0001437749-20-025763 | 10-K | XBRL Viewer | Hovnanian Enterprises INC

Inventory impairment and land option write-offs

$ 2,343,901

$ 2,016,916

$ 1,991,233

8,813

6,288

3,501

Total expenses

2,318,400

2,043,080

1,999,584

Corporate general and administrative

80,553

66,364

69,632

Other interest expensed

^[1],[2]

103,801

90,056

103,297

Other operations

1,096

1,561

1,584

Gain (loss) on extinguishment of debt

13,337

(42,436)

(7,536)

Income (loss) before income taxes

16,565

28,932

24,033

55,403

(39,668)

8,146

State and federal income tax provision

4,475

2,449

3,626

Net income (loss)

$ 50,928

$ (42,117)

$ 4,520

Net income (loss) per common share (in dollars per share)

$ 7.48

$ (7.06)

$ 0.73

Weighted-average number of common shares outstanding basic (in shares)

6,189

5,968

5,941

Net income (loss) per common share (in dollars per share)

$ 7.03

$ (7.06)

$ 0.72

Weighted-average number of common shares outstanding (in shares)

6,584

5,968

6,072

State and Local Jurisdiction [Member]

State and federal income tax provision

$ 4,475

$ 2,449

$ 3,626

Domestic Tax Authority [Member]

State and federal income tax provision

Cost of sales, excluding interest

2,271,739

1,962,764

1,937,878

1,848,486

1,604,777

1,566,555

Cost of sales interest

74,330

70,725

60,685

Inventory impairment and land option write-offs

8,813

6,288

3,501

Total cost of sales

1,931,629

1,681,790

1,630,741

Selling, general and administrative

161,261

166,784

159,202

Total expenses

2,092,890

1,848,574

1,789,943

Homebuilding [Member] | Sale of Homes [Member]

Homebuilding [Member] | Land Sales and Other Revenues [Member]

2,252,029

1,949,682

1,906,228

Financial Services [Member]

19,710

13,082

31,650

72,162

54,152

53,355

Total expenses

$ 40,060

$ 36,525

$ 35,128

[1]

Cash paid for interest, net of capitalized interest, is the sum of other interest expensed, as defined above, and interest paid by our mortgage and finance subsidiaries adjusted for the change in accrued interest on notes payable, which is calculated as follows: Year Ended October 31, October 31, October 31, (In thousands) 2020 2019 2018 Other interest expensed $ 103,801 $ 90,056 $ 103,297 Interest paid by our mortgage and finance subsidiaries 2,165 2,536 2,478 (Increase) decrease in accrued interest (16,482) 16,515 6,241 Cash paid for interest, net of capitalized interest $ 89,484 $ 109,107 $ 112,016

[2]

Other interest expensed includes interest that does not qualify for interest capitalization because our assets that qualify for interest capitalization (inventory under development) do not exceed our debt, which amounted to $61.9 million, $56.9 million and $76.2 million for the years ended October 31, 2020, 2019 and 2018, respectively. Other interest also includes interest on completed homes, land in planning and fully developed lots without homes under construction, which does not qualify for capitalization, and therefore, is expensed. This component of other interest was $41.9 million, $33.2 million and $27.1 million for the years ended October 31, 2020, 2019 and 2018, respectively.

Consolidated Statements of Changes in Equity Deficit - USD ($) $ in Thousands	Common Stock Outstanding [Member] Common Class A [Member]	Common Stock Outstanding [Member] Common Class B [Member]	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Noncontrolling Interest [Member]	Total
Balance (in shares) at Oct. 31, 2017	5,291,412	612,304	5,600
Balance at Oct. 31, 2017	$ 58	$ 6	$ 135,299	$ 708,002	$ (1,188,376)	$ (115,360)	$ 0	$ (460,371)
Stock options, amortization and issuances (in shares)	1,210
Stock options, amortization and issuances				802				802
Restricted stock amortization, issuances and forfeitures (in shares)	20,672	9,834
Restricted stock amortization, issuances and forfeitures				1,545				1,545
Conversion of Class B to Class A common stock (in shares)	134	(134)
Conversion of Class B to Class A common stock								0
Net (loss) income					4,520			4,520
Balance (in shares) at Oct. 31, 2018	5,313,428	622,004	5,600
Balance at Oct. 31, 2018	$ 58	$ 6	$ 135,299	710,349	(1,183,856)	(115,360)	0	(453,504)
Stock options, amortization and issuances (in shares)
Stock options, amortization and issuances				808				808
Restricted stock amortization, issuances and forfeitures (in shares)	11,210	922
Restricted stock amortization, issuances and forfeitures		$ 1		(126)				(125)
Conversion of Class B to Class A common stock (in shares)	232	(232)
Conversion of Class B to Class A common stock								0
Net (loss) income					(42,117)			(42,117)
Issuance of shares for debt (in shares)	178,427
Issuance of shares for debt	$ 2			4,473				4,475
Changes in noncontrolling interest in consolidated joint ventures							687	687
Balance (in shares) at Oct. 31, 2019	5,503,297	622,694	5,600
Balance at Oct. 31, 2019	$ 60	$ 7	$ 135,299	715,504	(1,225,973)	(115,360)	687	(489,776)
Stock options, amortization and issuances (in shares)
Stock options, amortization and issuances				387				387
Restricted stock amortization, issuances and forfeitures (in shares)	14,310	1,796
Restricted stock amortization, issuances and forfeitures				2,219				2,219
Conversion of Class B to Class A common stock (in shares)	2,273	(2,273)
Conversion of Class B to Class A common stock								0
Net (loss) income					50,928			50,928
Issuance of shares for debt (in shares)
Issuance of shares for debt								0
Changes in noncontrolling interest in consolidated joint ventures							148	148
Balance (in shares) at Oct. 31, 2020	5,519,880	622,217	5,600
Balance at Oct. 31, 2020	$ 60	$ 7	$ 135,299	$ 718,110	$ (1,175,045)	$ (115,360)	$ 835	$ (436,094)

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Cash flows from operating activities:
Net income (loss)	$ 50,928	$ (42,117)	$ 4,520
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	5,304	4,172	3,156
Compensation from stock options and awards	2,779	721	3,669
Amortization of bond discounts, premiums and deferred financing costs	1,891	8,128	8,822
Gain on sale and retirement of property and assets	(81)	(25)	(3,619)
Income from unconsolidated joint ventures	(16,565)	(28,932)	(24,033)
Distributions of earnings from unconsolidated joint venture	35,387	29,919	0
(Gain) loss on extinguishment of debt	(13,337)	42,436	7,536
Noncontrolling interest in consolidated joint ventures	148	4	0
Inventory impairment and land option write-offs	8,813	6,288	3,501
(Increase) decrease in assets:
Origination of mortgage loans	(1,306,279)	(1,089,825)	(1,069,519)
Sale of mortgage loans	1,367,903	1,054,535	1,071,250
Receivables, prepaids, deposits and other assets	20,519	(15,911)	20,669
Inventories	87,897	(220,608)	(58,801)
Increase (decrease) in liabilities:
State and federal income tax payable	1,531	(1,033)	1,107
Customers’ deposits	12,414	5,786	(3,686)
Accounts payable, accrued interest and other accrued liabilities	33,576	(2,665)	(31,394)
Net cash provided by (used in) operating activities	292,828	(249,127)	(66,822)
Cash flows from investing activities:
Proceeds from sale of property and assets	112	29	38,303
Purchase of property, equipment, and other fixed assets and acquisitions	(3,380)	(4,005)	(5,193)
Investment in and advances to unconsolidated joint ventures	(19,924)	(13,256)	(26,271)
Distributions of capital from unconsolidated joint ventures	25,332	8,925	28,662
Net cash provided by (used in) investing activities	2,140	(8,307)	35,501
Cash flows from financing activities:
Proceeds from mortgages and notes	278,577	318,462	181,101
Payments related to mortgages and notes	(348,371)	(209,445)	(162,192)
Proceeds from model sale leaseback financing programs	19,200	33,188	22,749
Payments related to model sale leaseback financing programs	(23,646)	(25,791)	(30,123)
Proceeds from land bank financing programs	68,060	104,961	18,827
Payments related to land bank financing programs	(73,999)	(33,902)	(38,991)
Proceeds from partner contributions to consolidated joint venture	0	683	0
Deferred financing costs from land banking financing programs and note issuances	(13,278)	(16,748)	(8,035)
Net cash (used in) provided by financing activities	(167,774)	206,708	(229,429)
Net increase (decrease) in cash and cash equivalents, and restricted cash and cash equivalents	127,194	(50,726)	(260,750)
Cash and cash equivalents, and restricted cash and cash equivalents balance, beginning of year	182,266	232,992	493,742
Cash and cash equivalents, and restricted cash and cash equivalents balance, end of year	309,460	182,266	232,992
Supplemental disclosures of cash flows:
Interest, net of capitalized interest (see Note 3 to the Consolidated Financial Statements)	89,484	109,107	112,016
Income taxes	3,013	3,483	2,520
Cash and cash equivalents, and restricted cash and cash equivalents balance, end of year	309,460	182,266	232,992
Homebuilding [Member]
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Inventory impairment and land option write-offs	8,813	6,288	3,501
Supplemental disclosures of cash flows:
Cash and cash equivalents	262,489	130,976	187,871
Restricted cash and cash equivalents	14,731	20,905	12,808
Financial Services [Member]
Supplemental disclosures of cash flows:
Cash and cash equivalents	4,854	5,578	6,948
Restricted cash and cash equivalents	27,386	24,807	25,365
Senior Secured Term Loan [Member]
Cash flows from financing activities:
Payments related to senior secured debt	0	0	(76,829)
Senior Unsecured Term Loan Credit Facility [Member]
Cash flows from financing activities:
Proceeds from senior unsecured term loan facility	0	0	202,547
Senior Secured Revolving Credit Facility [Member]
Cash flows from financing activities:
Borrowings from senior secured credit facility	125,000	0	0
Payments related to senior secured credit facility	(125,000)	0	0
Senior Secured Notes [Member]
Cash flows from financing activities:
Proceeds from senior secured notes, net of discount	0	578,231	0
Senior Secured, Senior, Senior Amortizing and Senior Exchangeable Notes [Member]
Cash flows from financing activities:
Payments related to senior secured debt	(21,240)	(570,032)	(285,095)
Mortgage Warehouse Lines of Credit [Member]
Cash flows from financing activities:
Net (payments) proceeds related to mortgage warehouse lines of credit	(53,077)	27,101	(1,388)
Unsecured Revolving Credit Facility [Member]
Cash flows from financing activities:
Net (payments) proceeds related to mortgage warehouse lines of credit	$ 0	$ 0	$ (52,000)

Supplemental Disclosure of Noncash Investing and Financing Activities

12 Months Ended

Oct. 31, 2020

Cash Flow, Supplemental Disclosures [Text Block]

Supplemental disclosure of noncash investing and financing activities:

In the first quarter of fiscal 2018, we acquired the remaining assets of one of our joint ventures, resulting in a $13.0 million reduction in our investment in the joint venture and a corresponding increase to inventory.

In the second quarter of fiscal 2018, we completed a debt for debt exchange of existing 8.0% Senior Notes due November 1, 2019 for newly issued 13.5% Senior Notes due 2026 and 5.0% Senior Notes due 2040. See Note 9 for further information.

In the fourth quarter of fiscal 2019, we completed a partial debt for debt exchange of existing 10.0% Senior Secured Notes due 2022 and 10.5% Senior Secured Notes due 2024 for a combination of cash and newly issued 7.75% 1.125 Lien Notes due 2026 and 11.25% 1.5 Lien Notes due 2026. See Note 9 for further information.

In accordance with the adoption of ASU 2016-02, in the first quarter of fiscal 2020, we recorded a beginning right-of-use asset of $23.3 million and a right-of-use lease liability of $24.4 million.

In the first quarter of fiscal 2020, K. Hovnanian, the issuer of our notes, completed a debt for debt exchange whereby it issued $158.5 million aggregate principal amount of 10.0% 1.75 Lien Notes due 2025 in exchange for $23.2 million in aggregate principal amount of its outstanding 10.0% Senior Secured Notes due 2022 and $141.7 million in aggregate principal amount of its outstanding 10.5% Senior Secured Notes due 2024. K. Hovnanian also exchanged $163.0 million in aggregate principal amount of its unsecured term loans for $81.5 million in aggregate principal amount of 1.75 Lien secured term loans made under a new Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028. See Note 9 for further information.

In the second quarter of fiscal 2020, K. Hovnanian, the issuer of the notes, completed a debt for debt exchange whereby it issued $59.1 million aggregate principal amount of additional 11.25% 1.5 Lien Notes due 2026 in exchange for $59.1 million aggregate principal amount of 10.0% Senior Secured Notes due 2022 Notes. See Note 9 for further information.

Note 1 - Basis of Presentation

12 Months Ended

Oct. 31, 2020

Basis of Presentation and Significant Accounting Policies [Text Block]

1. Basis of Presentation

Basis of Presentation - The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and include Hovnanian Enterprises, Inc.’s (“HEI”) accounts and those of all its consolidated subsidiaries, after elimination of all intercompany balances and transactions. HEI’s fiscal year ends October 31. Noncontrolling interest represents the proportionate equity interest in a consolidated joint venture that is not 100% owned by the Company. One of HEI's subsidiaries owns a 99% controlling interest in the consolidated joint venture and therefore HEI is required to consolidate the joint venture within its Consolidated Financial Statements. The 1% that we do not own is accounted for as noncontrolling interest.

Reverse Stock Split – As discussed in Note 14, in March 2019, the Company's stockholders approved and the Board of Directors determined to effectuate a reverse stock split (the “Reverse Stock Split”) of the Company’s common stock at a ratio of 1-for-25, and a corresponding decrease in the number of authorized shares of the common stock. The Reverse Stock Split became effective on March 29, 2019, and every 25 issued shares (including treasury shares) of Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), were combined into one share of Class A Common Stock, and every 25 issued shares (including treasury shares) of Class B Common Stock, par value $0.01 per share (the “Class B Common Stock”), were combined into one share of Class B Common Stock. All share and per share amounts throughout this report have been retroactively adjusted to reflect the reverse stock split.

Note 2 - Business

12 Months Ended

Oct. 31, 2020

Nature of Operations [Text Block]

2. Business

HEI conducts all of its homebuilding and financial services operations through its subsidiaries (references herein to the “Company”, “we”, “us” or “our” refer to HEI and its consolidated subsidiaries and should be understood to reflect the consolidated business of HEI’s subsidiaries). Our operations consist of homebuilding, financial services and corporate. Our homebuilding operations are made up of six reportable segments defined as Northeast, Mid-Atlantic, Midwest, Southeast, Southwest and West. Homebuilding operations comprise the substantial part of our business, representing approximately 97% of consolidated revenues for each of the years ended October 31, 2020, 2019 and 2018. HEI is a Delaware corporation, which through its subsidiaries, was building and selling homes in Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and West Virginia, including in 116 consolidated active selling communities at October 31, 2020. Our homebuilding subsidiaries 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 lifestyle buyers and empty nesters. Our financial services operations, which are a reportable segment, provide mortgage banking and title services to the homebuilding operations’ customers. Our financial services subsidiaries do not typically retain or service the mortgages that they 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.

See Note 10 “Operating and Reporting Segments” for further disclosure of our reportable segments.

Note 3 - Summary of Significant Accounting Policies

12 Months Ended

Oct. 31, 2020

Significant Accounting Policies [Text Block]

3. Summary of Significant Accounting Policies

Use of Estimates - The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and these differences could have a significant impact on the financial statements.

Income Recognition from Home and Land Sales - We are primarily engaged in the development, construction, marketing and sale of residential single-family and multi-family homes where the planned construction cycle is less than 12 months. For these homes, in accordance with Accounting Standards Codification (“ASC”) 606-10, “ Revenue fr

om Contracts with Customers,” revenue is recognized when title is conveyed to the buyer, adequate initial and continuing investments have been received and there is no continued involvement.



Income Recognition from Mortgage Loans - Our Financial Services segment originates mortgages, primarily for our homebuilding customers. We use mandatory investor commitments and forward sales of mortgage-backed securities (“MBS”) to hedge our mortgage-related interest rate exposure on agency and government loans.

We elected the fair value option for our mortgage loans held for sale in accordance with ASC 825, “Financial Instruments,” which permits us to measure our loans held for sale at fair value. Management believes that the election of the fair value option for loans held for sale improves financial reporting by mitigating volatility in reported earnings caused by measuring the fair value of the loans and the derivative instruments used to economically hedge them without having to apply complex hedge accounting provisions.



Substantially all of the mortgage loans originated are sold within a short period of time in the secondary mortgage market on a servicing released, nonrecourse basis, although the Company remains liable for certain limited representations, such as fraud, and warranties related to loan sales. Mortgage investors could seek to have us buy back loans or compensate them from losses incurred on mortgages we have sold based on claims that we breached our limited representations and warranties. We have established reserves for probable losses.



Cash and Cash Equivalents - Cash represents cash deposited in checking accounts. Cash equivalents include certificates of deposit, Treasury bills and government money–market funds with maturities of 90 days or less when purchased. Our cash balances are held at a few financial institutions and may, at times, exceed insurable amounts. We believe we help to mitigate this risk by depositing our cash in major financial institutions. At October 31, 2020 and 2019, $15.5 million and $143.1 million, respectively, of the total cash and cash equivalents was in cash equivalents and restricted cash equivalents, the book value of which approximates fair value.

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 and cash equivalents, restricted cash and cash equivalents, receivables, deposits and notes, accounts payable and other liabilities, customer deposits, mortgage loans held for sale, nonrecourse mortgages, mortgage warehouse lines of credit, senior secured revolving credit facility, accrued interest, senior secured term loan, senior unsecured term loan credit facility, senior secured notes and senior notes. The fair value of the senior secured credit facility, senior secured term loan, senior unsecured term loan credit facility, senior secured notes and senior 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 or when not available, are estimated based on third-party broker quotes or management's estimate of the fair value based on available trades for similar debt instruments. The fair value of all of our other financial instruments approximates their carrying amounts.

Inventories - Inventories consist of land, land development, home construction costs, capitalized interest, construction overhead and property taxes. 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 charged to cost of sales equally based upon the number of homes to be constructed in each product type.

We record inventories in our consolidated balance sheets at cost unless the inventory is determined to be impaired, in which case the inventory is written down to its fair value. Our inventories consist of the following three components: (1) sold and unsold homes and lots under development, which includes all construction, land, capitalized interest and land development costs related to started homes and land under development in our active communities; (2) land and land options held for future development or sale, which includes all costs related to land in our communities in planning or mothballed communities; and (3) consolidated inventory not owned, which includes all costs related to variable interest entities, and other options, which consists primarily of model homes financed with an investor and inventory related to land banking arrangements accounted for as financings.

We decide to mothball (or stop development on) certain communities when we determine that the current performance does not justify further investment at the time. When we decide to mothball a community, the inventory is reclassified on our Consolidated Balance Sheets from “Sold and unsold homes and lots under development” to “Land and land options held for future development or sale.” During fiscal 2020, we did not mothball any additional communities, or sell any previously mothballed communities, but we re-activated one previously mothballed community and also re-activated a portion of one previously mothballed community. As of October 31, 2020 and 2019, the net book value associated with our 12 and 13 total mothballed communities was $11.4 million and $13.8 million, respectively, which was net of impairment charges recorded in prior periods of $122.2 million and $138.1 million, respectively.

