes        Models      Total
                                   ------       ------      -----

Northeast Region..................    73           46         119
North Carolina....................   191           32         223
Metro D.C.........................    34           31          65
California........................   193           65         258
Texas.............................   261           31         292
Mid-South.........................     2           --           2
                                   ------       ------      -----
     Total                           754          205         959
                                   ======       ======      =====


BACKLOG

	At October 31, 2002 and October 31, 2001, we had a backlog of
signed contracts for 3,857 homes and 3,033 homes, respectively, with
sales values aggregating $1,076,728,000 and $773,074,000, respectively.
Substantially all of our backlog at October 31, 2002 is expected to be
completed and closed within the next twelve months.  At November 30, 2002
and 2001, our backlog of signed contracts was 4,051 homes and 3,025
homes, respectively, with sales values aggregating $1,130,807,000 and
$770,930,000, respectively.

	Sales of our homes typically are made pursuant to a standard sales
contract and provides the customer with a statutorily mandated right of
rescission for a period ranging up to 15 days after execution.  This
contract requires a nominal customer deposit at the time of signing.  In
addition, in the Northeast Region and Metro D. C. we typically obtain an
additional 5% to 10% down payment due 30 to 60 days after signing.  The
contract may include a financing contingency, which permits the customer
to cancel his obligation in the event mortgage financing at prevailing
interest rates (including financing arranged or provided by us) is
unobtainable within the period specified in the contract.  This
contingency period typically is four to eight weeks following the date of
execution.


RESIDENTIAL LAND INVENTORY

	It is our objective to control a supply of land, primarily through
options, consistent with anticipated homebuilding requirements in each of
our housing markets.  Controlled land as of October 31, 2002, exclusive
of communities under development described under "Business and Properties
- -- Residential Development Activities,"  is summarized in the following
table.  The proposed developable lots in communities under development
are included in the 53,988 total home lots under the total residential
real estate chart in Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations.




			      Number
			       of        Proposed    Total Land
			     Proposed   Developable    Option         Book
			   Communities     Lots        Price        Value(1)(2)
			   -----------  -----------  -----------    -----------
                                                  
                                                     (In Thousands)
Northeast Region:
  Under Option.......       82       14,941     $658,085        $103,447
  Owned..............        7          759                       28,281
                       ---------  -----------                 -----------
     Total...........       89       15,700                      131,728
		       ---------  -----------                 -----------
North Carolina:
  Under Option.......       13        2,283     $ 77,719             812
                       ---------  -----------                 -----------
Metro D.C.:
  Under Option.......       47        6,002     $426,421          14,566
  Owned..............        7        1,392                       23,446
                        --------  -----------                 -----------
     Total...........       54        7,394                       38,012
                        --------  -----------                 -----------
California:
  Under Option.......       30        4,354     $175,117          15,076
  Owned..............        1          103                        6,288
                        --------  -----------                 -----------
     Total...........       31        4,457                       21,364
                        --------  -----------                 -----------
Texas:
  Under Option.......       15        1,518     $ 59,004          12,454
                        --------  -----------                 -----------
Totals:
  Under Option.......      187       29,098                      146,355
  Owned..............       15        2,254                       58,015
			---------  -----------                 -----------
Combined Total.......      202       31,352                     $204,370
		        =========  ===========                 ===========



(1) Properties under option also includes costs incurred on properties
    not under option but which are under investigation.  For properties
    under option, we paid, as of October 31, 2002, option fees and
    deposits aggregating approximately $69,534,000 and accrued
    $13,832,000 for specific performance options..  As of October 31,
    2002, we spent an additional $62,989,000 in non-refundable
    predevelopment costs on such properties.

(2)  The book value of $204,370,000 is identified on the balance sheet as
     "Inventories - land, land options, held for future development or
     sale," and does not include inventory in Poland and Florida
     amounting to $4,463,000 and inventory amounting to $29,168,000 for
     communities partially under construction.

	In our Northeast Region, our objective is to control a supply of
land sufficient to meet anticipated building requirements for at least
three to five years.  We typically option parcels of unimproved land for
development.

	In North Carolina, Metro D.C., and the Mid South, a portion of the
land we acquired was from land developers on a lot takedown basis.  In
Texas, we primarily acquire improved lots from land developers.  Under a
typical agreement with the lot developer, we purchase a minimal number of
lots.  The balance of the lots to be purchased are covered under an
option agreement or a non-recourse purchase agreement.  Due to the
dwindling supply of improved lots in these markets, we are currently
optioning parcels of unimproved land for development.

	In California, where possible, we plan to option developed or
partially developed lots.  With a limited supply of developed lots in
California, we are also optioning parcels of unimproved land for
development.


CUSTOMER FINANCING

	At our communities, on-site personnel facilitate sales by offering
to arrange financing for prospective customers through our mortgage
subsidiaries.  We believe that the ability to offer financing to
customers on competitive terms as a part of the sales process is an
important factor in completing sales.

	Our business consists of providing our customers with competitive
financing and coordinating and expediting the loan origination
transaction through the steps of loan application, loan approval and
closing.  We originate loans in New Jersey, New York, Pennsylvania,
Maryland, Virginia, North Carolina, Texas, and California.  During the
year ended October 31, 2002, approximately 6.4% of our homebuyers paid in
cash and 71% of our non-cash homebuyers obtained mortgages originated by
one of our wholly-owned mortgage banking subsidiaries or our mortgage
joint venture in California.

	Like other mortgage bankers, we customarily sell nearly all of the
loans that we originate.  Additionally, we sell virtually all of the loan
servicing rights to loans we originate.  Loans are sold either
individually or in pools to GNMA, FNMA, or FHLMC or against forward
commitments to institutional investors, including banks, mortgage banking
firms, and savings and loan associations.



COMPETITION

	Our residential business is highly competitive.  We are among the
top ten homebuilders in the United States in both homebuilding revenues
and home deliveries.  We compete with numerous real estate developers in
each of the geographic areas in which we operate.  Our competition range
from small local builders to larger regional and national builders and
developers, some of which have greater sales and financial resources than
us.  Previously owned homes and the availability of rental housing
provide additional competition.  We compete primarily on the basis of
reputation, price, location, design, quality, service and amenities.


REGULATION AND ENVIRONMENTAL MATTERS

	General.  We are subject to various local, state and federal
statutes, ordinances, rules and regulations concerning zoning, building
design, construction and similar matters, including local regulations
which impose restrictive zoning and density requirements in order to
limit the number of homes that can eventually be built within the
boundaries of a particular locality.  In addition, we are subject to
registration and filing requirements in connection with the construction,
advertisement and sale of our communities in certain states and
localities in which we operate even if all necessary government approvals
have been obtained.  We may also be subject to periodic delays or may be
precluded entirely from developing communities due to building
moratoriums that could be implemented in the future in the states in
which we operate.  Generally, such moratoriums relate to insufficient
water or sewerage facilities or inadequate road capacity.

	Environmental.  We are also subject to a variety of local, state
and federal statutes, ordinances, rules and regulations concerning
protection of health and the environment ("environmental laws").  The
particular environmental laws which apply to any given community vary
greatly according to the community site, the site's environmental
conditions and the present and former uses of the site.  These
environmental laws may result in delays, may cause us to incur
substantial compliance and other costs, and prohibit or severely restrict
development in certain environmentally sensitive regions or areas.

	New Jersey Fair Housing Act.  In July 1985, New Jersey adopted the
Fair Housing Act which established an administrative agency to adopt
criteria by which municipalities will determine and provide for their
fair share of low and moderate income housing.  This agency adopted such
criteria in May 1986.  Its implementation thus far has caused some delay
in approvals for some of our New Jersey communities and may result in a
reduction in the number of homes planned for some properties.

	Both prior to the enactment of the Fair Housing Act and in its
implementation thus far, municipal approvals in some of the New Jersey
municipalities in which we own land or land options required us to set
aside up to 22% of the approved homes for sale at prices affordable to
persons of low and moderate income.  In order to comply with such
requirements, we must sell these homes at a loss.  We attempt to reduce
some of these losses through increased density, certain cost saving
construction measures and reduced land prices from the sellers of
property.  Such losses are absorbed by the market priced homes in the
same developments.

	New Jersey State Planning Act.  Pursuant to the 1985 State Planning
Act, the New Jersey State Planning Commission has adopted a State
Development and Redevelopment Plan ("State Plan").  The State Plan, if
fully implemented, would designate large portions of the state as
unavailable for development or as available for development only at low
densities, and other portions of the state for more intense development.
State government agencies would be required to make permitting decisions
in accordance with the State Plan, if it is fully implemented. The state
government agencies have adopted some policies and regulations to
implement the State Plan.  The Governor has issued an Executive Order to
all state agencies requiring compliance with the State Plan.  It is
unclear what effect this Executive Order may have on our ability to
develop our land.

	The California Environmental Quality Act (CEQA) requires that every
community comply with the CEQA.  Compliance with CEQA may result in delay
in obtaining the necessary approvals for commencement of the community, a
reduction in the density permitted in the community, additional costs in
developing the community, or denial of the permits necessary to construct
the community.

	Conclusion.  Despite our past ability to obtain necessary permits
and approvals for our communities, it can be anticipated that
increasingly stringent requirements will be imposed on developers and
homebuilders in the future.  Although we cannot predict the effect of
these requirements, they could result in time-consuming and expensive
compliance programs and substantial expenditures for pollution and water
quality control, which could have a material adverse effect on us.  In
addition, 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 interpretation and application.

	Company Offices.  We own our corporate headquarters, a four-story,
24,000 square feet office building located in Red Bank, New Jersey and
19,992 square feet in a Middletown, New Jersey condominium office
building.  We lease office space consisting of 106,549 square feet in
various New Jersey and Pennsylvania locations, 49,550 square feet in the
Metro D. C. area, 50,956 square feet in various North Carolina locations,
3,688 square feet in various Mid South locations, 13,505 square feet in
West Palm Beach, Florida, 48,618 square feet in California, and 23,055
square feet in various Texas locations.

ITEM 3 - LEGAL PROCEEDINGS

	We are involved from time to time in litigation arising in the
ordinary course of business, none of which is expected to have a material
adverse effect on us.  Recently the general liability insurance market
for homebuilding companies and their suppliers and subcontractors has
become very difficult.  The availability of general liability insurance
has been limited due to a decreased number of insurance companies willing
to write for the industry.  In addition, those few insurers willing to
write liability insurance have significantly increased the premium costs.
The Company has been able to obtain general liability insurance but at
higher premium costs with higher deductibles.  The Company has been
advised that a significant number of its subcontractors and suppliers
have also had difficulty obtaining insurance that also provides coverage
to the Company.  While no assurance can be given, the Company believes
that it will be able to continue to obtain coverage but at higher total
costs.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

	During the fourth quarter of the year ended October 31, 2002 no
matters were submitted to a vote of security holders.

EXECUTIVE OFFICERS OF THE REGISTRANT

	Information on executive officers of the registrant is incorporated
herein from Part III, Item 10.


PART II

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDERS MATTERS

	Our Class A Common Stock is traded on the New York Stock Exchange
and was held by 504 shareholders of record at January 6, 2003.  There is
no established public trading market for our Class B Common Stock, which
was held by 380 shareholders of record at January 6, 2003.  In order to
trade Class B Common Stock, the shares must be converted into Class A
Common Stock on a one-for-one basis.  The high and low sales prices for
our Class A Common Stock were as follows for each fiscal quarter during
the years ended October 31, 2002, 2001, and 2000:

                             Class A Common Stock
               ------------------------------------------------
               Oct. 31, 2002    Oct. 31, 2001    Oct. 31, 2000
               --------------   --------------   --------------
Quarter         High    Low      High    Low      High    Low
- -------        ------  ------   ------  ------   ------  ------
First........  $22.40  $10.00   $ 9.99  $ 7.19   $ 6.88  $ 5.25
Second.......  $32.40  $19.07   $18.75  $ 8.75   $ 6.62  $ 5.44
Third........  $38.75  $24.31   $19.34  $13.00   $ 6.38  $ 5.44
Fourth.......  $40.56  $24.70   $15.00  $ 9.71   $ 7.94  $ 5.88

	On August 7, 1999 and October 1, 1999 we acquired two homebuilding
companies.  As part of the purchase price 1,845,359 shares of
unregistered Class A Common Stock were issued to the sellers.  At October
31, 2002, 47,619 of these shares are being held in escrow (and thus not
reported as issued and outstanding).  There were no underwriters
associated with these transactions.  These shares were issued in private
transactions in reliance upon Section 4(2) of the Securities Act of 1933.

	Certain debt instruments to which we are a party contain
restrictions on the payment of cash dividends.  As a result of the most
restrictive of these provisions, approximately $115,183,000 of retained
earnings was free of such restrictions at October 31, 2002.  We have
never paid a cash dividend nor do we currently intend to pay dividends.


ITEM 6 - SELECTED CONSOLIDATED FINANCIAL DATA

	The following table sets forth selected financial data and should be read
in conjunction with the financial statements included elsewhere in this Form 10-
K.  Per common share data and weighted average number of common shares
outstanding reflect all stock splits.



                                                    Year Ended
                              ----------------------------------------------------
Summary Consolidated           October      October   October   October   October
Income Statement Data          31, 2002     31, 2001  31, 2000  31, 1999  31, 1998
- ----------------------------- ----------  ----------  --------  --------- --------
                                                           
                                      (In Thousands Except Per Share Data)
Revenues.....................$2,551,106  $1,741,990  $1,135,559  $946,414  $937,729
Expenses..................... 2,324,481   1,635,636   1,083,741   895,797   896,437
                              ----------  ----------  --------- --------- ---------
Income before income
  taxes and extraordinary loss  226,625     106,354      51,818    50,617    41,292
State and Federal income taxes.  88,347      42,668      18,655    19,674    15,141
Extraordinary loss...........      (582)                            (868)     (748)
                              ----------  ----------  --------- ---------  ---------
Net income................... $ 137,696  $   63,686  $   33,163  $ 30,075  $ 25,403
                              ==========  ==========  =========  ========  =========
Per Share Data:
Basic:
  Income before
    extraordinary loss....... $    4.55  $     2.38  $     1.51  $   1.45  $  1.20
  Extraordinary loss.........      (.02)                            (.04)    (0.03)
                              ----------  ----------  --------- ---------  --------
  Net income................. $    4.53  $     2.38  $     1.51  $   1.41  $  1.17
                              ==========  ==========  ========= =========  ========
  Weighted average number of
    common shares outstanding..  30,405      26,810      21,933    21,404   21,781

Assuming Dilution:
  Income before
    extraordinary loss....... $    4.30  $     2.29  $     1.50  $   1.43  $  1.19
  Extraordinary loss.........      (.02)                             (.04)   (0.03)
                              ----------  ----------  ---------  ---------  --------
  Net income................. $    4.28  $     2.29  $     1.50  $   1.39  $  1.16
                              ==========  ==========  =========  =========  ========
  Weighted average number of
    common shares outstanding..  32,155      27,792      22,043    21,612    22,016

Summary Consolidated           October      October   October    October   October
Balance Sheet Data             31, 2002     31, 2001  31, 2000   31, 1999  31, 1998
- ----------------------------- ----------  ----------  ---------  --------  --------
Total assets.................$1,678,128  $1,064,258  $  873,541  $712,861  $589,102
Mortgages and notes payable..$  215,365  $  111,795  $   78,206  $110,228  $150,282
Senior notes, participating
  senior subordinated
  debentures and subordinated
  notes......................$ 546,390   $  396,544  $  396,430  $250,000  $145,449
Stockholders' equity.........$ 562,549   $  375,646  $  263,359  $236,426  $201,392

Note:  See Item 7 "Results of Operations" for impact of our 1999, 2001, and 2002
acquisitions in our operating results.



RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS

	For purposes of computing the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred dividends, earnings consist
of earnings (loss) from continuing operations before income taxes, minority
interest, extraordinary items and cumulative effect of accounting changes,
plus fixed charges (interest charges and preferred share dividend requirements
of subsidiaries, adjusted to a pretax basis), less interest capitalized, less
preferred share dividend requirements of subsidiaries adjusted to a pretax
basis and less undistributed earnings of affiliates whose debt is not
guaranteed by us.

	The following table sets forth the ratios of earnings to fixed charges
and earnings to combined fixed charges and preferred dividends for the periods
indicated:

                                       Years Ended October 31,
                           --------------------------------------------------
                             2002       2001      2000      1999      1998
                           --------  --------  --------  --------  ----------
Ratio of earnings to
  fixed charges............    4.7       3.1       2.2       3.0       2.5
Ratio of earnings to
  combined fixed charges
  and preferred stock
  dividends.................   4.7       3.1       2.2       3.0       2.5




ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

	Management believes that the following critical accounting policies
affect its more significant judgments and estimates used in the
preparation of its consolidated financial statements:

	Business Combinations - When we make an acquisition of another
company, we use the purchase method of accounting in accordance with the
Statement of Financial Accounting Standards (SFAS) No. 141 "Business
Combinations".  Under SFAS No. 141 (for acquisitions subsequent to June
30, 2001) and APB 16 (for acquisitions prior to June 30, 2001) we record
as our cost the estimated fair value of the acquired assets less
liabilities assumed.  Any difference between the cost of an acquired
company and the sum of the fair values of tangible and identified
intangible assets less liabilities is recorded as goodwill.  The reported
income of an acquired company includes the operations of the acquired
company from the date of acquisition.

	Income Recognition from Home and Land Sales - Income from home
sales is recorded when each home is closed, title is conveyed to the
buyer, adequate cash payment has been received and there is no continued
involvement.

	Income Recognition from Mortgage Loans - Profits and losses
relating to the sale of mortgage loans are recognized when legal control
pass to the buyer and the sales price is collected.

	Inventories - For inventories of communities under development, a
loss is recorded when events and circumstances indicate impairment and
the undiscounted future cash flows generated are less than the related
carrying amounts.  The impairment loss is based on expected revenue, cost
to complete including interest, and selling costs.  Inventories and long-
lived assets held for sale are recorded at the lower of cost or fair
value less selling costs.  Fair value is defined in the Statement of
Financial Accounting Standards (SFAS)No. 144 "Accounting for the
Impairment of or Disposal of Long-Lived Assets" as the amount at which an
asset could be bought or sold in a current transaction between willing
parties, that is, other than in a forced or liquidation sale.  SFAS No.
144 provides accounting guidance for financial accounting and reporting
for impairment or disposal of long-lived assets.  Construction costs are
accumulated during the period of construction and charged to cost of
sales under specific identification methods.  Land, land development, and
common facility costs are allocated based on buildable acres to product
types within each community, then amortized equally based upon the number
of homes to be constructed in the community.

	Self Insurance Reserves - We are self insured for our worker's
compensation and general liability insurance.  Reserves have been
established based upon actuarial analysis of estimated future losses.

	Interest - Costs related to properties under development are
capitalized during the land development and home construction period and
expensed along with the associated cost of sales as the related
inventories are sold.

	Land Options - Costs are capitalized when incurred and either
included as part of the purchase price when the land is acquired or
charged to operations when we determine we will not exercise the option.
Options that include specific performance terms, which have been
triggered, are recorded on the balance sheet as inventory and other
liabilities.

	Intangible Assets - The intangible assets recorded on our balance
sheet are goodwill and a tradename which is an indefinite life intangible
asset resulting from company acquisitions.  In accordance with the
Financial Accounting Standards No. 142 ("SFAS No. 142") " Goodwill and
Other Intangible Assets", we no longer amortize goodwill or indefinite
life intangibles, but instead assess them periodically for impairment.
We performed such assessments utilizing a fair value approach as of
October 31, 2002, and determined that no impairment of intangibles
existed.

	Post Development Completion Costs - In those instances where a
development is substantially completed and sold and we have additional
construction work to be incurred, an estimated liability is provided to
cover the cost of such work and is recorded in accounts payable and other
liabilities in the accompanying consolidated balance sheets.


CAPITAL RESOURCES AND LIQUIDITY

	Our cash uses during the twelve months ended October 31, 2002 were
for operating expenses, seasonal increases in housing inventories,
construction, income taxes, interest, the repurchase of common stock, the
redemption of subordinated indebtedness, the acquisition of the
California operations of the Forecast Group, L.P. ("Forecast"), and the
acquisition of a land portfolio from another homebuilding company.  We
provided for our cash requirements from housing and land sales, the
revolving credit facility, the issuance of a term loan, the issuance of
$150,000,000 senior subordinated notes, the issuance of $100,000,000
senior notes, financial service revenues, and other revenues.  We believe
that these sources of cash are sufficient to finance our working capital
requirements, acquisitions, and other needs.

	At October 31, 2002 we had approximately $250.0 million of excess
cash.  Management anticipates using the excess cash to grow existing
operations and fund future acquisitions.

	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 receivables,
prepaid and other assets, interest and other accrued liabilities,
accounts payable, inventory levels, mortgage loans and liabilities, and
non-cash charges relating to depreciation, the writeoff of SAP costs, and
impairment losses.  In 2001 and 2000, a portion of the difference was
also due to goodwill amortization.  When we are expanding our operations,
which was the case in fiscal 2002 and 2001, inventory levels increase
causing cash flow from operating activities to decrease.  Liabilities
also increase as inventory levels increase.  The difference between net
income and net operating cash flow is our increased efforts to accelerate
the cash collection process from closing agents and increases in tax and
other liabilities due to a significant increase in business.  The
increase in liabilities partially offsets the negative effect on cash
flow from operations caused by the increase in inventory levels.  As our
mortgage warehouse loan asset increases, cash flow from operations
decrease.  Conversely, as such loans decrease, cash flow from operations
increase.  Depreciation and impairment losses always increase cash flow
from operating activities since they are non-cash charges to operations.

	On December 31, 2000, our stock repurchase program to purchase up
to 4 million shares of Class A Common Stock expired.  As of December 31,
2000, 3,391,047 shares had been purchased under this program.  On July 3,
2001, our Board of Directors authorized a revision to our stock
repurchase program to purchase up to 2 million shares of Class A Common
Stock.  As of October 31, 2002, 606,319 shares have been purchased under
this program, of which 147,619 were repurchased during the twelve months
ended October 31, 2002.

	Our homebuilding bank borrowings are made pursuant to an unsecured
revolving credit agreement (the "Agreement") that provides a revolving
credit line and letter of credit line of up to $440,000,000 through July
2005.  Interest is payable monthly and at various rates of either the
prime rate plus .40% or Libor plus 1.85%.  We believe that we will be
able either to extend the Agreement beyond July 2005 or negotiate a
replacement facility, but there can be no assurance of such extension or
replacement facility.  We currently are in compliance and intend to
maintain compliance with the covenants under the Agreement.  As of
October 31, 2002, there were no borrowings under the Agreement.

	On March 26, 2002, we issued $100,000,000 8% Senior Notes due 2012
and $150,000,000 8 7/8% Senior Subordinated Notes due 2012.  On April 29,
2002, we used a portion of the proceeds to redeem our 9 3/4% Subordinated
Notes due 2005 which had a balance of approximately $99,747,000.  The
early retirement of these notes resulted in an extraordinary loss of
$582,000 net of an income tax benefit of $313,000.  Other senior
indebtedness issued by us and outstanding as of October 31, 2002 was
$150,000,000 10 1/2% Senior Notes due 2007 and $150,000,000 9 1/8% Senior
Notes due 2009.

	On January 22, 2002 we issued a $165,000,000 Term Loan to a group
of banks which is due January 22, 2007.  Interest is payable monthly at
either the prime rate plus 1.25% or LIBOR plus 2.5%.  The proceeds from
the issuance of the Term Loan were primarily used to partially fund the
acquisition of the California operations of Forecast.  As of October 31,
2002 borrowings under the Term Loan were $115,000,000.

	Our mortgage banking subsidiary borrows up to $150,000,000 under a
bank warehousing arrangement that expires in June 2003.  Interest is
payable monthly at the Federal Funds Rate plus 1.375%.  We believe that
we will be able either to extend this agreement beyond June 2003 or
negotiate a replacement facility, but there can be no assurance of such
extension or replacement facility.  As of October 31, 2002 borrowings
under the agreement were $85,498,000.

	Total inventory increased $341,468,000 during the twelve months
ended October 31, 2002.  The increase in inventory was primarily due to
the acquisition of The Forecast Group, LP ("Forecast") and the purchase
of a land portfolio from a builder in our Northeast Region.  In addition,
inventory levels increased slightly in most of our housing markets except
in the Mid-South where we have liquidated our operations and in North
Carolina where the market has slowed down.  Substantially all homes under
construction or completed and included in inventory at October 31, 2002
are expected to be closed during the next twelve months.  Most inventory
completed or under development is financed through our line of credit,
senior and subordinated indebtedness, and cash flows generated from
operations.

	We usually option property for development prior to acquisition.
By optioning property, we are only subject to the loss of a small option
fee and predevelopment costs if we choose not to exercise the option.  As
a result, our commitment for major land acquisitions is reduced.



	The following table summarizes housing lots included in our total
residential real estate:

                               Total         Contracted       Remaining
                               Home              Not             Lots
                               Lots          Delivered        Available
                             --------        ----------       ---------

October 31, 2002:

Northeast Region............  21,399             1,371          20,028
North Carolina..............   7,469               466           7,003
Metro D. C..................  10,576               755           9,821
California..................  10,431               955           9,476
Texas.......................   4,084               277           3,807
Mid South...................      29                 7              22
                             --------        ----------       ---------
     Total..................  53,988             3,831          50,157
                             ========        ==========       =========
Owned.......................  13,362             3,195          10,167
Optioned....................  40,626               636          39,990
                             --------        ----------       ---------
     Total..................  53,988             3,831          50,157
                             ========        ==========       =========

October 31, 2001:

Northeast Region............   15,875            1,136          14,739
North Carolina..............    6,576              534           6,042
Metro D. C..................    7,568              779           6,789
California..................    1,670              172           1,498
Texas.......................    2,828              263           2,565
Mid South...................    1,279              122           1,157
Other.......................    1,009                3           1,006
                             --------        ----------       ---------
     Total..................   36,805            3,009          33,796
                             ========        ==========       =========
Owned.......................   10,970            2,525           8,445
Optioned....................   25,835              484          25,351
                             --------        ----------       ---------
     Total..................   36,805            3,009          33,796
                             ========        ==========       =========


	We expect to fund future acquisitions of home lots contracted not
delivered and remaining lots available principally through cash flows
from operations and through our revolving credit agreement.


	The following table summarizes our started or completed unsold
homes in active and substantially completed communities:

                         October 31,                  October 31,
                            2002                         2001
                --------------------------    -------------------------
                Unsold                        Unsold
                Homes     Models    Total     Homes     Models    Total
                ------    ------    ------    ------    ------    ------

Northeast Region.  73        33       106        69        48       117
North Carolina... 191        18       209       205        41       246
Metro D.C.....     34        25        59        27        27        54
California....    193        61       254        60        11        71
Texas.........    261         8       269       215        15       230
Mid South.....      2        --         2        54        22        76
Other.........     --        --        --         7        --         7
                ------    ------    ------    ------    ------    ------
   Total          754       145       899       637       164       801
                ======    ======    ======    ======    ======    ======

	Financial Services - mortgage loans held for sale consist of
residential mortgages receivable of which $91,339,000 and $105,174,000 at
October 31, 2002 and October 31, 2001, respectively, are being
temporarily warehoused and awaiting sale in the secondary mortgage
market.  The balance of mortgage loans held for sale are being held as an
investment.  We may incur risk with respect to mortgages that are
delinquent, but only to the extent the losses are not covered by mortgage
insurance or resale value of the house.  Historically, we have incurred
minimal credit losses.



RESULTS OF OPERATIONS

	Our operations consist primarily of residential housing development
and sales in our Northeast Region (New Jersey, southern New York state,
and eastern Pennsylvania), North Carolina, Metro D. C. (northern Virginia
and Maryland), California, Texas, and the Mid-South (Tennessee, Alabama,
and Mississippi).  During the year ended October 31, 2002, we
substantially liquidated our operations in the Mid-South.  In addition,
we provide financial services to our homebuilding customers.


Total Revenues

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

                                            Year Ended
                                  -------------------------------
                                  October    October    October
                                  31, 2002   31, 2001   31, 2000
                                  ---------  ---------  ---------
                                      (Dollars in Thousands)
Homebuilding:
  Sale of homes...................$ 768,378  $ 588,251  $ 196,913
  Land sales and other revenues...   31,396      6,076     (6,334)
Financial services................    9,342     12,104     (1,434)
                                  ---------  ---------  ---------
     Total change.................$ 809,116  $ 606,431  $ 189,145
                                  =========  =========  =========
  Percent change.................     46.4%      53.4%      20.0%
                                  =========  =========  =========



Homebuilding

	Compared to the same prior period, housing revenues increased
$768.4 million or 45.4% for the year ended October 31, 2002, increased
$588.3 million or 53.2% for the year ended October 31, 2001, and
increased $196.9 million or 21.7% for the year ended October 31, 2000.
Housing revenues are recorded at the time each home is delivered and
title and possession have been transferred to the buyer.

	Information on homes delivered by market area is set forth below:

                                         Year Ended
                              -----------------------------------
                               October       October     October
                               31, 2002      31, 2001    31, 2000
                              -----------   ---------   ---------
                                   (Dollars in Thousands)
Northeast Region:
  Housing Revenues............$   660,250  $  570,647  $  561,422
  Homes Delivered.............      2,144       1,860       1,939

North Carolina(2):
  Housing Revenues............$   264,055  $  255,390  $  126,596
  Homes Delivered.............      1,421       1,449         653

Metro D.C.(2):
  Housing Revenues............$   396,273  $  310,815  $   66,137
  Homes Delivered.............      1,385       1,294         263

California(1):
  Housing Revenues............$   852,373  $  280,582  $  143,729
  Homes Delivered.............      3,220         760         480

Texas:
  Housing Revenues............$   240,181  $  215,045  $  186,294
  Homes Delivered.............      1,033       1,003         914

Mid South(2):
  Housing Revenues............$    48,510  $   44,372          --
  Homes Delivered.............        305         290          --

Other:
  Housing Revenues............$       453  $   16,866  $   21,288
  Homes Delivered.............          6         135         118

Totals:
  Housing Revenues............$ 2,462,095  $1,693,717  $1,105,466
  Homes Delivered.............      9,514       6,791       4,367

(1) October 31, 2002 includes deliveries from the Forecast
    Acquisition beginning on January 10, 2002.

(2) October 31, 2001 includes deliveries from the Washington Homes,
    Inc. merger beginning on January 24, 2001.

The following pro forma information for the years ended October 31,
2002 and 2001 have been prepared as if the merger with Washington Homes,
Inc. on January 23, 2001 and the acquisition of Forecast on January 10,
2002 had occurred on November 1, 2000.  Total pro forma housing revenues
were $2,526,000 and $2,242,000 and total homes delivered were 9,789 and
9,306 as of October 31, 2002 and 2001, respectively.

	The increase in housing revenues was primarily due to the
acquisition of Forecast and a full year of operations from Washington
Homes, Inc.  In addition, these increases were due to increased
deliveries in the Northeast Region resulting from a land portfolio
acquisition in late March 2002, and increased average sales prices in all
our markets except California.  California's average sales price is down
due to the Forecast Group product being mostly lower priced, first time
buyer homes.


	Unaudited quarterly housing revenues and net sales contracts using
base sales prices by market area for the years ending October 31, 2002,
2001, and 2000 are set forth below:

                                         Quarter Ended
                           ------------------------------------------
                           October      July      April     January
                           31, 2002   31, 2002   30, 2002   31, 2002
                           ---------  ---------  ---------  ---------
                                         (In Thousands)
Housing Revenues:
  Northeast Region........ $ 205,079  $ 177,153  $ 145,249  $ 132,769
  North Carolina..........    70,153     72,437     64,784     56,681
  Metro D.C...............   137,518    110,030     78,333     70,392
  California(1)...........   316,412    242,631    178,688    114,642
  Texas...................    67,403     65,432     52,820     54,526
  Mid South...............     8,717     13,646     12,512     13,635
  Other...................        --         --         --        453
                           ---------  ---------  ---------  ---------
      Total............... $ 805,282  $ 681,329  $ 532,386  $ 443,098
                           =========  =========  =========  =========
Sales Contracts (Net of
  Cancellations):
  Northeast Region........ $ 154,623  $ 148,390  $ 165,148  $ 109,689
  North Carolina..........    49,938     55,660     89,394     53,794
  Metro D. C..............    88,864     98,828    164,098     78,993
  California(1)...........   283,607    288,885    261,002     84,122
  Texas...................    55,893     54,437     73,145     43,827
  Mid South...............     3,206      6,443      9,053     11,025
  Other...................        --         --         --        340
                           ---------  ---------  ---------  ---------
      Total............... $ 636,131  $ 652,643  $ 761,840  $ 381,790
                           =========  =========  =========  =========

(1) Quarter ended January 31, 2002 includes housing revenues and sales
contracts from Forecast Homes beginning on January 10, 2002.

                                        Quarter Ended
                           ------------------------------------------
                           October      July      April     January
                           31, 2001   31, 2001   30, 2001   31, 2001
                           ---------  ---------  ---------  ---------
                                         (In Thousands)
Housing Revenues:
  Northeast Region........ $163,955   $156,366   $126,700   $123,626
  North Carolina(2).......   77,248     85,887     60,457     31,798
  Metro D.C.(2)...........   89,472    109,535     74,263     36,691
  California..............  109,099     61,830     65,339     44,314
  Texas...................   68,441     62,360     46,434     37,810
  Mid South(2)............   10,675     18,774     11,846      3,077
  Other...................      830      2,539      8,262      6,089
                           ---------  ---------  ---------  ---------
      Total............... $519,720   $497,291   $393,301   $283,405
                           =========  =========  =========  =========
Sales Contracts (Net of
  Cancellations):
  Northeast Region........ $109,585   $119,073   $155,693   $125,433
  North Carolina(2).......   55,041     59,873    109,483     41,651
  Metro D. C.(2)..........   75,384     77,253    138,957     32,009
  California..............   38,350     66,794     88,620     65,547
  Texas...................   45,299     63,640     64,343     37,177
  Mid South(2)............   11,801     12,394     20,299      3,806
  Other...................      287        279        442        857
                           ---------  ---------  ---------  ---------
      Total............... $335,747   $399,306   $577,837   $306,480
                           =========  =========  =========  =========

(2) Quarter ended January 31, 2001 includes housing revenues and sales
    contracts from Washington Homes beginning on January 24, 2001.

                                         Quarter Ended
                           ------------------------------------------
                           October      July      April     January
                           31, 2000   31, 2000   30, 2000   31, 2000
                           ---------  ---------  ---------  ---------
                                         (In Thousands)
Housing Revenues:
  Northeast Region........ $188,770   $131,668   $113,732   $127,252
  North Carolina..........   35,016     33,319     30,891     27,370
  Metro D.C...............   18,932     13,901     17,459     15,845
  California..............   39,725     48,055     30,313     25,636
  Texas...................   52,188     47,318     37,573     49,215
  Other...................    7,658      3,743      5,087      4,800
                           ---------  ---------  ---------  ---------
      Total............... $342,289   $278,004   $235,055   $250,118
                           =========  =========  =========  =========
Sales Contracts (Net of
  Cancellations):
  Northeast Region........ $121,179   $115,649   $174,126   $109,040
  North Carolina..........   29,317     32,338     33,980     26,892
  Metro D. C..............   20,354     23,459     25,144     13,449
  California..............   43,551     41,350     52,114     23,839
  Texas...................   51,251     54,708     46,671     39,830
  Other...................    4,571      4,412     10,685      4,193
                           ---------  ---------  ---------  ---------
      Total............... $270,223   $271,916   $342,720   $217,243
                           =========  =========  =========  =========


	Our contract backlog using base sales prices by market area is set
forth below:

                                 October      October      October
                                 31, 2002     31, 2001     31, 2000
                                 ---------    ---------    ---------
                                      (Dollars in Thousands)
Northeast Region:
   Total Contract Backlog........$  416,264   $322,100     $311,539
   Number of Homes...............     1,397      1,160        1,149

North Carolina:
   Total Contract Backlog........$   88,291   $103,616     $ 40,635
   Number of Homes...............       466        534          215

Metro D.C.:
   Total Contract Backlog........$  243,391   $208,888     $ 52,339
   Number of Homes...............       755        779          215

California:
   Total Contract Backlog........$  267,305   $ 53,338     $ 58,089
   Number of Homes...............       955        172          151

Texas:
   Total Contract Backlog........$   60,532   $ 64,961     $ 61,703
   Number of Homes...............       277        263          282

Mid South:
   Total Contract Backlog........$      945   $ 19,734           --
   Number of Homes...............         7        122           --

Other:
   Total Contract Backlog........$       --   $    437     $ 14,241
   Number of Homes...............        --          3           84

Totals:
   Total Contract Backlog........$1,076,728   $773,074     $538,546
   Number of Homes...............     3,857      3,033        2,096

	The following pro forma information at October 31, 2001 has been
prepared as if the acquisition of Forecast Homes on January 10, 2002 had
occurred on October 31, 2001.  Total pro forma contract backlog was
$863,193 and total homes in backlog were 3,445 as of October 31, 2001.

	We have written down or written off certain inventories totaling
$8.2, $4.4, and $1.8 million during the years ended October 31, 2002,
2001, and 2000, respectively, to their estimated fair value.  See "Notes
to Consolidated Financial Statements - Note 11" for additional
explanation.  These write-downs and write-offs were incurred primarily
because of lower property values, a change in the marketing strategy to
liquidate a particular property, or the decision not to exercise certain
options to purchase land.

	During the years ended October 31, 2002, 2001, and 2000, we wrote
off residential land options including approval and engineering costs
amounting to $4.0, $1.9, and $1.8 million, respectively, which are
included in the total write-offs mentioned above.  We did not exercise
those options because the communities' proforma profitability did not
produce adequate returns on investment commensurate with the risk.  Those
communities were located in New Jersey, New York, Metro D. C., North
Carolina, California, and Poland.

	The write-down of residential inventory during the year ended
October 31, 2002 was attributed to Poland and the Mid-South.  The write-
down in Poland was based upon changes in market conditions.  In the Mid-
South, land was written down based on a purchase offer.  We have made a
decision to discontinue selling homes in these two markets and offer the
remaining lots for sale.  The result of the above decisions was a
reduction in inventory carrying amounts to fair value, resulting in a
$4.2 million impairment loss.

	During the year ended October 31, 2001, we wrote down two
residential communities in the Northeast Region, one community in North
Carolina, and two land parcels in Florida.  The write-down in the
Northeast Region was attributed to two communities that were part of a
large land acquisition, which resulted in a loss.  The write-downs in
North Carolina and Florida were based upon changes in market conditions.
The result of the above decisions was a reduction in inventory carrying
amounts to fair value, resulting in a $2.5 million impairment loss.



	Cost of sales includes expenses for housing and land and lot sales.
A breakout of such expenses for housing sales and housing gross margin is
set forth below:

                                       Year Ended
                             -----------------------------------
                              October      October     October
                              31, 2002     31, 2001     31, 2000
                             -----------   ---------   ---------
                                  (Dollars In Thousands)

Sale of homes..............  $2,462,095  $1,693,717  $1,105,466
Cost of sales..............   1,919,941   1,344,708     876,492
                             -----------   ---------   ---------
Housing gross margin.......  $  542,154  $  349,009  $  228,974
                             ===========   =========   =========
Gross margin percentage....       22.0%       20.6%       20.7%
                             ===========   =========   =========

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

                                      Year Ended
                             ---------------------------------
                             October     October     October
                             31, 2002    31, 2001    31, 2000
                             ---------   ---------   ---------

Sale of homes..............    100.0%      100.0%      100.0%
                             ---------   ---------   ---------
Cost of sales:
  Housing, land and
   development costs.......      70.6       71.5        71.1
  Commissions..............       2.2        2.3         2.2
  Financing concessions....       1.0        1.0         0.9
  Overheads................       4.2        4.6         5.1
                             ---------   ---------   ---------
Total cost of sales........      78.0       79.4        79.3
                             ---------   ---------   ---------
Gross margin percentage....     22.0%       20.6%       20.7%
                             =========   =========   =========

	We sell a variety of home types in various local communities, each
yielding a different gross margin.  As a result, depending on the mix of
both the communities and of home types delivered, consolidated gross
margin will fluctuate up or down.  We achieved higher gross margins
during the year ended October 31, 2002 compared to the same period last
year.  The consolidated gross margin percentage increased 1.4% from the
previous year primarily due to higher sales prices and increased national
contract rebates, which slightly lowered our housing costs.  Gross
margins for the year ended October 31, 2002 increased in our Metro D. C.
market, California market, (excluding Forecast communities), and in our
highest margin market, the Northeast region.  During the year ended
October 31, 2001, our gross margin percentage decreased 0.1% from the
previous year.  This decrease was due to the Washington Homes, Inc.
merger, which significantly increased our activity in Metro D. C. and
North Carolina and added markets in the Mid-South region that
collectively have a lower average sales price and gross margin than the
averages for our other markets.  On an individual market basis all of our
markets showed an increase in gross margin percentage primarily resulting
from increased sales prices for the years ended October 31, 2002, 2001,
and 2000.  The dollar increases in gross margin for each of the three
years ended October 31, 2002, 2001, and 2000 were attributed to increased
sales, primarily resulting from the acquisition of Forecast Homes in 2002
and the merger with Washington Homes in 2001.

	Selling, general, and administrative expenses as a percentage of
homebuilding revenues decreased to 7.8% for the year ended October 31,
2002 and decreased to 8.2% for the year ended October 31, 2001 from 9.4%
for the year ended October 31, 2000.  Such expenses increased to $194.9
million for the year ended October 31, 2002 and increased to $140.1
million for the year ended October 31, 2001 from $104.8 million for the
previous year.  The percentage decline for the years ended October 31,
2002 and 2001 was due to increased deliveries.  The increased spending
year over year was primarily due to the acquisition of the Forecast Group
in fiscal year 2002 and Washington Homes in fiscal year 2001.


Land Sales and Other Revenues

	Land sales and other revenues consist primarily of land and lot
sales.  A breakout of land and lot sales is set forth below:

                                                Year Ended
                                       ----------------------------
                                       October   October   October
                                       31, 2002  31, 2001  31, 2000
                                       --------  --------  --------
                                              (In Thousands)

Land and lot sales...................  $42,312   $11,356   $ 6,549
Cost of sales........................   35,897    10,646     3,971
                                       --------  --------  --------
Land and lot sales gross margin......  $ 6,415   $   710   $ 2,578
                                       ========  ========  ========

Land and lot sales are incidental to our residential housing
operations and are expected to continue in the future but may
significantly fluctuate up or down.

	Year ended October 2000 land and lot sales gross margin includes a
legal settlement in California amounting to $1,924,000.


Financial Services

	Financial services consists primarily of originating mortgages from
our homebuyers, selling such mortgages in the secondary market, and title
insurance activities.  During the years ended October 31, 2002 and
October 31, 2001, financial services provided a $18.2 and $10.0 million
pretax profit, respectively.  During the year ended October 31, 2000,
financial services resulted in a $0.5 million loss before income taxes.
The increases in 2002 and 2001 were primarily due to a change in
management, reduced costs, increased mortgage loan amounts, and the
addition of mortgage operations from the merger with Washington Homes for
a full year and the acquisition of Forecast Homes.  In addition to our
wholly-owned mortgage subsidiaries, customers obtained mortgages from our
mortgage joint venture in our Texas division in 2001 and 2000,
respectively, and our Forecast division in 2002.  In the market areas
served by our wholly-owned mortgage banking subsidiaries, approximately
71%, 57%, and 54% of our non-cash homebuyers obtained mortgages
originated by these subsidiaries during the years ended October 31, 2002,
2001, and  2000, respectively.  Servicing rights on new mortgages
originated by us will be sold as the loans are closed.


Corporate General and Administrative

	Corporate general and administrative expenses include the
operations at our headquarters in Red Bank, New Jersey.  Such expenses
include our executive offices, information services, human resources,
corporate accounting, training, treasury, process redesign, internal
audit, construction services, and administration of insurance, quality,
and safety.  As a percentage of total revenues, such expenses were 2.0%,
2.5%, and 2.9% for the years ended October 31, 2002, 2001, and 2000,
respectively.  The percentage decrease during the years ended October 31,
2002 and 2001 was due to increased housing revenues.  Our long term
improvement initiatives included total quality, process redesign, which
included the implementation of a software system (net of capitalized
expenses), and training.  Such initiatives resulted in additional
expenses for the years ended October 31, 2002, 2001, and 2000 which were
not capitalized amounting to $4.1 million, $7.2 million, and $6.9
million, respectively.  During the year ended October 31, 2002 we wrote
off $12.4 million of unamortized, capitalized costs associated with these
initiatives.  See Asset Write-off Section of Management's Discussion.


Interest

	Interest expense includes housing, and land and lot interest.
Interest expense is broken down as follows:


                                           Year Ended
                                 -------------------------------
                                 October    October    October
                                 31, 2002   31, 2001   31, 2000
                                 ---------  ---------  ---------
                                          (In Thousands)

Sale of homes..................  $ 59,276   $ 51,046   $ 34,541
Land and lot sales.............     1,095        400        415
                                 ---------  ---------  ---------
Total..........................  $ 60,371   $ 51,446   $ 34,956
                                 =========  =========  =========

Housing interest as a percentage of sale of home revenues amounted
to 2.4%, 3.0%, and 3.1% for the years ended October 31, 2002, 2001, and
2000, respectively.  The decreases are primarily the result of increased
equity and quicker inventory turnover.  Inventory turnover is up as a
result of the acquisition of Forecast Homes and the merger with
Washington Homes where a larger portion of their purchases are finished
lots requiring shorter holding periods until homes are delivered.


Other Operations

	Other operations consist primarily of miscellaneous residential
housing operations expenses, senior residential property operations,
amortization of senior and senior subordinated note issuance expenses,
earnout payments from homebuilding company acquisitions, amortization of
the Forecast consultant's agreement and the right of first refusal
agreement, expenses related to exiting our Mid-South market, minority
interest relating to joint ventures, corporate owned life insurance loan
interest, and contributions.  For the year ended October 31, 2002, other
operations increased primarily due to the amortization of the Forecast
consulting and right of first refusal agreements (starting in 2002),
increased amortization of senior and subordinated note issuance expenses,
and an increase in minority interest due to a new joint venture in our
Northeast Region.


Restructuring Charges

	Restructuring charges are estimated expenses associated with
the merger of our operations with those of Washington Homes, Inc. as a
result of the merger on January 23, 2001.  Under our merger plan,
administration offices in Maryland, Virginia, and North Carolina were
either closed, relocated, or combined.  The merger of administration
offices was completed by July 31, 2001.  At January 31, 2001, expenses
were accrued for salaries, severance and outplacement costs for the
involuntary termination of associates, costs to close and/or relocate
existing administrative offices, and lost rent and leasehold
improvements.  During the year ended October 31, 2001 our estimate for
restructuring charges was increased to a total of $3.2 million.  We have
provided for the termination of 65 associates.  We accrued approximately
$2.0 million to cover termination and related costs.  Associates being
terminated were primarily administrative.  In addition, we accrued
approximately $1.2 million to cover closing and/or relocation of various
administrative offices in these three states.  At October 31, 2002 all
costs have been charged against this accrual.


Asset Write Off

	We wrote off costs during the year ended October 31, 2002
associated with SAP, our enterprise-wide operating software, totaling
$12.4 million pretax included in Restructuring Charges/Asset Write Off in
the accompanying consolidated statements of income or $7.6  million after
taxes equal to $0.24 per fully diluted share.  These unamortized costs
are those associated with the development of the SAP system.  We were not
successful in implementing SAP, due to the complexities and limitations
in the software program.  We have $2.1 million initiative costs
remaining, all of which will be amortized over the remaining life of the
communities using SAP software, which are scheduled to be substantially
complete by the end of 2003.  We have recently identified an alternative
software package that will offer us the information system functionality
we need.  Our first pilot community is on line and is utilizing this
software package.



Recent Accounting Pronouncements

	In December 2001, the Accounting Standards Executive Committee of
the American Institute of Certified Public Accountants ("AICPA") issued
Statement of Position 01-6, "Accounting by Certain Entities (Including
Entities With Trade Receivables) That Lend to or Finance the Activities
of Others", ("SOP 01-6").  SOP 01-6 is effective for annual and interm
financial statements issued for fiscal years beginning after December 31,
2001.  Under SOP 01-6, Mortgage companies are explicitly subject to new
accounting rules and reporting and disclosure requirements, including
disclosures about regulatory capital and net worth requirements.  SOP 01-
6 also requires the carrying amounts of loans and servicing rights to be
allocated using relative fair values in a manner consistent with SFAS No.
140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities".  We do not anticipate that the adoption
of SOP 01-6 will have a material effect on the financial position or
results of operations of our Company.

	In April 2002, the Financial Accounting Standards Board issued
(SFAS) No. 145, "Reporting Gains and Losses from Extinguishment of Debt",
which rescinded SFAS No. 4, No. 44, and No. 64 and amended SFAS No. 13.
The new standard addresses the income statement classification of gains
or losses from the extinguishment of debt and criteria for classification
as extraordinary items.  We will adopt SFAS No. 145 effective for our
fiscal year beginning November 1, 2002.  Certain amounts in our prior
year financial statements will be reclassified to conform to the new
presentation.

	In June 2002, the Financial Accounting Standards Board issued
(SFAS) No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities".  SFAS No. 146 addresses financial accounting and reporting
for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to
Exit an Activity (including certain costs incurred in a restructuring)".
SFAS No. 146 requires recognition of a liability for a cost associated
with an exit or disposal activity when the liability is incurred as
opposed to when the entity commits to an exit plan as prescribed under
EITF No. 94-3.  SFAS No. 146 is effective for exit or disposal activities
initiated after December 31, 2002. We do not anticipate that the adoption
of SFAS 146 will have a material effect on the financial position or
results of operations of our Company.



Total Taxes

	Total taxes as a percentage of income before taxes amounted to
approximately 39.0%, 40.1%, and 36.0% for the years ended October 31,
2002, 2001, and 2000, respectively.  The decrease in this percentage from
2001 to 2002 is primarily attributed to a decrease in the effective
federal income tax rate.  This decreased federal effective rate is due
primarily to a reserve set up in 2001 for potential adjustments.
Deferred federal and state income tax assets primarily represent the
deferred tax benefits arising from temporary differences between book and
tax income which will be recognized in future years as an offset against
future taxable income.  If for some reason the combination of future
years income (or loss) combined with the reversal of the timing
differences results in a loss, such losses can be carried back to prior
years to recover the deferred tax assets.  As a result, management is
confident such deferred tax assets reflected in the balance sheet are
recoverable regardless of future income.  (See "Notes to Consolidated
Financial Statements - Note 10" for an additional explanation of taxes.)