We sell and lease back certain of our model homes with the right to participate in the potential profit when each home is sold to a third party at the end of the respective lease. As a result of our continued involvement, for accounting purposes in accordance with ASC 606-10-55-68, these sale and leaseback transactions are considered a financing rather than a sale. Therefore, for purposes of our Consolidated Balance Sheets, at October 31, 2020 and 2019, inventory of $48.8 million and $54.2 million, respectively, was recorded to “Consolidated inventory not owned,” with a corresponding amount of $47.2 million and $51.2 million, respectively, recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.



We have land banking arrangements, whereby we sell our land parcels to the land banker and they provide us an option to purchase back finished lots on a predetermined schedule. Because of our options to repurchase these parcels, for accounting purposes, in accordance with ASC 606-10-55-70, these transactions are considered a financing rather than a sale. For purposes of our Consolidated Balance Sheets, at October 31, 2020 and 2019, inventory of $133.4 million and $136.1 million, respectively, was recorded to “Consolidated inventory not owned,” with a corresponding amount of $84.0 million and $89.8 million, respectively, recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.

The recoverability of inventories and other long-lived assets is assessed in accordance with the provisions of ASC 360-10, “Property, Plant and Equipment – Overall.” ASC 360-10 requires long-lived assets, including inventories, held for development to be evaluated for impairment based on undiscounted future cash flows of the assets at the lowest level for which there are identifiable cash flows. As such, we evaluate inventories for impairment at the individual community level, the lowest level of discrete cash flows that we measure.

We evaluate inventories of communities under development and held for future development for impairment when indicators of potential impairment are present. Indicators of impairment include, but are not limited to, decreases in local housing market values, decreases in gross margins or sales absorption rates, decreases in net sales prices (base sales price net of sales incentives), or actual or projected operating or cash flow losses. The assessment of communities for indication of impairment is performed quarterly. As part of this process, we prepare detailed budgets for all of our communities at least semi-annually and identify those communities with a projected operating loss. For those communities with projected losses, we estimate the remaining undiscounted future cash flows and compare those to the carrying value of the community, to determine if the carrying value of the asset is recoverable.

The projected operating profits, losses or cash flows of each community can be significantly impacted by our estimates of the following:

●

future base selling prices;

●

future home sales incentives;

●

future home construction and land development costs; and

●

future sales absorption pace and cancellation rates.

These estimates are dependent upon specific market conditions for each community. While we consider available information to determine what we believe to be our best estimates as of the end of a quarterly reporting period, these estimates are subject to change in future reporting periods as facts and circumstances change. Local market-specific conditions that may impact our estimates for a community include:

●

the intensity of competition within a market, including available home sales prices and home sales incentives offered by our competitors;

●

the current sales absorption pace for both our communities and competitor communities;

●

community-specific attributes, such as location, availability of lots in the market, desirability and uniqueness of our community, and the size and style of homes currently being offered;

●

potential for alternative product offerings to respond to local market conditions;

●

changes by management in the sales strategy of the community;

●

current local market economic and demographic conditions and related trends and forecasts; and

●

existing home inventory supplies, including foreclosures and short sales.



These and other local market-specific conditions that may be present are considered by management in preparing projection assumptions for each community. The sales objectives can differ between our communities, even within a given market. For example, facts and circumstances in a given community may lead us to price our homes with the objective of yielding a higher sales absorption pace, while facts and circumstances in another community may lead us to price our homes to minimize deterioration in our gross margins, although it may result in a slower sales absorption pace. In addition, the key assumptions included in our estimate of future undiscounted cash flows may be interrelated. For example, a decrease in estimated base sales price or an increase in homes sales incentives may result in a corresponding increase in sales absorption pace. Additionally, a decrease in the average sales price of homes to be sold and closed in future reporting periods for one community that has not been generating what management believes to be an adequate sales absorption pace may impact the estimated cash flow assumptions of a nearby community. Changes in our key assumptions, including estimated construction and development costs, absorption pace and selling strategies, could materially impact future cash flow and fair value estimates. Due to the number of possible scenarios that would result from various changes in these factors, we do not believe it is possible to develop a sensitivity analysis with a level of precision that would be meaningful to an investor.



If the undiscounted cash flows are more than the carrying value of the community, then the carrying amount is recoverable, and no impairment adjustment is required. However, if the undiscounted cash flows are less than the carrying amount, then the community is deemed impaired and is written down to its fair value. We determine the estimated fair value of each community by determining the present value of its estimated future cash flows at a discount rate commensurate with the risk of the respective community, or in limited circumstances, prices for land in recent comparable sale transactions, market analysis studies, which include the estimated price a willing buyer would pay for the land (other than in a forced liquidation sale), and recent bona fide offers received from outside third parties. Our discount rates used for all impairments recorded from October 31, 2018 to October 31, 2020 ranged from 16.8% to 19.8%. The estimated future cash flow assumptions are virtually the same for both our recoverability and fair value assessments. Should the estimates or expectations used in determining estimated cash flows or fair value, including discount rates, decrease or differ from current estimates in the future, we may be required to recognize additional impairments related to current and future communities. The impairment of a community is allocated to each lot on a relative fair value basis.

From time to time, we write off deposits and approval, engineering and capitalized interest costs when we determine that it is no longer probable that we will exercise options to buy land in specific locations or when we redesign communities and/or abandon certain engineering costs. In deciding not to exercise a land option, we take into consideration changes in market conditions, the timing of required land takedowns, the willingness of land sellers to modify terms of the land option contract (including timing of land takedowns), and the availability and best use of our capital, among other factors. The write-off is recorded in the period it is deemed not probable that the optioned property will be acquired. In certain instances, we have been able to recover deposits and other pre-acquisition costs that were previously written off. These recoveries have not been significant in comparison to the total costs written off.

Inventories held for sale are land parcels ready for sale in their current condition, where we have decided not to build homes but are instead actively marketing for sale. These land parcels represented $2.0 million of our total inventories at October 31, 2020 and are reported at the lower of carrying amount or fair value less costs to sell. There were no inventories held for sale at October 31, 2019. In determining fair value for land held for sale, management considers, among other things, prices for land in recent comparable sale transactions, market analysis studies, which include the estimated price a willing buyer would pay for the land (other than in a forced liquidation sale) and recent bona fide offers received from outside third parties.

Warranty Costs and Construction Defect Reserves - We accrue for warranty costs that are covered under our existing general liability and construction defect policy as part of our general liability insurance deductible. This accrual is expensed as selling, general and administrative costs. For homes delivered in fiscal 2020 and 2019, our deductible under our general liability insurance was a $20 million aggregate for construction defect and warranty claims. For bodily injury claims, our deductible per occurrence in fiscal 2020 and 2019 was $0.25 million, up to a $5 million limit. Our aggregate retention for construction defect, warranty and bodily injury claims was $20 million for fiscal 2020 and 2019. We do not have a deductible on our worker's compensation insurance. Reserves for estimated losses for construction defects, warranty and bodily injury claims have been established using the assistance of a third-party actuary. We engage a third-party actuary that uses our historical warranty and construction defect data to assist our management in estimating our unpaid claims, claim adjustment expenses and incurred but not reported claims reserves for the risks that we are assuming under the general liability and construction defect programs. The estimates include provisions for inflation, claims handling and legal fees. These estimates are subject to a high degree of variability due to uncertainties such as trends in construction defect claims relative to our markets and the types of products we build, claim settlement patterns, insurance industry practices and legal interpretations, among others. Because of the high degree of judgment required in determining these estimated liability amounts, actual future costs could differ significantly from our currently estimated amounts. In addition, we establish a warranty accrual for lower cost-related issues to cover home repairs, community amenities and land development infrastructure that are not covered under our general liability and construction defect policy. We accrue an estimate for these warranty costs as part of cost of sales at the time each home is closed and title and possession have been transferred to the homebuyer. See Note 16 for additional information on the amount of warranty costs recognized in cost of goods sold and administrative expenses.



Interest - Interest attributable to properties under development during the land development and home construction period is capitalized and expensed along with the associated cost of sales as the related inventories are sold. Interest incurred in excess of interest capitalized, which occurs when assets qualifying for interest capitalization are less than our outstanding debt balances, is expensed as incurred in “Other interest.”



Interest costs incurred, expensed and capitalized were:

Year Ended

October 31,

October 31,

October 31,

(In thousands)

2020

2019

2018

Interest capitalized at beginning of year
$ 71,264 $ 68,117 $ 71,051

Plus interest incurred(1)
176,457 165,906 161,048

Less cost of sales interest expensed
74,330 70,725 60,685

Less other interest expensed(2)(3)
103,801 90,056 103,297

Less interest contributed to unconsolidated joint venture(4)
4,580 1,978 -

Interest capitalized at end of year(5)
$ 65,010 $ 71,264 $ 68,117

(1)

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

(2)

Other interest expensed includes interest that does not qualify for interest capitalization because our assets that qualify for interest capitalization (inventory under development) do not exceed our debt, which amounted to $61.9 million, $56.9 million and $76.2 million for the years ended October 31, 2020, 2019 and 2018, respectively. Other interest also includes interest on completed homes, land in planning and fully developed lots without homes under construction, which does not qualify for capitalization, and therefore, is expensed. This component of other interest was $41.9 million, $33.2 million and $27.1 million for the years ended October 31, 2020, 2019 and 2018, respectively.

(3)

Cash paid for interest, net of capitalized interest, is the sum of other interest expensed, as defined above, and interest paid by our mortgage and finance subsidiaries adjusted for the change in accrued interest on notes payable, which is calculated as follows:

Year Ended

October 31,

October 31,

October 31,

(In thousands)

2020

2019

2018

Other interest expensed
$ 103,801 $ 90,056 $ 103,297

Interest paid by our mortgage and finance subsidiaries
2,165 2,536 2,478

(Increase) decrease in accrued interest
(16,482 ) 16,515 6,241

Cash paid for interest, net of capitalized interest
$ 89,484 $ 109,107 $ 112,016

(4)

Represents capitalized interest which was included as part of the assets contributed to the joint ventures the Company entered into in December 2019 and June 2019 during the years ended October 31, 2020 and 2019, respectively, as discussed in Note 20. There was no impact to the Consolidated Statement of Operations as a result of these transactions.

(5)

Capitalized interest amounts are shown gross before allocating any portion of impairments, if any, to capitalized interest.

Land Options - Costs incurred to obtain options to acquire improved or unimproved home sites are capitalized. Such amounts are either included as part of the purchase price if the land is acquired or charged to “Inventory impairments loss and land option write-offs” if we determine we will not exercise the option. In accordance with ASC 810-10 “Consolidation – Overall,” we record costs associated with other options on the Consolidated Balance Sheets under “Land and land options held for future development or sale.” If the options are with variable interest entities and we are the primary beneficiary, we record the land under option on the Consolidated Balance Sheets under “Consolidated inventory not owned” with an offset under “Liabilities from inventory not owned.” If the option has terms that require us to record it as financing, then we record the option on the Consolidated Balance Sheets under “Consolidated inventory not owned” with an offset under “Liabilities from inventory not owned.”



Unconsolidated Homebuilding and Land Development Joint Ventures - Investments in unconsolidated homebuilding and land development joint ventures are accounted for under the equity method of accounting. Under the equity method, we recognize our proportionate share of earnings and losses earned by the joint venture upon the delivery of lots or homes to third parties. Our ownership interests in the joint ventures vary but our voting interests are generally 50% or less. In determining whether or not we must consolidate joint ventures where we are the managing member of the joint venture, we assess whether the other partners have specific rights to overcome the presumption of control by us as the manager of the joint venture. In most cases, the presumption is overcome because the joint venture agreements require that both partners agree on establishing the significant operating and capital decisions of the partnership, including budgets, in the ordinary course of business. The evaluation of whether or not we control a venture can require significant judgment. In accordance with ASC 323-10, “Investments - Equity Method and Joint Ventures – Overall,” we assess our investments in unconsolidated joint ventures for recoverability, and if it is determined that a loss in value of the investment below its carrying amount is other than temporary, we write down the investment to its fair value. We evaluate our equity investments for impairment based on the joint venture’s projected cash flows. This process requires significant management judgment and estimates. During fiscal 2019, we wrote down certain unconsolidated joint venture investments by $0.9 million. There were no write-downs in fiscal 2020 or fiscal 2018.



Deferred Bond Issuance Costs - Costs associated with borrowings under our credit facilities and terms loans and the issuance of senior secured and senior notes are capitalized and amortized over the term of each note’s issuance. The capitalization of the costs are recorded as a contra liability within our debt balances, except for the revolving credit facility costs, which are recorded as a prepaid asset.

Debt Issued At a Discount/Premium - Debt issued at a discount or premium to the face amount is amortized up or down, as applicable, 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 Operations.

Advertising Costs - Advertising costs are expensed as incurred. During the years ended October 31, 2020, 2019 and 2018, advertising costs expensed totaled $12.9 million, $17.1 million and $16.4 million, respectively.

Deferred Income Taxes - Deferred income taxes are provided for temporary differences between amounts recorded for financial reporting and for income tax purposes. If 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 or carried forward to future years to recover the deferred tax assets. In accordance with ASC 740-10, “Income Taxes – Overall,” we evaluate our deferred tax assets quarterly to determine if valuation allowances are required. ASC 740-10 requires that companies assess whether valuation allowances should be established based on the consideration of all available evidence using a “more-likely-than-not” standard.

In evaluating the exposures associated with our various tax filing positions, we recognize tax liabilities in accordance with ASC 740-10, for more likely than not exposures. We re-evaluate the exposures associated with our tax positions on a quarterly basis. This evaluation is based on factors such as changes in facts or circumstances, changes in tax law, new audit activity by taxing authorities, and effectively settled issues. Determining whether an uncertain tax position is effectively settled requires judgment. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision. A number of years may elapse before a particular matter for which we have established a liability is audited and fully resolved or clarified. We adjust our liability for unrecognized tax benefits and income tax provision in the period in which an uncertain tax position is effectively settled, or the statute of limitations expires for the relevant taxing authority to examine the tax position or when more information becomes available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a liability that is materially different from our current estimate. Any such changes will be reflected as increases or decreases to income tax expense in the period in which they are determined.

Prepaid Expenses - Prepaid expenses which relate to specific housing communities (model setup, architectural fees, homeowner warranty program fees, etc.) are amortized to cost 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.

Allowance for Doubtful Accounts – We regularly review our receivable balances, which are included in Receivables, deposits and notes on the Consolidated Balance Sheets, for collectability and record an allowance against a receivable when it is deemed that collectability is uncertain. These receivables include receivables from our insurance carriers, receivables from municipalities related to the development of utilities or other infrastructure, and other miscellaneous receivables. The balance for allowance for doubtful accounts was $12.0 million and $12.2 million at October 31, 2020 and 2019, respectively, which primarily related to allowances for receivables from municipalities and an allowance for a receivable for a prior year land sale. During fiscal 2020 and 2019, we recorded $0.2 million and $0.5 million, respectively, in recoveries. During fiscal 2019, we recorded $1.3 million of additional reserves. There were no write-offs in fiscal 2020 or fiscal 2019.



Stock Options - We account for our stock options under ASC 718-10, “Compensation - Stock Compensation – Overall,” which requires the fair-value based method of accounting for stock awards granted to employees and measures and records the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award.

Compensation cost arising from nonvested stock granted to employees and from nonemployee stock awards is based on the fair value of the awards at the grant date recognized as expense using the straight-line method over the vesting period.

Per Share Calculations - Basic earnings per share is computed by dividing net income (loss) (the “numerator”) by the weighted-average number of common shares outstanding, adjusted for nonvested shares of restricted stock (the “denominator”) for the period. Computing diluted earnings per share is similar to computing basic earnings per share, except that the denominator is increased to include the dilutive effects of options and nonvested shares of restricted stock, as well as common shares issuable upon exchange of our Senior Exchangeable Notes issued as part of our 6.0% Exchangeable Note Units (which matured and were paid in full in fiscal 2018). Any options that have an exercise price greater than the average market price are considered to be anti-dilutive and are excluded from the diluted earnings per share calculation.



All outstanding nonvested shares that contain nonforfeitable rights to dividends or dividend equivalents that participate in undistributed earnings with common stock are considered participating securities and are included in computing earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings in periods where we have net income. The Company’s restricted common stock (“nonvested shares”) are considered participating securities.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which provides guidance for accounting for leases. ASU 2016-02 requires lessees to classify leases as either finance or operating leases and to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight-line basis over the term of the lease. Accounting for lessors remains largely unchanged from current GAAP. ASU 2016-02 was effective for the Company on November 1, 2019, and we applied the modified retrospective method of adoption, resulting in no restatement of prior period financial statements. We elected the practical expedient package which allows us to carry forward our original assessment of whether contracts contained leases, lease classification and the initial direct costs. We also elected the practical expedient that allows lessees the option to account for lease and non-lease components together as a single component for all classes of underlying assets. The adoption of ASU 2016-02 resulted in a gross up on our Condensed Consolidated Balance Sheets for right of use ("ROU") assets and lease liabilities of $23.3 million and $24.4 million, respectively, as of November 1, 2019. Existing prepaid rent and accrued rent were recorded as an offset to the gross operating ROU assets. Our ROU assets are included in “Prepaid expenses and other assets” and the corresponding lease liabilities are included in “Accounts payable and other liabilities” line items on our Consolidated Balance Sheets. The adoption of ASU 2016-02 had no impact on our consolidated statements of operations or cash flows, nor did it have a significant impact on our business processes, systems or internal controls.



In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820) - Disclosure Framework” (“ASU 2018-13”), which improves the disclosure requirements for fair value measurements. ASU 2018-13 is effective for us beginning November 1, 2020. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for us beginning November 1, 2020. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with reference rate reform on financial reporting. This guidance was effective for the Company beginning on March 12, 2020, and we may elect to apply the amendments prospectively from now through December 31, 2022. The Company has not yet adopted this guidance and is currently evaluating the potential impact of adoption on our Consolidated Financial Statements.

Note 4 - Leases

12 Months Ended

Oct. 31, 2020

Lessee, Operating Leases [Text Block]

4.	Leases

We lease certain office space for use in our operations. We assess each of these contracts to determine whether the arrangement contains a lease as defined by ASC 842 “Leases” ("ASC 842"). In order to meet the definition of a lease under ASC 842, the contractual arrangement must convey to us the right to control the use of an identifiable asset for a period of time in exchange for consideration. We recognize lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Our office lease terms are generally from three to five years and generally contain renewal options. In accordance with ASC 842, our lease terms include those renewals only to the extent that they are reasonably certain to be exercised. The exercise of these lease renewal options is generally at our discretion. In accordance with ASC 842, the lease liability is equal to the present value of the remaining lease payments while the ROU asset is based on the lease liability, subject to adjustment, such as for lease incentives. Our leases do not provide a readily determinable implicit interest rate and therefore, we must estimate our incremental borrowing rate. In determining the incremental borrowing rate, we consider the lease period and our collateralized borrowing rates.