Extraordinary Loss

	On April 29, 2002, we redeemed our 9 3/4% Subordinated Notes due
2005.  The early retirement of these notes resulted in an extraordinary
loss of $582,000 net of income taxes of $313,000.


Inflation

	Inflation has a long-term effect on us because increasing costs of
land, materials, and labor result in increasing sale prices of our homes.
In general, 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 costs, including land and
interest costs, will substantially outpace increases in the income of
potential purchasers.  In recent years, in the price ranges in which our
homes sell, we have not found this risk to be a significant problem.

	Inflation has a lesser short-term effect on us because we generally
negotiate fixed price contracts with 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 four to twelve months.  Construction costs for
residential buildings represent approximately 57% of our homebuilding
cost of sales.


Mergers and Acquisitions

	On January 23, 2001 we merged with Washington Homes, Inc. for a
total purchase price of $87.4 million, of which $38.5 million was paid in
cash and 6,352,900 shares of our Class A common stock were issued.  At
the date of merger we loaned Washington Homes, Inc. approximately $57.0
million to pay off their third party debt.  On January 10, 2002 we
acquired The Forecast Group, L.P. for a total purchase price of $196.5
million, of which $151.6 million was paid in cash and 2,208,738 shares of
our Class A common stock were issued.  At the date of acquisition we also
paid off approximately $88.0 million of Forecast's third party debt.


Safe Harbor Statement

	All statements in this Form 10-K that are not historical facts
should be considered as "Forward-Looking Statements" within the meaning
of the Private Securities Litigation Act of 1995.  Such statements
involve known and unknown risks, uncertainties and other factors that may
cause actual results, performance or achievements expressed or implied by
the forward looking statements.  Such risks, uncertainties and other
factors include, but are not limited to:
	.  Changes in general and local economic and business conditions
	.  Weather conditions
	.  Changes in market conditions
	.  Changes in home prices and sales activity in the markets where
           the Company builds homes
	.  Government regulation, including regulations concerning
           development of land, the homebuilding process, and the
           environment
	.  Fluctuations in interest rates and the availability of mortgage
           financing
	.  Increases in raw materials and labor costs
	.  The availability and cost of suitable land and improved lots
	.  Levels of competition
	.  Availability of financing to the Company
	.  Terrorist acts and other acts of war

	These risks, uncertainties, and other factors are described in
detail in Item 1 and 2 Business and Properties in this Form 10-K for the
year ended October 31, 2002.

Item 7(A) - Quantitative and Qualitative Disclosures About Market Risk.

	The primary market risk facing us is interest rate risk on our long
term debt.  In connection with our mortgage operations, mortgage loans
held for sale and the associated mortgage warehouse line of credit are
subject to interest rate risk; however, such obligations reprice
frequently and are short-term in duration.  In addition, we hedge the
interest rate risk on mortgage loans by obtaining forward commitments
from FNMA, FHLMC, GNMA securities and private investors.  Accordingly the
risk from mortgage loans is not material.  We do not hedge interest rate
risk other than on mortgage loans using financial instruments.  We are
also subject to foreign currency risk but this risk is not material.  The
following tables set forth as of October 31, 2002 and 2001, our long term
debt obligations, principal cash flows by scheduled maturity, weighted
average interest rates and estimated fair market value ("FMV").  There
have been no significant changes in our market risk from October 31, 2001
to October 31, 2002.



                      As of October 31, 2002 for the
                           Year Ended October 31,
                   --------------------------------------
                                                                                   FMV @
                    2003    2004    2005    2006    2007   Thereafter   Total    10/31/02
                   ------  ------  ------  ------  ------  ----------  ------  ----------
                                                       
                                         (Dollars in Thousands)
Long Term Debt(1):
  Fixed Rate.......$14,177 $   75  $   81  $   88  $   96  $ 550,349   $564,866  $549,991
  Average interest
    rate........... 10.31%  8.38%   8.38%   8.38%    8.38%     9.23%      9.25%        --
  Variable rate....    --     --      --      --   $115,000      --    $115,000  $115,000
  Average interest
    rate...........    --     --      --      --        (2)      --          --        --

                      As of October 31, 2001 for the
                           Year Ended October 31,
                   --------------------------------------
                                                                                   FMV @
                    2002    2003    2004    2005    2006   Thereafter   Total    10/31/01
                   ------  ------  ------  ------  ------  ----------  --------  ---------
                                         (Dollars in Thousands)
Long Term Debt(1):
  Fixed Rate.......$ 8,919 $2,577  $   75  $  81   $  88   $ 400,193   $411,933  $406,192
  Average interest
    rate...........  6.65%  7.04%   8.38%  8.38%   8.38%       9.80%      9.71%        --


(1) Does not include bonds collateralized by mortgages receivable.
(2) Libor plus 2.5%



Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

	Financial statements of Hovnanian Enterprises, Inc. and its
consolidated subsidiaries are set forth herein beginning on Page F-1.


Item 9 - CHANGES IN OR DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

	During the years ended October 31, 2002, 2001, and 2000, there have
not been any changes in or disagreements with accountants on accounting
and financial disclosure.


PART III


Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

	The information called for by Item l0, except as set forth below
under the heading "Executive Officers of the Registrant", is incorporated
herein by reference to our definitive proxy statement to be filed
pursuant to Regulation l4A, in connection with the Company's annual
meeting of shareholders to be held on March 7, 2003, which will involve
the election of directors.

Executive Officers of the Registrant

	Our executive officers are listed below and brief summaries of
their business experience and certain other information with respect to
them are set forth following the table.  Each executive officer holds
such office for a one year term.

                                                           Year Started
       Name             Age       Position                 With Company

Kevork S. Hovnanian      79   Chairman of the Board and            l967
                              Director of the Company.

Ara K. Hovnanian         45   Chief Executive Officer, President   1979
                              and Director of the Company.

Paul W. Buchanan         52   Senior Vice President-Corporate      l981
                              Controller.

Geaton A. DeCesaris, Jr. 47   President of Homebuilding Operations
                              And Chief Operating Officer and
                              Director of the Company              2001

Kevin C. Hake            43   Vice President, Finance and          2000
                              Treasurer

Peter S. Reinhart        52   Senior Vice President and General    1978
                              Counsel

J. Larry Sorsby          47   Executive Vice President and         1988
                              Chief Financial Officer and
                              Director of the Company

	Mr. K. Hovnanian founded the predecessor of the Company in l959
(Hovnanian Brothers, Inc.) and has served as Chairman of the Board of the
Company since its incorporation in l967.  Mr. K. Hovnanian was also Chief
Executive Officer of the Company from 1967 to July 1997.

	Mr. A. Hovnanian was appointed President in April 1988, after
serving as Executive Vice President from March 1983.  He has also served
as Chief Executive Officer since July 1997.  Mr. A. Hovnanian was elected
a Director of the Company in December l98l.  Mr. A. Hovnanian is the son
of Mr. K. Hovnanian.

	Mr. Buchanan has been Senior Vice President-Corporate Controller
since May l990.  Mr. Buchanan resigned as a Director of the Company on
September 13, 2002, in which he served since March 1982, for the purpose
of reducing the number of non-independent board members.

	Mr. DeCesaris was appoiinted President of Homebuilding Operations
and Chief Operating Officer in January 2001.  From August 1988 to January
2001, he was President, Chief Executive Officer and a Director of
Washington Homes, Inc. ("WHI") and from April 1999 Chairman of the Board
of WHI.

	Mr. Hake joined the Company in July 2000 as Vice President, Finance
and Treasurer.  Prior to joining the Company, Mr. Hake was Director, Real
Estate Finance at BankBoston Corporation from 1994 to June 2000.

	Mr. Reinhart has been Senior Vice President and General Counsel
since April 1985.  Mr. Reinhart resigned as a Director of the Company on
September 13, 2002, in which he served since December l98l, for the
purpose of reducing the number of non-independent board members.

	Mr. Sorsby was appointed Executive Vice President and Chief
Financial Officer of the Company in October 2000 after serving as Senior
Vice President, Treasurer, and Chief Financial Officer from February 1996
and as Vice President-Finance/Treasurer of the Company since March 1991.



Item 11 - EXECUTIVE COMPENSATION

	The information called for by Item ll is incorporated herein by
reference to our definitive proxy statement to be filed pursuant to
Regulation l4A, in connection with our annual meeting of shareholders to
be held on March 7, 2003, which will involve the election of directors.

Item 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
          AND RELATED STOCKHOLDER MATTERS

	The information called for by Item l2 is incorporated herein by
reference to our definitive proxy statement to be filed pursuant to
Regulation l4A, in connection with our annual meeting of shareholders to
be held on March 7, 2003, which will involve the election of directors.

	The following table provides information as of October 31, 2002
with respect to compensation plans (including individual compensation
arrangements) under which our equity securities are authorized for
issuance.



                                      Equity Compensation Plan Information

                              Number of           Weighted        Number of securities
                             securities            average         remaining available
                               to be            exercise price     for future issuance
                             issued upon        of outstanding        under equity
                             exercise of           options,        compensation plans
                             outstanding           warrants       (excluding securities
                          options, warrants      and rights            reflected in
                             and rights                                 column (a)
Plan Category              (in thousands)                             (in thousands)
- -------------            -------------------   ---------------   ----------------------
                                                        
                               (a)                   (b)                   (c)
Equity compensation
  plans approved by
  security holders            3,276                 9.29                    1,230

Equity compensation
  plans not approved
  by security holders
                         -------------------    ---------------    --------------------
                  Total       3,276                 9.29                    1,230
                         -------------------    ---------------    --------------------



Item 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

	The information called for by Item l3 is incorporated herein by
reference to our definitive proxy statement with the exception of the
information regarding certain relationships as described below to be
filed pursuant to Regulation l4A, in connection with our annual meeting
of shareholders to be held on March 7, 2003, which will involve the
election of directors.

	The weighted average interest rate on Mr. K. Hovnanian and Mr. A.
Hovnanian related party debt was 1.79%, 3.90%, and 5.87% for the years
ended October 31, 2002, 2001, and 2000, respectively.  The largest amount
of debt outstanding held by Mr. K. Hovnanian for the years ending October
31, 2002, 2001, and 2000 was $22,000, $56,000, and $386,000,
respectively.  The largest amount of debt outstanding held by Mr. A.
Hovnanian for the years ending October 31, 2002, 2001, and 2000 was
$1,729,000, $3,002,000, and $3,124,000, respectively.  The balance
outstanding for both Mr. K. Hovnanian and Mr. Ara Hovnanian at October
31, 2002 was zero.  The interest rate on six month Treasury bills at
October 31, 2002, 2001, and 2000 was 1.55%, 2.01%, and 6.08%.  During the
years ended October 31, 2002, 2001, and 2000, we received $62,000,
$76,000, and $85,000, respectively, from our affected partnerships.

Item 14 - CONTROLS AND PROCEDURES

	Our chief executive officer and chief financial officer evaluated
the effectiveness of our disclosure controls and procedures (as defined
in Rule 13A-14(c) under the Securities Exchange Act of 1934, as amended)
within 90 days of the filing date of this report (the "Evaluation Date")
and, based on that evaluation, concluded that, as of the Evaluation Date,
we had sufficient controls and procedures for recording, processing,
summarizing and reporting information that is required to be disclosed in
our reports under the Securities Exchange Act of 1934, as amended, within
the time periods specified in the SEC's rules and forms.

	Since the Evaulation Date, there have not been any significant
changes to our internal controls, including any corrective actions with
regard to significant deficiencies and material weaknesses.


PART IV

Item 15 - EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES
          AND REPORTS ON FORM 8-K

                                                                     Page

Financial Statements:

  Index to Consolidated Financial Statements.......................  F-1
  Report of Independent Auditors...................................  F-2
  Consolidated Balance Sheets at October 31, 2002 and 2001.........  F-3
  Consolidated Statements of Income for the years ended
     October 31, 2002, 2001, and 2000..............................  F-5
  Consolidated Statements of Stockholders' Equity for the years
     ended October 31, 2002, 2001, and 2000........................  F-6
  Consolidated Statements of Cash Flows for the years ended
     October 31, 2002, 2001, and 2000..............................  F-7
  Notes to Consolidated Financial Statements.......................  F-8

	No schedules have been prepared because the required information of
such schedules is not present, is not present in amounts sufficient to
require submission of the schedule or because the required information is
included in the financial statements and notes thereto.


Exhibits:

3(a)  Certificate of Incorporation of the Registrant.(1)
3(b)  Certificate of Amendment of Certificate of Incorporation
      of the Registrant.(5)
3(c)  Bylaws of the Registrant.(5)
4(a)  Specimen Class A Common Stock Certificate.(5)
4(b)  Specimen Class B Common Stock Certificate.(5)
4(c)  Indenture dated as of May 4, 1999, relating to 9 1/8% Senior
      Notes between the Registrant and First Fidelity Bank,
      including form of 9 1/8% Senior Notes due May 1, 2009.(6)
4(d)  Indenture dated as of October 2, 2000, relating to 10 1/2%
      Senior Notes between the Registrant and First Union National
      Bank, including form of 10 1/2% Senior Notes due October 1,
      2007.(9)
4(e)  Indenture dated March 26, 2002, relating to 8% Senior Notes
      between the Registrant and First Union National Bank,
      including form of 8% Senior Notes and 8.875% Senior
      Subordinated Notes due April 1, 2012.(10)
4(f)  Indenture dated March 26, 2002, relating to 8.875% Senior
      Subordinated Notes between the Registrant and First Union
      National Bank, including form of 8.875% Senior Subordinated
      Notes due April 1, 2012.(10)
10(a) Amended and Restated Credit Agreement dated June 21, 2002
            among K. Hovnanian Enterprises, Inc., Hovnanian Enterprises,
            Inc., certain subsidiaries Thereof, PNC Bank, National
            Association, First Union National Bank, Fleet National Bank,
            Bank of America, National Association, Bank One, National
            Association, Comerica Bank, Guaranty Bank, AmSouth Bank, Key
            Bank, National Association, National City Bank of
            Pennsylvania, Washington Mutual Bank FA, and Sun Trust
            Bank.(7)
10(b) Description of Management Bonus Arrangements.(5)
10(c) Description of Savings and Investment Retirement Plan.(1)
10(d) 1999 Stock Incentive Plan (as amended and restated March 8,
      2002).
10(e) 1983 Stock Option Plan (as amended and restated March 8,
      2002).
10(f) Management Agreement dated August 12, 1983 for the management
      of properties by K. Hovnanian Investment Properties, Inc.(1)
10(g) Management Agreement dated December 15, 1985, for the
      management of properties by K. Hovnanian Investment
      Properties, Inc.(2)
10(h) Description of Deferred Compensation Plan.(4)
10(i) Senior Executive Short-Term Incentive Plan.(8)
10(j) $165,000,000 Term Loan Credit Agreement.(11)
10(k) $110,000,000 K. Hovnanian Mortgage, Inc. Revolving Credit
      Agreement dated June 7, 2002.(7)
10(l) First Amendment to K. Hovnanian Mortgage, Inc. Revolving
      Credit Agreement dated July 25, 2002.(7)
12    Ratio of Earnings to Fixed Charges
21    Subsidiaries of the Registrant.
23    Consent of Independent Auditors
99(a) Certification of Chief Executive Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes- Oxley Act of 2002.
99(b) Certificatiaon of Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes- Oxley Act of 2002.
(1)   Incorporated by reference to Exhibits to Registration
      Statement (No. 2-85198) on Form S-1 of the Registrant.
(2)   Incorporated by reference to Exhibits to Annual Report on
      Form 10-K for the year ended February 28, 1986 of the
      Registrant.
(3)   Incorporated by reference to Exhibits to Registration
      Statement (No. 33-61778) on Form S-3 of the Registrant.
(4)   Incorporated by reference to Exhibits to Annual Report on
      Form 10-K for the year ended February 28, 1990 of the
      Registrant.
(5)   Incorporated by reference to Exhibits to Annual Report on
      Form 10- K for the year ended February 28, 1994 of the
      Registrant.
(6)   Incorporated by reference to Exhibits to Registration
      Statement (No. 333-75939) on Form S-3 of the Registrant.
(7)   Incorporated by reference to Exhibits to Quarterly Report on
      Form 10Q for the quarter ended July 31, 2002 of the
      Registrant.
(8)   Incorporated by reference to Exhibit B of the Proxy Statement
      of the Registrant filed on Schedule 14A dated January 26,
      2000.
(9)   Incorporated by reference to Exhibits to Registration
      Statement (No. 333-52836-01) on Form S-4 of the Registrant.
(10)  Incorporated by reference to Exhibits to Registration
      Statement (No. 333-89976-01) on Form S-4 of the Registrant.
(11)  Incorporated by reference to Exhibits to Quarterly Report on
      Form 10Q for the quarter ended April 30, 2002 of the Registrant.

Reports on Form 8-K

(i) On September 4, 2002, the Company filed a report on Form 8-K,
Items 7 and 9 relating to certifications made by its
principal executive officer and principal financial officer
in accordance with Securities and Exchange Commission Order
No. 4-460 (June 27, 2002).
(ii) On August 6, 2002, the Company filed a report on Form 8-K,
Items 5 and 7, relating to the Company's press release dated
August 5, 2002 with respect to July 2002 new home orders.


SIGNATURES

	Pursuant to the requirements of Section l3 or l5(d) of the
Securities Exchange Act of l934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                          Hovnanian Enterprises, Inc.
                                      By:


                                          /S/KEVORK S. HOVNANIAN
                                          Kevork S. Hovnanian
                                          Chairman of the Board

	Pursuant to the requirements of the Securities Exchange Act of
l934,  this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated



/S/KEVORK S. HOVNANIAN         Chairman of The Board            1/24/03
Kevork S. Hovnanian            and Director



/S/ARA K. HOVNANIAN            Chief Executive Officer,         1/24/03
Ara K. Hovnanian               President and Director



/S/PAUL W. BUCHANAN            Senior Vice President            1/24/03
Paul W. Buchanan               Corporate Controller



/S/GEATON A. DECESARIS, JR.    President of Homebuilding        1/24/03
Geaton A. DeCesaris, Jr.       Operations and Chief Operating
                               Officer and Director



S/SKEVIN C. HAKE               Vice President, Finance          1/24/03
Kevin C. Hake                  and Treasurer



/S/PETER S. REINHART           Senior Vice President and        1/24/03
Peter S. Reinhart              General Counsel



/S/J. LARRY SORSBY             Executive Vice President,        1/24/03
J. Larry Sorsby                Chief Financial Officer
                               and Director




CEO/CFO Section 302 Certification


Each principal executive officer and principal financial officer of the
issuer (or persons performing similar functions) must sign separate 302
Certification included with each applicable report filed.


I, Ara K. Hovnanian, certify that:

1)  I have reviewed this Form 10K of Hovnanian Enterprises, Inc.

2)  Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;

3)  Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
annual report;

4)  The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:

a)  designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;

b)  evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

c)  presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5)  The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing
the equivalent functions):

a)  all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize, and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b)  any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6)  The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.




					/S/ARA K. HOVNANIAN
					Ara K. Hovnanian
					Chief Executive Officer

					Dated:	January 17, 2003





CEO/CFO Section 302 Certification


Each principal executive officer and principal financial officer of the
issuer (or persons performing similar functions) must sign separate 302
Certification included with each applicable report filed.




I, J. Larry Sorsby, certify that:

1)  I have reviewed this Form 10K of Hovnanian Enterprises, Inc.

2)  Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;

3)  Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
annual report;

4)  The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:

a)  designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;

b)  evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

c)  presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5)  The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing
the equivalent functions):

a)  all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize, and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b)  any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6)  The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.




					/S/J. LARRY SORSBY
					J. Larry Sorsby
					Executive Vice President
					And Chief Financial Officer

               				Dated:	January 17, 2003





HOVNANIAN ENTERPRISES, INC.

Index to Consolidated Financial Statements


Page
Financial Statements:

   Independent Auditors' Report...................................    F-2

   Consolidated Balance Sheets as of October 31, 2002 and 2001....    F-3

   Consolidated Statements of Income for the Years Ended
   October 31, 2002, 2001, and 2000...............................    F-5

   Consolidated Statements of Stockholders' Equity for the Years
   Ended October 31, 2002, 2001, and 2000.........................    F-6

   Consolidated Statements of Cash Flows for the Years Ended
   October 31, 2002, 2001, and 2000...............................    F-7

   Notes to Consolidated Financial Statements.....................    F-8

No schedules have been prepared because the required information of such
schedules is not present, is not present in amounts sufficient to require
submission of the schedule or because the required information is
included in the financial statements and notes thereto.




REPORT OF INDEPENDENT AUDITORS


To the Stockholders and
Board of Directors of
Hovnanian Enterprises, Inc.


We have audited the accompanying consolidated balance sheets of Hovnanian
Enterprises, Inc. and subsidiaries as of October 31, 2002 and 2001 and
the related consolidated statements of income, stockholders' equity and
cash flows for each of the three years in the period ended October 31,
2002.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hovnanian Enterprises, Inc. and subsidiaries at October 31, 2002 and 2001
and the consolidated results of their operations and their cash flows for
each of the three years in the period ended October 31, 2002 in
conformity with accounting principles generally accepted in the United
States.

As discussed in Note 2 to the consolidated financial statements, in 2002
the Company changed its method of accounting for goodwill.


						/S/ERNST AND YOUNG, LLP
						Ernst and Young, LLP

New York, New York
December 6, 2002,
except for Note 20, as to which the date is
December 31, 2002




HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)

                                                   October 31,    October 31,
          ASSETS                                       2002           2001
                                                   ------------   ------------
                                                            
Homebuilding:
  Cash and cash equivalents(Note 5)...............  $  262,675     $   10,173
                                                   ------------   ------------
  Inventories - At the lower of cost or fair
      value (Notes 7, 11, and 12):
    Sold and unsold homes and lots under
      development.................................     843,581        593,149
    Land and land options held for future
      development or sale.........................     238,001        146,965
                                                   ------------   ------------
      Total Inventories...........................   1,081,582        740,114
                                                   ------------   ------------

  Receivables, deposits, and notes (Note 12)......      26,276         75,802
                                                   ------------   ------------

  Property, plant, and equipment - net (Note 4)...      19,242         30,756
                                                   ------------   ------------

  Senior residential rental properties - net (Notes 4
     and 7).......................................       9,504          9,890
                                                   ------------   ------------

  Prepaid expenses and other assets (Note 15).....      86,582         46,178
                                                   ------------   ------------
  Goodwill and intangibles (Note 15)..............      82,275         32,618
                                                   ------------   ------------
      Total Homebuilding..........................   1,568,136        945,531
                                                   ------------   ------------

Financial Services:
  Cash............................................       7,315          5,976
  Mortgage loans held for sale (Notes 6 and 7)....      91,451        105,567
  Other assets....................................      11,226          6,465
                                                   ------------   ------------
      Total Financial Services....................     109,992        118,008
                                                   ------------   ------------

Income Taxes Receivable - Including deferred tax
  benefits (Note 10)..............................                        719
                                                   ------------   ------------
Total Assets......................................  $1,678,128     $1,064,258
                                                   ============   ============

See notes to consolidated financial statements.



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)

                                                     October 31,   October 31,
LIABILITIES AND STOCKHOLDERS' EQUITY                     2002          2001
                                                     ------------  ------------
                                                             
Homebuilding:
  Nonrecourse land mortgages (Note 7)...............   $  11,593      $ 10,086
  Accounts payable and other liabilities (Note 16)..     298,213       124,125
  Customers' deposits (Note 5)......................      40,422        39,114
  Nonrecourse mortgages secured by operating
    properties (Note 7).............................       3,274         3,404
                                                     ------------  ------------
      Total Homebuilding............................     353,502       176,729
                                                     ------------  ------------
Financial Services:
  Accounts payable and other liabilities............       4,857         5,264
  Mortgage warehouse line of credit (Notes 6 and 7).      85,498        98,305
                                                     ------------  ------------
      Total Financial Services......................      90,355       103,569
                                                     ------------  ------------
Notes Payable:
  Term loan (Note 7)................................     115,000
  Senior notes (Note 8).............................     396,390       296,797
  Senior subordinated notes (Note 8)................     150,000
  Subordinated notes (Note 8).......................                    99,747
  Accrued interest (Notes 7 and 8)..................       9,555        11,770
                                                     ------------  ------------
      Total Notes Payable...........................     670,945       408,314
                                                     ------------  ------------

Income Taxes Payable - Net of deferred tax benefits
  (Note 10)..........................................        777
                                                     ------------  ------------

      Total Liabilities.............................   1,115,579       688,612
                                                     ------------  ------------
Commitments and Contingent Liabilities (Notes 9, 12,
    14 and 15)

Stockholders' Equity (Notes 13 and 15):
  Preferred Stock,$.01 par value-authorized 100,000
    shares; none issued............................
  Common Stock,Class A,$.01 par value-authorized
    87,000,000 shares; issued 27,453,994 shares in 2002
    and 24,599,379 shares in 2001 (including 4,343,240
    shares in 2002 and 4,195,621 shares in 2001 held
    in Treasury)....................................         275           246
  Common Stock,Class B,$.01 par value
    (convertible to Class A at time of sale)
    -authorized 13,000,000 shares; issued 7,788,061
    shares in 2002 and 7,818,927 shares in 2001
    (both years include 345,874 shares held in Treasury)      78            78
  Paid in Capital...................................     152,977       100,957
  Retained Earnings (Note 8)........................     447,802       310,106
  Deferred Compensation.............................         (21)         (127)
  Treasury Stock - at cost..........................     (38,562)      (35,614)
                                                     ------------  ------------
      Total Stockholders' Equity....................     562,549       375,646
                                                     ------------  ------------
Total Liabilities and Stockholders' Equity..........  $1,678,128    $1,064,258
                                                     ============  ============

See notes to consolidated financial statements.