Our lease population at October 31, 2020 is comprised of operating leases where we are the lessee and these leases are primarily real estate for office space for our corporate office, division offices and design centers. As allowed by ASC 842, we adopted an accounting policy election to not record leases with lease terms of twelve months or less on our Consolidated Balance Sheets.

Lease cost included in our Consolidated Statements of Operations in Selling, general and administrative expenses and payments on our lease liabilities are presented in the table below. Our short-term lease costs and sublease income are de minimis.

	Year Ended October 31,
(In thousands)	2020
Operating lease cost	$	10,507
Cash payments on lease liabilities	$	9,257

ROU assets are classified within Prepaids and other assets on our Consolidated Balance Sheets, while lease liabilities are classified within Accounts payable and other liabilities on our Consolidated Balance Sheets. The Company recorded a net increase to both its ROU assets and lease liabilities of $2.8 million as a result of lease renewals that commenced during the year ended October 31, 2020. The following table contains additional information about our leases:

(In thousands)	*At October 31, 2020*
ROU assets	$	20,016
Lease liabilities	$	21,049
Weighted-average remaining lease term (in years)		3.5
Weighted-average discount rate (incremental borrowing rate)		9.6	%

Maturities of our operating lease liabilities as of October 31, 2020 are as follows:

Year ending October 31,	*(in thousands)*
2021	$	8,880
2022		7,506
2023		4,298
2024		1,673
2025		1,324
Thereafter		1,107
Total payments		24,788
Less: imputed interest		(3,739	)
Present value of lease liabilities	$	21,049

Under ASC 840, Leases (ASC 840), the Company’s total net rental expense for the years ended October 31, 2019 and 2018 was $14.8 million and $14.4 million, respectively.

Note 5 - Property, Plant and Equipment

12 Months Ended

Oct. 31, 2020

Property, Plant and Equipment Disclosure [Text Block]

5. Property, Plant and Equipment

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.

Property, plant, and equipment balances as of October 31, 2020 and 2019 were as follows:

	*October 31,*
(In thousands)	*2020*		*2019*

Land and land improvements	$	1,639	$	1,639
Buildings		9,497		9,155
Building improvements		13,281		11,552
Furniture		4,363		4,338
Equipment, including capitalized software		35,763		35,423
Total		64,543		62,107
Less accumulated depreciation		46,358		41,980
Total	$	18,185	$	20,127

Note 6 - Restricted Cash and Deposits

12 Months Ended

Oct. 31, 2020

Cash and Cash Equivalents Disclosure [Text Block]

6. Restricted Cash and Deposits

Homebuilding - Restricted cash and cash equivalents on the Consolidated Balance Sheets totaled $14.7 million and $20.9 million as of October 31, 2020 and 2019, respectively, which primarily consists of cash collateralizing our letter of credit agreements and facilities as discussed in Note 9.

Financial services restricted cash and cash equivalents, which are included in Financial services other assets on the Consolidated Balance Sheets, totaled $27.4 million and $24.8 million as of October 31, 2020 and 2019, respectively. Included in these balances were (1) financial services customers’ deposits of $25.4 million at October 31, 2020 and $22.8 million as of October 31, 2019, which are subject to restrictions on our use, and (2) $2.0 million at both October 31, 2020 and 2019 of restricted cash under the terms of our mortgage warehouse lines of credit.

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

Note 7 - Mortgage Loans Held for Sale

12 Months Ended

Oct. 31, 2020

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

7. Mortgage Loans Held for Sale

Our wholly owned mortgage banking subsidiary, K. Hovnanian American Mortgage, LLC (“K. Hovnanian Mortgage”) originates mortgage loans, primarily from the sale of our homes. Such mortgage loans are sold in the secondary mortgage market within a short period of time of origination. Mortgage loans held for sale consist primarily of single-family residential loans collateralized by the underlying property. We have elected the fair value option to record loans held for sale and therefore these loans are recorded at fair value with the changes in the value recognized in the Consolidated Statements of Operations in “Revenues: Financial services.” We currently use forward sales of mortgage-backed securities (“MBS”), interest rate commitments from borrowers and mandatory and/or best efforts forward commitments to sell loans to third-party purchasers to protect us from interest rate fluctuations. These short-term instruments, which do not require any payments to be made to the counterparty or purchaser in connection with the execution of the commitments, are recorded at fair value. Gains and losses on changes in the fair value are recognized in the Consolidated Statements of Operations in “Revenues: Financial services.”

At October 31, 2020 and 2019, $87.9 million and $143.2 million, respectively, of mortgages held for sale were pledged against our mortgage warehouse lines of credit (see Note 8). We may incur losses with respect to mortgages that were previously sold that are delinquent and which had underwriting defects, but only to the extent the losses are not covered by mortgage insurance or resale value of the home. The reserves for these estimated losses are included in the “Financial services” balances on the Consolidated Balance Sheets. As of October 31, 2020 and 2019, we had reserves specifically for 15 and 20 identified mortgage loans, respectively, as well as reserves for an estimate for future losses on mortgages sold but not yet identified to us.

The activity in our loan origination reserves in fiscal 2020 and 2019 was as follows:

	*Year Ended*
	*October 31,*
(In thousands)	*2020*			*2019*

Loan origination reserves, beginning of period	$	1,268		$	2,563
Provisions for losses during the period		196			198
Adjustments to pre-existing provisions for losses from changes in estimates		(6	)		(143	)
Payments/settlements		-			(1,350	)
Loan origination reserves, end of period	$	1,458		$	1,268

Note 8 - Mortgages

12 Months Ended

Oct. 31, 2020

Line of Credit [Text Block]

8. Mortgages

Nonrecourse. We have nonrecourse mortgage loans for certain communities totaling $135.1 million and $203.6 million (net of debt issuance costs) at October 31, 2020 and 2019, respectively, which are secured by the related real property, including any improvements, with an aggregate book value of $368.1 million and $410.2 million, respectively. The weighted-average interest rate on these obligations was 6.4% and 8.3% at October 31, 2020 and 2019, respectively, and the mortgage loan payments on each community primarily correspond to home deliveries.

Mortgage Loans. K. Hovnanian Mortgage originates mortgage loans primarily from the sale of our homes. Such mortgage loans and related servicing rights are sold in the secondary mortgage market within a short period of time. In certain instances, we retain the servicing rights for a small amount of loans. K. Hovnanian Mortgage finances the origination of mortgage loans through various master repurchase agreements, which are recorded in financial services liabilities on the Consolidated Balance Sheets.

Our secured Master Repurchase Agreement with JPMorgan Chase Bank, N.A. (“Chase Master Repurchase Agreement”), which was amended on December 11, 2020, is a short-term borrowing facility that provides up to $50.0 million through its maturity on December 10, 2021. The loan is secured by the mortgages held for sale and is repaid when we sell the underlying mortgage loans to permanent investors. Interest is payable monthly on outstanding advances at an adjusted LIBOR rate, which was 0.14% at October 31, 2020, plus the applicable margin of 2.5%. As of October 31, 2020 and 2019, the aggregate principal amount of all borrowings outstanding under the Chase Master Repurchase Agreement was $23.5 million and $47.1 million, respectively.

K. Hovnanian Mortgage has another secured Master Repurchase Agreement with Customers Bank (“Customers Master Repurchase Agreement”) which is a short-term borrowing facility that provides up to $50.0 million through its maturity on February 12, 2021. The loan is secured by the mortgages held for sale and is repaid when we sell the underlying mortgage loans to permanent investors. Interest is payable daily or as loans are sold to permanent investors on outstanding advances at the current LIBOR rate, plus the applicable margin ranging from 2.125% to 4.75% based on the type of loan and the number of days outstanding on the warehouse line. As of October 31, 2020 and 2019, the aggregate principal amount of all borrowings outstanding under the Customers Master Repurchase Agreement was $31.1 million and $47.6 million, respectively.

K. Hovnanian Mortgage also has a secured Master Repurchase Agreement with Comerica Bank (“Comerica Master Repurchase Agreement”) which is a short-term borrowing facility through its maturity on June 18, 2021. The Comerica Master Repurchase Agreement provides up to $60.0 million on the 15th day of the last month of the Company's fiscal quarters, and reverts back to up to $50.0 million 30 days thereafter. The loan is secured by the mortgages held for sale and is repaid when we sell the underlying mortgage loans to permanent investors. Interest is payable monthly at the current LIBOR rate, subject to a floor of 0.25%, plus the applicable margin of 1.875% or 3.25% based upon the type of loan. As of October 31, 2020 and 2019, the aggregate principal amount of all borrowings outstanding under the Comerica Master Repurchase Agreement was $32.6 million and $45.5 million, respectively.

The Chase Master Repurchase Agreement, Customers Master Repurchase Agreement and Comerica Master Repurchase Agreement (together, the “Master Repurchase Agreements”) require K. Hovnanian Mortgage to satisfy and maintain specified financial ratios and other financial condition tests. Because of the extremely short period of time mortgages are held by K. Hovnanian Mortgage before the mortgages are sold to investors (generally a period of a few weeks), the immateriality to us on a consolidated basis of the size of the Master Repurchase Agreements, the levels required by these financial covenants, our ability based on our immediately available resources to contribute sufficient capital to cure any default, were such conditions to occur, and our right to cure any conditions of default based on the terms of the applicable agreement, we do not consider any of these covenants to be substantive or material. As of October 31, 2020, we believe we were in compliance with the covenants under the Master Repurchase Agreements.

Note 9 - Senior Notes and Credit Facilities

12 Months Ended

Oct. 31, 2020

Long-term Debt [Text Block]

9. Senior Notes and Credit Facilities

Senior notes and credit facilities balances as of October 31, 2020 and October 31, 2019, were as follows:

	*October 31,*			*October 31,*
(In thousands)		*2020*			*2019*
Senior Secured Notes:
10.0% Senior Secured Notes due July 15, 2022	$	111,214		$	218,994
10.5% Senior Secured Notes due July 15, 2024		69,683			211,391
10.0% Senior Secured 1.75 Lien Notes due November 15, 2025		158,502			-
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		350,000			350,000
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		282,322			282,322
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		162,269			103,141
Total Senior Secured Notes	$	1,133,990		$	1,165,848
Senior Notes:
8.0% Senior Notes due November 1, 2027 (1)	$	-		$	-
13.5% Senior Notes due February 1, 2026		90,590			90,590
5.0% Senior Notes due February 1, 2040		90,120			90,120
Total Senior Notes	$	180,710		$	180,710
Senior Unsecured Term Loan Credit Facility due February 1, 2027	$	39,551		$	202,547
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028	$	81,498		$	-
Senior Secured Revolving Credit Facility (2)	$	-		$	-
Subtotal notes payable	$	1,435,749		$	1,549,105
Net (discounts) premiums	$	17,521		$	(49,145	)
Net debt issuance costs	$	(22,160	)	$	(19,970	)
Total notes payable, net of discounts, premiums and debt issuance costs	$	1,431,110		$	1,479,990

(1) $26.0 million of 8.0% Senior Notes due 2027 are owned by a wholly-owned consolidated subsidiary of HEI. Therefore, in accordance with GAAP, such notes are not reflected on the Consolidated Balance Sheets of HEI. On November 1, 2019, the maturity of the 8.0% Senior Notes was extended to November 1, 2027.

(2) At October 31, 2020, provides for up to $125.0 million in aggregate amount of senior secured first lien revolving loans. Availability thereunder will terminate on December 28, 2022.

As of October 31, 2020, future maturities of our borrowings were as follows (in thousands):

Fiscal Year Ended October 31, (1)
2021	$	-
2022		111,214
2023		-
2024		69,683
2025		-
Thereafter		1,254,852
Total	$	1,435,749

(1) Does not include our $125.0 million Senior Secured Revolving Credit Facility under which there were no borrowings outstanding as of October 31, 2020.

General

Except for K. Hovnanian, the issuer of the notes and borrower under the Credit Facilities (as defined below), our home mortgage subsidiaries, certain of our title insurance subsidiaries, joint ventures and subsidiaries holding interests in our joint ventures, we and each of our subsidiaries are guarantors of the Credit Facilities, the senior secured notes (subject in the case of the 10.5% 2024 Notes (as defined below), to the 10.5% 2024 Notes Supplemental Indenture (as defined below)) and senior notes outstanding at October 31, 2020 (collectively, the “Notes Guarantors”).

The credit agreements governing the Credit Facilities and the indentures governing the senior secured and senior notes (together, the “Debt Instruments”) outstanding at October 31, 2020 do not contain any financial maintenance covenants, but do contain restrictive covenants that limit, among other things, the ability of HEI and certain of its subsidiaries, including K. Hovnanian, to incur additional indebtedness (other than non-recourse indebtedness, certain permitted indebtedness and refinancing indebtedness), pay dividends and make distributions on common and preferred stock, repay certain indebtedness prior to its respective stated maturity, repurchase common and preferred stock, make other restricted payments (including investments), sell certain assets (including in certain land banking transactions), incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of their assets and enter into certain transactions with affiliates. The Debt Instruments also contain customary events of default which would permit the lenders or holders thereof to exercise remedies with respect to the collateral (as applicable), declare the loans made under the Unsecured Term Loan Facility (defined below) (the “Unsecured Term Loans”), loans made under the Secured Term Loan Facility (defined below) (the “Secured Term Loans”) and loans made under the Secured Credit Agreement (as defined below) (the “Secured Revolving Loans”) or notes to be immediately due and payable if not cured within applicable grace periods, including the failure to make timely payments on the Unsecured Term Loans, Secured Term Loans, Secured Revolving Loans or notes or other material indebtedness, cross default to other material indebtedness, the failure to comply with agreements and covenants and specified events of bankruptcy and insolvency, with respect to the Unsecured Term Loans, Secured Term Loans and Secured Revolving Loans, material inaccuracy of representations and warranties and with respect to the Unsecured Term Loans, Secured Term Loans and Secured Revolving Loans, a change of control, and, with respect to the Secured Term Loans, Secured Revolving Loans and senior secured notes, the failure of the documents granting security for the obligations under the secured Debt Instruments to be in full force and effect, and the failure of the liens on any material portion of the collateral securing the obligations under the secured Debt Instruments to be valid and perfected. As of October 31, 2020, we believe we were in compliance with the covenants of the Debt Instruments.

If our consolidated fixed charge coverage ratio is less than 2.0 to 1.0, as defined in the applicable Debt Instrument, we are restricted from making certain payments, including dividends, and from incurring indebtedness other than certain permitted indebtedness, refinancing indebtedness and nonrecourse indebtedness. As a result of this ratio restriction, we are currently restricted from paying dividends (in the case of the payment of dividends on preferred stock, our secured debt leverage ratio must also be less than 4.0 to 1.0), which are not cumulative, on our 7.625% Series A Preferred Stock. We anticipate that we will continue to be restricted from paying dividends for the foreseeable future. Our inability to pay dividends is in accordance with covenant restrictions and will not result in a default under our Debt Instruments or otherwise affect compliance with any of the covenants contained in our Debt Instruments.

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

Fiscal 2020

On December 10, 2019, K. Hovnanian consummated an exchange offer (the "1.75 Lien Exchange Offer") pursuant to which it issued $158.5 million aggregate principal amount of 10.0% 1.75 Lien Notes due 2025 (the “1.75 Lien Notes”) in exchange for $23.2 million in aggregate principal amount of its outstanding 10.0% Senior Secured Notes due 2022 (the “10.0% 2022 Notes”) and $141.7 million in aggregate principal amount of its outstanding 10.5% Senior Secured Notes due 2024 (the “10.5% 2024 Notes” and, together with the 10.0% 2022 Notes, the “Second Lien Notes”). K. Hovnanian also exchanged $163.0 million in aggregate principal amount of its Unsecured Term Loans for $81.5 million in aggregate principal amount of Secured Term Loans made under a new Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028 (the “Secured Term Loan Facility”). There was no cash consideration in these exchanges. These secured notes and term loan exchanges were accounted for in accordance with ASC 470-60, resulting in a carrying value of $164.9 million and $148.8 million, respectively, for the $158.5 million of 1.75 Lien Notes and $81.5 million of Secured Term Loans, respectively, and a net gain on extinguishment of debt of $9.2 million, which is included in “Gain on extinguishment of debt” on the Consolidated Statement of Operations. The effect of this gain on a per share basis, assuming dilution, for the year ended October 31, 2020 was $1.40, excluding the impact of taxes, as our deferred tax assets are fully reserved by a valuation allowance.

In connection with the 1.75 Lien Exchange Offer, K. Hovnanian obtained consents from a majority of the holders of the 10.5% 2024 Notes to amendments to the indenture under which such 10.5% 2024 Notes were issued and entered into the Tenth Supplemental Indenture dated as of December 6, 2019 among HEI, K. Hovnanian, the guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent (the “10.5% 2024 Notes Supplemental Indenture”) to provide for such amendments, which became operative on December 10, 2019. The amendments eliminate most of the restrictive covenants, certain of the affirmative covenants and certain events of default, including eliminating the obligations of subsidiaries that are formed after December 10, 2019 to become guarantors of the 10.5% 2024 Notes and to provide collateral in respect of their assets. As a result, the 10.5% 2024 Notes do not have the same guarantors or collateral as K. Hovnanian’s other secured debt obligations.

The 1.75 Lien Notes were issued under an Indenture, dated as of December 10, 2019, among HEI, K. Hovnanian, the guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent. The 1.75 Lien Notes are guaranteed by HEI and the Notes Guarantors and are secured by substantially all of the assets owned by K. Hovnanian and the Notes Guarantors, subject to permitted liens and certain exceptions. Interest on the 1.75 Lien Notes is payable semi-annually on May 15 and November 15 of each year, beginning on May 15, 2020, to holders of record at the close of business on May 1 or November 1, as the case may be, immediately preceding each such interest payment date. The 1.75 Lien Notes have a maturity of November 15, 2025.

The 1.75 Lien Notes are redeemable in whole or in part at K. Hovnanian’s option at any time prior to November 15, 2021 at a redemption price equal to 100.0% of their principal amount plus an applicable “Make-Whole Amount”. At any time and from time to time on or after November 15, 2021 and prior to November 15, 2022, K. Hovnanian may redeem some or all of the 1.75 Lien Notes at a redemption price equal to 105.00% of their principal amount, at any time and from time to time after November 15, 2022 and prior to November 15, 2023, K. Hovnanian may redeem some or all of the 1.75 Lien Notes at a redemption price equal to 102.50% of their principal amount and at any time and from time to time after November 15, 2023, K. Hovnanian may redeem some or all of the 1.75 Lien Notes at a redemption price equal to 100.0% of their principal amount. In addition, K. Hovnanian may also redeem up to 35.0% of the aggregate principal amount of the 1.75 Lien Notes prior to November 15, 2021 with the net cash proceeds from certain equity offerings at 110.00% of principal.