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Data)

                                                         Year Ended
                                            -------------------------------------
                                              October      October      October
                                              31, 2002     31, 2001     31, 2000
                                            -----------  -----------  -----------
                                                             
Revenues:
  Homebuilding:
    Sale of homes...........................$2,462,095   $1,693,717   $1,105,466
    Land sales and other revenues (Notes 12
       and 14)..............................    48,241       16,845       10,769
                                            -----------  -----------  -----------
      Total Homebuilding.................... 2,510,336    1,710,562    1,116,235
  Financial Services........................    40,770       31,428       19,324
                                            -----------  -----------  -----------
      Total Revenues........................ 2,551,106    1,741,990    1,135,559
                                            -----------  -----------  -----------
Expenses:
  Homebuilding:
    Cost of sales........................... 1,955,838    1,355,381      880,463
    Selling, general and administrative.....   194,903      140,126      104,771
    Inventory impairment loss (Note 11).....     8,199        4,368        1,791
                                            -----------  -----------  -----------
      Total Homebuilding.................... 2,158,940    1,499,875      987,025
                                            -----------  -----------  -----------
  Financial Services........................    22,543       21,443       19,750
                                            -----------  -----------  -----------
  Corporate General and Administrative(Note 3)  51,974       44,278       33,309
                                            -----------  -----------  -----------
  Interest (Notes 7 and 8)..................    60,371       51,446       34,956
                                            -----------  -----------  -----------
  Other operations (Note 15)................    18,241       11,583        6,188
                                            -----------  -----------  -----------
  Restructuring charges/asset writeoff
    (Notes 16 and 17).......................    12,412        3,247
                                            -----------  -----------  -----------
  Goodwill Amortization.....................                  3,764        2,513
                                            -----------  -----------  -----------
      Total Expenses........................ 2,324,481    1,635,636    1,083,741
                                            -----------  -----------  -----------
Income Before Income Taxes and
  Extraordinary Loss........................   226,625      106,354       51,818
                                            -----------  -----------  -----------
State and Federal Income Taxes:
  State (Note 10)...........................     8,993        4,024        2,495
  Federal (Note 10).........................    79,354       38,644       16,160
                                            -----------  -----------  -----------
    Total Taxes.............................    88,347       42,668       18,655
                                            -----------  -----------  -----------
Extraordinary Loss From Extinguishment of
  Debt, Net of Income Taxes (Note 8)........      (582)
                                            -----------  -----------  -----------
Net Income..................................$  137,696   $   63,686   $   33,163
                                            ===========  ===========  ===========
Per Share Data:
  Basic:
    Income Per Common Share Before
      Extraordinary Loss....................$     4.55   $     2.38   $     1.51
    Extraordinary Loss......................      (.02)
                                            -----------  -----------  -----------
    Income..................................$     4.53   $     2.38   $     1.51
                                            ===========  ===========  ===========
    Weighted Average Number of Common Shares
    Outstanding.............................    30,405       26,810       21,933
                                            ===========  ===========  ===========
  Assuming Dilution:
    Income Per Common Share Before
      Extraordinary Loss.................... $    4.30    $    2.29    $    1.50
    Extraordinary Loss......................      (.02)
                                            -----------  -----------  -----------
    Income.................................. $    4.28    $    2.29    $    1.50
                                            ===========  ===========  ===========
    Weighted Average Number of Common Shares
    Outstanding.............................    32,155       27,792       22,043
                                            ===========  ===========  ===========

See notes to consolidated financial statements.




HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollars in Thousands)

                                 A Common Stock       B Common Stock
                              -------------------  -------------------
                                Shares               Shares
                              Issued and            Issued and          Paid-In  Retained   Deferred  Treasury
                              Outstanding  Amount  Outstanding  Amount  Capital  Earnings    Comp       Stock      Total
                              -----------  ------  -----------  ------  -------  --------  ---------  ---------  ---------
                                                                                      
Balance, October 31, 1999...   14,508,168  $  172    7,651,209  $   79   45,856  $213,257  $          $(22,938)  $ 236,426

Acquisitions................       47,619       1                          (270)                                      (269)
Sale of common stock under
  employee stock option
  plan......................                                                346                                        346
Stock bonus plan............       25,128                                   154                                        154
Conversion of Class B to
  Class A common stock......       18,180              (18,180)
Treasury stock purchases....   (1,026,647)                                                              (6,461)     (6,461)
Net Income .................                                                       33,163                           33,163
                              -----------  ------  -----------  ------  -------  --------  ---------  ---------  ---------
Balance, October 31, 2000...   13,572,448     173    7,633,029      79   46,086   246,420              (29,399)    263,359
                              -----------  ------  -----------  ------  -------  --------  ---------  ---------  ---------

Acquisitions................    6,546,932      66                        51,361                                     51,427
Sale of common stock under
  employee stock option
  plan......................      519,673       5                         2,885                                      2,890
Stock bonus plan............       63,429       1                           625                                        626
Conversion of Class B to
  Class A common stock......      159,976       1     (159,976)     (1)
Deferred compensation.......                                                                  (127)                   (127)
Treasury stock purchases....     (458,700)                                                              (6,215)     (6,215)
Net Income .................                                                       63,686                           63,686
                              -----------  ------  -----------  ------  -------  --------  ---------  ---------  ---------
Balance, October 31, 2001...   20,403,758     246    7,473,053      78  100,957   310,106     (127)    (35,614)    375,646
                              -----------  ------  -----------  ------  -------  --------  ---------  ---------  ---------

Acquisitions................    2,402,769      24                        48,051                                     48,075
Sale of common stock under
  employee stock option
  plan......................      357,165       4                         3,577                                      3,581
Stock bonus plan............       63,815       1                           392                                        393
Conversion of Class B to
  Class A common stock......       30,866              (30,866)
Deferred compensation.......                                                                   106                     106
Treasury stock purchases....     (147,619)                                                              (2,948)     (2,948)
Net Income .................                                                      137,696                          137,696
                              -----------  ------  -----------  ------  -------  --------  ---------  ---------  ---------
Balance, October 31, 2002...   23,110,754  $  275    7,442,187  $   78 $152,977  $447,802  $   (21)   $(38,562)  $ 562,549

                              ===========  ======  ===========  ======  =======  ========  =========  =========  =========

See notes to consolidated financial statements.



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

                                                             Year Ended
                                                   ----------------------------------
                                                   October     October     October
                                                   31, 2002    31, 2001    31, 2000
                                                   ----------  ----------  ----------
                                                                  
Cash Flows From Operating Activities:
  Net Income...................................... $ 137,696   $  63,686   $  33,163
  Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
      Depreciation................................     6,506       8,164       6,423
      Amortization of Goodwill....................                 3,764       2,513
      Loss (gain) on sale and retirement of
        property and assets.......................    12,328         641        (728)
      Extraordinary loss from extinguishment of
        Debt net of income taxes..................       582
      Deferred income taxes.......................   (18,307)     (6,265)      2,551
      Impairment losses...........................     8,199       4,368       1,791
      Decrease (increase) in assets:
        Mortgage notes receivable.................    14,870     (42,573)    (27,703)
        Receivables, prepaids and other assets....    38,557     (35,805)    (13,256)
        Inventories...............................   (31,573)     12,540     (89,544)
      Increase (decrease) in liabilities:
        State and Federal income taxes............    21,451       7,004       3,244
        Tax effect from exercise of stock options.    (1,335)       (566)
        Customers' deposits.......................     1,006       4,543       6,240
        Interest and other accrued liabilities....    29,949      15,466       8,222
        Post development completion costs.........     8,545       5,120      (2,555)
        Accounts payable..........................    20,066      (3,018)      8,994
          Net cash provided by (used in)           ----------  ----------  ----------
            operating activities..................   248,540      37,069     (60,645)
                                                   ----------  ----------  ----------
Cash Flows From Investing Activities:
  Net proceeds from sale of property and assets...       627       5,325       1,517
  Purchase of property, equipment, and other
    fixed assets..................................    (6,903)     (6,777)    (15,607)
  Acquisition of homebuilding companies...........  (137,582)    (37,911)     (3,845)
  Investment in and advances to unconsolidated
    affiliates....................................   (15,828)       (372)
                                                   ----------  ----------  ----------
          Net cash (used in) investing activities.  (159,686)    (39,735)    (17,935)
                                                   ----------  ----------  ----------
Cash Flows From Financing Activities:
  Proceeds from mortgages and notes............... 1,895,429   1,472,789   1,433,150
  Proceeds from senior debt.......................    99,152                 146,430
  Proceeds from senior subordinated debt..........   150,000
  Principal payments on mortgages and notes.......(1,880,873) (1,494,528) (1,470,805)
  Principal payments on subordinated debt.........   (99,747)
  Purchase of treasury stock......................    (2,948)     (6,215)     (6,461)
  Proceeds from sale of stock and employee stock
    plan..........................................     3,974       3,516         154
          Net cash provided by (used in)           ----------  ----------  ----------
            financing activities..................   164,987     (24,438)    102,468
                                                   ----------  ----------  ----------
Net Increase (Decrease) In Cash...................   253,841     (27,104)     23,888
Cash and Cash Equivalents Balance, Beginning
  Of Year.........................................    16,149      43,253      19,365
                                                   ----------  ----------  ----------
Cash and Cash Equivalents Balance, End Of Year.....$ 269,990   $  16,149   $  43,253
                                                   ==========  ==========  ==========
Supplemental Disclosures Of Cash Flow:
  Cash paid during the year for:
    Interest...................................... $  62,066   $  53,100   $  33,814
                                                   ==========  ==========  ==========
    Income Taxes.................................. $  85,203   $  45,498   $  12,858
                                                   ==========  ==========  ==========
Stock issued for acquisitions/extension of options
  granted......................................... $  48,075   $  51,427   $     721
                                                   ==========  ==========  ==========
Supplemental disclosures of noncash operating
  activities:
  Inventory capitalized and accrued for specific
    performance................................... $  97,983
                                                   ==========

See notes to consolidated financial statements.




HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEARS ENDED OCTOBER 31, 2002, 2001, AND
2000.


1. BASIS OF PRESENTATION AND SEGMENT INFORMATION

	Basis of Presentation - The accompanying consolidated financial
statements include our accounts and all wholly-owned subsidiaries after
elimination of all significant intercompany balances and transactions.

	Segment Information - Statement of Financial Accounting Standards
(SFAS) No. 131 "Disclosures About Segments of an Enterprise and Related
Information" establishes new standards for segment reporting based on the
way management organizes segments within a company for making operating
decisions and assessing performance.  Our financial reporting segments
consist of homebuilding, financial services, and corporate.  Our
homebuilding operations comprise the most substantial part of our
business, with approximately 98% of consolidated revenues in the years
ended October 31, 2002, 2001, and 2000 contributed by the homebuilding
operations.  We are a Delaware corporation, currently building and
selling homes in more than 196 new home communities in New Jersey,
Pennsylvania, New York, Virginia, Maryland, North Carolina, Texas, and
California.  We offer a wide variety of homes that are designed to appeal
to first time buyers, first and second time move up buyers, luxury
buyers, active adult buyers and empty nesters.  Our financial services
operations provide mortgage banking and title services to the
homebuilding operations' customers.  We do not retain or service the
mortgages that we originate but rather, sell the mortgages and related
servicing rights to investors.  Corporate primarily includes the
operations of our corporate office whose primary purpose is to provide
executive services, accounting, information services, human resources,
management reporting, training, cash management, internal audit, risk
management, and administration of process redesign, quality and safety.
Assets, liabilities, revenues and expenses of our reportable segments are
separately included in the consolidated balance sheets and consolidated
statements of income.


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

	Use of Estimates - The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States 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 financial statements.

	Business Combinations - When we make an acquisition of another
company, we use the purchase method of accounting in accordance with the
Statement of Financial Accounting Standards (SFAS) No. 141 "Business
Combinations" which we adopted on June 30, 2001.  Under SFAS 141 we
record as our cost the estimated fair value of acquired assets less
liabilities assumed.  Any difference between the cost of an acquired
company and the sum of the fair values of tangible and identified
intangible assets less liabilities is recorded as goodwill.  The reported
income of an acquired company includes the operations of an acquired
company from the date of acquisition.

	Income Recognition From Home and Land Sales - Income from home and
land sales is recorded when each home is closed, title is conveyed to the
buyer, adequate cash payment has been received, and there is no continued
involvement.

	Income Recognition from Mortgage Loans - Profits and losses
relating to the sale of mortgage loans are recognized when all
indications of legal control pass to the buyer and the sales price is
collected.

	Cash and Cash Equivalents - Cash and cash equivalents include cash
deposited in checking accounts, overnight repurchase agreements,
certificates of deposit, Treasury bills and government money market funds
with original maturities of 90 days or less when purchased.

	Fair Value of Financial  Instruments - The fair value of financial
instruments is determined by reference to various market data and other
valuation techniques as appropriate.  Our financial instruments consist
of cash equivalents, receivables, customer deposits and notes, accounts
payable and other liabilities, mortgages and notes receivable, mortgages
and notes payable, our term loan, and the senior and senior subordinated
notes payable.  Unless otherwise disclosed, the fair value of financial
instruments approximates their recorded values.

	Inventories - For inventories of communities under development, a
loss is recorded when events and circumstances indicate impairment and
the undiscounted future cash flows generated are less than the related
carrying amounts.  The impairment loss is based on expected revenue, cost
to complete including interest, and selling costs.  Inventories and long-
lived assets held for sale are recorded at the lower of cost or fair
value less selling costs.  Fair value is defined in the Statement of
Financial Accounting Standards (SFAS)No. 144 "Accounting for the
Impairment of or Disposal of Long-Lived Assets" as the amount at which an
asset could be bought or sold in a current transaction between willing
parties, that is, other than in a forced or liquidation sale.  SFAS No.
144, which the Company adopted on November 1, 2001, provides accounting
guidance for financial accounting and reporting for impairment or
disposal of long-lived assets.  Construction costs are accumulated during
the period of construction and charged to cost of sales under specific
identification methods.  Land, land development, and common facility
costs are allocated based on buildable acres to product types within each
community, then amortized equally based upon the number of homes to be
constructed in the community.

	Self Insurance Reserves - We are self insured for our workman's
compensation and general liability insurance.  Reserves have been
established based upon actuarial analysis of estimated future losses.

	Interest costs related to properties under development are
capitalized during the land development and home construction period and
expensed along with the associated cost of sales as the related
inventories are sold.

	The cost of land options is capitalized when incurred and either
included as part of the purchase price when the land is acquired or
charged to operations when we determine we will not exercise the option.
Options that include specific performance terms and such terms have been
triggered are recorded on the balance sheet as inventory and other
liabilities.

	Intangible Assets - The intangible assets recorded on our balance
sheet are goodwill and a trademark, which is an indefinite life
intangible asset, resulting from company acquisitions.  In accordance
with the Financial Accounting Standards (SFAS) No. 142 "Goodwill and
Other Intangible Assets", which we acopted on November 1, 2001, we no
longer amortize goodwill or indefinite life intangibles, but instead
assess them periodically for impairment.  We performed such assessments
utilizing a fair value approach as of October 31, 2002, and determined
that no impairment of goodwill or intangibles existed.  On a pro forma
basis adding back goodwill amortization, net income for the years ended
October 31, 2001 and 2000 was $65.9 million and $34.8 million,
respectively.

	Deferred Bond Issuance Costs - Costs associated with the issuance
of our Senior and Senior Subordinated Notes are capitalized and amortized
over the associated term of each note issuance into other operations on
the consolidated statements of income.

	Debt Issued At a Discount - Debt issued at a discount to the face
amount is credited back up to its face amount utilizing the effective
interest method over the term of the note and recorded as a component of
Interest on the consolidated statements of income.

	Post Development Completion Costs - In those instances where a
development is substantially completed and sold and we have additional
construction work to be incurred, an estimated liability is provided to
cover the cost of such work and is recorded in accounts payable and other
liabilities in the accompanying consolidated balance sheets.

	Advertising Costs - Advertising costs are treated as period costs
and expensed as incurred.  During the years ended October 31, 2002, 2001,
and 2000, advertising costs expensed amounted to $23,440,000,
$18,536,000, and $14,418,000, respectively.

	Deferred Income Tax - Deferred income taxes or income tax benefits
are provided for temporary differences between amounts recorded for
financial reporting and for income tax purposes.

	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
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.

	On December 31, 2000, our stock repurchase program to purchase up
to 4 million shares of Class A Common Stock expired.  As of December 31,
2000 3,391,047 shares had been purchased under this program.  On July 3,
2001, our Board of Directors authorized a revision to our stock
repurchase program to purchase up to 2 million shares of Class A Common
Stock.  As of October 31, 2002, 606,319 have been purchased under this
program.

	Depreciation - Property, plant and equipment are depreciated using
the straight-line method over the estimated useful life of the assets.

	Prepaid Expenses - Prepaid expenses which relate to specific
housing communities (model setup, architectural fees, homeowner warranty,
etc.) are amortized to costs of sales as the applicable inventories are
sold.  All other prepaid expenses are amortized over a specific time
period or as used and charged to overhead expense.

	Stock Options - Statement of Financial Accounting Standards (SFAS)
No. 123 "Accounting for Stock-Based Compensation" establishes a fair
value-based method of accounting for stock-based compensation plans,
including stock options.  Registrants may elect to continue accounting
for stock option plans under Accounting Principles Board Opinion No. 25
(APB 25), "Accounting for Stock Issued to Employees," but are required to
provide pro forma net income and earnings per share information "as if"
the new fair value approach had been adopted.  We intend to continue
accounting for our stock option plan under APB 25.  Under APB 25, no
compensation expense is recognized when the exercise price of our
employee stock options equals the market price of the underlying stock on
the date of grant (see Note 13).

	Per Share Calculations - Basic earnings per common share is
computed using the weighted average number of shares outstanding.
Diluted earnings per common share is computed using the weighted average
number of shares outstanding adjusted for the incremental shares
attributed to outstanding options to purchase common stock shares.

	Computer Software Development - On November 1, 1999 we adopted SOP-
98-1, Accounting For the Costs of Computer Software Developed For or
Obtained For Internal Use.  The SOP-98-1 requires the capitalization of
certain costs incurred in connection with developing or obtaining
software for internal use.  The effect of adopting SOP-98-1 was to
increase net income for the year ended October 31, 2000 by $2,570,000 or
$0.12 per share.  Upon entering the application and development phase,
the capitalized costs are amortized over the systems estimated useful
life.  We wrote off the unamortized capitalized costs associated with the
development and implementation of the SAP systems during the year ended
October 31, 2002, totaling $12.4 million pretax included in Restructuring
Charges/Asset Write Off in the accompanying consolidated statements of
income, or $7.6 million after taxes equal to $0.24 per fully diluted
share (See Note 17).  For both years ended October 31, 2001 and 2002 we
recorded amortization expense of the SAP system in the amount of
approximately $2.0 million based on an estimated useful life of 10 years.

	Accounting for Derivative Instruments and Hedging Activities - On
November 1, 2000, we adopted Statement of Financial Accounting Standards
(SFAS) No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by Statement of Financial Accounting Standards
(SFAS) No. 138, which addresses the accounting for and disclosure of
derivative instruments, including derivative instruments imbedded in
other contracts, and hedging activities.  The statement requires us to
recognize all derivatives on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through
income.  If the derivative is a hedge, depending on the nature of the
hedge, changes in the fair value of derivatives are either offset against
the change in fair value of assets, liabilities, or firm commitments
through earnings or recognized in other comprehensive income until the
hedged item is recognized in earnings.  The ineffective portion of a
derivative's change is recognized in earnings.

	We manage our interest rate risk on mortgage loans held for sale
and our estimated future commitments to originate and close mortgage
loans at fixed prices through the use of best-efforts whole loan delivery
commitments.  These instruments are classified as derivatives and
generally have maturities of three months or less.  Accordingly, gains
and losses are recognized in current earnings during the period of
change.  The impact of the adoption of the new statement as of November
1, 2000 did not have a significant impact on our earnings or financial
position.  The effect of SFAS 133 is immaterial to our financial
statements.

	Accounting Pronouncements Not Yet Adopted - In December 2001, the
Accounting Standards Executive Committee of the American Institute of
Certified Public Accountants ("AICPA") issued Statement of Position 01-6,
"Accounting by Certain Entities (Including Entities With Trade
Receivables) That Lend to or Finance the Activities of Others", ("SOP 01-
6").  SOP 01-6 is effective for annual and interm financial statements
issued for fiscal years beginning after December 31, 2001.  Under SOP 01-
6, Mortgage companies are explicitly subject to new accounting rules and
reporting and disclosure requirements, including disclosures about
regulatory capital and net worth requirements.  SOP 01-6 also required
the carrying amounts of loans and servicing rights to be allocated using
relative fair values in a manner consistent with SFAS No. 140,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities."  We have adopted SOP 01-6 effective
November 1, 2002.  We do not anticipate that the adoption of SOP 01-6
will have a material effect on the financial position or results of
operations of our Company.

	In April 2002, the Financial Accounting Standards Board issued
(SFAS) No. 145, "Reporting Gains and Losses from Extinguishment of Debt",
which rescinded SFAS No. 4, No. 44, and No. 64 and amended SFAS No. 13.
The new standard addresses the income statement classification of gains
or losses from the extinguishment of debt and criteria for classification
as extraordinary items.  We will adopt SFAS No. 145 effective for our
fiscal year beginning November 1, 2002.  Certain amounts in our prior
year financial statements will be reclassified to conform to the new
presentation.

	In June 2002, the Financial Accounting Standards Board issued
(SFAS) No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities".  SFAS No. 146 addresses financial accounting and reporting
for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to
Exit an Activity (including certain costs incurred in a restructuring)".
SFAS No. 146 requires recognition of a liability for a cost associated
with an exit or disposal activity when the liability is incurred as
opposed to when the entity commits to an exit plan as prescribed under
EITF No. 94-3.  SFAS No. 146 is effective for exit or disposal activities
initiated after December 31, 2002. We do not anticipate that the adoption
of SFAS 146 will have a material effect on the financial position or
results of operations of our Company.

	Reclassifications - Certain amounts in the 2001 and 2000
consolidated financial statements have been reclassified to conform to
the 2002 presentation.


3.  CORPORATE INITIATIVES

	We have embarked on long term improvement initiatives of total
quality, process redesign, and training.  Included in Corporate General
and Administrative expense is $4,074,000, $7,200,000, and $6,902,000 for
the years ended October 31, 2002, 2001, and 2000, respectively, related
to such initiatives.  These amounts are in addition to software
development costs capitalized in those years.


4.  PROPERTY

	Homebuilding property, plant, and equipment consists of land, land
improvements, buildings, building improvements, furniture and equipment
used to conduct day to day business and are recorded at cost less
accumulated depreciation.  Homebuilding accumulated depreciation related
to these assets at October 31, 2002 and October 31, 2001 amounted to
$18,470,000 and $18,367,000, respectively.  In addition we have two
senior citizen residential rental communities recorded as senior
residential rental properties on the consolidated balance sheets.
Accumulated depreciation on senior residential rental properties at
October 31, 2002 and October 31, 2001 amounted to $3,054,000 and
$2,688,000, respectively.


5.  DEPOSITS

	We hold escrow cash amounting to $3,455,000 and $4,420,000 at
October 31, 2002 and October 31, 2001, respectively, which primarily
represents customers' deposits which are restricted from use by us.  We
are able to release other escrow cash by pledging letters of credit and
surety bonds.  Escrow cash accounts are substantially invested in short-
term certificates of deposit, time deposits, or money market accounts.
The remaining deposits are not restricted from use by us.



6.  MORTGAGE LOANS HELD FOR SALE

	Our wholly-owned mortgage banking subsidiary originates mortgage
loans, primarily from the sale of our homes.  Such mortgage loans are
sold in the secondary mortgage market with servicing released. At October
31, 2002 and 2001, respectively, $91,339,000 and $105,174,000 of such
mortgages were pledged against our mortgage warehouse line (see Note 7).
We may incur risk with respect to mortgages that are delinquent, but only
to the extent the losses are not covered by mortgage insurance or resale
value of the home.  Historically, we have incurred minimal credit losses.
The mortgage loans held for sale are carried at the lower of cost or
market value, determined on an aggregate basis.  There was no valuation
adjustment at October 31, 2002 or 2001.


7.  MORTGAGES AND NOTES PAYABLE

	Substantially all of the nonrecourse land mortgages are short-term
borrowings.  Nonrecourse mortgages secured by operating properties are
installment obligations having annual principal maturities in the
following years ending October 31, of approximately $2,584,000 in 2003,
$75,000 in 2004, $81,000 in 2005, $88,000 in 2006, $96,000 in 2007, and
$350,000 after 2007.  The interest rates on these obligations range from
6.0% to 10.0%.

	We have an unsecured Revolving Credit Agreement ("Agreement") with
a group of banks which provides up to $440,000,000 through July 2005.
Interest is payable monthly and at various rates of either the prime rate
plus .40% or LIBOR plus 1.85%.  In addition, we pay a fee equal to .375%
per annum on the weighted average unused portion of the line.  As of
October 31, 2002 and 2001, there was no outstanding balance under the
Agreement.  See Note 19 for loan guarantee.

	On January 22, 2002, we issued a $165,000,000 Term Loan to a group
of banks which is due January 22, 2007.  Interest is payable monthly at
either the prime rate plus 1.25% or LIBOR plus 2.5%.  The proceeds from
the issuance of the Term Loan were primarily used to partially fund the
acquisition of the California operations of Forecast.  (See Note 15).  As
of October 31, 2002, borrowings under the Term Loan were $115,000,000.
See Note 19 for loan guarantee.

	  Interest costs incurred, expensed and capitalized were:

                                             Year Ended
                                    ----------------------------
                                    October   October   October
                                    31, 2002  31, 2001  31, 2000
                                    --------  --------  --------
                                      (Dollars in Thousands)
Interest capitalized at
  beginning of year..............   $25,124   $25,694   $21,966
Plus acquired entity interest....              3,604
Plus interest incurred(1)(2).....    57,406    47,272    38,878
Less interest expensed(2)........    60,371    51,446    34,956
Less impairment write-off........                           194
                                    --------  --------  --------
Interest capitalized at
  end of year(2)..................  $22,159   $25,124   $25,694
                                    ========  ========  ========

(1)  Data does not include interest incurred by our mortgage and finance
     subsidiaries.
(2)  Represents interest for construction, land and development costs
     which is charged to interest expense when homes are delivered or
     when land is not under active development.


	Average interest rates and average balances outstanding for short-
term debt are as follows:

                              October     October     October
                              31, 2002    31, 2001    31, 2000
                              --------    --------    --------
                                  (Dollars In Thousands)

Average monthly outstanding
  borrowings................. $10,717    $ 74,543    $128,788
Average interest rate during
  period.....................    4.4%        7.1%       10.0%
Average interest rate at end
  of period(1)...............    3.6%        4.1%        8.4%
Maximum outstanding at any
  month end.................. $36,425    $120,600    $170,800

(1) Average interest rate at the end of the period excludes any charges
    on unused loan balances.

	In addition, we have a secured mortgage loan warehouse agreement
with a group of banks, which is a short-term borrowing, that provides up
to $150,000,000 through June 7, 2003.  Interest is payable monthly at the
Federal Funds Rate plus 1.375% (approximately 3.195% and 3.810% at
October 31, 2002 and 2001, respectively) of the outstanding loan balance.
The loan is repaid when the underlying mortgage loans are sold to
permanent investors by the Company.  As of October 31, 2002 borrowings
under the agreement were $85,498,000.


8.  SENIOR AND SUBORDINATED NOTES

	On June 7, 1993, we issued $100,000,000 principal amount of 9 3/4%
Subordinated Notes due June 1, 2005.  In April 2001, we retired $253,000
of these notes.  Interest is payable semi-annually. The notes were
redeemable in whole or in part at our option, initially at 104.875% of
their principal amount on or after June 1, 1999 and reducing to 100% of
their principal amount on or after June 1, 2002.  On April 29, 2002 we
used a portion of the proceeds from our March 2002 debt issuance (see
below) to redeem the remainder of these notes which resulted in an
extraordinary loss of $582,000 net of an income tax benefit of $313,000.

	On May 4, 1999, we issued $150,000,000 principal amount of 9 1/8%
Senior Notes due May 1, 2009.  Interest is payable semi-annually.  The
notes are redeemable in whole or in part at our option, initially at
104.563% of their principal amount on or after May 1, 2004 and reducing
to 100% of their principal amount on or after May 1, 2007.

	On October 2, 2000, we issued $150,000,000 principal amount of 10
1/2% Senior Notes due October 1, 2007.  The 10 1/2% Senior Notes were
issued at a discount to yield 11% and have been reflected net of the
unamortized discount in the accompanying consolidated balance sheet.
Interest is payable semi-annually.  The notes are redeemable in whole or
in part at our option at 100% of their principal amount upon payment of a
make-whole price.

	On March 26, 2002, we issued $100,000,000 8% Senior Notes due 2012
and $150,000,000 8 7/8% Senior Subordinated Notes due 2012.  The 8%
Senior Notes were issued at a discount to yield 8.125% and have been
reflected net of the unamortized discount in the accompanying
consolidated balance sheet.  Interest on both notes is paid semi-
annually.  The notes are redeemable in whole or in part at our option at
100% of their principal amount upon payment of a make-whole price.  The
proceeds were used to redeem the remaining 9 3/4% Subordinated Notes (see
above), repay a portion of our Term Loan Facility (See Note 7), repay the
current outstanding indebtedness under our Revolving Credit Agreement,
and the remainder for general corporate purposes.

	The indentures relating to the Senior and Subordinated Notes and
the Revolving Credit Agreement contain a Company guarantee (See Note 19)
and restrictions on the payment of cash dividends.  At October 31, 2002,
$115,183,000 of retained earnings were free of such restrictions.

	The fair value of both the Senior Notes and Senior Subordinated
Notes is estimated based on the quoted market prices for the same or
similar issues or on the current rates offered to us for debt of the same
remaining maturities.  The fair value of the Senior Notes and Senior
Subordinated Notes is estimated at $398,625,000 and $136,500,000,
respectively, as of October 31, 2002.


9.  RETIREMENT PLAN

	In  December 1982, we established a defined contribution savings
and investment retirement plan.  Under such plan there are no prior
service costs.  All associates are eligible to participate in the
retirement plan and employer contributions are based on a percentage of
associate contributions.  Plan costs charged to operations amount to
$6,556,000, $3,675,000, and $2,948,000 for the years ended October 31,
2002, 2001, and 2000, respectively.  The year over year increases are the
result of increased number of participants from acquisitions and
increased profit sharing contributions resulting from higher Company
Returns on Equity.


10.  INCOME TAXES

	Income Taxes payable (receivable) including deferred benefits,
consists of the following:
                                         Year Ended
                                    October      October
                                    31, 2002     31, 2001
                                    ---------    ---------
                                    (Dollars In Thousands)

State income taxes:
  Current.......................... $  7,092     $  3,393
  Deferred.........................   (7,088)      (2,262)
Federal income taxes:
  Current..........................   27,541        6,623
  Deferred.........................  (26,768)      (8,473)
                                    ---------    ---------
    Total.......................... $    777     $   (719)
                                    =========    =========



	The provision for income taxes is composed of the following charges
(benefits):

                                               Year Ended
                                    -----------------------------------
                                    October      October      October
                                    31, 2002     31, 2001     31, 2000
                                    ---------    ---------    ---------
                                          (Dollars In Thousands)
Current income tax expense:
  Federal.......................... $ 97,347     $ 48,478     $ 13,609
  State(1).........................   13,808        6,461        1,574
                                    ---------    ---------    ---------
                                     111,155       54,939       15,183
                                    ---------    ---------    ---------
Deferred income tax (benefit)
    expense:
  Federal..........................  (18,307)      (9,834)       2,551
  State............................   (4,814)      (2,437)         921
                                    ---------    ---------    ---------
                                     (23,121)     (12,271)       3,472
                                    ---------    ---------    ---------
    Total.......................... $ 88,034     $ 42,668     $ 18,655
                                    =========    =========    =========

(1)   The current state income tax expense is net of the use of state loss
      carryforwards amounting to $45,778,000, $26,830,000, and $21,330,000
      for the years ended October 31, 2002, 2001, and 2000.


	The deferred tax liabilities or assets have been recognized in the
consolidated balance sheets due to temporary differences as follows:

                                                Year Ended
                                            October   October
                                            31, 2002  31, 2001
                                            --------  ---------
                                           (Dollars In Thousands)
Deferred tax assets:
  Maintenance guarantee reserves.......     $   659   $    658
  Inventory impairment loss............       1,048      2,206
  Uniform capitalization of overhead...      14,157      6,726
  Post development completion costs....       8,006      5,319
  Acquisition goodwill.................       2,995
  State net operating loss
    carryforwards......................      27,684     27,846
  Other................................       9,999      7,067
                                            --------  ---------
    Total..............................      64,548     49,822
  Valuation allowance(2)...............     (27,684)   (27,846)
                                            --------  ---------
    Total deferred tax assets..........      36,864     21,976
                                            --------  ---------
Deferred tax liabilities:
  Deferred interest....................                     31
  Installment sales....................          72         76
  Accelerated depreciation.............       2,936      2,113
  Acquisition goodwill.................                  3,124
  Software development expenses........                  5,897
                                            --------  ---------
    Total deferred tax liabilities.....       3,008     11,241
                                            --------  ---------
Net deferred tax assets................     $33,856    $10,735
                                            ========  =========

(2)  The net change in the valuation allowance of $(162,000) results from
     a decrease in the separate company state net operating losses that
     may not be fully utilized.

	The effective tax rates varied from the expected rate.  The sources
of these differences were as follows:
                                              Year Ended
                                     ------------------------------
                                     October    October    October
                                     31, 2002   31, 2001   31, 2000
                                     --------   --------   --------

Computed "expected" tax rate......    35.0%      35.0%      35.0 %
State income taxes, net of Federal
  income tax benefit..............     2.6        3.2        3.1
Permanent timing differences......     1.4        1.6        1.0
Low income housing tax credit.....    (0.6)      (1.3)      (2.6)
Other.............................     0.6        1.6       (0.5)
                                     --------   --------   --------
Effective tax rate................    39.0%      40.1%      36.0 %
                                     ========   ========   ========

	We have state net operating loss carryforwards for financial
reporting and tax purposes of $370,257,000 due to expire between the
years October 31, 2003 and October 31, 2017.


11.  REDUCTION OF INVENTORY TO FAIR VALUE

We record impairment losses on inventories related to communities
under development when events and circumstances indicate that they may be
impaired and the undiscounted cash flows estimated to be generated by
those assets are less than their related carrying amounts.  During the
year ended October 31, 2001, inventory with a carrying amount of
$12,084,000 was written down by $2,088,000 to its fair value.  This was
based on our evaluation of the expected revenue, cost to complete
including interest and selling cost.  The writedown during the year ended
October 31, 2001 was attributed to two communities in the Northeast
Region that were part of a large land acquisition, which resulted in a
loss.

	As of October 31, 2002, inventory with a carrying amount of
$9,400,000 was writen down by $4,163,000 to its fair market.  As of
October 31, 2001, inventory with a carrying amount of $1,391,000 was
written down by $424,000 to its fair value.  The writedowns during the
year ended October 31, 2002 were attributed to two properties in Poland
and one community in the Mid-South.  The writedowns were attributed to
market conditions coupled with our plan to exit both Poland and the Mid-
South.  The writedowns during the year ended October 31, 2001 were
attributed to two land parcels in Florida and one community in North
Carolina.  The writedowns in Florida and North Carolina were based upon
changes in market conditions.

	The total aggregate impairment losses, which are presented in the
consolidated statements of income and deducted from inventory held for
future development or sale were $4,163,000, $2,512,000, and $0 for the
years ended October 31, 2002, 2001, and 2000, respectively.

	On the statement of income the line entitled "Homebuilding -
Inventory impairment loss" also includes write-offs of options including
approval, engineering, and capitalized interest costs.  During the years
ended October 31, 2002, 2001, and 2000 write-offs amounted to $4,036,000,
$1,856,000 and $1,791,000, respectively.  During the years ended October
31, 2002, 2001, and 2000 we did not exercise options in various locations
because the communities pro forma profitability did not produce adequate
returns on investment commensurate with the risk.  Those communities were
located in New Jersey, New York, Metro D. C., North Carolina, California,
and Poland.


12.  TRANSACTIONS WITH RELATED PARTIES

	Our Board of Directors had adopted a general policy providing that
it will not make loans to our officers or directors or their relatives at
an interest rate less than the interest rate at the date of the loan on
six month U.S. Treasury Bills, that the aggregate of such loans will not
exceed $3,000,000 at any one time, and that such loans will be made only
with the approval of the members of our Board of Directors who have no
interest in the transaction.  At October 31, 2002 and 2001 included in
receivables, deposits and notes are related party receivables from
officers and directors amounting to zero and $1,119,000, respectively.
Interest income from these loans for the years ended October 31, 2002,
2001, and 2000 amounted to $18,000, $84,000, and $167,000, respectively.

	We provide property management services to various limited
partnerships including one partnership in which Mr. A. Hovnanian, our
Chief Executive Officer, President and a Director, is a general partner,
and members of his family and certain officers and directors are limited
partners.  During the years ended October 31, 2002, 2001, and 2000 we
received $62,000, $76,000, and $85,000, respectively, in fees for such
management services.  At October 31, 2002, no amounts were due us by
these partnerships.

	During the year ended October 31, 2001 we entered into an agreement
to purchase land from an entity that is owned by a family relative of our
Chairman of the Board and our Chief Executive Officer.  As of October 31,
2002 and 2001, land aggregating $10,293,000 and $2,384,000, respectively,
has been purchased.  The Company remains obligated under a land purchase
agreement to purchase an additional $16.6 million of land from this
entity over the next two years.  Neither the Company nor the Chairman of
the Board and Chief Executive Officer has a financial interest in the
relative's company from whom the land was purchased.


13.  STOCK PLANS

	We have a stock option plan for certain officers and key employees.
Options are granted by a Committee appointed by the Board of Directors.
The exercise price of all stock options must be at least equal to the
fair market value of the underlying shares on the date of the grant.
Options granted prior to May 14, 1998 vest in three equal installments on
the first, second and third anniversaries of the date of the grant.
Options granted on or after May 14, 1998 vest in four equal installments
on the third, fourth, fifth and sixth anniversaries of the date of the
grant.  Certain Washington Homes associates were granted and held options
to purchase Washington Homes stock prior to the January 23, 2001 merger.
These options vest in three installments:  25% on the first and second
anniversary, and 50% on the third anniversary of the date of the grant.
In connection with the merger (See Note 15) the options were exchanged
for options to purchase the Company's Class A Common Stock.  In 2000 we
extended the life of options that expired on May 4, 2000 five years which
resulted in additional compensation expense of $346,000 net of taxes.
All options expire ten years after the date of the grant.  In addition,
during the year ended October 31, 2002 each of the four outside directors
of the Company were granted options to purchase 7,500 shares.  During the
year ended October 31, 2000 each of the three outside directors of the
Company were granted options to purchase 5,000 shares.  All shares
granted to the outside directors were issued at the same price and terms
as those granted to officers and key employees.  Stock option
transactions are summarized as follows:



                                   Weighted             Weighted            Weighted
                                   Average              Average             Average
                                   Fair                 Fair                Fair
                                   Value (1)            Value (1)           Value (1)
                                   And                  And                 And
                        October    Exercise  October    Exercise  October   Exercise
                        31, 2002    Price    31, 2001    Price    31, 2000   Price
                        ---------  --------  ---------  --------  --------- --------
                                                             
Options outstanding at
  beginning of period.  2,280,657   $ 7.52   1,980,500   $7.55    1,656,000   $8.02
   Granted............    545,500   $15.12   1,058,785   $5.81      444,500   $6.10
   Exercised..........    357,165   $ 6.28     519,673   $4.29
   Forfeited..........     30,000   $ 7.72     238,955   $7.67      120,000   $8.60
                        ---------            ---------            ---------
Options outstanding at
  end of period.......  2,438,992   $ 9.40   2,280,657   $7.44    1,980,500   $9.44
                        =========            =========            =========

Options exercisable at
  end of period.......  1,089,513            1,451,718            1,276,708
Price range of options     $2.66-               $2.66-               $5.13-
  outstanding.........    $34.75               $15.08               $11.50
Weighted-average
  remaining contractual
  life................   6.0 yrs.             6.0 yrs.             7.0 yrs.

(1) Fair value of options at grant date approximate exercise price.




	Pro forma information regarding net income and earnings per share
is required under the fair value method of Financial Accounting Standards
(SFAS) No. 123 "Accounting for Stock-Based Compensation" and is to be
calculated as if we had accounted for our stock options under the fair
value method of SFAS 123.  The fair value for these options is
established at the date of grant using a Black-Scholes option pricing
model with the following weighted-average assumptions for 2002, 2001, and
2000:  risk- free interest rate of 4.3%, 4.4%, and 5.9%, respectively;
dividend yield of zero; volatility factor of the expected market price of
our common stock of 0.43 , 0.38, and 0.41, respectively; and a weighted-
average expected life of the option of 5.5, 5.1, and 7.0 years,
respectively.

	The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting
restrictions and are fully transferable.  In addition, option valuation
models require the input of highly subjective assumptions including the
expected stock price volatility.  Because our employee stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect
the fair value estimate, in management's opinion, the existing models do
not necessarily provide a reliable single measure of the fair value of
its employee stock options and are not likely to be representative of the
effects on reported net income for future years, if applicable.


	For purposes of pro forma disclosures, the estimated fair value of
the options is amortized to expense over the options' vesting period.
Our pro forma information follows (dollars in thousands except for
earnings per share information):

                                              Year Ended
                                    -----------------------------------
                                    October     October     October
                                    31, 2002    31, 2001    31, 2000
                                    ----------  ----------  -----------

Pro forma net income................ $ 137,136   $  63,491   $  32,322
                                    ==========  ==========  ===========
Pro forma basic earnings per share.. $    4.51   $    2.37   $    1.47
                                    ==========  ==========  ===========
Pro forma diluted earnings per share $    4.26   $    2.28   $    1.47
                                    ==========  ==========  ===========

	During the year ended October 31, 1999, we modified our bonus plan
for certain associates.  A portion of their bonus is paid by issuing a
deferred right to receive our Class A Common Stock.  The number of shares
is calculated by dividing the portion of the bonus subject to the
deferred right award by our stock price on the date the bonus is earned.
25% of the deferred right award will vest and shares will be issued one
year after the year end and then 25% a year for the next three years.
During the years ended October 31, 2002 and 2001, we issued 63,815 and
84,962 shares under the plan.  During the years ended October 31, 2002
and 2001 7,355 and 41,550 shares were forfeited under this plan,
respectively.  For the years ended October 31, 2002, 2001, and 2000,
approximately 242,000, 319,000, and 281,000 deferred rights were awarded
in lieu of $6,291,000, $3,857,000, and $1,923,000 of bonus payments,
respectively.


14.  COMMITMENTS AND CONTINGENT LIABILITIES

	We are involved from time to time in litigation arising in the
ordinary course of business, none of which is expected to have a material
adverse effect on us.  We were involved in an action resulting from the
non-performance by a land owner (the "Defendant") to sell real property
to us.  In 1999, we entered into a Settlement Agreement and Mutual
Release ("SAMR") relating to this action.  Pursuant to the terms of the
SAMR, the Defendant stipulated to a judgement in our favor in the amount
of $3,535,349.  In 2000 the judgement was upheld in bankruptcy
proceedings.  As a result of the bankruptcy proceeding and evaluation of
the collateral underlying our claim, we recorded a net gain on settlement
of $1.8 million which is included in land sales and other revenues in the
consolidated statements of income at October 31, 2000.

	As of October 31, 2002 and 2001, respectively, we are obligated
under various performance letters of credit amounting to $99,984,000 and
$51,647,000.  (See Note 5).


15.  ACQUISITIONS

	On January 23, 2001 we merged with Washington Homes, Inc. for a
total purchase price of $87.4 million, of which $38.5 million was paid in
cash and 6,352,900 shares of our Class A Common Stock valued at $44.9
million were issued and options were issued to Washington Homes, Inc.
employees with an intrinsic value of $3.4 million were converted to
738,785 of our options.  At the date of acquisition we loaned Washington
Homes, Inc. approximately $57,000,000 to pay off their third party debt.

	On January 10, 2002 we acquired the California homebuilding
operations of The Forecast Group, LP ("Forecast") for a total purchase
price of $196.5 million, of which $151.6 million was paid in cash and
2,208,738 shares of Class A Common Stock were issued.  We acquired
Forecast to expand our California homebuilding operations.  In addition,
we have an option to purchase additional land parcels owned by Forecast
for a price of $49.0 million.  As of October 31, 2002, we have purchased
$8.1 million of these land parcels.  At the date of the acquisition we
also paid off approximately $88.0 million of Forecast's third party debt.
The total purchase price amounted to $90.4 million over Forecast's book
value, of which $22.8 million was added to inventory to reflect fair
value, $18.5 million was paid for two option agreements, a two year
consultant's agreement, and a three year right of first refusal
agreement, and the balance recorded as a tradename, which is an
indefinite life intangible asset.

	A Forecast condensed balance sheet (including the effects of
purchase accounting adjustments) as of the acquisition date is as follows
(dollars in thousands):

                                  January 10,
                                     2002
                                  -----------

Cash and cash equivalents........ $   10,209
Inventories......................    220,110
Tradename intangible.............     49,107
Prepaids and other assets........     20,676
                                  -----------
     Total Assets                 $  300,102
                                  ===========

Accounts payable and other
  liabilities.................... $   35,028
Revolving credit agreement.......    219,574
Stockholders' equity.............     45,500
                                  -----------
     Total Liabilities and
       Stockholders' Equity...... $  300,102
                                  ===========

	The merger with Washington Homes, Inc. and acquisition of Forecast
were accounted for as purchases with the results of operations of these
entities included in our consolidated financial statements as of the date
of the merger and acquisition.  The purchase price was allocated based on
estimated fair value of the assets and liabilities at the date of the
merger and acquisition.  An intangible asset equal to the excess purchase
price over the fair value of the net assets of $12.8 million and $49.8
million for Washington Homes and Forecast, respectively, were recorded as
goodwill and a tradename, which is an indefinite life intangible asset on
the consolidated balance sheet.  The Washington Homes amount was being
amortized on a straight line basis over a period of ten years during
fiscal 2001.  On November 1, 2001 we adopted Statement of Financial
Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible
Assets".  Indefinite life intangible assets are not amortized.  As a
result of adopting SFAS No. 142, we no longer amortize goodwill or
indefinite life intangibles, but instead assess them periodically for
impairment.  We performed a fair value analysis as of October 31, 2002
and determined that no impairment of goodwill or intangibles existed.

	The following unaudited pro forma financial data for the years
ended October 31, 2002 and 2001 has been prepared as if the merger with
Washington Homes, Inc. on January 23, 2001 and the acquisition of
Forecast on January 10, 2002 had occurred on November 1, 2000.  Unaudited
pro forma financial data is presented for information purposes only and
may not be indicative of the actual amounts had the events occurred on
the dates listed above, nor does it purport to represent future periods.

                                         Year Ended October 31,
                                     ------------------------------
                                           2002           2001
                                     -------------    -------------
                                     (In Thousands Except Per Share)

Revenues...........................   $2,615,455       $2,308,130
Expenses...........................    2,383,466        2,145,759
Income Taxes.......................       90,445           64,387
Extraordinary Loss.................         (582)
                                     -------------    -------------
Net Income.........................   $  140,962       $   97,984
                                     =============    =============
Diluted Net Income Per
  Common Share.....................    $    4.33       $     3.12
                                     =============    =============


16.  RESTRUCTURING CHARGES

	Restructuring charges are estimated expenses associated with the
merger of our operations with those of Washington Homes, Inc. as a result
of the merger on January 23, 2001.  Under our merger plan, administration
offices in Maryland, Virginia, and North Carolina were either closed,
relocated, or combined.  The merger of administration offices was
completed by July 31, 2001.  At January 31, 2001, expenses were accrued
for salaries, severance and outplacement costs for the involuntary
termination of associates, costs to close and/or relocate existing
administrative offices, and lost rent and leasehold improvements.  During
the year ended October 31, 2001 our estimate for restructuring charges
was increased to a total of $3.2 million.  We have provided for the
termination of 65 associates.  We accrued approximately $2.0 million to
cover termination and related costs.  Associates being terminated were
primarily administrative.  In addition, we accrued approximately $1.2
million to cover closing and/or relocation of various administrative
offices in these three states.  At October 31, 2002 all costs have been
charged against this accrual.


17.  ASSET WRITE OFF

	We wrote off costs during the year ended October 31, 2002
associated with SAP, our enterprise-wide operating software, totaling
$12.4 million pretax included in Restructuring Charges/Asset Write Off in
the accompanying consolidated statements of income or $7.6  million after
taxes equal to $0.24 per fully diluted share.  These unamortized costs
are those associated with the development of the SAP system.  We were not
successful in implementing SAP, due to the complexities and limitations
in the software program.  We have $2.1 million initiative costs
remaining, all of which will be amortized over the remaining life of the
communities using SAP software, which are scheduled to be substantially
complete by the end of 2003.