The Secured Term Loans and the guarantees thereof are secured on a pari passu basis with the 1.75 Lien Notes by the same assets that secure the 1.75 Lien Notes, subject to permitted liens and certain exceptions. The Secured Term Loans bear interest at a rate equal to 10.0% per annum and will mature on January 31, 2028. The Secured Term Loans bear interest at a rate equal to 10.0% per annum and interest is payable in arrears, on the last business day of each fiscal quarter. The Secured Term Loans may be voluntarily prepaid in whole or in part at K. Hovnanian’s option at any time prior to November 15, 2021 at a prepayment price equal to 100.0% of their principal amount plus any applicable “Make-Whole Amount”. At any time and from time to time on or after November 15, 2021 and prior to November 15, 2022, K. Hovnanian may voluntarily prepay some or all of the Secured Term Loans at a prepayment price equal to 105.00% of their principal amount, at any time and from time to time after November 15, 2022 and prior to November 15, 2023, K. Hovnanian may voluntarily prepay some or all of the Secured Term Loans at a prepayment price equal to 102.50% of their principal amount and at any time and from time to time after November 15, 2023, K. Hovnanian may voluntarily prepay some or all of the Secured Term Loans at a prepayment price equal to 100.0% of their principal amount.

On March 25, 2020, K. Hovnanian consummated a private exchange (the “Exchange”) pursuant to which it issued $59.1 million aggregate principal amount of additional 1.5 Lien Notes (defined below) (the “Additional 1.5 Lien Notes”) in exchange for of $59.1 million aggregate principal amount of 10.0% 2022 Notes held by certain participating bondholders (the “Exchange Holders”) pursuant to an Exchange Agreement, dated March 25, 2020 (the “Exchange Agreement”), among the K. Hovnanian, the Notes Guarantors, the Exchanging Holders and certain holders of the Initial 1.5 Lien Notes (defined below) (the “Consenting Holders”). In connection therewith, the Consenting Holders provided their consents (the “Consents”) under the Indenture under which the 1.5 Lien Notes were issued to permit the issuance of the Additional 1.5 Lien Notes.

The Additional 1.5 Lien Notes were issued as additional notes of the same series as the $103.1 million aggregate principal amount of K. Hovnanian’s 11.25% Senior Secured 1.5 Lien Notes due 2026 issued on October 31, 2019 (the “Initial 1.5 Lien Notes” and, together with the Additional 1.5 Lien Notes, the “1.5 Lien Notes”). In connection with the issuance of the Additional 1.5 Lien Notes in the Exchange, K. Hovnanian, the Notes Guarantors and Wilmington Trust, National Association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”), entered into the Fourth Supplemental Indenture, dated as of March 25, 2020 (the “Supplemental Indenture”), to the Indenture, dated as of October 31, 2019 (as amended and supplemented prior to the Supplemental Indenture, the “Indenture”), among the K. Hovnanian, the Notes Guarantors, the Trustee and the Collateral Agent. The Supplemental Indenture also amends the Indenture in accordance with the Consents to permit K. Hovnanian and the Notes Guarantors to secure up to $162.3 million of 1.5 Lien Obligations (as defined in the Indenture). As of March 25, 2020, after giving effect to the issuance of the Additional 1.5 Lien Notes, $162.3 million aggregate principal amount of 1.5 Lien Obligations, which consist of the 1.5 Lien Notes, were outstanding. For a discussion of the 1.5 Lien Notes see “—Secured Obligations” below.

During the year ended October 31, 2020, the Company repurchased in open market transactions $25.5 million aggregate principal amount of the 10.0% 2022 Notes. The aggregate purchase price for these repurchases was $21.4 million, which included accrued and unpaid interest. These repurchases resulted in a gain on extinguishment of debt of $4.1 million for the year ended October 31, 2020, net of the write-off of unamortized financing costs and fees. The gains from the repurchases are included in the Consolidated Statement of Operations as "Gain on extinguishment of debt".

Fiscal 2019

On January 15, 2019, K. Hovnanian issued $25.0 million in aggregate principal amount of additional 10.5% 2024 Notes to GSO Capital Partners LP (“GSO”) or one or more funds managed, advised or sub-advised by GSO (collectively, the “GSO Entities”) at a discount for a purchase price of $21.3 million in cash. The additional 10.5% 2024 Notes were issued as additional notes of the same series as the 10.5% 2024 Notes.

On October 31, 2019, K. Hovnanian, HEI, the Notes Guarantors, Wilmington Trust, National Association, as administrative agent, and affiliates of certain investment managers (the “Investors”), as lenders, entered into a credit agreement (the “Secured Credit Agreement” and, together with the Unsecured Term Loan Facility and the Secured Term Loan Facility, the “Credit Facilities”) providing for up to $125.0 million in aggregate amount of Secured Revolving Loans to be used for general corporate purposes, upon the terms and subject to the conditions set forth therein. Secured Revolving Loans are to be borrowed by K. Hovnanian and guaranteed by the Notes Guarantors. Availability under the Secured Credit Agreement will terminate on December 28, 2022. The Secured Revolving Loans bear interest at a rate per annum equal to 7.75%, and interest is payable in arrears, on the last business day of each fiscal quarter. In connection with the entering into of the Secured Credit Agreement, K. Hovnanian terminated the 2018 Secured Credit Facility (as defined under "- Fiscal 2018").

On October 31, 2019, K. Hovnanian completed private placements of senior secured notes as follows: (i) K. Hovnanian issued an aggregate of $350.0 million of 7.75% Senior Secured 1.125 Lien Notes due 2026 (the “1.125 Lien Notes”) in part pursuant to a Note Purchase Agreement, dated October 31, 2019, among K. Hovnanian, the Notes Guarantors and certain Investors as purchasers thereof (the “1.125 Lien Notes Purchase Agreement”) and in part pursuant to the Exchange Agreement (as defined below), with the proceeds from the sale of 1.125 Lien Notes under the 1.125 Lien Notes Purchase Agreement used to fund the cash payments to certain Exchanging Holders (as defined below) under the Exchange Agreement; and (ii) K. Hovnanian issued an aggregate of $282.3 million of 10.5% Senior Secured 1.25 Lien Notes due 2026 (the “1.25 Lien Notes”), pursuant to a Note Purchase Agreement (the “1.25 Lien Notes Purchase Agreement”), dated October 31, 2019, among K. Hovnanian, the Notes Guarantors and certain Investors as purchasers thereof (the “1.25 Lien Notes Purchasers”), the proceeds of which were used to fund the Satisfaction and Discharge (as defined below).

In addition, on October 31, 2019, K. Hovnanian completed private exchanges of (i) approximately $221.0 million aggregate principal amount of its 10.0% 2022 Notes and approximately $114.0 million aggregate principal amount of its 10.5% 2024 Notes held by certain participating bondholders (the “Exchanging Holders”) for a portion of the $350.0 million aggregate principal amount of 1.125 Lien Notes described above and/or cash, and (ii) approximately $99.6 million aggregate principal amount of its 10.5% 2024 Notes held by certain of the Exchanging Holders for approximately $103.1 million aggregate principal amount of 1.5 Lien Notes (the 1.5 Lien Notes together with the 1.125 Lien Notes and the 1.25 Lien Notes, the “New Secured Notes”), pursuant to an Exchange Agreement, dated October 30, 2019 (the “Exchange Agreement”), among K. Hovnanian, the Notes Guarantors and the Exchanging Holders.

On October 31, 2019, K. Hovnanian issued notices of redemption for all of its outstanding 9.50% Senior Secured Notes due 2020 (the “9.50% Notes”), 2.000% Senior Secured Notes due 2021 (the “2.000% Notes”) and 5.000% Senior Secured Notes due 2021 (the “5.000% Notes”) and deposited with Wilmington Trust, National Association, as trustee under the indenture (the “9.50% Notes Indenture”) governing the 9.50% Notes and as trustee under the indenture (the “5.000%/2.000% Notes Indenture”) governing the 5.000% Notes and the 2.000% Notes sufficient funds to satisfy and discharge (collectively, the “Satisfaction and Discharge”) (i) the 9.50% Indenture and to fund the redemption of all outstanding 9.50% Notes and to pay accrued and unpaid interest on the redeemed notes to, but not including, the November 10, 2019 redemption date and (ii) the 5.000%/2.000% Indenture and to fund the redemption of all outstanding 5.000% Notes and 2.000% Notes and to pay accrued and unpaid interest on the redeemed notes to, but not including, the November 30, 2019 redemption date. Proceeds from the issuance of the 1.25 Lien Notes together with cash on hand were used to fund the Satisfaction and Discharge. Upon the Satisfaction and Discharge of the 9.50% Notes Indenture, all of the collateral securing the 9.50% Notes was released and the restrictive covenants and events of default contained therein ceased to have effect and upon the Satisfaction and Discharge of the 5.000%/2.000% Notes Indenture, all of the collateral securing the 5.000% Notes and the 2.000% Notes was released and the restrictive covenants and events of default contained therein ceased to have effect as to both such series of Notes.

HEI and K. Hovnanian obtained the consent of certain lenders/holders under its existing debt instruments to amend such debt instruments in connection with the issuance of the New Secured Notes and the execution of the indentures governing the New Secured Notes and the Secured Credit Agreement. HEI, K. Hovnanian and the guarantors also amended such debt instruments to add certain subsidiaries as guarantors thereunder and, in the case of the Second Lien Notes, to add such new guarantors as pledgors and grantors of their assets (subject to permitted liens and certain exceptions) to secure such Second Lien Notes.

The transactions that were consummated on October 31. 2019, as described, are collectively referred to herein as the “2019 Transactions.” The 2019 Transactions resulted in a loss of extinguishment of debt of $42.4 million for the year ended October 31, 2019, which is included as “Loss on Extinguishment of Debt” on the Consolidated Statement of Operations.

Fiscal 2018

On December 1, 2017, our 6.0% Senior Exchangeable Note Units were paid in full, which units consisted of $53.9 million principal amount of our Senior Exchangeable Notes that matured and the final installment payment of $2.1 million on our 11.0% Senior Amortizing Notes.

On December 28, 2017, the Company and K. Hovnanian announced that they had entered into a commitment letter (the “Commitment Letter”) in respect of certain financing transactions with the GSO Entities, and had commenced a private exchange offer with respect to the 8.0% Senior Notes due 2019 (on November 1, 2019, the maturity of such Notes was extended to 2027) (the “8.0% Notes”) (the “Exchange Offer”).

Pursuant to the Commitment Letter, the GSO Entities agreed to, among other things, provide the principal amount of the following: (i) a senior unsecured term loan credit facility (the “Unsecured Term Loan Facility”) to be borrowed by K. Hovnanian and guaranteed by the Company and certain of its subsidiaries, pursuant to which the GSO Entities committed to lend K. Hovnanian Term Loans consisting of $132.5 million of initial term loans (the “Unsecured Initial Term Loans”) on the settlement date of the Exchange Offer for purposes of refinancing K. Hovnanian’s 7.0% Senior Notes due 2019 (the “7.0% Notes”), and up to $80.0 million of delayed draw term loans (the “Unsecured Delayed Draw Term Loans”) for purposes of refinancing certain of the 8.0% Notes, in each case, upon the terms and subject to the conditions set forth therein, and (ii) a senior secured first lien credit facility (the “2018 Secured Credit Facility”) to be borrowed by K. Hovnanian and guaranteed by certain of its subsidiaries, pursuant to which the GSO Entities committed to lend to K. Hovnanian up to $125.0 million of senior secured first priority loans to fund the repayment of K. Hovnanian’s then outstanding secured term loans and for general corporate purposes, upon the terms and subject to the conditions set forth therein. In addition, pursuant to the Commitment Letter, the GSO Entities committed to purchase, and K. Hovnanian agreed to issue and sell, on January 15, 2019, $25.0 million in aggregate principal amount of additional 10.5% 2024 Notes, upon the terms and subject to conditions set forth therein.

On January 29, 2018, K. Hovnanian, the Notes Guarantors, Wilmington Trust, National Association, as administrative agent, and the GSO Entities entered into the Term Loan Facility. K. Hovnanian borrowed the Unsecured Initial Term Loans on February 1, 2018 to fund, together with cash on hand, the redemption on February 1, 2018 of all $132.5 million aggregate principal amount of 7.0% Notes, which resulted in a loss on extinguishment of debt of $0.5 million for the nine months ended July 31, 2018. On May 29, 2018, K. Hovnanian completed the redemption of $65.7 million aggregate principal amount of the 8.0% Notes (representing all of the outstanding 8.0% Notes, excluding the $26 million of 8% Notes held by the Subsidiary Purchaser (as defined below)) with approximately $70.0 million in borrowings on the Unsecured Delayed Draw Term Loans under the Unsecured Term Loan Facility (with the completion of this redemption, the remaining committed amounts under the Unsecured Delayed Draw Term Loans may not be borrowed). This transaction resulted in a loss on extinguishment of debt of $4.3 million for the year ended October 31, 2018. The Unsecured Term Loans bear interest at a rate equal to 5.0% per annum and interest is payable in arrears, on the last business day of each fiscal quarter. The Term Loans will mature on February 1, 2027.

On January 29, 2018, K. Hovnanian, the subsidiary guarantors named therein, Wilmington Trust, National Association, as administrative agent, and the GSO Entities entered into the 2018 Secured Credit Facility, which provided for a $125.0 million secured revolving credit facility. This 2018 Secured Credit Facility was terminated on October 31, 2019 in connection with the 2019 Transactions.

On February 1, 2018, K. Hovnanian accepted all of the $170.2 million aggregate principal amount of 8.0% Notes validly tendered and not validly withdrawn in the Exchange Offer (representing 72.14% of the aggregate principal amount of 8.0% Notes outstanding prior to the Exchange Offer), and in connection therewith, K. Hovnanian issued $90.6 million aggregate principal amount of its 13.5% Senior Notes due 2026 (the “2026 Notes”) and $90.1 million aggregate principal amount of its 5.0% Senior Notes due 2040 (the “2040 Notes”) under a new indenture. Also, as part of the Exchange Offer, K. Hovnanian at Sunrise Trail III, LLC, a wholly-owned subsidiary of the Company (the “Subsidiary Purchaser”), purchased for $26.5 million in cash an aggregate of $26.0 million in principal amount of the 8.0% Notes (the “Purchased 8.0% Notes”). The 2026 Notes and the 2040 Notes were issued by K. Hovnanian and guaranteed by certain of its subsidiaries, except the Subsidiary Purchaser, which does not guarantee the 2026 Notes or the 2040 Notes. The 2026 Notes bear interest at 13.5% per annum and mature on February 1, 2026. The 2040 Notes bear interest at 5.0% per annum and mature on February 1, 2040. Interest on the 2026 Notes and the 2040 Notes is payable semi-annually on February 1 and August 1 of each year to holders of record at the close of business on January 15 or July 15, as the case may be, immediately preceding each such interest payment date. The Exchange Offer was treated as a substantial modification of debt, and resulted in a loss on extinguishment of debt of $0.9 million for the fiscal year ended October 31, 2018. The 2026 Notes and the 2040 Notes were recorded at fair value (based on management's estimate using available trades for similar debt instruments) on the date of the issuance of the 2026 Notes and the 2040 Notes.

K. Hovnanian’s 2026 Notes are redeemable in whole or in part at K. Hovnanian’s option at any time prior to February 1, 2025 at a redemption price equal to 100% of their principal amount plus an applicable “Make Whole Amount”. At any time and from time to time on or after February 1, 2025, K. Hovnanian may also redeem some or all of the 2026 Notes at a redemption price equal to 100.0% of their principal amount.

At any time and from time to time on or after February 1, 2020 and prior to February 1, 2021 K. Hovnanian may redeem some or all of the 2040 Notes at a redemption price equal to 102.50% of their principal amount and at any time and from time to time after February 1, 2020, K. Hovnanian may redeem some or all of the 2040 Notes at a redemption price equal to 100.0% of their principal amount.

Secured Obligations

The 10.0% 2022 Notes have a maturity of July 15, 2022 and bear interest at a rate of 10.0% per annum payable semi-annually on January 15 and July 15 of each year, to holders of record at the close of business on January 1 and July 1, as the case may be, immediately preceding such interest payment dates. K. Hovnanian may redeem some or all of the 10.0% 2022 Notes at 102.50% of principal commencing July 15, 2020 and at 100.0% of principal commencing July 15, 2021.

The 10.5% 2024 Notes have a maturity of July 15, 2024 and bear interest at a rate of 10.5% per annum payable semi-annually on January 15 and July 15 of each year, to holders of record at the close of business on January 1 and July 1, as the case may be, immediately preceding such interest payment dates. K. Hovnanian may redeem some or all of the 10.5% 2024 Notes at 105.25% of principal commencing July 15, 2020, at 102.625% of principal commencing July 15, 2021 and at 100.0% of principal commencing July 15, 2022.

The 1.125 Lien Notes have a maturity of February 15, 2026 and bear interest at a rate of 7.75% per annum payable semi-annually on February 15 and August 15 of each year, to holders of record at the close of business on February 1 and August 1, as the case may be, immediately preceding such interest payment dates. The 1.125 Lien Notes are redeemable in whole or in part at our option at any time prior to February 15, 2022 at 100.0% of their principal amount plus an applicable “Make-Whole Amount.” In addition, up to 35% of the original aggregate principal amount of the 1.125 Lien Notes may be redeemed with the net cash proceeds from certain equity offerings at 107.75% of principal at any time prior to February 15, 2022. K. Hovnanian may also redeem some or all of the 1.125 Lien Notes at 103.875% of principal commencing February 15, 2022, at 101.937% of principal commencing February 15, 2023 and at 100.0% of principal commencing February 15, 2024.

The 1.25 Lien Notes have a maturity of February 15, 2026 and bear interest at a rate of 10.5% per annum payable semi-annually on February 15 and August 15 of each year, to holders of record at the close of business on February 1 and August 1, as the case may be, immediately preceding such interest payment dates. The 1.25 Lien Notes are redeemable in whole or in part at our option at any time prior to February 15, 2022 at 100.0% of their principal amount plus an applicable “Make-Whole Amount.” In addition, up to 35% of the original aggregate principal amount of the 1.25 Lien Notes may be redeemed with the net cash proceeds from certain equity offerings at 110.5% of principal at any time prior to February 15, 2022. K. Hovnanian may also redeem some or all of the 1.25 Lien Notes at 105.25% of principal commencing February 15, 2022, at 102.625% of principal commencing February 15, 2023 and at 100.0% of principal commencing February 15, 2024.

The 1.5 Lien Notes have a maturity of February 15, 2026 and bear interest at a rate of 11.25% per annum payable semi-annually on February 15 and August 15 of each year, to holders of record at the close of business on February 1 and August 1, as the case may be, immediately preceding such interest payment dates. The 1.5 Lien Notes are redeemable in whole or in part at our option at any time prior to February 15, 2026 at 100.0% of their principal amount.

See “—Fiscal 2020” for a discussion of the 1.75 Lien Notes and the Secured Term Loans and “—Fiscal 2019” for a discussion of the Secured Credit Agreement.

Each series of secured notes (subject in the case of the 10.5% 2024 Notes, to the 10.5% 2024 Notes Supplemental Indenture) and the guarantees thereof, the Secured Term Loans and the guarantees thereof and the Secured Credit Agreement and the guarantees thereof are secured by the same assets. Among the secured debt, the liens securing the Secured Credit Agreement are senior to the liens securing all of K. Hovnanian’s other secured notes and the Secured Term Loan. The liens securing the 1.125 Lien Notes are senior to the liens securing the 1.25 Lien Notes, 1.5 Lien Notes, the 1.75 Lien Notes, the Secured Term Loans, the Second Lien Notes and any other future secured obligations that are junior in priority with respect to the assets securing the 1.125 Lien Notes, the liens securing the 1.25 Lien Notes are senior to the liens securing the 1.5 Lien Notes, the 1.75 Lien Notes, the Secured Term Loans, the Second Lien Notes and any other future secured obligations that are junior in priority with respect to the assets securing the 1.25 Lien Notes, the liens securing the 1.5 Lien Notes are senior to the liens securing the 1.75 Lien Notes, the Secured Term Loans, the Second Lien Notes and any other future secured obligations that are junior in priority with respect to the assets securing the 1.5 Lien Notes, the liens securing the 1.75 Lien Notes and the Secured Term Loans (which are secured on a pari passu basis with each other) are senior to the liens securing the Second Lien Notes and any other future secured obligations that are junior in priority with respect to the assets securing the 1.75 Lien Notes and the Secured Term Loans, in each case, with respect to the assets securing such debt.

As of October 31, 2020, the collateral securing the Secured Credit Agreement, the Secured Term Loan Facility and the secured notes (subject in the case of the 10.5% 2024 Notes, to the 10.5% 2024 Notes Supplemental Indenture) included (1) $258.9 million of cash and cash equivalents, which included $11.6 million of restricted cash collateralizing certain letters of credit (subsequent to such date, fluctuations as a result of cash uses include general business operations and real estate and other investments along with cash inflow primarily from deliveries); (2) $435.5 million aggregate book value of real property, which does not include the impact of inventory investments, home deliveries or impairments thereafter and which may differ from the value if it were appraised; and (3) equity interests in joint venture holding companies with an aggregate book value of $185.5 million.

Other

We have certain stand-alone cash collateralized letter of credit agreements and facilities under which there was a total of $11.3 million and $19.2 million letters of credit outstanding at October 31, 2020 and October 31, 2019, respectively. These agreements and facilities require us to maintain specified amounts of cash as collateral in segregated accounts to support the letters of credit issued thereunder, which will affect the amount of cash we have available for other uses. At October 31, 2020 and October 31, 2019, the amount of cash collateral in these segregated accounts was $11.6 million and $19.9 million, respectively, which is reflected in “Restricted cash and cash equivalents” on the Consolidated Balance Sheets.

Note 10 - Operating and Reporting Segments

12 Months Ended

Oct. 31, 2020

Segment Reporting Disclosure [Text Block]

10. Operating and Reporting Segments

HEI’s operating segments are components of the Company’s business for which discrete financial information is available and reviewed regularly by the chief operating decision maker, our Chief Executive Officer, to evaluate performance and make operating decisions. Based on this criteria, each of the Company's communities qualifies as an operating segment, and therefore, it is impractical to provide segment disclosures for this many segments. As such, HEI has aggregated the homebuilding operating segments into six reportable segments.

HEI’s homebuilding operating segments are aggregated into reportable segments based primarily upon geographic proximity, similar regulatory environments, land acquisition characteristics and similar methods used to construct and sell homes. HEI’s reportable segments consist of the following six homebuilding segments and a financial services segment noted below.

Homebuilding:

	(1)	Northeast (New Jersey and Pennsylvania)
	(2)	Mid-Atlantic (Delaware, Maryland, Virginia, Washington D.C. and West Virginia)
	(3)	Midwest (Illinois and Ohio)
	(4)	Southeast (Florida, Georgia and South Carolina)
	(5)	Southwest (Arizona and Texas)
	(6)	West (California)

Financial Services

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

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

Evaluation of segment performance is based primarily on operating earnings from continuing operations before provision for income taxes (“Income (loss) before income taxes”). Income (loss) before income taxes for the Homebuilding segments consist of revenues generated from the sales of homes and land, income (loss) from unconsolidated entities, management fees and other income, less the cost of homes and land sold, selling, general and administrative expenses and interest expense. Income (loss) before income taxes for the Financial Services segment consist of revenues generated from mortgage financing, title insurance and closing services, less the cost of such services and selling, general and administrative expenses incurred by the Financial Services segment.

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

Financial information relating to HEI’s segment operations was as follows:

	*Year Ended October 31,*
(In thousands)	*2020*			*2019*			*2018*
Revenues:
Northeast	$	192,069		$	124,372		$	116,296
Mid-Atlantic		403,669			357,247			354,690
Midwest		225,718			204,461			196,599
Southeast		232,730			220,082			241,620
Southwest		744,197			629,344			638,282
West		472,889			425,516			384,627
Total homebuilding		2,271,272			1,961,022			1,932,114
Financial services		72,162			54,152			53,355
Corporate and unallocated		467			1,742			5,764
Total revenues	$	2,343,901		$	2,016,916		$	1,991,233
Income (loss) before income taxes:
Northeast	$	30,371		$	20,954		$	20,869
Mid-Atlantic		34,570			14,327			18,757
Midwest		(1,805	)		(649	)		1,528
Southeast		1,355			(10,060	)		(9,914	)
Southwest		68,184			33,459			49,852
West		16,415			40,018			47,987
Total homebuilding		149,090			98,049			129,079
Financial services		32,102			17,627			18,227
Corporate and unallocated (1)		(125,789	)		(155,344	)		(139,160	)
Income (loss) before income taxes	$	55,403		$	(39,668	)	$	8,146

(1) Corporate and unallocated for the year ended October 31, 2020 included corporate general and administrative costs of $80.5 million, interest expense of $61.9 million (a component of Other interest on our Consolidated Statements of Operations), gain on extinguishment of debt of $13.3 million, and $3.3 million of other income and expenses, along with the adjustment to our insurance reserves. Corporate and unallocated for the year ended October 31, 2019 included corporate general and administrative costs of $66.4 million, interest expense of $55.5 million (a component of Other interest on our Consolidated Statements of Operations), loss on extinguishment of debt of $42.4 million, and $9.0 million of other income and expenses, along with the adjustment to our insurance reserves. Corporate and unallocated for the year ended October 31, 2018 included corporate general and administrative costs of $69.6 million, interest expense of $76.2 million (a component of Other interest on our Consolidated Statements of Operations), loss on extinguishment of debt of $7.5 million, $14.1 million of other income and expenses primarily related to interest income and gain on the sale of our former corporate headquarters building, along with the adjustment to our insurance reserves.

	*October 31,*
(In thousands)	*2020*		*2019*
Assets:
Northeast	$	107,748	$	163,342
Mid-Atlantic		271,867		264,894
Midwest		106,774		117,242
Southeast		248,506		281,654
Southwest		357,444		357,052
West		278,811		311,919
Total homebuilding		1,371,150		1,496,103
Financial services		140,607		199,275
Corporate and unallocated		315,585		186,046
Total assets	$	1,827,342	$	1,881,424

	*October 31,*
(In thousands)	*2020*		*2019*
Investments in and advances to unconsolidated joint ventures:
Northeast	$	14,646	$	49,340
Mid-Atlantic		11,055		9,166
Midwest		498		4,382
Southeast		66,234		52,983
Southwest		9,965		10,019
West		64		(33	)
Total homebuilding		102,462		125,857
Corporate and unallocated		702		1,181
Total investments in and advances to unconsolidated joint ventures	$	103,164	$	127,038

	*Year Ended October 31,*
(In thousands)	*2020*			*2019*		*2018*
Homebuilding interest expense:
Northeast	$	13,636		$	10,011	$	11,811
Mid-Atlantic		16,076			18,563		15,051
Midwest		9,377			7,121		5,874
Southeast		17,005			18,798		14,934
Southwest		29,898			27,731		21,820
West		30,222			23,051		18,309
Total homebuilding		116,214			105,275		87,799
Corporate and unallocated		61,917			55,506		76,183
Financial services interest expense (1)		(35	)		334		104
Total interest expense, net	$	178,096		$	161,115	$	164,086

(1)

Financial services interest expenses are included in the Financial services lines on the Consolidated Statements of Operations in the respective revenues and expenses sections.

	*Year Ended October 31,*
(In thousands)	*2020*		*2019*		*2018*
Depreciation:
Northeast	$	229	$	188	$	135
Mid-Atlantic		264		209		63
Midwest		1,112		1,097		1,106
Southeast		327		230		124
Southwest		699		331		70
West		801		326		45
Total homebuilding		3,432		2,381		1,543
Financial services		13		14		14
Corporate and unallocated		1,859		1,777		1,599
Total depreciation	$	5,304	$	4,172	$	3,156

	*Year Ended October 31,*
(In thousands)	*2020*		*2019*		*2018*
Net additions to operating properties and equipment:
Northeast	$	43	$	107	$	142
Mid-Atlantic		165		168		318
Midwest		861		237		621
Southeast		102		221		701
Southwest		776		741		23
West		846		921		55
Total homebuilding		2,793		2,395		1,860
Financial services		-		-		-
Corporate and unallocated		587		1,610		3,333
Total net additions to operating properties and equipment	$	3,380	$	4,005	$	5,193

	*Year Ended October 31,*
(In thousands)	*2020*			*2019*			*2018*
Equity in earnings (losses) from unconsolidated joint ventures:
Northeast	$	11,039		$	19,242		$	20,231
Mid-Atlantic		(292	)		3,404			799
Midwest		(103	)		(432	)		(775	)
Southeast		820			1,310			(2,032	)
Southwest		5,111			7,951			5,165
West		(10	)		(2,543	)		645
Total equity in earnings from unconsolidated joint ventures	$	16,565		$	28,932		$	24,033

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Note 11 - Income Taxes

12 Months Ended

Oct. 31, 2020

Income Tax Disclosure [Text Block]

11. Income Taxes

Income taxes payable, including deferred benefits, consists of the following:

	*Year Ended October 31,*
(In thousands)	*2020*		*2019*
State income taxes:
Current	$	3,832	$	2,301
Deferred		-		-
Federal income taxes:
Current		-		-
Deferred		-		-
Total	$	3,832	$	2,301

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

	*Year Ended October 31,*
(In thousands)	*2020*		*2019*		*2018*
Current income tax expense:
Federal (1)	$	-	$	-	$	-
State (2)		4,475		2,449		3,626
Total current income tax expense:		4,475		2,449		3,626
Federal		-		-		-
State		-		-		-
Total deferred income tax expense:		-		-		-
Total	$	4,475	$	2,449	$	3,626

(1)

The current federal income tax expense is net of the use of federal net operating losses totaling $183.0 million (tax effected $38.4 million) and $4.0 million (tax effected $0.8 million) for the years ended October 31, 2020 and 2019, respectively. The current federal income tax expense did not include the use of federal net operating losses for the year ended October 31, 2018.

(2)	The current state income tax expense is net of the use of state net operating losses totaling $72.5 million, $1.3 million and $4.4 million for the years ended October 31, 2020, 2019 and 2018, respectively.

The total income tax expense of $4.5 million, $2.4 million, and $3.6 million for the periods ending October 31, 2020, 2019 and 2018, respectively, was primarily related to state tax expense from income generated in states where we do not have net operating loss carryforwards to offset the current year income. In addition, the expense for the year ended October 31, 2020 was primarily related to state tax expense from the impact of a cancellation of debt income recorded for tax purposes but not for GAAP purposes, creating a permanent difference.

Our federal net operating losses of $1.4 billion expire between 2028 and 2038, and $15.7 million have an indefinite carryforward period. Of our $2.4 billion of state NOLs, $232.6 million expire between 2021 through 2025; $1.3 billion expire between 2026 through 2030; $587.9 million expire between 2031 through 2035; $239.2 million expire between 2036 through 2040; and $48.8 million have an indefinite carryforward period.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted and signed into U.S. law to provide economic relief to individuals and businesses facing economic hardship as a result of the COVID-19 pandemic. The CARES Act did not have a material impact on the Company's consolidated financial condition or results of operations as of and for the year ended October 31, 2020. The Company deferred the timing of estimated payments and payroll taxes as permitted by federal and state legislation, including under the CARES Act. We will continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and various state agencies.

Deferred federal and state income tax assets ("DTAs") primarily represent the deferred tax benefits arising from NOL carryforwards and temporary differences between book and tax income which will be recognized in future years as an offset against future taxable income. If the combination of future years’ income (or loss) and the reversal of the timing differences results in a loss, such losses can be carried forward to future years. In accordance with ASC 740, we evaluate our DTAs quarterly to determine if valuation allowances are required. ASC 740 requires that companies assess whether valuation allowances should be established based on the consideration of all available evidence using a “more likely than not” standard.

As of October 31, 2020, we considered all available positive and negative evidence to determine whether, based on the weight of that evidence, our valuation allowance for our DTAs was appropriate in accordance with ASC 740. Listed below, in order of the weighting of each factor, is the available positive and negative evidence that we considered in determining that it is more likely than not that all of our DTAs will not be realized. In analyzing these factors, overall the negative evidence, both objective and subjective, outweighed the positive evidence. Based on this analysis, we determined that the current valuation allowance for deferred taxes of $577.5 million as of October 31, 2020, which fully reserves for our DTAs, is appropriate.

As of October 31, 2020, on a tax basis, the Company had pre-tax income when adjusted for permanent differences on a three-year cumulative basis. However, on a U.S. GAAP basis, the Company has generated only $23.8 million of cumulative pre-tax income in the three years ended October 31, 2020. That cumulative profit was generated over those three years as follows: $8.1 million in fiscal 2018, $39.7 million loss in fiscal 2019 and $55.4 million of income in fiscal 2020. As noted, we had a significant loss in fiscal 2019 and generated a low level of profit in fiscal 2018. While the fiscal 2020 profit is a positive for the Company, it benefited greatly from the extremely strong housing market in the last half of the year. This strong market, as a result of low interest rates and lack of available supply from resale, resulted in contract pace per average active selling community of 17.8 and 16.4 for the third and fourth quarters of fiscal 2020, respectively, both of which are higher than any quarterly sales per community ever recorded by the Company. This increase in sales pace resulted in a 61.3% increase in dollar value of our backlog from October 31, 2019 to October 31, 2020. The Company believes that it is premature to conclude that this pace is sustainable, and in fact the pace has slowed somewhat in November 2020. We remain uncertain regarding the full long-term magnitude or duration of the business and economic impacts from the unprecedented COVID-19 pandemic. Further, it remains unknown whether recent, current or anticipated demand will continue once the current COVID-19 pandemic subsides. These uncertainties bring into doubt the Company’s ability to generate substantive positive income prospectively. Per ASC 740, cumulative losses are one of the most objectively verifiable forms of negative evidence. (Negative Objective Evidence)

Over the last several years, we have completed a number of debt refinancing/restructuring transactions which, by extending our debt maturities, will enable us to allocate cash to invest in new communities and grow our community count to get back to sustained profitability. (Positive Objective Evidence)

We incurred pre-tax losses during the housing market decline and the slower than expected housing market recovery. Given our current highly leveraged balance sheet, a downturn in the housing market, perhaps as a result of a prolonged pandemic, would be significantly more damaging to the Company than to other better capitalized homebuilders and make it very difficult for the Company to avoid future losses, given our high interest burden. (Negative Objective Evidence)

We exited several geographic markets over the last few years that have historically had losses. By exiting these underperforming markets, the Company has been able to redeploy capital to better performing markets, which over time should improve our profitability. (Positive Subjective Evidence)

The historical cyclicality of the U.S. housing market, a more restrictive mortgage lending environment compared to before the housing downturn of 2007-2009, the uncertainty of the overall US economy and government policies and consumer confidence, and impacts of the COVID 19 pandemic, all or any of which could continue to hamper a sustained, stronger recovery of the housing market. (Negative Subjective Evidence)

The deferred tax assets and liabilities have been recognized in the Consolidated Balance Sheets as follows:

	*Year Ended October 31,*
(In thousands)	*2020*			*2019*
Deferred tax assets:
Inventory impairment loss	$	42,120		$	47,000
Uniform capitalization of overhead		3,870			3,917
Warranty and legal reserves		4,848			4,404
Acquisition intangibles		-			424
Compensation		9,554			8,477
Deferred Income		3,793			5,167
Interest Expense		3,930			6,616
Restricted stock bonus		1,644			1,553
Stock options		4,026			4,288
Provision for losses		16,566			16,820
Joint venture loss		3,020			4,392
Federal net operating losses		299,854			334,142
State net operating losses		181,050			184,740
Other		3,259			1,280
Total deferred tax assets		577,534			623,220
Total deferred tax liabilities		-			-
Valuation allowance		(577,534	)		(623,220	)
Net deferred income taxes	$	-		$	-

The effective tax rate varied from the statutory federal income tax rate. The effective tax rate is affected by a number of factors, the most significant of which has been the valuation allowance related to our deferred tax assets. Due to the effects of these factors, our effective tax rates for 2020, 2019 and 2018 are not correlated to the amount of our income or loss before income taxes. The sources of these factors were as follows:

	*Year Ended October 31,*
	*2020*			*2019*			*2018*
Computed “expected” tax rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal income tax benefit		10.6			(5.0	)		17.2
Permanent differences, net		53.2			(42.4	)		74.0
Deferred tax asset valuation allowance impact		(83.3	)		20.8			(70.8	)
Tax contingencies		(0.5	)		0.5			1.0
Adjustments to prior years’ tax accruals		7.0			(1.0	)		2.1
Effective tax rate		8.0	%		(6.1	)%		44.5	%

ASC 740-10 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.

Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of ASC 740-10 and in subsequent periods. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

We recognize tax liabilities in accordance with ASC 740-10 and we adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a liability that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.

We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheet.

The following is a tabular reconciliation of the total amount of unrecognized tax benefits for the year (in millions) excluding interest and penalties:


	*2020*			*2019*
Unrecognized tax benefit—November 1,	$	0.9		$	1.2
Gross increases—tax positions in current period		-			-
Lapse of statute of limitations		(0.2	)		(0.3	)
Unrecognized tax benefit—October 31,	$	0.7		$	0.9

Related to the unrecognized tax benefits noted above, as of October 31, 2020 and 2019, we recognized a liability for interest and penalties of $0.3 and $0.4 million, respectively. For the year ended October 31, 2020, we recognized $60 thousand of interest and penalties in net income tax benefit. For the years ended October 31, 2019 and 2018, we recognized $32 thousand and $41 thousand, respectively, of interest and penalties in income tax expense.

It is likely that, within the next year, the amount of the Company's unrecognized tax benefits will decrease by $0.2 million, excluding penalties and interest. This reduction is expected primarily due to the expiration of the statutes of limitation. The portion of unrecognized tax benefits that, if recognized, would affect the Company’s effective tax rate (excluding any related impact to the valuation allowance) is $0.7 million and $0.9 million for the years ended October 31, 2020 and 2019. The recognition of unrecognized tax benefits could have an impact on the Company’s deferred tax assets and the valuation allowance.

The consolidated federal tax returns have been audited through October 31, 2019 and these years are closed. We are also subject to various income tax examinations in the states in which we do business. The outcome for a particular audit cannot be determined with certainty prior to the conclusion of the audit, appeal, and in some cases, litigation process. As each audit is concluded, adjustments, if any, are appropriately recorded in the period determined. To provide for potential exposures, tax reserves are recorded, if applicable, based on reasonable estimates of potential audit results. However, if the reserves are insufficient upon completion of an audit, there could be an adverse impact on our financial position and results of operations. The statute of limitations for our major tax jurisdictions remains open for examination for tax years 2016 – 2019.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Note 12 - Reduction of Inventory to Fair Value

12 Months Ended

Oct. 31, 2020

Inventory Impairments and Land Option Cost Write-offs [Text Block]

12. Reduction of Inventory to Fair Value

We record impairment losses on inventories related to communities under development and held for future 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. If the expected undiscounted cash flows are less than the carrying amount, then the community is written down to its fair value. We estimate the fair value of each impaired community by determining the present value of the estimated future cash flows at a discount rate commensurate with the risk of the respective community. For the year ended October 31, 2020, our discount rate used for the impairments recorded was 17.3%, and for the years ended October 31, 2019 and 2018, our discount rates used for the impairments recorded ranged from 17.3% to 18.3% and 16.8% to 19.8%, respectively. Should the estimates or expectations used in determining cash flows or fair value decrease or differ from current estimates in the future, we may need to recognize additional impairments.