18.  UNAUDITED SUMMARIZED CONSOLIDATED QUARTERLY INFORMATION

	Summarized quarterly financial information for the years ended
October 31, 2002 and 2001 is as follows:


                                            Three Months Ended
                                 ---------------------------------------
                                 October     July      April   January
                                 31, 2002  31, 2002  30, 2002  31, 2002
                                 --------  --------  --------  ---------
                                                   
                                   (In Thousands Except Per Share Data)

Revenues.....................    $831,410  $704,636  $560,998  $454,062
Expenses.....................    $739,011  $642,675  $518,530  $424,265
Income before income taxes and
  extraordinary loss.........    $ 92,399  $ 61,961  $ 42,468  $ 29,797
State and Federal income tax.    $ 37,961  $ 22,774  $ 15,976  $ 11,636
Extraordinary loss from extinguish-
  ment of debt, net of income
  taxes......................                        $   (582)
Net Income...................    $ 54,438  $ 39,187  $ 25,910  $ 18,161
Per Share Data:
Basic:
  Income per common share before
    extraordinary loss.......    $   1.75  $   1.27  $   0.86  $   0.63
  Extraordinary loss.........                        $  (0.02)
  Net Income.................    $   1.75  $   1.27  $   0.84  $   0.63
  Weighted average number of
    common shares outstanding      31,089    30,877    30,670    28,965
Assuming Dilution:
  Income per common share before
    extraordinary loss.......    $   1.66  $   1.20  $   0.82  $   0.60
  Extraordinary loss.........                        $  (0.02)
  Net Income.................    $   1.66  $   1.20  $   0.80  $   0.60
  Weighted average number of
    common shares outstanding      32,886    32,703    32,402    30,456



                                          Three Months Ended
                                ---------------------------------------
                                October     July      April   January
                                31, 2001  31, 2001  30, 2001  31, 2001
                                --------  --------  --------  --------
                                                  
                                 (In Thousands Except Per Share Data)

Revenues....................... $537,212  $509,250  $402,340  $293,188
Expenses....................... $500,270  $473,965  $379,773  $281,628
Income before income taxes..... $ 36,942  $ 35,285  $ 22,567  $ 11,560
State and Federal income tax... $ 15,251  $ 14,273  $  8,507  $  4,637
Net Income..................... $ 21,691  $ 21,012  $ 14,060  $  6,923
Per Share Data:
Basic:
  Net Income................... $   0.77  $   0.74  $   0.50  $   0.31
  Weighted average number of
    common shares outstanding..   28,288    28,375    28,176    22,286

Assuming Dilution:
  Net Income................... $   0.74  $   0.71  $   0.48  $   0.30
  Weighted average number of
    common shares outstanding..   29,227    29,623    29,472    22,732


19.  FINANCIAL INFORMATION OF SUBSIDIARY ISSUER AND SUBSIDIARY GUARANTORS

	Hovnanian Enterprises, Inc., the parent company (the "Parent") is
the issuer of publicly traded common stock.  One of its wholly owned
subsidiaries, K. Hovnanian Enterprises, Inc., (the "Subsidiary Issuer")
was the issuer of certain Senior Notes on May 4, 1999, October 2, 2000,
and March 26, 2002 and Senior Subordinated Notes on March 26, 2002.

	The Subsidiary Issuer acts as a finance and management entity that
as of October 31, 2002 had issued and outstanding approximately
$150,000,000 senior subordinated notes, $400,000,000 face value senior
notes, a term loan with an outstanding balance of $115,000,000, and a
revolving credit agreement with an outstanding balance of zero.  The
senior subordinated notes, senior notes, the revolving credit agreement,
and the term loan are fully and unconditionally guaranteed by the Parent.

	Each of the wholly owned subsidiaries of the Parent (collectively
the "Guarantor Subsidiaries"), with the exception of various subsidiaries
formerly engaged in the issuance of collateralized mortgage obligations,
a mortgage lending subsidiary, a subsidiary holding and licensing the "K.
Hovnanian" trade name, a subsidiary engaged in homebuilding activity in
Poland, our Title subsidiaries, and in 2001 and 2002 joint ventures
(collectively the "Non-guarantor Subsidiaries"), have guaranteed fully
and unconditionally, on a joint and several basis, the obligation to pay
principal and interest under the senior notes, subordinated notes,
revolving credit agreement and term loan of the Subsidiary Issuer.

	In lieu of providing separate audited financial statements for the
Guarantor Subsidiaries we have included the accompanying consolidated
condensed financial statements.  Management does not believe that
separate financial statements of the Guarantor Subsidiaries are material
to investors.  Therefore, separate financial statements and other
disclosures concerning the Guarantor Subsidiaries are not presented.

	The following consolidating condensed financial information
presents the results of operations, financial position and cash flows of
(i) the Parent (ii) the Subsidiary Issuer (iii) the Guarantor
Subsidiaries of the Parent (iv) the Non-guarantor Subsidiaries of the
Parent and (v) the eliminations to arrive at the information for
Hovnanian Enterprises, Inc. on a consolidated basis.


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATING CONDENSED BALANCE SHEET
OCTOBER 31, 2002
(Thousands of Dollars)

                                                        Guarantor     Non-
                                             Subsidiary  Subsid-    Guarantor    Elimin-     Consol-
                                    Parent    Issuer     iaries    Subsidiaries  ations      idated
                                   --------  ---------- ---------- ------------ ---------- ----------
                                                                         
Assets
Homebuilding.......................$  1,501  $  261,107 $1,269,514 $     36,014  $         $1,568,136
Financial Services.................                            111      109,881               109,992
Investments in and amounts due to
  and from consolidated
  subsidiaries..................... 584,103     432,130   (628,246)     (34,316)  (353,671)
                                   --------  ---------- ---------- ------------ ---------- ----------
Total Assets.......................$585,604  $  693,237 $  641,379 $    111,579 $ (353,671)$1,678,128
                                   ========  ========== ========== ============ ========== ==========

Liabilities
Homebuilding.......................$         $   35,736 $  314,171 $      3,595 $          $  353,502
Financial Services.................                                      90,355                90,355
Notes Payable......................             661,390      2,345        7,210               670,945
Income Taxes Payable (Receivables).  23,055      (3,147)   (18,184)        (947)                  777
Stockholders' Equity............... 562,549        (742)   343,047       11,366   (353,671)   562,549
                                   --------  ---------- ---------- ------------ ---------- ----------
Total Liabilities and Stockholders'
  Equity...........................$585,604  $  693,237 $  641,379 $    111,579 $ (353,671)$1,678,128
                                   ========  ========== ========== ============ ========== ==========



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATING CONDENSED BALANCE SHEET
OCTOBER 31, 2001
(Thousands of Dollars)

                                                        Guarantor     Non-
                                             Subsidiary  Subsid-    Guarantor    Elimin-     Consol-
                                    Parent    Issuer     iaries    Subsidiaries  ations      idated
                                   --------  ---------- ---------- ------------ ---------- ----------
                                                                         
Assets
Homebuilding.......................$  2,022  $   50,565 $  882,715 $     10,229 $          $  945,531
Financial Services.................                            205      117,803               118,008
Income Taxes (Payables)Receivables.  (5,067)     (3,658)    11,893       (2,449)                  719
Investments in and amounts due to
  and from consolidated
  subsidiaries..................... 378,691     375,514   (668,285)      14,513   (100,433)
                                   --------  ---------- ---------- ------------ ---------- ----------
Total Assets.......................$375,646  $  422,421 $  226,528 $    140,096 $ (100,433)$1,064,258
                                   ========  ========== ========== ============ ========== ==========

Liabilities
Homebuilding.......................$         $   14,679 $  161,759 $        291 $          $  176,729
Financial Services.................                                     103,569               103,569
Notes Payable......................             408,206        108                            408,314
Stockholders' Equity............... 375,646        (464)    64,661       36,236   (100,433)   375,646
                                   --------  ---------- ---------- ------------ ---------- ----------
Total Liabilities and Stockholders'
  Equity...........................$375,646  $  422,421 $  226,528 $    140,096 $ (100,433)$1,064,258
                                   ========  ========== ========== ============ ========== ==========



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATING CONDENSED STATEMENT OF INCOME
TWELVE MONTHS ENDED OCTOBER 31, 2002
(Thousands of Dollars)

                                                       Guarantor   Non-
                                           Subsidiary  Subsid-   Guarantor      Elimin-     Consol-
                                  Parent    Issuer     iaries    Subsidiaries   ations      idated
                                  -------  ---------- ---------- ------------ ----------  ----------
                                                                        
Revenues:
  Homebuilding...................$         $    1,059 $2,523,632 $     14,093  $ (28,448) $2,510,336
  Financial Services..............                         7,153       33,617                 40,770
  Intercompany Charges............            139,502     21,183                (160,685)
  Equity In Pretax Income of
    Consolidated Subsidiaries.....226,625                                       (226,625)
                                  -------  ---------- ---------- ------------ ----------  ----------
    Total Revenues............... 226,625     140,561  2,551,968       47,710   (415,758)  2,551,106
                                  -------  ---------- ---------- ------------ ----------  ----------

Expenses:
  Homebuilding....................            140,561  2,312,199       18,165   (168,987)  2,301,938
  Financial Services..............                         2,397       20,324       (178)     22,543
                                  -------  ---------- ---------- ------------ ----------  ----------
    Total Expenses................            140,561  2,314,596       38,489   (169,165)  2,324,481
                                  -------  ---------- ---------- ------------ ----------  ----------

Income(Loss) Before Income Taxes  226,625                237,372        9,221   (246,593)    226,625

State and Federal Income Taxes.... 88,347        (195)    89,530        5,797    (95,132)     88,347

Extraordinary Loss From
  Extinguishment of Debt, Net of
  Income Taxes..................     (582)       (582)                               582        (582)
                                  -------  ---------- ---------- ------------ ----------  ----------
Net Income (Loss)............... $137,696  $     (387)$  147,842 $      3,424 $ (150,879) $  137,696
                                  =======  ========== ========== ============ ==========  ==========



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATING CONDENSED STATEMENT OF INCOME
TWELVE MONTHS ENDED OCTOBER 31, 2001
(Thousands of Dollars)

                                                       Guarantor   Non-
                                           Subsidiary  Subsid-   Guarantor      Elimin-     Consol-
                                  Parent    Issuer     iaries    Subsidiaries   ations      idated
                                  -------  ---------- ---------- ------------ ----------  ----------
                                                                        
Revenues:
  Homebuilding....................$        $      431 $1,701,421 $     46,190 $  (37,480) $1,710,562
  Financial Services..............                        10,391       21,037                 31,428
  Intercompany Charges............             96,368     30,480                (126,848)
  Equity In Pretax Income of
    Consolidated Subsidiaries.....106,354                                       (106,354)
                                  -------  ---------- ---------- ------------ ----------  ----------
    Total Revenues................106,354      96,799  1,742,292       67,227   (270,682)  1,741,990
                                  -------  ---------- ---------- ------------ ----------  ----------

Expenses:
  Homebuilding....................             96,799  1,637,265        8,935   (128,806)  1,614,193
  Financial Services..............                         5,748       15,821       (126)     21,443
                                  -------  ---------- ---------- ------------ ----------  ----------
    Total Expenses................             96,799  1,643,013       24,756   (128,932)  1,635,636
                                  -------  ---------- ---------- ------------ ----------  ----------

Income (Loss) Before Income Taxes106,354                  99,279       42,471   (141,750)    106,354

State and Federal Income Taxes....42,668          109     39,278       16,448    (55,835)     42,668
                                  -------  ---------- ---------- ------------ ----------  ----------
Net Income (Loss)................$63,686   $     (109)$   60,001 $     26,023 $  (85,915) $   63,686
                                  =======  ========== ========== ============ ==========  ==========



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATING CONDENSED STATEMENT OF INCOME
TWELVE MONTHS ENDED OCTOBER 31, 2000
(Thousands of Dollars)

                                                       Guarantor   Non-
                                           Subsidiary  Subsid-   Guarantor      Elimin-     Consol-
                                  Parent    Issuer     iaries    Subsidiaries   ations      idated
                                  -------  ---------- ---------- ------------ ----------  ----------
                                                                        
Revenues:
  Homebuilding....................$        $      391 $1,112,173 $   21,397   $ (17,726)  $1,116,235
  Financial Services..............                         6,028     13,296                   19,324
  Intercompany Charges............             82,051     34,505               (116,556)
  Equity In Pretax Income of
    Consolidated Subsidiaries..... 51,818                                       (51,818)
                                  -------  ---------- ---------- ------------ ----------  ----------
    Total Revenues................ 51,818      82,442  1,152,706     34,693    (186,100)   1,135,559
                                  -------  ---------- ---------- ------------ ----------  ----------

Expenses:
  Homebuilding....................             66,232  1,094,207      2,831     (99,279)   1,063,991
  Financial Services..............                         4,591     15,426        (267)      19,750
                                  -------  ---------- ---------- ------------ ----------  ----------
    Total Expenses................             66,232  1,098,798     18,257     (99,546)   1,083,741
                                  -------  ---------- ---------- ------------ ----------  ----------

Income (Loss) Before Income Taxes. 51,818      16,210     53,908     16,436     (86,554)      51,818

State and Federal Income Taxes.... 18,655       6,616     18,438      5,757     (30,811)      18,655
                                  -------  ---------- ---------- ------------ ----------  ----------
Net Income (Loss).................$33,163  $    9,594 $   35,470 $   10,679   $ (55,743)  $   33,163
                                  =======  ========== ========== ============ ==========  ==========



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
TWELVE MONTHS ENDED OCTOBER 31, 2002
(Thousands of Dollars)

                                                         Guarantor     Non-
                                              Subsidiary   Subsid-   Guarantor     Elimin-    Consol-
                                      Parent    Issuer     iaries   Subsidiaries   ations     idated
                                     --------  --------- ---------- ------------ ---------- ----------
                                                                          
Cash Flows From Operating Activities:
  Net Income........................$137,696   $   (387) $ 147,841  $     3,425  $ (150,879) $137,696
  Adjustments to reconcile net income
    to net cash provided by
    (used in) operating activities.. 122,389     23,716   (217,049)      30,909     150,879   110,844
                                     --------  --------- ---------- ------------ ---------- ----------
  Net Cash Provided By (Used In)
      Operating Activities.......... 260,085     23,329    (69,208)      34,334               248,540

  Net Cash Provided By (Used In)
    Investing Activities............ (48,775)    (6,875)  (104,202)         166              (159,686)

  Net Cash Provided By (Used In)
    Financing Activities............  (2,948)   264,846    (83,298)     (13,613)              164,987

  Intercompany Investing and Financing
    Activities - Net................(208,362)   (56,616)   284,781      (19,803)
                                     --------  --------- ---------- ------------ ---------- ----------
  Net Increase (Decrease)...........            224,684     28,073        1,084               253,841
  In Cash and Cash Equivalents Balance,
    Beginning of Period.............      10     (5,840)    15,616        6,363               16,149
                                     --------  --------- ---------- ------------ ---------- ----------
  Cash and Cash Equivalents Balance,
    End of Period................... $    10   $ 218,844 $  43,689  $     7,447  $     --   $269,990
                                     ========  ========= ========== ============ ========== ==========



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
TWELVE MONTHS ENDED OCTOBER 31, 2001
(Thousands of Dollars)

                                                         Guarantor     Non-
                                              Subsidiary   Subsid-   Guarantor     Elimin-    Consol-
                                      Parent    Issuer     iaries   Subsidiaries   ations     idated
                                     --------  --------- ---------- ------------ ---------- ----------
                                                                          
Cash Flows From Operating Activities:
  Net Income........................$ 63,686   $   (109)$   60,001 $     26,023  $ (85,915) $ 63,686
  Adjustments to reconcile net income
    to net cash provided by
    (used in) operating activities.. 102,908     99,063   (264,122)     (50,381)    85,915   (26,617)
                                     --------  --------- ---------- ------------ ---------- ----------
  Net Cash Provided By (Used In)
      Operating Activities.......... 166,594     98,954   (204,121)     (24,358)              37,069

  Net Cash Provided By (Used In)
    Investing Activities............ (49,622)    (3,770)    13,393          264              (39,735)

  Net Cash Provided By (Used In)
    Financing Activities............  (6,215)       114    (59,549)      41,212              (24,438)

  Intercompany Investing and Financing
    Activities - Net................(110,684)  (118,767)   243,387      (13,936)
                                     --------  --------- ---------- ------------ ---------- ----------
  Net Increase (Decrease)...........      73    (23,469)    (6,890)       3,182              (27,104)
  In Cash and Cash Equivalents Balance,
    Beginning of Period.............     (63)    17,629     22,506        3,181               43,253
                                     --------  --------- ---------- ------------ ---------- ----------
  Cash and Cash Equivalents Balance,
    End of Period................... $    10   $ (5,840) $  15,616  $     6,363  $     --   $ 16,149
                                     ========  ========= ========== ============ ========== ==========



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
TWELVE MONTHS ENDED OCTOBER 31, 2000
(Thousands of Dollars)

                                                         Guarantor     Non-
                                              Subsidiary   Subsid-   Guarantor     Elimin-    Consol-
                                      Parent    Issuer     iaries   Subsidiaries   ations     idated
                                     --------  --------- ---------- ------------ ---------- ----------
                                                                          
Cash Flows From Operating Activities:
  Net Income.........................$ 33,163  $  9,594  $  35,470  $    10,679  $ (55,743) $  33,163
  Adjustments to reconcile net income
    to net cash provided by
    (used in) operating activities...     751    80,742   (196,014)     (35,030)    55,743    (93,808)
                                     --------  --------- ---------- ------------ ---------- ----------
  Net Cash Provided By (Used In)
    Operating Activities.............  33,914    90,336   (160,544)     (24,351)              (60,645)

  Net Cash Provided By (Used In)
    Investing Activities.............    (231)  (13,262)    (4,433)          (9)              (17,935)

  Net Cash Provided By (Used In)
    Financing Activities.............  (6,461)   76,305      6,864       25,760               102,468

  Intercompany Investing and Financing
    Activities - Net................. (27,331) (130,355)   156,011        1,675
                                     --------  --------- ---------- ------------ ---------- ----------
  Net Increase (Decrease)............    (109)   23,024     (2,102)       3,075                23,888
  In Cash and Cash Equivalents Balance,
    Beginning of Period..............      46    (5,395)    24,608          106                19,365
                                     --------  --------- ---------- ------------ ---------- ----------
  Cash and Cash Equivalents Balance,
    End of Period....................$    (63) $ 17,629  $  22,506  $     3,181  $      --  $  43,253
                                     ========  ========= ========== ============ ========== ==========




20.  Subsequent Event (Unaudited)

	During the first quarter we purchased two Houston based
homebuilders for approximately $100.0 million.







1999 HOVNANIAN ENTERPRISES, INC
STOCK INCENTIVE PLAN

(As amended and restated March 8th, 2002)