During the years ended October 31, 2020 and 2019, we evaluated inventories of all 354 and 393 communities under development and held for future development or sale, respectively, for impairment indicators through preparation and review of detailed budgets or other market indicators of impairment. We performed undiscounted future cash flow analyses during the years ended October 31, 2020 and 2019 for three and nine of those communities (i.e., those with a projected operating loss or other impairment indicators), respectively, with an aggregate carrying value of $5.4 million and $58.9 million, respectively. As a result of our undiscounted future cash flow analyses, we performed discounted cash flow analyses for two of those communities for the fiscal year ended October 31, 2020, resulting in aggregate impairment losses of $2.0 million. The one community, with an aggregate carrying value of $0.6 million, that did not require a discounted cash flow analysis to be performed during the year ended October 31, 2020 did not have undiscounted future cash flows that exceeded the carrying amount by less than 20%. During the year ended October 31, 2019, six communities that required discounted cash flow analyses were impaired, which resulted in recording aggregate impairment losses of $2.7 million. The three communities that did not require a discounted cash flow analysis to be performed during the year ended October 31, 2019, had an aggregate carrying value of $41.3 million and undiscounted future cash flows that exceeded the carrying amount by less than 20%. The pre-impairment value in the table below represents the carrying value, net of prior period impairments, if any, at the time of recording the impairments. Our aggregate impairment losses are included in the Consolidated Statement of Operations on the line entitled “Homebuilding: Inventory impairment loss and land option write-offs” and deducted from inventory.

The following table represents impairments by segment for fiscal 2020, 2019 and 2018:

(Dollars in millions)	*Year Ended October 31, 2020*
			*Dollar*		*Pre-*
	*Number of*		*Amount of*		*Impairment*
	*Communities*		*Impairment*		*Value (1)*
Northeast		-	$	-	$	-
Mid-Atlantic		-		-		-
Midwest		2		2.0		4.8
Southeast		-		-		-
Southwest		-		-		-
West		-		-		-
Total		2	$	2.0	$	4.8

(Dollars in millions)	*Year Ended October 31, 2019*
			*Dollar*		*Pre-*
	*Number of*		*Amount of*		*Impairment*
	*Communities*		*Impairment*		*Value (1)*
Northeast		2	$	0.2	$	7.8
Mid-Atlantic		1		0.3		1.7
Midwest		1		1.4		4.6
Southeast		1		0.7		2.2
Southwest		1		0.1		1.2
West		-		-		-
Total		6	$	2.7	$	17.5

(Dollars in millions)	*Year Ended October 31, 2018*
			*Dollar*		*Pre-*
	*Number of*		*Amount of*		*Impairment*
	*Communities*		*Impairment*		*Value (1)*
Northeast		1	$	0.4	$	1.0
Mid-Atlantic		-		-		-
Midwest		1		0.1		0.5
Southeast		3		1.6		9.7
Southwest		-		-		-
West		-		-		-
Total		5	$	2.1	$	11.2

(1)	Represents carrying value, net of prior period impairments, if any, at the time of recording the applicable period’s impairments.

The Consolidated Statements of Operations line entitled “Homebuilding: Inventory impairment loss and land option write-offs” also includes write-offs of options and approval, engineering and capitalized interest costs that we record when we redesign communities and/or abandon certain engineering costs and we do not exercise options in various locations because the communities’ pro forma profitability is not projected to produce adequate returns on investment commensurate with the risk. The total aggregate write-offs related to these items were $6.8 million, $3.6 million and $1.4 million for the years ended October 31, 2020, 2019 and 2018, respectively. Occasionally, these write-offs are offset by recovered deposits (sometimes through legal action) that had been written off in a prior period as walk-away costs. Historically, these recoveries have not been significant in comparison to the total costs written off.

The following table represents write-offs of such costs by segment for fiscal 2020, 2019 and 2018:

	*Year Ended October 31,*
(In millions)	*2020*		*2019*		*2018*
Northeast	$	1.5	$	0.6	$	0.6
Mid-Atlantic		-		0.5		0.2
Midwest		3.5		0.9		0.1
Southeast		0.8		0.3		-
Southwest		0.6		0.6		0.2
West		0.4		0.7		0.3
Total	$	6.8	$	3.6	$	1.4

Note 13 - Per Share Calculation

12 Months Ended

Oct. 31, 2020

Earnings Per Share [Text Block]

13. Per Share Calculations

Basic earnings per share is computed by dividing net income (loss) (the “numerator”) by the weighted-average number of common shares outstanding, adjusted for nonvested shares of restricted stock (the “denominator”) for the period. Computing diluted earnings per share is similar to computing basic earnings per share, except that the denominator is increased to include the dilutive effects of options and nonvested shares of restricted stock, as well as common shares issuable upon exchange of our Senior Exchangeable Notes issued as part of our 6.0% Exchangeable Notes Units (which matured and were paid in full in fiscal 2018). Any options that have an exercise price greater than the average market price are considered to be anti-dilutive and are excluded from the diluted earnings per share calculation.

All outstanding nonvested shares that contain nonforfeitable rights to dividends or dividend equivalents that participate in undistributed earnings with common stock are considered participating securities and are included in computing earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings in periods when we have net income. The Company’s restricted common stock (“nonvested shares”) are considered participating securities.

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

	*Year Ended October 31,*
(In thousands, except per share data)	*2020*			*2019*			*2018*

Numerator:
Net earnings (loss) attributable to Hovnanian	$	50,928		$	(42,117	)	$	4,520
Less: undistributed earnings allocated to nonvested shares		(4,652	)		-			(159	)
Numerator for basic earnings (loss) per share	$	46,276		$	(42,117	)	$	4,361
Plus: undistributed earnings allocated to nonvested shares		4,652			-			159
Less: undistributed earnings reallocated to nonvested shares		(4,652	)		-			(159	)
Numerator for diluted earnings (loss) per share	$	46,276		$	(42,117	)	$	4,361
Denominator:
Denominator for basic earnings per share		6,189			5,968			5,941
Effect of dilutive securities:
Share-based payments		395			-			131
Denominator for diluted earnings per share – weighted-average shares outstanding		6,584			5,968			6,072
Basic earnings (loss) per share	$	7.48		$	(7.06	)	$	0.73
Diluted earnings (loss) per share	$	7.03		$	(7.06	)	$	0.72

Incremental shares attributed to nonvested stock and outstanding options to purchase common stock of 0.3 million for the year ended October 31, 2019, were excluded from the computation of diluted earnings per share because we had a net loss for the period, and any incremental shares would not be dilutive. For the year ended October 31, 2018, 33 thousand shares of common stock issuable upon the exchange of our 6% senior exchangeable note units (which were issued in fiscal 2012) were excluded from the computation of diluted earnings per share because they were anti-dilutive.

In addition, shares related to out-of-the money stock options that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share were 0.2 million for each of the years ended October 31, 2020, 2019 and 2018, because to do so would have been anti-dilutive for the periods presented.

Note 14 - Capital Stock

12 Months Ended

Oct. 31, 2020

Stockholders' Equity Note Disclosure [Text Block]

14. Capital Stock

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

On March 19, 2019, the Company's stockholders approved at an annual meeting an amendment to our Certificate of Incorporation to effect a reverse stock split (the “Reverse Stock Split”) of the Company’s common stock at a ratio of 1-for-25, and a corresponding decrease in the number of authorized shares of the common stock. Following the stockholders' approval, the Board of Directors, on March 19, 2019, determined to effectuate the Reverse Stock Split, which became effective on March 29, 2019, and every 25 issued shares (including treasury shares) of Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), were combined into one share of Class A Common Stock, and every 25 issued shares (including treasury shares) of Class B Common Stock, par value $0.01 per share (the “Class B Common Stock”), were combined into one share of Class B Common Stock. No fractional shares were issued in connection with the Reverse Stock Split. All share and per share amounts have been retroactively adjusted to reflect the reverse stock split.

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

On July 3, 2001, our Board of Directors authorized a stock repurchase program to purchase up to 0.2 million shares of Class A Common Stock. There were no shares purchased during the year ended October 31, 2020. As of October 31, 2020, the maximum number of shares of Class A Common Stock that may yet be purchased under this program is 22 thousand.

On October 31, 2019, in connection with the issuance of the 7.75% Senior Secured 1.25 Lien Notes due 2026, we issued and sold an aggregate of 178,427 shares of Class A Common Stock, par value $0.01 per share (and associated Preferred Stock Purchase Rights), to the purchasers of such Notes for an aggregate purchase price of $1,784.27. The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933.

Preferred Stock - On July 12, 2005, we issued 5,600 shares of 7.625% Series A Preferred Stock, with a liquidation preference of $25,000 per share. Dividends on the Series A Preferred Stock are not cumulative and are payable at an annual rate of 7.625%. The Series A Preferred Stock is not convertible into the Company’s common stock and is redeemable in whole or in part at our option at the liquidation preference of the shares. The Series A Preferred Stock is traded as depositary shares, with each depositary share representing 1/1000th of a share of Series A Preferred Stock. The depositary shares are listed on the NASDAQ Global Market under the symbol “HOVNP.” In fiscal 2020, 2019 and 2018, we did not pay any dividends on the Series A Preferred Stock due to covenant restrictions in our debt instruments. We anticipate that we will continue to be restricted from paying dividends, which are not cumulative, for the foreseeable future.

Retirement Plan - We have established a tax-qualified, defined contribution savings and investment retirement plan (a 401(k) plan). All associates are eligible to participate in the retirement plan, and employer contributions are based on a percentage of associate contributions and our operating results. Plan costs charged to operations were $7.4 million, $7.3 million and $7.0 million for the years ended October 31, 2020, 2019 and 2018, respectively.

Note 15 - Stock Plans

12 Months Ended

Oct. 31, 2020

Share-based Payment Arrangement [Text Block]

15. Stock Plans

There were no stock option grants during the year ended October 31, 2020. The fair value of option awards is established at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for the years ended October 31, 2019 and 2018: risk free interest rate of 1.99% and 2.80%, respectively; dividend yield of zero; historical volatility factor of the expected market price of our common stock of 0.56 and 0.50, respectively; a weighted-average expected life of the option of 7.98 years and 8.0 years, respectively; and an estimated forfeiture rate of 7.84% and 9.90%, respectively.

For the years ended October 31, 2020, 2019 and 2018, total stock-based compensation expense was $2.8 million, ($2.6 million post tax), $0.7 million and $3.7 million ($2.0 million post tax), respectively. Included in this total stock-based compensation expense was expense from stock options of $0.4 million, $0.8 million and $0.7 million for the years ended October 31, 2020, 2019 and 2018, respectively. The expense for the years ended October 31, 2020, 2019 and 2018 includes income of $2.4 million, $2.6 million and $0.8 million, respectively, from previously recognized expense of certain time and performance based restricted stock grants for which the performance metrics were not or are no longer expected to be satisfied.

We have a stock incentive plan for certain officers and key employees and directors. Beginning in fiscal 2020, restricted share units are granted by a committee appointed by the Board of Directors or its delegate in accordance with the stock incentive plan. At the time of our annual stock grant in the third quarter of fiscal 2020, each of the five of our existing non-employee directors of the Company were granted a number of shares of restricted stock units subject to a two-year post-vesting holding period, based on the fair market value on the date of grant. Prior to fiscal 2020, options were granted by a committee appointed by the Board of Directors or its delegate in accordance with the stock incentive plan. 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. Stock options granted to officers and associates generally vest in four equal installments on the second, third, fourth and fifth anniversaries of the date of the grant. All options expire 10 years after the date of the grant. Non-employee directors’ stock options and restricted stock units vest in three equal installments on the first, second and third anniversaries of the date of the grant. Stock option transactions are summarized as follows:

	*October 31,*		*Weighted-Average*		*October 31,*		*Weighted-Average*		*October 31,*		*Weighted-Average*
	*2020*		*Exercise Price*		*2019*		*Exercise Price*		*2018*		*Exercise Price*
Options outstanding at beginning of period		331,481	$	53.93		278,569	$	73.76		274,423	$	85.22
Granted		-	$	-		110,975	$	9.44		37,825	$	56.30
Exercised		-	$	-		-	$	-		1,210	$	49.91
Forfeited		6,560	$	26.24		2,038	$	53.96		2,000	$	64.25
Expired		35,530	$	115.28		56,025	$	64.41		30,469	$	156.95
Options outstanding at end of period		289,391	$	47.02		331,481	$	53.93		278,569	$	73.76
Options exercisable at end of period		145,553				147,019				191,748

There were no options exercised in fiscal 2020 or fiscal 2019. Exercise prices for options outstanding at October 31, 2020 ranged from $7.85 to $157.00. The total intrinsic value of options exercised during fiscal 2018 was $26 thousand. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option.

The weighted-average fair value of grants made in fiscal 2019 and 2018 was $4.46 and $27.09 per share, respectively. Based on the fair value at the time they were granted, the weighted-average fair value of options vested in fiscal 2019 and 2018 was $36.07 and $69.56 per share, respectively.

The following table summarizes the exercise price range and related number of options outstanding at October 31, 2020:

					Weighted-
					Average
			Weighted-		Remaining
	Number		Average		Contractual
Range of Exercise Prices	Outstanding		Exercise Price		Life
$7.85 – $38.50		108,150	$	9.65		8.58
$38.75 – $58.13		96,995	$	50.07		3.76
$61.00 – $90.38		57,300	$	67.66		4.11
$118.25 – $157.00		26,946	$	142.17		2.76
		289,391	$	47.02		5.54

The following table summarizes the exercise price range and related number of exercisable options at October 31, 2020:

					Weighted-
					Average
			Weighted-		Remaining
	Number		Average		Contractual
Range of Exercise Prices	Exercisable		Exercise Price		Life
$7.85 – $38.50		850	$	24.08		3.25
$38.75 – $58.13		82,557	$	50.31		3.2
$61.00 – $90.38		35,200	$	71.46		1.95
$118.25 – $157.00		26,946	$	142.17		2.76
		145,553	$	72.28		2.81

Officers and key associates who are eligible to receive equity grants are granted shares of restricted stock units. Prior to fiscal 2020, officers and key associates who were eligible to receive equity grants could elect to receive either a stated number of stock options, or a reduced number of shares of restricted stock units, or a combination thereof. Shares underlying restricted stock units granted to officers and associates generally vest in four equal installments on the second, third, fourth and fifth anniversaries of the grant date. Participants aged 60 years or older, or aged 58 with 15 years of service, are eligible to vest in their equity awards on an accelerated basis on their retirement (which in the case of the restricted stock units only applies to a retirement that is at least one year after the date of grant). During the years ended October 31, 2020, 2019 and 2018, we granted 142,231 (including 36,731 units to certain of our non-employee directors), 107,650 (including 103,612 units to certain of our non-employee directors) and 20,292 (including 15,904 units to certain of our non-employee directors) restricted stock units, respectively, and also issued 11,503, 8,380 and 5,936 units, relating to awards granted in prior fiscal years, respectively. During the years ended October 31, 2020 and 2019, 5,567 and 656 restricted stock units were forfeited, respectively.

For the years ended October 31, 2020 and 2018 total compensation cost recognized in the Consolidated Statement of Operations for the annual restricted stock unit grants, market share unit grants and performance share units (both discussed below), and the stock portion of the long-term incentive plan (also discussed below) was $2.4 million and $2.8 million, respectively. For the year ended October 31, 2019, total compensation cost recognized in the Consolidated Statement of Operations for the annual restricted stock unit grants, market share unit grants (discussed below), and the stock portion of the long-term incentive plan (also discussed below) was income of $0.2 million. In addition to nonvested share awards summarized in the following tables, there were 60,446, 33,643 and 21,609 vested share awards at October 31, 2020, 2019 and 2018, respectively, which were deferred at the participants' election.

A summary of the Company’s nonvested Time-Based share awards for the years ended October 31, 2020, 2019, and 2018 are as follows:

	*October 31,*		*Weighted-Average Grant Date*		*October 31,*		*Weighted-Average Grant Date*		*October 31,*		*Weighted-Average Grant Date*
	*2020*		*Fair Value*		*2019*		*Fair Value*		*2018*		*Fair Value*
Nonvested Time-Based at beginning of period		231,210	$	23.01		105,594	$	61.77		96,091	$	60.50
Granted		142,231	$	19.48		164,050	$	7.66		37,888	$	54.95
Vested		62,309	$	17.04		21,329	$	45.52		22,821	$	55.19
Forfeited		22,267	$	57.81		17,106	$	86.96		5,564	$	20.87
Nonvested Time-Based at end of period		288,865	$	19.88		231,210	$	23.01		105,594	$	61.77

A summary of the Company’s nonvested Performance-Based share awards for the years ended October 31, 2020, 2019, and 2018 are as follows:

	*October 31,*		*Weighted-Average Grant Date*		*October 31,*		*Weighted-Average Grant Date*		*October 31,*		*Weighted-Average Grant Date*
	*2020*		*Fair Value*		*2019*		*Fair Value*		*2018*		*Fair Value*
Nonvested Performance-Based at beginning of period		136,316	$	44.22		101,407	$	69.28		150,881	$	50.26
Granted		183,825	$	15.11		56,400	$	10.10		47,277	$	70.41
Vested		4,284	$	57.22		8,655	$	42.69		5,390	$	72.52
Forfeited		21,385	$	70.44		12,836	$	93.31		91,361	$	38.27
Nonvested Performance-Based at end of period		294,472	$	24.64		136,316	$	44.22		101,407	$	69.28

Included in the above table are awards for the share portion of long-term incentive plans (“LTIPs”) for certain officers and associates, which are performance based plans. These amounts include adjustments for performance outcomes during the LTIP period. LTIP shares vest in the third, fourth and fifth fiscal years after grant date, subject to certain performance metrics.

Also included in the tables above are 142,500 target Performance-based Performance Share Units (“PSUs”), which were granted to certain officers in fiscal 2020. The PSUs vest in four equal installments commencing on the second, third, fourth and fifth anniversary of the grant date, except that no portion of the award will vest unless the Committee determines that the Company achieved specified revenue goals.

The fair value of the PSU grants is determined using the Finnerty model, which uses an arithmetic average strike, put option. The strike price is based on the predetermined period average value of the underlying asset. The following assumptions were used for 2020 PSU grants: historical volatility factor of the expected market price of our common stock of 108.15% for the two-year period ending on the valuation date, and the concluded risk free rate assumption of 0.19% equals the continuously compounded two-year yield, and dividend yield of zero.

Also included in the tables above are 81,850 target Time-based and 81,250 Performance-based Market Share Units (“MSUs”) of which 56,400 of each Time-based and Performance-based were granted to certain officers in fiscal 2019. There were no MSUs granted in fiscal 2020. MSU grants from fiscal years 2015 through 2018 were reduced by 16,700 Time-based and 20,350 Performance-based MSUs in fiscal 2020, as certain performance conditions at measurement periods were not met and only a portion of the shares were vested, resulting in the reversal of $2.4 million of expense during the period. Fifty percent of the MSUs will vest in four equal annual installments, commencing on the second anniversary of the grant date subject to stock price performance conditions, pursuant to which the actual number of shares issuable with respect to vested MSUs may range from 0% to 200% of the target number of shares covered by the MSU awards, generally depending on the growth in the 60-day average trading price of the Company’s shares during the period between the grant date and the relevant vesting dates. The remaining fifty percent of the MSUs are also subject to financial performance conditions in addition to the stock price performance conditions applicable to all MSUs. These additional performance-based MSUs vest in four equal installments with the first installment vesting on January 1, three years after the MSU grant date (for example, January 1, 2022 for the 2019 MSU grant) and the remaining annual installments commencing on the third anniversary of the grant date, except that no portion of the award will vest unless the Committee determines that the Company achieved (1) for the 2019 MSU grants, specified community count improvement (as to 25% of the MSU amount) and pre-tax profit (as to 25% of the MSU amount) goals comparing the fiscal year of the grant date and the second fiscal year following the grant date (fiscal 2020 compared to fiscal 2019), (2) for the 2017 and 2016 MSU grants, specified gross margin improvement (as to 25% of the MSU amount) and debt reduction (as to 25% of the MSU amount) goals comparing the fiscal year of the grant date and the second fiscal year following the grant date (fiscal 2020 compared to fiscal 2018).

The fair value of the MSU grants is determined using the Monte-Carlo simulation model, which simulates a range of possible future stock prices and estimates the probabilities of the potential payouts. This model uses the average closing trading price of the Company’s Class A Common Stock on the New York Stock Exchange over the 60-calendar day period ending on the grant date. This model also incorporates the following ranges of assumptions:

	●	The expected volatility is based on our stock’s historical volatility commensurate with the life 2 years, 2.6 years, 3 years, 4 years and 5 years.
	●	The risk-free interest rate is based on the U.S. Treasury rate assumption ranging from 2-5 years.
	●	The expected dividend yield is not applicable since we do not currently pay dividends.

The following assumptions were used for 2019 MSU grants: historical volatility factor of the expected market price of our common stock of 62.51%, 59.60%, 57.04%, 60.03% and 56.86% for the 2 year, 2.6 year, 3 year, 4 year and 5 year vesting tranches, respectively and the concluded risk free rate assumptions of 1.80% and 1.81% equals the continuously compounded 2.55 year and 4 year yield, respectively and dividend yield of zero for all time periods. The following assumptions were used for 2018 MSU Grants: historical volatility factor of the expected market price of our common stock of 48.41%, 51.92%, 56.11%, 52.59% and 49.57% for the 2 year, 2.6 year, 3 year, 4 year and 5 year vesting tranches, respectively; the concluded risk free rate assumptions of 2.56% and 2.68% equals the continuously compounded 2.56 year and 4 year yield, respectively and dividend yield of zero for all time periods.

Based on the terms of our equity compensation plans, awards that are forfeited become available to us for future grants under the plan. As of October 31, 2020, we had 0.2 million shares authorized and remaining for future issuance under our equity compensation plans. In addition, as of October 31, 2020, there were $6.2 million of total unrecognized compensation costs related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 1.8 years.

Note 16 - Warranty Costs

12 Months Ended

Oct. 31, 2020

Product Warranty Disclosure [Text Block]

16. Warranty Costs

General liability insurance for homebuilding companies and their suppliers and subcontractors is very difficult to obtain. The availability of general liability insurance is limited due to a decreased number of insurance companies willing to underwrite for the industry. In addition, those few insurers willing to underwrite liability insurance have significantly increased the premium costs. To date, we have been able to obtain general liability insurance but at higher premium costs with higher deductibles. Our subcontractors and suppliers have advised us that they have also had difficulty obtaining insurance that also provides us coverage. As a result, we have an owner controlled insurance program for certain of our subcontractors whereby the subcontractors pay us an insurance premium (through a reduction of amounts we would otherwise owe such subcontractors for their work on our homes) based on the risk type of the trade. We absorb the liability associated with their work on our homes as part of our overall general liability insurance at no additional cost to us because our existing general liability and construction defect insurance policy and related reserves for amounts under our deductible covers construction defects regardless of whether we or our subcontractors are responsible for the defect. For the fiscal years ended October 31, 2020 and 2019, we received $4.4 million and $4.8 million, respectively, from subcontractors related to the owner controlled insurance program, which we accounted for as reductions to inventory.

We accrue for warranty costs that are covered under our existing general liability and construction defect policy as part of our general liability insurance deductible. This accrual is expensed as selling, general and administrative costs. For homes delivered in fiscal 2020 and 2019, our deductible under our general liability insurance was a $20 million aggregate for construction defect and warranty claims. For bodily injury claims, our deductible per occurrence in fiscal 2020 and 2019 was $0.25 million, up to a $5 million limit. Our aggregate retention for construction defect, warranty and bodily injury claims was $20 million for fiscal 2020 and 2019. In addition, we establish a warranty accrual for lower cost-related issues to cover home repairs, community amenities and land development infrastructure that are not covered under our general liability and construction defect policy. We accrue an estimate for these warranty costs as part of cost of sales at the time each home is closed and title and possession have been transferred to the homebuyer. Additions and charges in the warranty reserve and general liability reserve for the fiscal years ended October 31, 2020 and 2019 were as follows:

	*Year Ended October 31,*
(In thousands)	*2020*			*2019*

Balance, beginning of period	$	89,371		$	95,064
Additions – Selling, general and administrative		9,587			8,408
Additions – Cost of sales		10,273			6,260
Charges incurred during the period		(20,163	)		(18,757	)
Changes to pre-existing reserves		(2,651	)		(1,604	)
Balance, end of period	$	86,417		$	89,371

Warranty accruals are based upon historical experience. We engage a third-party actuary that uses our historical warranty and construction defect data to assist our management in estimating our unpaid claims, claim adjustment expenses and incurred but not reported claims reserves for the risks that we are assuming under the general liability and construction defect programs. The estimates include provisions for inflation, claims handling and legal fees. As a result of reductions in our construction defect claims in recent years and the impact of these reductions on the actuarial analysis on our total reserves, we recorded reductions in our construction defect reserves of $2.5 million in the fourth quarter of fiscal 2020 and $6.9 million in the fourth quarter of fiscal 2019. These reductions are reflected in the changes to pre-existing reserves in the table above.

Insurance claims paid by our insurance carriers, excluding insurance deductibles paid, were less than $0.1 million and $0.1 million for the fiscal years ended October 31, 2020 and 2019, respectively, for prior year deliveries.

Note 17 - Transactions With Related Parties

12 Months Ended

Oct. 31, 2020

17. Transactions with Related Parties

During the years ended October 31, 2020, 2019 and 2018, an engineering firm owned by Tavit Najarian, a relative of Ara K. Hovnanian, our Chairman of the Board of Directors and our Chief Executive Officer, provided services to the Company totaling $0.7 million, $0.9 million and $0.7 million, respectively. Neither the Company nor Mr. Hovnanian has a financial interest in the relative’s company from whom the services were provided.

Mr. Carson Sorsby, the son of J. Larry Sorsby, one of our directors and Chief Financial Officer, was employed by the Company’s mortgage subsidiary. Mr. Carson Sorsby resigned in August 2020. His total commissions from the Company’s mortgage affiliate totaled approximately $265,000, $223,000 and $148,000 in fiscal 2020, 2019 and 2018, respectively.

Mr. Alexander Hovnanian, the son of Ara K. Hovnanian, our Chairman of the Board of Directors and our Chief Executive Officer, is employed by the Company. In fiscal 2020, Mr. Hovnanian was Division President of the Northeast Division and in March 2020 he became the Executive Vice President - National Homebuilding Operations. His total compensation was approximately $1,152,000, $609,000 and $514,000 in fiscal 2020, 2019 and 2018, respectively.

Note 18 - Commitments and Contingent Liabilities

12 Months Ended

Oct. 31, 2020

Commitments and Contingencies Disclosure [Text Block]

18. Commitments and Contingent Liabilities

We are involved in litigation arising in the ordinary course of business, none of which is expected to have a material adverse effect on our financial position, results of operations or cash flows, and we are subject to extensive and complex laws and regulations that affect the development of land and home building, sales and customer financing processes, including zoning, density, building standards and mortgage financing. These laws and regulations often provide broad discretion to the administering governmental authorities. This can delay or increase the cost of development or homebuilding. The significant majority of our litigation matters are related to construction defect claims. Our estimated losses from construction defect litigation matters, if any, are included in our construction defect reserves.

We also are subject to a variety of local, state, federal and foreign laws and regulations concerning protection of health and the environment, including those regulating the emission or discharge of materials into the environment, the management of storm water runoff at construction sites, the handling, use, storage and disposal of hazardous substances, impacts to wetlands and other sensitive environments, and the remediation of contamination at properties that we have owned or developed or currently own or are developing (“environmental laws”). The particular environmental laws that apply to a site may vary greatly according to the community site, for example, due to the community, the environmental conditions at or near the site, and the present and former uses of the site. These environmental laws may result in delays, may cause us to incur substantial compliance, remediation and/or other costs, and can prohibit or severely restrict development and homebuilding activity. In addition, noncompliance with these laws and regulations could result in fines and penalties, obligations to remediate, permit revocations or other sanctions; and contamination or other environmental conditions at or in the vicinity of our developments may result in claims against us for personal injury, property damage or other losses.

We anticipate that increasingly stringent requirements will continue to be imposed on developers and homebuilders in the future. For example, for a number of years, the EPA and U.S. Army Corps of Engineers have been engaged in rulemakings to clarify the scope of federally regulated wetlands, which included a June 2015 rule many affected businesses contend impermissibly expanded the scope of such wetlands that was challenged in court, stayed, and remains in litigation. After a series of interim rulemakings, in April 2020 the EPA and the U.S. Army Corps of Engineers formally published the Navigable Waters Protection Rule, which they characterize as more appropriate for determining the scope of waters subject to federal permitting. The new rule took effect in June 2020 in all states except Colorado, where a federal district court issued a preliminary injunction against application of the rule in that state. It is being challenged by 17 states in one lawsuit and by a number of environmental advocacy groups in at least three other lawsuits, as well as in several lawsuits by cattlemen and other rancher groups contending that the new rule still exercises permitting authority over too many waters. It is unclear how these and related developments, including at the state or local level, ultimately may affect the scope of regulated wetlands where we operate. Although we cannot reliably predict the extent of any effect these developments regarding wetlands, or any other requirements that may take effect may have on us, they could result in time-consuming and expensive compliance programs and in substantial expenditures, which could cause delays and increase our cost of operations. In addition, our ability to obtain or renew permits or approvals and the continued effectiveness of permits already granted or approvals already obtained is dependent upon many factors, some of which are beyond our control, such as changes in policies, rules and regulations and their interpretations and application.

In March 2013, we received a letter from the Environmental Protection Agency (“EPA”) requesting information about our involvement in a housing redevelopment project in Newark, New Jersey that a Company entity undertook during the 1990s. We understand that the development is in the vicinity of a former lead smelter and that tests on soil samples from properties within the development conducted by the EPA showed elevated levels of lead. We also understand that the smelter ceased operations many years before the Company entity involved acquired the properties in the area and carried out the re-development project. We responded to the EPA’s request. In August 2013, we were notified that the EPA considers us a potentially responsible party (or “PRP”) with respect to the site, that the EPA will clean up the site, and that the EPA is proposing that we fund and/or contribute towards the cleanup of the contamination at the site. We began preliminary discussions with the EPA concerning a possible resolution but do not know the scope or extent of the Company’s obligations, if any, that may arise from the site and therefore cannot provide any assurance that this matter will not have a material impact on the Company. The EPA requested additional information in April 2014 and again in March 2017 and the Company responded to the information requests. On May 2, 2018 the EPA sent a letter to the Company entity demanding reimbursement for 100% of the EPA’s costs to clean-up the site in the amount of $2.7 million. The Company responded to the EPA’s demand letter on June 15, 2018 setting forth the Company’s defenses and expressing its willingness to enter into settlement negotiations. Two other PRPs identified by the EPA are now also in negotiations with the EPA and in preliminary negotiations with the Company regarding the site. In the course of negotiations, the EPA informed the Company that the New Jersey Department of Environmental Protection has also incurred costs remediating part of the site. The EPA has since requested that the three PRPs present a joint settlement offer to the EPA. The Company and the other two PRPs are parties to a series of agreements tolling the statute of limitations on the EPA's claims for reimbursement, most recently extending the date until January 15, 2021. We believe that we have adequate reserves for this matter.

In 2015, the condominium association of the Four Seasons at Great Notch condominium community (the “Great Notch Plaintiff”) filed a lawsuit in the Superior Court of New Jersey, Law Division, Passaic County (the “Court”) alleging various construction defects, design defects, and geotechnical issues relating to the community. The operative complaint (“Complaint”) asserts claims against Hovnanian Enterprises, Inc. and several of its affiliates, including K. Hovnanian at Great Notch, LLC, K. Hovnanian Construction Management, Inc., and K. Hovnanian Companies, LLC. The Complaint also asserts claims against various other design professionals and contractors. The Great Notch Plaintiff has also filed a motion, which remains pending, to permit it to pursue a claim to pierce the corporate veil of K. Hovnanian at Great Notch, LLC to hold its alleged parent entities liable for any damages awarded against it. To date, the Hovnanian-affiliated defendants have reached a partial settlement with the Great Notch Plaintiff as to a portion of the Great Notch Plaintiff’s claims against them for an amount immaterial to the Company. On its remaining claims against the Hovnanian-affiliated defendants, the Great Notch Plaintiff has asserted damages of approximately $119.5 million, which amount is potentially subject to treble damages pursuant to the Great Notch Plaintiff’s claim under the New Jersey Consumer Fraud Act. The trial is currently scheduled for June 21, 2021. Mediation was held in September 2020 with further mediation sessions anticipated in the future. The Hovnanian-affiliated defendants intend to defend these claims vigorously.

Note 19 - Variable Interest Entities

12 Months Ended

Oct. 31, 2020

Variable Interest Entity Disclosure [Text Block]

19. Variable Interest Entities

The Company enters into land and lot option purchase contracts to procure land or lots for the construction of homes. Under these contracts, the Company will fund a stated deposit in consideration for the right, but not the obligation, to purchase land or lots at a future point in time with predetermined terms. Under the terms of the option purchase contracts, many of the option deposits are not refundable at the Company's discretion. Under the requirements of ASC 810, certain option purchase contracts may result in the creation of a variable interest in the entity (“VIE”) that owns the land parcel under option.

In compliance with ASC 810, the Company analyzes its option purchase contracts to determine whether the corresponding land sellers are VIEs and, if so, whether the Company is the primary beneficiary. Although the Company does not have legal title to the underlying land, ASC 810 requires the Company to consolidate a VIE if the Company is determined to be the primary beneficiary. In determining whether it is the primary beneficiary, the Company considers, among other things, whether it has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. Such activities would include, among other things, determining or limiting the scope or purpose of the VIE, selling or transferring property owned or controlled by the VIE, or arranging financing for the VIE. The Company also considers whether it has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. As a result of its analyses, the Company determined that as of October 31, 2020 and 2019, it was not the primary beneficiary of any VIEs from which it is purchasing land under option purchase contracts.

We will continue to secure land and lots using options, some of which are with VIEs. Including deposits on our unconsolidated VIEs, at October 31, 2020, we had total cash and letters of credit deposits amounting to $88.9 million to purchase land and lots with a total purchase price of $1.3 billion. The maximum exposure to loss with respect to our land and lot options is limited to the deposits plus any pre-development costs invested in the property, although some deposits are refundable at our request or refundable if certain conditions are not met.

Note 20 - Investments in Unconsolidated Homebuilding and Land Development Joint Ventures

12 Months Ended

Oct. 31, 2020

Equity Method Investments and Joint Ventures Disclosure [Text Block]

20. Investments in Unconsolidated Homebuilding and Land Development Joint Ventures

We enter into homebuilding and land development joint ventures from time to time as a means of accessing lot positions, expanding our market opportunities, establishing strategic alliances, managing our risk profile, leveraging our capital base and enhancing returns on capital. Our homebuilding joint ventures are generally entered into with third-party investors to develop land and construct homes that are sold directly to third-party home buyers. Our land development joint ventures include those entered into with developers and other homebuilders as well as financial investors to develop finished lots for sale to the joint venture’s members or other third parties.

During the first quarter of fiscal 2018, we acquired the remaining assets of one of our unconsolidated joint ventures, resulting in a $13.0 million reduction in our investment in the unconsolidated joint venture and a corresponding increase to inventory. During the third quarter of fiscal 2019, we contributed one community we owned to an existing unconsolidated joint venture, resulting in our receiving $15.9 million of net cash. During the first quarter of fiscal 2020, we contributed eight communities we owned, including four active communities, to a new joint venture for $29.8 million of net cash.

The tables set forth below summarize the combined financial information related to our unconsolidated homebuilding and land development joint ventures that are accounted for under the equity method.

	*October 31, 2020*
				*Land*
(Dollars in thousands)	*Homebuilding*			*Development*			*Total*
Assets:
Cash and cash equivalents	$	120,107		$	3,454		$	123,561
Inventories		389,001			91			389,092
Other assets		27,062			488			27,550
Total assets	$	536,170		$	4,033		$	540,203
Liabilities and equity:
Accounts payable and accrued liabilities	$	207,277		$	2,152		$	209,429
Notes payable		117,179			-			117,179
Total liabilities		324,456			2,152			326,608
Equity of:
Hovnanian Enterprises, Inc.		102,908			1,340			104,248
Others		108,806			541			109,347
Total equity		211,714			1,881			213,595
Total liabilities and equity	$	536,170		$	4,033		$	540,203
Debt to capitalization ratio		36	%		0	%		35	%

	*October 31, 2019*
				*Land*
(Dollars in thousands)	*Homebuilding*			*Development*			*Total*
Assets:
Cash and cash equivalents	$	108,520		$	2,203		$	110,723
Inventories		397,804			6,038			403,842
Other assets		24,896			233			25,129
Total assets	$	531,220		$	8,474		$	539,694
Liabilities and equity:
Accounts payable and accrued liabilities	$	71,297		$	592		$	71,889
Notes payable		186,882			-			186,882
Total liabilities		258,179			592			258,771
Equity of:
Hovnanian Enterprises, Inc.		120,891			4,747			125,638
Others		152,150			3,135			155,285
Total equity		273,041			7,882			280,923
Total liabilities and equity	$	531,220		$	8,474		$	539,694
Debt to capitalization ratio		41	%		0	%		40	%

As of October 31, 2020 and 2019, respectively, we had payables outstanding of $1.1 million and advances outstanding of $1.4 million to these unconsolidated joint ventures. These amounts were included in the “Accounts payable and accrued liabilities” balances in the tables above. On our Consolidated Balance Sheets, our “Investments in and advances to unconsolidated joint ventures” amounted to $103.2 million and $127.0 million at October 31, 2020 and 2019, respectively. In some cases, our net investment in these unconsolidated joint ventures is less than our proportionate share of the equity reflected in the table above because of the differences between asset impairments recorded against our unconsolidated joint venture investments and any impairments recorded in the applicable unconsolidated joint venture. Impairments of unconsolidated joint venture investments are recorded at fair value while impairments recorded in the unconsolidated joint venture are recorded when undiscounted cash flows trigger the impairment. During the year ended October 31, 2019, we recorded a $0.9 million write down in our investment in one of our unconsolidated joint ventures in the West. During the year ended October 31, 2020 we did not write-down any of our unconsolidated joint venture investments.