1. Purpose of the Plan
The purpose of the Plan is to aid the Company and its
Affiliates in recruiting and retaining key employees, directors or
consultants of outstanding ability and to motivate such employees,
directors or consultants to exert their best efforts on behalf of the
Company and its Affiliates by providing incentives through the
granting of Awards. The Company expects that it will benefit from the
added interest which such key employees, directors or consultants
will have in the welfare of the Company as a result of their
proprietary interest in the Company's success.
2. Definitions
The following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, or
any successor thereto.
(b) Affiliate: With respect to the Company, any entity
directly or indirectly controlling, controlled by, or
under common control with, the Company or any other
entity designated by the Board in which the Company or an
Affiliate has an interest.
(c) Award: An Option, Stock Appreciation Right or Other
Stock-Based Award granted pursuant to the Plan.
(d) Beneficial Owner: A "beneficial owner", as such term is
defined in Rule 13d-3 under the Act (or any successor
rule thereto).
(e) Board: The Board of Directors of the Company.
(f) Change in Control:
The occurrence of any of the following
events:
(i)  any Person (other than a Person holding securities
representing 10% or more of the combined voting power of
the Company's outstanding securities as of the Effective
Date, or any Family Member of such a Person, the Company,
any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, or any company
owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their
ownership of stock of the Company), becomes the
Beneficial Owner, directly or indirectly, of securities
of the Company, representing 50% or more of the combined
voting power of the Company's then-outstanding
securities;
(ii)  during any period of twenty-four consecutive
months (not including any period prior to the Effective
Date), individuals who at the beginning of such period
constitute the Board, and any new director (other than
(A) a director nominated by a Person who has entered into
an agreement with the Company to effect a transaction
described in Sections 2(f) (i) , (iii) or (iv) of the
Plan or (B) a director nominated by any Person (including
the Company) who publicly announces an intention to take
or to consider taking actions (including, but not limited
to, an actual or threatened proxy contest) which if
consummated would constitute a Change in Control) whose
election by the Board or nomination for election by the
Company's shareholders was approved in advance by a vote
of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of
the period or whose election or nomination for election
was previously so approved, cease for any reason to
constitute at least a majority thereof;
(iii) the consummation of any transaction or series of
transactions under which the Company is merged or
consolidated with any other company, other than a merger
or consolidation which would result in the shareholders
of the Company immediately prior thereto continuing to
own (either by remaining outstanding or by being
converted into voting securities of the surviving entity)
more than 65% of the combined voting power of the voting
securities of the Company or such surviving entity
outstanding immediately after such merger or
consolidation; or
(iv) the Company undergoes a complete liquidation of the
Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's
assets, other than a liquidation of the Company into a
wholly-owned subsidiary.
(g) Code: The Internal Revenue Code of 1986, as amended, or
any successor thereto.
(h) Committee: The Compensation Committee of the Board.
(i) Company: Hovnanian Enterprises, Inc., a Delaware
corporation.
(j) Disability: Inability of a Participant to perform in all
material respects his duties and responsibilities to the
Company, or any Subsidiary of the Company, by reason of a
physical or mental disability or infirmity which
inability is reasonably expected to be permanent and has
continued (i) for a period of six consecutive months or
(ii) such shorter period as the Board may reasonably
determine in good faith. The Disability determination
shall be in the sole discretion of the Board and a
Participant (or his representative) shall furnish the
Board with medical evidence documenting the Participant's
disability or infirmity which is satisfactory to the
Board.
(k) Effective Date: March 5,1999
(l) Fair Market Value: On a given date, the arithmetic mean
of the high and low prices of the Shares as reported on
such date on the Composite Tape of the principal national
securities exchange on which such Shares are listed or
admitted to trading, or, if no Composite Tape exists for
such national securities exchange on such date, then on
the principal national securities exchange on which such
Shares are listed or admitted to trading, or, if the
Shares are not listed or admitted on a national
securities exchange, the arithmetic mean of the per Share
closing bid price and per Share closing asked price on
such date as quoted on the National Association of
Securities Dealers Automated Quotation System (or such
market in which such prices are regularly quoted), or, if
there is no market on which the Shares are regularly
quoted, the Fair Market Value shall be the value
established by the Committee in good faith. If no sale of
Shares shall have been reported on such Composite Tape or
such national securities exchange on such date or quoted
on the National Association of Securities Dealer
Automated Quotation System on such date, then the
immediately preceding date on which sales of the Shares
have been so reported or quoted shall be used.
(m) Family Member:
(i) any Person holding securities representing 10% or
more of the combined voting power of the Company's
outstanding securities as of the Effective Date;
(ii) any spouse of such a person;
(iii) any descendant of such a person;
(iv) any spouse of any descendant of such a person; or
(v) any trust for the benefit of any of the
aforementioned persons.
(n) ISO: An Option that is also an incentive stock option
granted pursuant to Section 6(d) of the Plan.
(o) LSAR: A limited stock appreciation right granted pursuant
to Section 7(d) of the Plan.
(p) Other Stock-Based Awards: Awards granted pursuant to
Section 8 of the Plan.
(q) Option: A stock option granted pursuant to Section 6 of
the Plan.
(r) Option Price: The purchase price per Share of an Option,
as determined pursuant to Section 6(a) of the Plan.
(s) Participant: An employee, director or consultant who is
selected by the Committee to participate in the Plan.
(t) Performance-Based Awards: Certain Other Stock-Based
Awards granted pursuant to Section 8(b) of the Plan.
(u) Person: A "person", as such term is used for purposes of
Section 13 (d) or 14(d) of the Act (or any successor
section thereto).
(v) Plan: The 1999 Hovnanian Enterprises, Inc. Stock
Incentive Plan.
(w) Shares: Shares of common stock of the Company.
(x) Stock Appreciation Right: A stock appreciation right
granted pursuant to Section 7 of the Plan.
(y) Subsidiary: A subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section
thereto)
3. Shares Subject to the Plan
The total number of Shares which may be issued under the Plan
is 1,500,000. The maximum number of Shares for which Options or Stock
Appreciation Rights may be granted during a calendar year to any
Participant shall be 300,000. The Shares may consist, in whole or in
part, of unissued Shares or treasury Shares. The issuance of Shares
or the payment of cash upon the exercise of an Award shall reduce the
total number of Shares available under the Plan, as applicable.
Shares which are subject to Awards which terminate or lapse may be
granted again under the Plan.
4. Administration
The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any
subcommittee thereof consisting solely of at least two individuals
who are each "non-employee directors" within the meaning of Rule 16b-
3 under the Act (or any successor rule thereto) and "outside
directors" within the meaning of Section 162(m) of the Code (or any
successor section thereto); provided, however, that any action
permitted to be taken by the Committee may be taken by the Board, in
its discretion. The Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to
the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan. The
Committee may correct any defect or omission or reconcile any
inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of the Committee
in the interpretation and administrations of the Plan, as described
herein, shall lie within its sole and absolute discretion and shall
be final, conclusive and binding on all parties concerned (including,
but not limited to Participants and their beneficiaries or
successors. Determinations made by the Committee under the Plan need
not be uniform and may be made selectively among Participants,
whether or not such Participants are similarly situated. The
Committee shall require payment of any amount it may determine to be
necessary to withhold for federal, state, local or other, taxes as a
result of the exercise of an Award. Unless the Committee specifies
otherwise, the Participant may elect to pay a portion or all of such
withholding taxes by (a) delivery in Shares or (b) having Shares
withheld by the Company from any Shares that would have otherwise
been received by the Participant. The number of Shares so delivered
or withheld shall have an aggregate Fair Market Value sufficient to
satisfy the applicable withholding taxes. If the chief executive
officer of the Company is a member of the Board, the Board by
specific resolution may constitute such chief executive officer as a
committee of one which shall have the authority to grant Awards of up
to an aggregate of 300,000 Shares in each calendar year to
Participants who are (i) not subject to the rules promulgated under
Section 16 of the Act (or any successor section thereto) or (ii)
covered employees (or anticipated to become covered employees) as
such term is defined in Section 162(m) of the Code; provided,
however, that such chief executive officer shall notify the Committee
of any such grants made pursuant to this Section 4.
5. Limitations
No Award may be granted under the Plan after the tenth
anniversary of the Effective Date, but Awards theretofore granted may
extend beyond that date.
6. Terms and Conditions of Options
Options granted under the Plan shall be, as determined by the
Committee, non-qualified or incentive stock options for federal
income tax purposes, as evidenced by the related Award agreements,
and shall be subject to the foregoing and the following terms and
conditions and to such other terms and conditions, not inconsistent
therewith, as the Committee shall determine:
(a)  Option Price. The Option Price per Share shall be
determined by the Committee, but shall not be less than 100% of the
Fair Market Value of the Shares on the date an Option is granted.
(b)  Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be
determined by the Committee, but in no event shall an Option be
exercisable more than ten years after the date it is granted.  The
Committee may, in its discretion, accelerate the date after which
Options may be exercised in whole or in part.  If the chief executive
officer of the Company is a member of the Board, the Board by
specific resolution may constitute such chief executive officer as a
committee of one which shall have the authority to accelerate the
date after which Options may be exercised in whole or in part.
(c) Exercise of Options. Except as otherwise provided in the
Plan or in an Award agreement, an Option may be exercised for all, or
from time to time any part, of the Shares for which it is then
exercisable. For purposes of Section 6 of the plan, the exercise date
of an Option shall be the later of the date a notice of exercise is
received by the Company and, if applicable, the date payment is
received by the Company pursuant to clauses (i), (ii), (iii) or (iv)
in the following sentence. The purchase price ~or the Shares as to
which an Option is exercised shall be paid to the Company in full at
the time of exercise at the election of the Participant (i) in cash,
(ii) in Shares having a Fair Market Value equal to the aggregate
Option Price for the Shares being purchased and satisfying such other
requirements as may be imposed by the Committee; provided, that such
Shares have been held by the Participant for no less than six months,
(iii) partly in cash and partly in such Shares or (iv) through the
delivery of irrevocable instruments to a broker to deliver promptly
to the Company an amount equal to the aggregate option price for the
shares being purchased. No Participant shall have any rights to
dividends or other rights of a stockholder with respect to Shares
subject to an Option until the Participant has given written notice
of exercise of the Option, paid in full for such Shares and, if
applicable, has satisfied any other conditions imposed by the
Committee pursuant to the Plan.
(d) ISOs. The Committee may grant Options under the Plan that
are intended to be ISOs. Such ISOs shall comply with the requirements
of Section 422 of the Code (or any successor section thereto) . No
ISO may be granted to any Participant who at the time of such grant,
owns more than ten percent of the total combined voting power of all
classes of stock of the Company or of any Subsidiary, unless (i) the
Option Price for such ISO is at least 110% of the Fair Market Value
of a Share on the date the ISO is granted and (ii) the date on which
such ISO terminates is a date not later than the day preceding the
fifth anniversary of the date on which the ISO is granted. Any
Participant who disposes of Shares acquired upon the exercise of an
ISO either (i) within two years after the date of grant of such ISO
or (ii) within one year after the transfer of such Shares to the
Participant, shall notify the Company of such disposition and of the
amount realized upon such disposition.
7. Terms and Conditions of Stock Appreciation Rights
(a)  Grants. The Committee also may grant (i) a Stock
Appreciation Right independent of an Option or (ii) a Stock
Appreciation Right in connection with an Option, or a portion
thereof. A Stock Appreciation Right granted pursuant to clause (ii)
of the preceding sentence (A) may be granted at the time the related
Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same Shares
covered by an Option (or such lesser number of Shares as the
Committee may determine) and (C) shall be subject to the same terms
and conditions as such Option except for such additional limitations
as are contemplated by this Section 8 (or such additional limitations
as may be included in an Award agreement).
(b) Terms. The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee but
in no event shall such amount be less than the greater of (i) the
Fair Market Value of a Share on the date the Stock Appreciation Right
is granted or, in the case of a Stock Appreciation Right granted in
conjunction with an Option, or a portion thereof, the Option Price of
the related Option and (ii) an amount permitted by applicable laws,
rules, by-laws or policies of regulatory authorities or stock
exchanges. Each Stock Appreciation Right granted independent of an
Option shall entitle a Participant upon exercise to an amount equal
to (i) the excess of (A) the Fair Market Value on the exercise date
of one Share over (B) the exercise price per Share, times (ii) the
number of Shares covered by the Stock Appreciation Right. Each Stock
Appreciation Right granted in conjunction with an Option, or a
portion thereof, shall entitle a Participant to surrender to the
Company the unexercised Option, or any portion thereof, and to
receive from the Company in exchange therefor an amount equal to (i)
the excess of (A) the Fair Market Value on the exercise date of one
Share over (B) the Option Price per Share, times (ii) the number of
Shares covered by the Option, or portion thereof, which is
surrendered. The date a notice of exercise is received by the Company
shall be the exercise date. Payment shall be made in Shares or in
cash, or partly in Shares and partly in cash (any such Shares valued
at such Fair Market Value), all as shall be determined by the
Committee. Stock Appreciation Rights may be exercised from time to
time upon actual receipt by the Company of written notice of exercise
stating the number of Shares with respect to which the Stock
Appreciation Right is being exercised. No fractional Shares will be
issued in payment for Stock Appreciation Rights, but instead cash
will be paid for a fraction or, if the Committee should so determine,
the number of Shares will be rounded downward to the next whole
Share.
(c) Limitations. The Committee may impose, in its discretion,
such conditions upon the exercisability or transferability of Stock
Appreciation Rights as it may deem fit.
(d) Limited Stock Appreciation Rights. The Committee may
grant LSARs that are exercisable upon the occurrence of specified
contingent events. Such LSARs may provide for a different method of
determining appreciation, may specify that payment will be made only
in cash and may provide that any related Awards are not exercisable
while such LSARS are exercisable. Unless the context otherwise
requires, whenever the term "Stock Appreciation Right" is used in the
Plan, such term shall include LSARs.
8. Other Stock-Based Awards
(a)  Generally. The Committee, in its sole discretion, may
grant Awards of Shares, Awards of restricted Shares and Awards that
are valued in whole or in part by reference to, or are otherwise
based on the Fair Market Value of, Shares ("Other Stock-Based
Awards"). Such Other Stock-Based Awards shall be in such form, and
dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive one or more
Shares (or the equivalent cash value of such Shares) upon the
completion of a specified period of service, the occurrence of an
event and/or the attainment of performance objectives. Other Stock-
Based Awards may be granted alone or in addition to any other Awards
granted under the Plan. Subject to the provisions of the Plan, the
Committee shall determine to whom and when Other Stock-Based Awards
will be made, the number of Shares to be awarded under (or otherwise
related to) such Other Stock-Based Awards; whether such Other Stock-
Based Awards shall be settled in cash, Shares or a combination of
cash and Shares; and all other terms and conditions of such Awards
(including, without limitation, the vesting provisions thereof and
provisions ensuring that all Shares so awarded and issued shall be
fully paid and non-assessable).
(b) Performance-Based Awards. Notwithstanding anything to the
contrary herein, certain Other Stock-Based Awards granted under this
Section 8 may be granted in a manner which is deductible by the
Company under Section 162(m) of the Code (or any successor section
thereto) ("Performance-Based Awards"). A Participant's Performance-
Based Award shall be determined based on the attainment of written
performance goals approved by the Committee for a performance period
established by the Committee (i) while the outcome for that
performance period is substantially uncertain and (ii) no more than
90 days after the commencement of the performance period to which the
performance goal relates or, if less, the number of days which is
equal to 25 percent of the relevant performance period. The
performance goals, which must be objective, shall be based upon one
or more of the following criteria: (i) consolidated earnings before
or after taxes (including earnings before interest, taxes,
depreciation and amortization); (ii) net income; (iii) operating
income; (iv) earnings per Share; (v) book value per Share; (vi)
return on shareholders' equity; (vii) expense management; (viii)
return on investment; (ix) improvements in capital structure; (x)
profitability of an identifiable business unit or product; (xi)
maintenance or improvement of profit margins; (xii) stock price;
(xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash
flow; (xvii) working capital and (xviii) return on assets. The
foregoing criteria may relate to the Company, one or more of its
Subsidiaries or one or more of its divisions or units, or any
combination of the foregoing, and may be applied on an absolute basis
and/or be relative to one or more peer group companies or indices, or
any combination thereof, all as the Committee shall determine. In
addition, to the degree consistent with Section 162(m) of the Code
(or any successor section thereto), the performance goals may be
calculated without regard to extraordinary items. The maximum amount
of a Performance-Based Award during a calendar year to any
Participant shall be $2,000,000. The Committee shall determine
whether, with respect to a performance period, the applicable
performance goals have been met with respect to a given Participant
and, if they have, to so certify and ascertain the amount of the
applicable Performance-Based Award. No Performance-Based Awards will
be paid for such performance period until such certification is made
by the Committee. The amount of the Performance-Based Award actually
paid to a given Participant may be less than the amount determined by
the applicable performance goal formula, at the discretion of the
Committee. The amount of the Performance-Based Award determined by
the Committee for a performance period shall be paid to the
Participant at such time as determined by the Committee in its sole
discretion after the end of such performance period; provided,
however, that a Participant may, if and to the extent permitted by
the Committee and consistent with the provisions of Section 162(m) of
the Code, elect to defer payment of a Performance-Based Award.
9. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the
contrary, the following provisions shall apply to all Awards granted
under the Plan:
(a) Generally. In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share dividend or
split, reorganization, recapitalization, merger, consolidation, spin-
off, combination or exchange of Shares or other corporate exchange,
any distribution to shareholders of Shares other than regular cash
dividends or any similar event, the Committee in its sole discretion
and without liability to any person may make such substitution or
adjustment, if any, as it deems to be equitable, as to (i) the number
or kind of Shares or other securities issued or reserved for issuance
pursuant to the Plan or pursuant to outstanding Awards, (ii) the
Option Price and/or (iii) any other affected terms of such Awards.
(b) Change in Control. Except as otherwise provided in an
Award agreement, in the event of a Change in Control, the Committee
in its sole discretion and without~ liability to any person may take
such actions, if any, as it deems necessary or desirable with respect
to any Award (including, without limitation, (i) the acceleration of
an Award, (ii) the payment of a cash amount in exchange for the
cancellation of an Award and/or (iii) the requiring of the issuance
of substitute Awards that will substantially preserve the value,
rights and benefits of any affected Awards previously granted
hereunder) as of the date of the consummation of the Change in
Control.
10. No Right to Employment
The granting of an Award under the Plan shall impose no
obligation on the Company or any Subsidiary to continue the
employment of a Participant and shall not lessen or affect the
Company's or Subsidiary's right to terminate the employment of such
Participant.
11. Successors and Assigns
The Plan shall be binding on all successors and assigns of the
Company and a Participant; including without limitation, the estate
of such Participant and the executor, administrator or trustee of
such estate, or any receiver or trustee in bankruptcy or
representative of the Participant's creditors.
12. Nontransferability of Awards
Unless otherwise determined by the Committee, an Award shall
not be transferable or assignable by the Participant otherwise than
by will or by the laws of descent and distribution.  Notwithstanding
the foregoing, a Participant may transfer an option (other than an
ISO) in whole or in party by gift or domestic relations order to a
family member of the Participant (a "Permitted Transferee") and,
following any such transfer such option or portion thereof shall be
exercisable only by the Permitted Transferee, provided that no such
option or portion thereof is transferred for value, and provided
further that, following any such transfer, neither such option or any
portion thereof nor any right hereunder shall be transferable other
than to the Participant or otherwise than by will or the laws of
descent and distribution or be subject to attachment, execution or
other similar process.  For purposes of this Section 12, "family
member" includes any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships,
any person sharing the Participant's household (other than a tenant
or employee), trust in which these persons have more than fifty
percent of the beneficial interest, a foundation in which these
persons (or the Participant) control the management of assets and any
other entity in which these persons (or the Participant) own more
than fifty percent of the voting interests.  An Award exercisable
after the death of a Participant may be exercised by the legatees,
personal representatives or distributees of the Participant.
13. Amendments or Termination
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which, (a)
without the approval of the shareholders of the Company, would
(except as is provided in Section 10 of the Plan), increase the total
number of Shares reserved for the purposes of the Plan or change the
maximum number of Shares for which Awards may be granted to any
Participant or (b) without the consent of a Participant, would impair
any of the rights or obligations under any Award theretofore granted
to such Participant under the Plan; provided, however, that the
Committee may amend the Plan in such manner as it deems necessary to
permit the granting of Awards meeting the requirements of the Code or
other applicable laws. Notwithstanding anything to the contrary
herein, the Board may not amend, alter or discontinue the provisions
relating to Section 9(b) of the Plan after the occurrence of a Change
in Control.
14. International Participants
With respect to Participants who reside or work outside the
United States of America and who are not (and who are not expected to
be) `covered employees' within the meaning of Section 162(m) of the
Code, the Committee may, in its sole discretion, amend the terms of
the Plan or Awards with respect to such Participants in order to
conform such terms with the requirements of local law.
15. Choice of Law
The Plan shall be governed by and construed in accordance with
the laws of the State of Delaware.
16. Effectiveness of the Plan
The Plan shall be effective as of the Effective Date. If the
Plan is not approved by the shareholders of the Company prior to the
first anniversary of the Effective Date, no Awards may be granted
thereafter.
		6
045050-0001-08714-NY03.2155838.2		01/15/03 10:57 AM

HOVNANIAN ENTERPRISES, INC.
1983 Stock Option Plan
(As amended and restated March 8th, 2002)
The purpose of the 1983 Stock Option Plan (the "Plan") is to make
stock options for Common Stock of Hovnanian Enterprises, Inc. (the
"Company") available to certain officers and key employees of the
Company and its subsidiaries to give them a greater personal interest
in the success of the enterprise and an added incentive to continue and
advance in their employment.
	1. AMOUNT AND SOURCE OF STOCK: Except as otherwise permitted
pursuant to paragraph 8 hereof, the total number of shares of the
Company's Common Stock which may be issued under the Plan shall not
exceed 1,000,000. These shares may be authorized and unissued shares or
issued and reacquired shares, as the Board of Directors of the Company
(the "Board of Directors") may from time to time determine. The number
of shares of the Company's Common Stock available for grant of options
under the Plan shall be decreased by the sum of the number of shares
with respect to which options have been issued and are then outstanding
and the number of shares issued upon exercise of options, and shall be
increased due to the expiration or termination of options which have
not been exercised.
	2. EFFECTIVE DATE AND TERM OF PLAN: This Plan (as amended and
restated) shall, subject to shareholder approval, be effective May 4,
1990. Options may be granted under the Plan on or before March 8, 2005.
	3. ADMINISTRATION: The Plan shall be administered by a committee
of the Board of Directors (the "Committee") consisting of not less than
three directors of the Company to be appointed by, and to serve at the
pleasure of, the Board of Directors. The Committee shall have full
power to interpret the Plan and to establish and amend rules and
regulations for its administration. The Board of Directors may from
time to time appoint members of the Board of Directors in substitution
for or in addition to members previously appointed and may fill
vacancies in the Committee. The Board of Directors or the Committee may
establish a subcommittee (the "Subcommittee") to award options to such
key employees (other than executive officers) as the Subcommittee shall
determine subject to such limitations as may be set by the Board of
Directors. The Subcommittee shall consist of one or more directors of
the Company who shall be appointed by the Board of Directors or by the
Committee and who may but need not be members of the Committee.
	4. SELECTION: From time to time the Committee shall determine,
from among the key employees of the Company or its subsidiaries, which
of such employees shall be granted options under the Plan (the
"Optionees"), the number of shares subject to each option, and whether
each option shall comply with the provisions of Section 422A of the
Internal Revenue Code of 1986, as amended (the "Code") and be
designated an Incentive Stock Option.
	5. TERMS OF OPTIONS: (a) Option Period and Exercise of Options:
The Committee shall determine in its discretion the dates after which
each option granted under the Plan (an "Option") may be exercised in
whole or in part and the date after which such Option may no longer be
exercised (the "Termination Date"), which date shall not be later than
the day preceding the tenth anniversary of the date when granted. The
Committee may, in its discretion, accelerate the date after which an
Option may be exercised in whole or in part. If the chief executive
officer of the Company is a member of the Board of Directors, the Board
of Directors by specific resolution may constitute such chief executive
officer as a committee of one which shall have the authority to
accelerate the date after which an Option may be exercised in whole or
in part.  In exercising an Option, the Optionee may exercise less than
the full installment available to the Optionee, but the Optionee must
exercise the Option in full shares of Common Stock of the Company. An
Option which has not been exercised on or prior to its Termination Date
shall be cancelled.
	(b) Option Price: The purchase price per share of Common Stock
purchased under Options granted pursuant to the Plan (the "Option
Price") shall be determined by the Committee and shall not be less than
the Fair Market Value of the Common Stock of the Company on the date
the Option is granted. The "Fair Market Value" of the Common Stock of
the Company on the date of the Company's initial public offering of
Common Stock shall be the public offering price. On any subsequent
date, the "Fair Market Value" shall be deemed, for all purposes under
this Plan, to be the mean between the high and low sale prices of the
Common Stock of the Company reported as having occurred on any Stock
Exchange on which the Company's Common Stock may be listed and traded
on the date the Option is granted, or if there is no such sale on that
date, then on the last preceding date on which such a sale was
reported. The Option Price shall be paid in full upon the exercise of
the Option by certified or bank cashier's check payable to the order of
the Company, by the surrender or delivery to the Company of shares of
its Common Stock or by any other means acceptable to the Committee, and
the stock purchased shall thereupon be promptly delivered, provided,
however, that the Committee may, in its discretion, require that an
Optionee pay to the Company at the time of exercise, or at such later
date as the Company shall specify, such amount as the Committee deems
necessary to satisfy the Company's obligation to withhold Federal,
state or local income or other taxes incurred by reason of the exercise
or the transfer of shares thereupon. No Optionee or his legal
representatives, legatees or distributees, as the case may be, will be
deemed to be a holder of any shares pursuant to exercise of an Option
until the date of the issuance of a stock certificate to him for such
shares. Any cash proceeds of the sale of stock subject to Options are
to be added to the general funds of the Company and used for its
general corporate purposes. In no event shall the Option Price be less
than the par value of a share of Common Stock of the Company.
	(c) Special Rules Regarding Incentive Stock Options Granted to
Certain Employees: Notwithstanding the provisions of subsections (a)
and (b) of this section, no Incentive Stock Option shall be granted to
any employee who, at the time the Option is granted, owns (directly, or
within the meaning of Section 425(d) of the Code) more than ten percent
of the total combined voting power of all classes of stock of the
Company or any subsidiary corporation, unless (a) the Option Price
under the Option is at least 110 percent of the Fair Market Value of
the stock subject to the Option at the time of the grant and (b) the
Option by its terms is not exercisable after the expiration of five
years from the date it is granted.
	(d) Escrow Account and Special Rules Regarding Incentive Stock
Options Granted Prior to May 4, 1990: Notwithstanding the foregoing
paragraphs, the Optionee may, in the sole discretion of the Committee,
purchase the full number of shares of Common Stock with respect to
which the Option has been granted, subject to the condition that any
shares of Common Stock transferred to the Optionee under installments
of the Option which would not have been currently exercisable (in
accordance with the terms of the preceding paragraph) shall be placed
in an escrow account ("Escrow Account"). Shares held in the Escrow
Account shall be registered in the name of the Optionee, and all
dividend, voting, liquidation and other rights of ownership with
respect to shares held in the Escrow Account shall belong to the
Optionee, except that the Optionee may not sell, pledge, or otherwise
transfer such shares. As shares held in the Escrow Account would have
become exercisable (in accordance with the terms of the preceding
paragraph) they shall be withdrawn from the Escrow Account. The
Optionee shall have free and clear title to all shares withdrawn from
the Escrow Account, including the right to sell, pledge or otherwise
transfer the shares. Upon termination of the Optionee's employment with
the Company or a subsidiary thereof, all shares held in the Escrow
Account on the date of termination of employment shall be subject to a
right of repurchase in favor of the Company. The period of the right of
repurchase shall run for 30 days commencing with the date the
Optionee's employment with the Company or a subsidiary thereof
terminates. During the period of the right of repurchase the Company
shall have the right to repurchase from the Optionee at the Option
Price all shares held in the Escrow Account.
	Notwithstanding the foregoing paragraphs, Incentive Stock Options
granted prior to May 4, 1990 shall, by their terms, not be exercisable
while there is outstanding any Incentive Stock Option which was
granted, before the granting of such option, to such Optionee to
purchase stock in the Company or in a corporation which at the time of
the granting of such option is a subsidiary corporation of the Company
or in a predecessor corporation of the Company or any such subsidiary.
For the purpose of this paragraph an Incentive stock Option is
outstanding until it is exercised in full or expires by reason of lapse
of time. For the purposes of this paragraph the term "predecessor
corporation" means a corporation which was a party to a transaction
described in Section 425(a) of the Code (irrespective of whether a
substitution or assumption under such section was in fact effected)
with the Company or a corporation which at the time the new Incentive
Stock Option is granted is a related corporation of the Company or a
predecessor corporation of any such corporations.
	(e) Nontransferability of Options: Each option shall, during the
Optionee's lifetime, be exercisable only by the Optionee, and neither
it nor any right hereunder shall be transferable otherwise than by will
or the laws of descent and distribution or be subject to attachment,
execution or other similar process. Notwithstanding the foregoing, an
Optionee may transfer an option in whole or in part by gift or domestic
relations order to a family member of the Optionee (a "Permitted
Transferee") and, following any such transfer such option or portion
thereof shall be exercisable only by the Permitted Transferee, provided
that no such option or portion thereof is transferred for value, and
provided further that, following any such transfer, neither such option
or any portion thereof nor any right hereunder shall be transferable
other than to the Optionee or otherwise than by will or the laws of
descent and distribution or be subject to attachment, execution or
other similar process.  For purposes of this paragraph, "family member"
includes any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-
law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships, any person sharing the
Optionee's household (other than a tenant or employee), trust in which
these persons have more than fifty percent of the beneficial interest,
a foundation in which these persons (or the Optionee) control the
management of assets and any other entity in which these persons (or
the Optionee) own more than fifty percent of the voting interests. In
the event of any attempt by the Optionee to alienate, assign, pledge,
hypothecate or otherwise dispose of his Option or of any right
hereunder, except as provided for herein, or in the event of any levy
or any attachment, execution or similar process upon the rights or
interest hereby conferred, the Company may terminate his Option by
notice to the Optionee and it shall thereupon become null and void.
	(f) Cessation of Employment of Optionee: If, prior to the
Termination Date, the Optionee ceases to be employed by the Company or
a subsidiary thereof (otherwise than by reason of death or disability
within the meaning of Code Section 22(e)(3)), each Option (other than
an Incentive Stock Option granted prior to March     , 2002) to the
extent not previously exercised shall remain exercisable prior to the
Termination Date for a period of sixty days from the date of cessation
of employment, and thereafter all Options to the extent not previously
exercised shall terminate together with all other rights hereunder.
	(g) Death or Disability of Optionee: In the event of the death of
the Optionee, prior to the Termination Date, while employed by the
Company or a subsidiary thereof, each Option shall immediately become
exercisable and shall remain exercisable prior to the Termination Date
for a period of one year after the date of the Optionee's death by the
person or persons to whom the Optionee's rights under each Option shall
pass by will or by the applicable laws of descent and distribution, and
thereafter all Options to the extent not previously exercised shall
terminate together with all other rights hereunder. If, prior to the
Termination Date, the Optionee ceases to be employed by the Company or
a subsidiary thereof by reason of disability within the meaning of Code
section 22(e)(3), each Option shall immediately become exercisable and
shall remain exercisable prior to the Termination Date for a period of
one year from the date of cessation of employment, and thereafter all
Options to the extent not previously exercised shall terminate together
with all other rights hereunder.
	6. LIMITATION ON GRANTS OF INCENTIVE STOCK OPTIONS: With respect
to Incentive Stock Options granted prior to May 4, 1990, the aggregate
fair market value (determined as of the date the Option is granted) of
the Common Stock for which any employee may be granted Incentive Stock
Options in any calendar year under this and any other stock option plan
maintained by the Company and/or its subsidiaries shall not exceed (a)
$100,000 plus (b) the "carryover amount" for that calendar year. The
"carryover amount" with respect to a calendar year shall equal (a) one-
half of the sum of the excess, for each of the preceding three calendar
years (excluding years prior to 1981) of $100,000 over the fair market
value (determined as of the time the option is granted) of the Common
Stock for which the employee was granted incentive stock options under
this and any other stock option plan maintained by the Company and/or
its subsidiaries, minus (b) the amount of any such excess used as a
carryover amount in the grant of incentive stock options in any
preceding calendar year. For purposes of this paragraph, the amount of
options granted in any calendar year shall be treated as first using up
the $100,000 limitation for that year and any additional grants shall
be treated as using up unused carryover amounts in the order of the
calendar years in which the carryover amounts arose.
	With respect to Incentive Stock Options granted subsequent to
December 31, 1986, the aggregate fair market value (determined as of
the date the Option is granted) of the Common Stock with respect to
which Incentive Stock Options are exercisable for the first time in any
calendar year under this and any other stock option plan maintained by
the Company and/or its subsidiaries shall not exceed $100,000.
	7. INSTRUMENT OF GRANT: The terms and conditions of each Option
granted under the Plan shall be set forth in an instrument designated
"Incentive Stock Option Agreement" substantially in the form of Exhibit
1 attached hereto and made a part hereof if the Committee determines
that such Option shall be an Incentive Stock Option under the
provisions of section 422A of the Code. Otherwise, the terms and
conditions of each Option granted under the Plan shall be set forth in
an instrument designated "Stock A-4 Option Agreement" substantially in
the form of Exhibit 2 attached hereto and made a part hereof. The
Committee may make such modifications in the provisions of the
instrument of grant as it shall deem advisable or as may be required by
any provision of the Code.
	8. ADJUSTMENTS UPON CHANGES IN STOCK: If (a) the Company shall at
any time be involved in a transaction to which subsection (a) of
section 425 of the Code is applicable; (b) the Company shall declare a
dividend payable in, or shall subdivide or combine, its Common Stock;
or (c) any other event shall occur which in the judgment of the Board
of Directors necessitates action by way of adjusting the terms of the
outstanding Options, the Board of Directors shall forthwith take any
such action as in its judgment shall be necessary to preserve for the
Optionees rights substantially proportionate to the rights existing
prior to such event and to the extent that such action shall include an
increase or decrease in the number of shares of Common Stock subject to
outstanding Options, the number of shares available under paragraph 1
above shall be increased or decreased, as the case may be,
proportionately. The judgment of the Board of Directors with respect to
any matter referred to in this paragraph shall be conclusive and
binding upon each Optionee.
	9. AMENDMENTS AND TERMINATION: The Board may amend, alter or
discontinue the Plan, but no amendment, alteration or discontinuation
shall be made which, (a) without the approval of the shareholders of
the Company, would increase the total number of shares reserved for the
purposes of the Plan or change the maximum number of shares for which
Options may be granted to any Optionee or (b) without the consent of an
Optionee, would impair any of the rights or obligations under any
Option theretofore granted to such Optionee under the Plan; provided,
however, that the Compensation Committee may amend the Plan in such
manner as it deems necessary to permit the granting of Options meeting
the requirements of the Code or other applicable laws."
	10. PLAN DOES NOT CONFER EMPLOYMENT OR STOCKHOLDER RIGHTS: The
right of the Company or any subsidiary thereof to terminate (whether by
dismissal, discharge, retirement or otherwise) the Optionee's
employment with it at any time at will, or as otherwise provided by any
agreement between the Company and the Optionee, is specifically
reserved. Neither the Optionee nor any person entitled to exercise the
Optionee's rights in the event of the Optionee's death shall have any
rights of a stockholder with respect to the shares subject to each
Option, except to the extent that a certificate for such shares shall
have been issued upon the exercise of each Option as provided for
herein.
	11. DEFINITION: As used in the Plan the term "subsidiary" shall
have the meaning assigned to such term in Section 425 of the Code and
in addition shall include both foreign and domestic subsidiaries and
any corporation which becomes a subsidiary after the date of adoption
of the Plan.

		6
045050-0001-08714-NY03.2155623.3		01/15/03 10:59 AM

EXHIBIT 21
SUBSIDIARY LISTING


K. Hovnanian Equities, Inc.
EXC, Inc.
K. Hovnanian Companies of North Carolina, Inc.
KHL, Inc.
Hovnanian Texas, Inc.
Hovnanian Georgia, Inc.
Hovnanian Financial Services III, Inc.
K. Hovnanian Mortgage USA, Inc.
Hovnanian Financial Services IV, Inc.
K. Hovnanian Developments of New Jersey, Inc.
KHE Finance, Inc.
K. Hov International, Inc.
Hovnanian Financial Services II, Inc.
New Fortis Investment
Hovnanian Financial Services I, Inc.
K. Hovnanian Enterprises, Inc.
Hovnanian Pennsylvania, Inc.
Recreational Development Corp., Inc.
K. Hovnanian Marine, Inc.
K. Hovnanian Aviation, Inc.
K. Hovnanian Companies of North Jersey, Inc.
K. Hovnanian at Montville, Inc.
K. Hovnanian at Wayne, Inc.
K. Hovnanian at Mahwah IV, Inc
K. Hovnanian at Morris II, Inc.
K. Hovnanian at Mahwah II, Inc.
K. Hovnanian at Mahwah III, Inc.
K. Hovnanian at Northern Westchester, Inc.
K. Hovnanian at Hanover, Inc.
K. Hovnanian at Montville II, Inc.
K. Hovnanian at Newark Urban Renewal Corp.I, Inc.
K. Hovnanian at Newark I, Inc.
K. Hovnanian at Newark Urban Renewal Corp.II, Inc.
Jersey City Danforth CSO, Inc.
K. Hovnanian at Newark Urban Renewal Corp.III, Inc.
K. Hovnanian at Newark Urban Renewal Corp. IV, Inc.
K. Hovnanian at Newark Urban Renewal Corp. V, Inc.
K. Hovnanian at Jersey City I, Inc.
K. Hovnanian at Jersey City II, Inc.(Phase 2A)
K. Hovnanian at Jersey City III, Inc.
K. Hovnanian at Mahwah VI, Inc.
K. Hovnanian at Jersey City II, Inc.(Phase 2B)
K. Hovnanian at Mahwah VII, Inc.
K. Hovnanian at Montclair, New Jersey, Inc.
K. Hovnanian at Horizon Heights, Inc.
K. Hovnanian at Reservoir Ridge, Inc.
K. Hovnanian at Mahwah V, Inc.
K. Hovnanian at Mahwah VIII, Inc.
K. Hovnanian of North Jersey, Inc. (Hudson River)
Montego Bay I Acquisition Corp., Inc.
Montego Bay Associates Limited I, LP (MBAI)
Montego Bay II Acquisition Corp., Inc.
Montego Bay Associates Limited II, LP (MBAII)
0515 Co., Inc.
K. Hovnanian at North Brunswick IV, Inc.
K. Hovnanian Properties of North Brunswick IV, Inc.
Arrow Properties, Inc.
KHIPE, Inc.
Pine Brook Company, Inc.
K. Hovnanian Properties of North Brunswick II, Inc.
K. Hovnanian Properties of Galloway, Inc.
K. Hovnanian at Cedar Grove I, Inc.
K. Hovnanian at Cedar Grove II, Inc.
K. Hovnanian Properties of Piscataway, Inc.
K. Hovnanian Properties of North Brunswick I, Inc.
Molly Pitcher Renovations, Inc.
K. Hovnanian Properties of East Brunswick II,Inc.
K. Hovnanian Investment Properties of N.J., Inc.
K. Hovnanian Investment Properties, Inc.
Hovnanian Properties of Atlantic County, Inc.
K. Hovnanian Properties of Newark Urban Renewal Corporation, Inc.
K. Hovnanian Properties of Hamilton, Inc.
K. Hovnanian Properites of Franklin, Inc.
K. Hovnanian Properties of North Brunswick III, Inc.
K. Hovnanian Properties of Franklin II, Inc.
K. Hovnanian at Jacksonville, Inc.
K. Hovnanian Properties of North Brunswick V, Inc.
K. Hovnanian Properties of Wall, Inc.
K.Hovnanian at Pompano Beach, Inc.
Hovnanian Properties of Lake Worth, Inc.
Landarama, Inc.
K. Hovnanian Companies Northeast, Inc.
Parthenon Group
Minerva Group
K. Hovnanian Companies of Central Jersey, Inc.
K. Hovnanian Real Estate Investment, Inc.
K. Hovnanian at Princeton, Inc.
K. Hovnanian at South Brunswick III, Inc.
K. Hovnanian at South Brunswick IV, Inc.
K. Hovnanian at Plainsboro I, Inc.
K. Hovnanian at Plainsboro II, Inc.
K. Hovnanian at Klockner Farms, Inc.
K. Hovnanian at South Brunswick II, Inc.
K. Hovnanian at Hopewell III, Inc.
K. Hovnanian at Hopewell I, Inc.
K. Hovnanian at South Brunswick, Inc.
K. Hovnanian at East Windsor I, Inc.
K. Hovnanian at North Brunswick II, Inc.
K. Hovnanian at North Brunswick III, Inc.
K. Hovnanian at Hopewell II, Inc.
K. Hovnanian at Somerset VIII, Inc.
K. Hovnanian at Lawrence Square, Inc.
Dryer Associates, Inc.
K. Hovnanian at East Brunswick V, Inc.
K. Hovnanian at Bernards II, Inc.
K. Hovnanian at Bridgewater III, Inc.
K. Hovnanian at Plainsboro III, Inc.
K. Hovnanian at Somerset V, Inc.
K. Hovnanian at Somerset VI, Inc.
Eastern Title Agency, Inc.
K. Hovnanian Mortgage, Inc.
Governors Abstract
Eastern National Title Insurance Agency, Inc.
Founders Title Agency, Inc.
K. Hovnanian Companies North Central Jersey, Inc.
K. Hovnanian at Bedminster, Inc.
K. Hovnanian at Bridgewater IV, Inc.
K. Hovnanian at Branchburg III, Inc.
K. Hovnanian at Spring Ridge, Inc.
K. Hovnanian at Bridgewater V, Inc.
K. Hovnanian at Readington, Inc.
K. Hovnanian at Branchburg II, Inc.
K. Hovnanian at Bridgewater II, Inc.
K. Hovnanian at Branchburg I, Inc.
K. Hovnanian Companies Jersey Shore, Inc.
K. Hovnanian at Wall Township, Inc.
K. Hovnanian at Galloway VIII, Inc.
K. Hovnanian at Dover Township, Inc.
K. Hovnanian at Galloway VII, Inc.
K. Hovnanian at Tinton Falls II, Inc.
K. Hovnanian at Ocean Township, Inc.
K. Hovnanian at Wall Township II, Inc.
K. Hovnanian at Wall Township III, Inc.
K. Hovnanian at Holmdel Township, Inc.
K. Hovnanian at Wall Township IV, Inc.
K. Hovnanian at Wall Township V, Inc.
K. Hovnanian at Atlantic City, Inc.
K. Hovnanian at Ocean Township II, Inc.
K. Hovnanian at Ocean Township, Inc.
K. Hovnanian at Marlboro Township, Inc.
K. Hovnanian at Howell Township, Inc.
K. Hovnanian at Howell Township II, Inc.
K. Hovnanian at Woodbury Oaks, Inc.
K. Hovnanian at Freehold Township, Inc.
K. Hovnanian at Lakewood, Inc.
K. Hovnanian Companies of the Delaware Valley, Inc.
K. Hovnanian Co. of Delaware Valley, Inc. Brokerage Company
K. Hovnanian at Lower Saucon, Inc
K. Hovnanian at Perkiomen I, Inc.
K. Hovnanian at Montgomery I, Inc.
K. Hovnanian at Upper Merion, Inc.
K. Hovnanian at Perkiomen II, Inc.
K. Hovnanian Companies of South Jersey, Inc.
K. Hovnanian at Valleybrook, Inc.
Kings Grant Evesham Corp.
K. Hovnanian at Burlington, Inc.
K. Hovnanian at Medford I, Inc.
K. Hovnanian at The Reserve @ Medford, Inc
K. Hovnanian at Kings Grant I, Inc.
K. Hovnanian at Valleybrook II, Inc.
K. Hovnanian Real Estate of Florida, Inc.
Hovnanian Developments of Florida, Inc.
K. Hovnanian Companies of Florida, Inc.
Hovnanian of Palm Beach II, Inc.
Hovnanian of Palm Beach III, Inc.
Hovnanian of Palm Beach IV, Inc.
Hovnanian of Palm Beach V, Inc.
Hovnanian of Palm Beach VI, Inc.
Hovnanian of Palm Beach VII, Inc.
Hovnanian of Palm Beach VIII, Inc.
Hovnanian of Palm Beach IX, Inc.
Hovnanian at Tarpon Lakes I, Inc.
Hovnanian at Tarpon Lakes II, Inc.
Hovnanian at Tarpon Lakes III, Inc.
K. Hovnanian at Pasco I, Inc.
K. Hovnanian at Ft. Myers I, Inc.
K. Hovnanian at Palm Beach XI, Inc.
K. Hovnanian at Jensen Beach, Inc.
Hovnanian of Palm Beach X, Inc.
K. Hovnanian at Martin Downs I, Inc.
K. Hovnanian at Jacksonville I, Inc.
K. Hovnanian at Ft. Myers II, Inc.
K. Hovnanian at Lawrence Grove, Inc.
K. Hovnanian at Jacksonville II, Inc.
K. Hovnanian of Palm Beach XIII, Inc.
Hovnanian of Palm Beach, Inc.
K. Hovnanian at Half Moon Bay, Inc.
K. Hovnanian at Woodridge Estates, Inc.
Pike Utilities, Inc.
Tropical Service Builders, Inc.
K. Hovnanian at Embassy Lakes, Inc.
K. Hovnanian at Delray Beach II, Inc.
K. Hovnanian at Orlando I, Inc.
K. Hovnanian at Orlando II, Inc.
K. Hovnanian at Orlando III, Inc.
K. Hovnanian at Martin Downs II, Inc.
K. Hovnanian at Orlando IV, Inc.
K. Hovnanian Properties of Orlando, Inc.
K. Hovnanian at Delray Beach I, Inc.
K. Hovnanian at Pasco II, Inc.
K. Hovnanian at Port St. Lucie I, Inc.
K. Hovnanian at Delray Beach, Inc.
Eastern National Title Insurance Agency, Inc.
K. Hovnanian Mortgage of Florida, Inc.
South Florida Residential Title Agency, Inc.
Eastern National Title Insurance Agency I, Inc.
Western Financial Services, Inc.
r. e. Scott Mortgage co. of Florida, Inc.
New K. Hovnanian Developments of Florida, Inc.
New K. Hovnanian Companies of Florida, Inc.
K. Hovnanian at Fairway Views, Inc.
K. Hovanian at Lake Charleston, Inc.
K. Hovnanian at Carolina Country Club I, Inc.
K. Hovnanian at Chapel Trail, Inc.
K. Hovnanian at Winston Trails, Inc.
K. Hovnanian at Lakes of Boca Raton, Inc.
K. Hovnanian at Lake Charleston II, Inc.
K. Hovnanian at Lake Charleston III, Inc.
K. Hovnanian at Carolina Country Club II, Inc.
K. Hovnanian at Winston Trails, Inc.
K. Hovnanian at Pembroke Isles, Inc.
K. Hovnanian at Carolina Country Club III, Inc.
K. Hovnanian at Coconut Creek, Inc.
K. Hovnanian at Polo Trace, Inc.
K. Hovnanian Companies of New York, Inc.
K. Hovnanian at Westchester, Inc.
K. Hovnanian at Peekskill, Inc.
K. Hovnanian at Washingtonville, Inc.
K. Hovnanian at Mahopac, Inc.
K. Hovnanian at Carmel, Inc.
K. Hovnanian Developments of New York, Inc.
Cedar Hill Water Corporation
Cedar Hill Sewer Corporation
R.C.K. Community Management Co., Inc.
K. Hovnanian Companies of Massachusetts, Inc.
K. Hovnanian at Merrimack, Inc.
K. Hovnanian at Merrimack II, Inc.
K. Hovnanian at Taunton, Inc.
New England Community Management Co., Inc.
K. Hovnanian Cos. of Metro Washington, Inc.
K. Hovnanian at Ashburn Village, Inc.
K. Hovnanian at Woodmont,, Inc.
K. Hovnanian at Sully Station, Inc.
K. Hovnanian at Bull Run, Inc.
K. Hovnanian at Montclair, Inc.
K. Hovnanian at River Oaks, Inc.
K. Hovnanian at Holly Crest, Inc.
K. Hovnanian at Woodmont, Inc.
K. Hovnanian at Montclair, Inc.(Montclair Condos)
K. Hovnanian at Fair Lakes, Inc.
K. Hovnanian at Ashburn Village, Inc.
K. Hovnanian at Park Ridge, Inc.
K. Hovnanian at Belmont, Inc.
K. Hovnanian at Fair Lakes Glen, Inc.
K. Hovnanian Developments of Metro Washington, Inc.
K. Hovnanian at River Oaks, Inc.
K. Hovnanian at Montclair, Inc. (Montclair Laing)
K. Hovnanian Companies of California, Inc.
K. Hovnanian at Clarkstown, Inc.
K. Hovnanian at West Orange, Inc.
K. Hovnanian at Wayne III, Inc.
K. Hovnanian at Wayne IV, Inc.
K. Hovnanian at Wayne V, Inc.
K. Hovnanian at Hackettstown, Inc.
K. Hovnanian at Spring Mountain, Inc.
K. Hovnaian at East Windsor II, Inc.
K. Hovnanian Treasure Coast, Inc.
K. Hovnanian at La Terraza, Inc.
K. Hovnanian at Highland Vineyards, Inc.
K. Hovnanian Companies of Southern California II, Inc.
K. Hovnanian at Vail Ranch, Inc.
K. Hovnanian at Carmel Del Mar, Inc.
K. Hovnanian at Calabria, Inc.
K. Hovnanian Developments of California, Inc.
K. Hovnanian at Ballantrae, Inc.
Ballantrae Home Sales, Inc.
K. Hovnanian at Hunter Estates, Inc.
K. Hovnanian Developments of Maryland, Inc.
K. Hovnanian Companies of Maryland, Inc.
K. Hovnanian at Seneca Crossing, Inc.
K. Hovnanian at Exeter Hills, Inc.
K. Hovnanian Southeast Florida, Inc.
K. Hovnanian Florida Region, Inc.
K. Hovnanian at East Brunswick VI, Inc.
K. Hovnanian at Berlin, Inc.
K. Hovnanian at Bedminster II, Inc.
K. Hovnanian at Marlboro Township II, Inc.
K. Hovnanian at Inverrary I, Inc.
K. Hovnanian at Mahwah IX, Inc.
K. Hovnanian at Hopewell IV, Inc.
K. Hovnanian at Northlake, Inc.
K. Hovnanian at Castile, Inc.
K. Hovnanian at Tierrasanta, Inc.
K. Hovnnaian at Bridgewater VI, Inc.
K. Hovnanian at Preston, Inc.
K. Hovnanian at Bernards III, Inc.
K. Hovnanian at Wayne VI, Inc.
K. Hovnanian at Rancho Cristianitos, Inc.
K. Hovnanian at La Trovata, Inc.
K. Hovnanian at Watchung Reserve, Inc.
K. Hovnanian at Windsong East Brunswick, Inc.
K. Hovnanian at South Brunswick V, Inc.
K. Hovnanian at Wall Township III, Inc.
K. Hovnanian at Tannery Hill, Inc.
K. Hovnanian at Upper Freehold Township I, Inc.
K. Hovnanian at Jefferson, Inc.
K. Hovnanian at Hershey's Mill, Inc.
K. Hovnanian at Bernards VI, Inc.
K. Hovnanian at Port Imperial North, Inc.
K. Hovnanian at Hopewell V, Inc.
K. Hovnanian at Hopewell VI, Inc.
K. Hovnanian at Manalapan II, Inc.
K. Hovnanian at Union Township, Inc.
K. Hovnanian at Wayne VII, Inc.
K. Hovnanian at Scotch Plains II, Inc.
K. Hovnanian at Thornbury, Inc.
K. Hovnanian at Cameron Chase, Inc.
K. Hovnanian at Marlboro Township IV, Inc.
K. Hovnanian at Port Imperial Urban Renewal, Inc.
K. Hovnanian at East Whiteland, Inc.
K. Hovnanian at Stonegate, Inc.
K. Hovnanian Companies of Southern California, Inc.
K. Hovnanian at Crestline, Inc.
K. Hovnanian at Sycamore, Inc.
K. Hovnanian at Saratoga, Inc.
K. Hovnanian at Stone Canyon, Inc.
K. Hovnanian at Chaparral, Inc.
K. Hovnanian at Ocean Walk, Inc.
K. Hovnanian at Maplewood, Inc.
K. Hovnanian at Tuxedo, Inc.
K. Hovnanian at Bridgeport, Inc.
K. Hovnanian at Stonegate, Inc. (California)
K. Hovnanian at Lower Saucon II, Inc.
K. Hovnanian at Barrington, Inc.
K. Hovnanian at The Glen, Inc.
K. Hovnanian at Hampton Oaks, Inc.
K. Hovnanian at Summerwood, Inc.
K. Hovnanian at Chester I, LLC
K. Hovnanian at West Windsor, LLC
K. Hovnanian at Bernards V, LLC
K. Hovnanian's Four Seasons of the Palm Beaches, Inc.
K. Hovnanian at Menifee, LLC
K. Hovnaian at Rowland Heights, LLC
K. Hovnanian at Winchester, LLC
K. Hovnanian at Carmel Village, LLC
K. Hovnanian's Four Seasons, LLC
K. Hovnanian at North Brunswick VI, LLC
K. Hovnanian at Lawrence V, LLC
K. Hovnanian at Jackson, LLC
K. Hovnanian at Blue Heron Pines, LLC
K. Hovnanian at Middletown, LLC
K. Hovnanian at Berkeley, LLC
K. Hovnanian at Guttenberg, LLC
K. Hovnanian at Prince William, LLC
K. Hovnanian at Lake Terrapin, LLC
K. Hovnanian at King Farm, LLC
K. Hovnanian at South Bank, LLC
K. Hovnanian at Clifton, LLC
K. Hovnanian at Jersey City IV, LLC
K. Hovnanian at Lafayette Estates, LLC
K. Hovnanian at Upper Freehold II, LLC
K. Hovnanian at Kincaid, LLC
K. Hovnanian at Linwood, LLC
K. Hovnanian at South Amboy, LLC
K. Hovnanian at Upper Freehold Township III, LLC
K. Hovnanian at Brenbrooke, LLC
K. Hovnanian at Blooms Crossing, LLC
K. Hovnanian at Spring Hill Road, LLC
K. Hovnanian at St. Margarets, LLC
K. Hovnanian at Paramus, LLC
K. Hovnanian Developments of Texas, Inc.
The Matzel & Mumford Organization, Inc.
Matzel & Mumford of Delaware, Inc.
K. Hovnanian at Kent Island, LLC
K. Hovnanian at Northfield, LLC
K. Hovnanian at Willow Brook, LLC
K. Hovnanian at South Brunswick II, Inc.
K. Hovnanian at Rancho Santa Margarita, LLC
K. Hovnanian at Arbor Heights, LLC
K. Hovnanian at the Gables, LLC
K. Hovnanian at Riverbend, LLC
K. Hovnanian at Encinitas Ranch, LLC
K. Hovnanian at Sunsets, LLC
K. Hovnanian at Pacific Bluffs, LLC
K. Hovnanian at Park Lane, LLC
K. Hovnanian at West Milford, LLC
K. Hovnanian at Washington, LLC
K. Hovnanian at Roderick,LLC
K. Hovnanian at Columbia Town Center, LLC
K. Hovnanian at North Haledon, LLC
K. Hovnanian at Curries Woods, LLC
K. Hovnanian at Lake Ridge Crossing, LLC
K. Hovnanian at Lower Moreland I, LLC
K. Hovnanian at Lower Moreland II, LLC
K. Hovnanian at Northampton, LLC
K. Hovnanian at Marlboro VII, LLC
K. Hovnanian at Marlboro VI, LLC
K. Hovnanian at Little Egg Harbor, LLC
K. Hovnanian at Barnegat I, LLC
K. Hovnanian at Cranbury, LLC
K. Hovnanian at Hamburg Contractors, LLC
K. Hovnanian at Little Egg Harbor Contractors, LLC
K. Hovnanian at Mt. Olive, LLC
K. Hovnanian at Sayreville, LLC
K. Hovnanian at Sayreville, LLC
K. Hovnanian at Cedar Grove III, LLC
K. Hovnanian at Woolwich I, LLC
K. Hovnanian at Wayne IX, LLC
K. Hovnanian at Woodhill Estates, LLC
K. Hovnanian Forecast, LLC
Westminster Homes of South Carolina, LLC
K. Hovnanian Developments of South Carolina, Inc.

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration
Statements (Form S-3 No. 333-68528, Form S-3 No. 333-75939, Form S-3
No. 333-90567, Form S-3 No. 333-87861, Form S-3 No. 333-51991 and
Form S-3 No. 333-84396) of Hovnanian Enterprises, Inc. and in the
related Prospectuses and in the Registration Statements (Form S-8 No.
333-92977, Form S-8 No. 333-56972, Form S-8 No. 033-36098, Form S-8
No. 002-92773, and Form S-8 No. 333-56640) of our report dated
December 6, 2002, except for Note 20, as to which the date is
December 31, 2002, with respect to the consolidated financial
statements of Hovnanian Enterprises, Inc. included in this Annual
Report (Form 10-K) for the year ended October 31, 2002.


/s/ Ernst & Young LLP

New York, New York
January 20, 2003

Exhibit 99(a)



                        CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



 In connection with the Annual Report of Hovnanian Enterprises,
Inc. (the "Company") on Form 10-K for the period ended October 31, 2002
as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), I, Ara K. Hovnanian, Chief Executive Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 (1) The Report fully complies with the requirements of Section
13(a) of the Securities Exchange Act of 1934; and


 (2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.



							/S/ARA K. HOVNANIAN
Ara K. Hovnanian
Chief Executive Officer


Date:  January 17, 2003


Exhibit 99(b)




                        CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



 In connection with the Annual Report of Hovnanian Enterprises,
Inc. (the "Company") on Form 10-K for the period ended October 31, 2002
as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), I, J. Larry Sorsby, Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


 (1) The Report fully complies with the requirements of Section
13(a) of the Securities Exchange Act of 1934; and


 (2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.



							/S/J. LARRY SORSBY
J. Larry Sorsby
Chief Financial Officer


Date:  January 17, 2003