	*For The Year Ended October 31, 2020*
				*Land*
(Dollars in thousands)	*Homebuilding*			*Development*			*Total*
Revenues	$	435,077		$	13,024		$	448,101
Cost of sales and expenses		(420,977	)		(11,225	)		(432,202	)
Joint venture net income	$	14,100		$	1,799		$	15,899
Our share of net income	$	16,904		$	17		$	16,921

	*For The Year Ended October 31, 2019*
				*Land*
(Dollars in thousands)	*Homebuilding*			*Development*			*Total*
Revenues	$	488,914		$	8,704		$	497,618
Cost of sales and expenses		(456,563	)		(7,948	)		(464,511	)
Joint venture net income	$	32,351		$	756		$	33,107
Our share of net income	$	28,761		$	378		$	29,139

	*For The Year Ended October 31, 2018*
				*Land*
(Dollars in thousands)	*Homebuilding*			*Development*			*Total*
Revenues	$	602,681		$	6,418		$	609,099
Cost of sales and expenses		(577,106	)		(5,173	)		(582,279	)
Joint venture net income	$	25,575		$	1,245		$	26,820
Our share of net income	$	23,904		$	623		$	24,527

“Income (loss) from unconsolidated joint ventures” is reflected as a separate line in the accompanying Consolidated Statements of Operations and reflects our proportionate share of the income or loss of these unconsolidated homebuilding and land development joint ventures. The difference between our share of the income or loss from these unconsolidated joint ventures in the tables above compared to the Consolidated Statements of Operations is due primarily to the reclassification of the intercompany portion of management fee income from certain unconsolidated joint ventures and the deferral of income for lots purchased by us from certain unconsolidated joint ventures. To compensate us for the administrative services we provide as the manager of certain unconsolidated joint ventures, we receive a management fee based on a percentage of the applicable unconsolidated joint venture’s revenues. These management fees, which totaled $16.0 million, $16.9 million and $21.1 million for the years ended October 31, 2020, 2019 and 2018, are recorded in “Homebuilding: Selling, general and administrative” on the Consolidated Statements of Operations.

In determining whether or not we must consolidate joint ventures that we manage, we assess whether the other partners have specific rights to overcome the presumption of control by us as the manager of the joint venture. In most cases, the presumption is overcome because the joint venture agreements require that both partners agree on establishing the operations and capital decisions of the partnership, including budgets in the ordinary course of business.

Typically, our unconsolidated joint ventures obtain separate project specific mortgage financing. For some of our unconsolidated joint ventures, obtaining financing was challenging, therefore, some of our unconsolidated joint ventures are capitalized only with equity. The total debt to capitalization ratio of all our unconsolidated joint ventures was 35% as of October 31, 2020. Any unconsolidated joint venture financing is on a nonrecourse basis, with guarantees from us limited only to performance and completion of development, environmental warranties and indemnification, standard indemnification for fraud, misrepresentation and other similar actions, including a voluntary bankruptcy filing. In some instances, the unconsolidated joint venture entity is considered a VIE under ASC 810-10 “Consolidation – Overall” due to the returns being capped to the equity holders; however, in these instances, we have determined that we are not the primary beneficiary, and therefore we do not consolidate these entities.

Note 21 - Fair Value of Financial Instruments

12 Months Ended

Oct. 31, 2020

Fair Value Disclosures [Text Block]

21. Fair Value of Financial Instruments

ASC 820, "Fair Value Measurements and Disclosures," provides a framework for measuring fair value, expands disclosures about fair-value measurements and establishes a fair-value hierarchy which prioritizes the inputs used in measuring fair value summarized as follows:

Level 1: Fair value determined based on quoted prices in active markets for identical assets.

Level 2: Fair value determined using significant other observable inputs.

Level 3: Fair value determined using significant unobservable inputs.

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

		*Fair Value at*			*Fair Value at*
	*Fair Value*	*October 31,*			*October 31,*
(In thousands)	*Hierarchy*	*2020*			*2019*

Mortgage loans held for sale (1)	Level 2	$	104,378		$	166,007
Forward contracts	Level 2		(28	)		(64	)
Total		$	104,350		$	165,943
Interest rate lock commitments	Level 3		11		$	42
Total		$	104,361		$	165,985

(1) The aggregate unpaid principal balance was $100.4 million and $161.1 million at October 31, 2020 and 2019, respectively.

We elected the fair value option for our loans held for sale in accordance with ASC 825, “Financial Instruments,” which permits us to measure financial instruments at fair value on a contract-by-contract basis. Management believes that the election of the fair value option for loans held for sale improves financial reporting by mitigating volatility in reported earnings caused by measuring the fair value of the loans and the derivative instruments used to economically hedge them without having to apply complex hedge accounting provisions. Fair value of loans held for sale is based on independent quoted market prices, where available, or the prices for other mortgage loans with similar characteristics.

The Financial Services segment had a pipeline of loan applications in process of $890.8 million at October 31, 2020. Loans in process for which interest rates were committed to the borrowers totaled $57.2 million as of October 31, 2020. Substantially all of these commitments were for periods of 60 days or less. Since a portion of these commitments is expected to expire without being exercised by the borrowers, the total commitments do not necessarily represent future cash requirements.

The Financial Services segment uses investor commitments and forward sales of mandatory MBS to hedge its mortgage-related interest rate exposure. These instruments involve, to varying degrees, elements of credit and interest rate risk. Credit risk is managed by entering into MBS forward commitments, option contracts with investment banks, federally regulated bank affiliates and loan sales transactions with permanent investors meeting the segment’s credit standards. The segment’s risk, in the event of default by the purchaser, is the difference between the contract price and fair value of the MBS forward commitments and option contracts. At October 31, 2020, the segment had open commitments amounting to $20.0 million to sell MBS with varying settlement dates through November 19, 2020.

The assets accounted for using the fair value option are initially measured at fair value. Gains and losses from initial measurement and subsequent changes in fair value are recognized in the Consolidated Financial Statements in “Revenues: Financial services.” The fair values that are included in income are shown, by financial instrument and financial statement line item, below:

Year Ended October 31, 2020

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

for Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

3,928

(28

)

Year Ended October 31, 2019

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

for Sale

Commitments

Contracts

Fair value included in net loss all reflected in financial services revenues

4,869

(64

)

Year Ended October 31, 2018

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

for Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

3,115

(28

)

The Company's assets measured at fair value on a nonrecurring basis are those assets for which the Company has recorded valuation adjustments and write-offs during the fiscal years ended October 31, 2020 and 2019. The assets measured at fair value on a nonrecurring basis are all within the Company's Homebuilding operations and are summarized below:

Nonfinancial Assets

	*Year Ended*
	*October 31, 2020*
(In thousands)	*Fair*	*Pre-*
	*Value*	*Impairment*
	*Hierarchy*	*Amount*		*Total Losses*			*Fair Value*

Sold and unsold homes and lots under development	Level 3	$	691	$	(276	)	$	415
Land and land options held for future development or sale	Level 3	$	4,089	$	(1,741	)	$	2,348

	*Year Ended*
	*October 31, 2019*
(In thousands)	*Fair*	*Pre-*
	*Value*	*Impairment*
	*Hierarchy*	*Amount*		*Total Losses*			*Fair Value*

Sold and unsold homes and lots under development	Level 3	$	9,670	$	(2,494	)	$	7,176
Land and land options held for future development or sale	Level 3	$	7,801	$	(185	)	$	7,616

We record impairment losses on inventories related to communities under development and held for future 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. If the expected undiscounted cash flows are less than the carrying amount, then the community is written down to its fair value. We estimate the fair value of each impaired community by determining the present value of its estimated future cash flows at a discount rate commensurate with the risk of the respective community. Should the estimates or expectations used in determining cash flows or fair value decrease or differ from current estimates in the future, we may be required to recognize additional impairments. We recorded inventory impairments, which are included in the Consolidated Statements of Operations as “Inventory impairment loss and land option write-offs” and deducted from inventory, of $2.0 million, $2.7 million and $2.1 million for the years ended October 31, 2020, 2019 and 2018, respectively. See Note 12 for further detail of the communities evaluated for impairment.

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

The fair value of each series of our Notes and Credit Facilities are listed below. Level 2 measurements are estimated based on recent trades or quoted market prices for the same issues or based on recent trades or quoted market prices for our debt of similar security and maturity to achieve comparable yields. Level 3 measurements are estimated based on third-party broker quotes or management’s estimate of the fair value based on available trades for similar debt instruments.

Fair Value as of October 31, 2020

(In thousands)	*Level 1*		*Level 2*		*Level 3*		*Total*
Senior Secured Notes:
10.0% Senior Secured Notes due July 15, 2022	$	-	$	107,878	$	-	$	107,878
10.5% Senior Secured Notes due July 15, 2024		-		-		67,941		67,941
10.0% Senior Secured 1.75 Lien Notes due November 15, 2025		-		-		132,246		132,246
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		-		-		353,500		353,500
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		-		-		274,558		274,558
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		-		-		162,723		162,723
Senior Notes:
13.5% Senior Notes due February 1, 2026		-		54,354		-		54,354
5.0% Senior Notes due February 1, 2040		-		10,814		-		10,814
Senior Credit Facilities:
Senior Unsecured Term Loan Credit Facility due February 1, 2027		-		-		13,091		13,091
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028		-		-		64,465		64,465
Total fair value	$	-	$	173,046	$	1,068,524	$	1,241,570

Fair Value as of October 31, 2019

(In thousands)	*Level 1*		*Level 2*		*Level 3*		*Total*
Senior Secured Notes:
10.0% Senior Secured Notes due July 15, 2022	$	-	$	189,430	$	-	$	189,430
10.5% Senior Secured Notes due July 15, 2024		-		166,999		-		166,999
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		-		-		350,000		350,000
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		-		-		282,322		282,322
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		-		-		103,141		103,141
Senior Notes:
13.5% Senior Notes due February 1, 2026						80,254		80,254
5.0% Senior Notes due February 1, 2040		-		-		31,993		31,993
Senior Unsecured Term Loan Credit Facility due February 1, 2027		-		-		106,499		106,499
Total fair value	$	-	$	356,429	$	954,209	$	1,310,638

The Senior Secured Revolving Credit Facility is not included in the above tables because there were no borrowings outstanding thereunder as of October 31, 2020 and 2019.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Note 22 - Unaudited Summarized Consolidated Quarterly Information

12 Months Ended

Oct. 31, 2020

Quarterly Financial Information [Text Block]

22. Unaudited Summarized Consolidated Quarterly Information

Summarized quarterly financial information for the years ended October 31, 2020 and 2019 is as follows:

	*Three Months Ended*
	*October 31,*		*July 31,*		*April 30,*			*January 31,*
(In thousands, except per share data)	*2020*		*2020*		*2020*			*2020*
Revenues	$	683,358	$	628,136	$	538,351		$	494,056
Expenses		641,449		619,269		539,209			509,660
Inventory impairment loss and land option write-offs		2,611		2,364		1,010			2,828
Gain (loss) on extinguishment of debt		-		4,055		(174	)		9,456
Income from unconsolidated joint ventures		3,146		5,658		6,221			1,540
Income (loss) before income taxes		42,444		16,216		4,179			(7,436	)
State and federal income tax provision		1,810		853		100			1,712
Net income (loss)	$	40,634	$	15,363	$	4,079		$	(9,148	)
Per share data:
Basic:
Net income (loss) per common share	$	5.97	$	2.27	$	0.63		$	(1.49	)
Weighted-average number of common shares outstanding		6,221		6,201		6,172			6,161
Assuming dilution:
Net income (loss) per common share	$	5.54	$	2.16	$	0.60		$	(1.49	)
Weighted-average number of common shares outstanding		6,699		6,518		6,432			6,161

	*Three Months Ended*
	*October 31,*			*July 31,*			*April 30,*			*January 31,*
(In thousands, except per share data)	*2019*			*2019*			*2019*			*2019*
Revenues	$	713,590		$	482,041		$	440,691		$	380,594
Expenses		677,429			491,412			461,393			406,558
Inventory impairment loss and land option write-offs		2,687			1,435			1,462			704
Loss on extinguishment of debt		(42,436	)		-			-			-
Income from unconsolidated joint ventures		8,376			3,742			7,252			9,562
Loss before income taxes		(586	)		(7,064	)		(14,912	)		(17,106	)
State and federal income tax provision		1,221			537			345			346
Net (loss)	$	(1,807	)	$	(7,601	)	$	(15,257	)	$	(17,452	)
Per share data:
Basic and assuming dilution:
Net (loss) per common share	$	(0.30	)	$	(1.27	)	$	(2.56	)	$	(2.93	)
Weighted-average number of common shares outstanding		5,982			5,971			5,962			5,958

Significant Accounting Policies (Policies)

12 Months Ended

Oct. 31, 2020

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Revenue [Policy Text Block]

om Contracts with Customers,” revenue is recognized when title is conveyed to the buyer, adequate initial and continuing investments have been received and there is no continued involvement.

Income Recognition from Mortgage Loans - Our Financial Services segment originates mortgages, primarily for our homebuilding customers. We use mandatory investor commitments and forward sales of mortgage-backed securities (“MBS”) to hedge our mortgage-related interest rate exposure on agency and government loans.

We elected the fair value option for our mortgage loans held for sale in accordance with ASC 825, “Financial Instruments,” which permits us to measure our loans held for sale at fair value. Management believes that the election of the fair value option for loans held for sale improves financial reporting by mitigating volatility in reported earnings caused by measuring the fair value of the loans and the derivative instruments used to economically hedge them without having to apply complex hedge accounting provisions.

Substantially all of the mortgage loans originated are sold within a short period of time in the secondary mortgage market on a servicing released, nonrecourse basis, although the Company remains liable for certain limited representations, such as fraud, and warranties related to loan sales. Mortgage investors could seek to have us buy back loans or compensate them from losses incurred on mortgages we have sold based on claims that we breached our limited representations and warranties. We have established reserves for probable losses.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents - Cash represents cash deposited in checking accounts. Cash equivalents include certificates of deposit, Treasury bills and government money–market funds with maturities of 90 days or less when purchased. Our cash balances are held at a few financial institutions and may, at times, exceed insurable amounts. We believe we help to mitigate this risk by depositing our cash in major financial institutions. At October 31, 2020 and 2019, $15.5 million and $143.1 million, respectively, of the total cash and cash equivalents was in cash equivalents and restricted cash equivalents, the book value of which approximates fair value.

Fair Value of Financial Instruments, Policy [Policy Text Block]

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 and cash equivalents, restricted cash and cash equivalents, receivables, deposits and notes, accounts payable and other liabilities, customer deposits, mortgage loans held for sale, nonrecourse mortgages, mortgage warehouse lines of credit, senior secured revolving credit facility, accrued interest, senior secured term loan, senior unsecured term loan credit facility, senior secured notes and senior notes. The fair value of the senior secured credit facility, senior secured term loan, senior unsecured term loan credit facility, senior secured notes and senior 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 or when not available, are estimated based on third-party broker quotes or management's estimate of the fair value based on available trades for similar debt instruments. The fair value of all of our other financial instruments approximates their carrying amounts.

Inventory, Policy [Policy Text Block]

Inventories - Inventories consist of land, land development, home construction costs, capitalized interest, construction overhead and property taxes. 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 charged to cost of sales equally based upon the number of homes to be constructed in each product type.

We record inventories in our consolidated balance sheets at cost unless the inventory is determined to be impaired, in which case the inventory is written down to its fair value. Our inventories consist of the following three components: (1) sold and unsold homes and lots under development, which includes all construction, land, capitalized interest and land development costs related to started homes and land under development in our active communities; (2) land and land options held for future development or sale, which includes all costs related to land in our communities in planning or mothballed communities; and (3) consolidated inventory not owned, which includes all costs related to variable interest entities, and other options, which consists primarily of model homes financed with an investor and inventory related to land banking arrangements accounted for as financings.

We decide to mothball (or stop development on) certain communities when we determine that the current performance does not justify further investment at the time. When we decide to mothball a community, the inventory is reclassified on our Consolidated Balance Sheets from “Sold and unsold homes and lots under development” to “Land and land options held for future development or sale.” During fiscal 2020, we did not mothball any additional communities, or sell any previously mothballed communities, but we re-activated one previously mothballed community and also re-activated a portion of one previously mothballed community. As of October 31, 2020 and 2019, the net book value associated with our 12 and 13 total mothballed communities was $11.4 million and $13.8 million, respectively, which was net of impairment charges recorded in prior periods of $122.2 million and $138.1 million, respectively.

We sell and lease back certain of our model homes with the right to participate in the potential profit when each home is sold to a third party at the end of the respective lease. As a result of our continued involvement, for accounting purposes in accordance with ASC 606-10-55-68, these sale and leaseback transactions are considered a financing rather than a sale. Therefore, for purposes of our Consolidated Balance Sheets, at October 31, 2020 and 2019, inventory of $48.8 million and $54.2 million, respectively, was recorded to “Consolidated inventory not owned,” with a corresponding amount of $47.2 million and $51.2 million, respectively, recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.

We have land banking arrangements, whereby we sell our land parcels to the land banker and they provide us an option to purchase back finished lots on a predetermined schedule. Because of our options to repurchase these parcels, for accounting purposes, in accordance with ASC 606-10-55-70, these transactions are considered a financing rather than a sale. For purposes of our Consolidated Balance Sheets, at October 31, 2020 and 2019, inventory of $133.4 million and $136.1 million, respectively, was recorded to “Consolidated inventory not owned,” with a corresponding amount of $84.0 million and $89.8 million, respectively, recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.

The recoverability of inventories and other long-lived assets is assessed in accordance with the provisions of ASC 360-10, “Property, Plant and Equipment – Overall.” ASC 360-10 requires long-lived assets, including inventories, held for development to be evaluated for impairment based on undiscounted future cash flows of the assets at the lowest level for which there are identifiable cash flows. As such, we evaluate inventories for impairment at the individual community level, the lowest level of discrete cash flows that we measure.

We evaluate inventories of communities under development and held for future development for impairment when indicators of potential impairment are present. Indicators of impairment include, but are not limited to, decreases in local housing market values, decreases in gross margins or sales absorption rates, decreases in net sales prices (base sales price net of sales incentives), or actual or projected operating or cash flow losses. The assessment of communities for indication of impairment is performed quarterly. As part of this process, we prepare detailed budgets for all of our communities at least semi-annually and identify those communities with a projected operating loss. For those communities with projected losses, we estimate the remaining undiscounted future cash flows and compare those to the carrying value of the community, to determine if the carrying value of the asset is recoverable.

The projected operating profits, losses or cash flows of each community can be significantly impacted by our estimates of the following:

●

future base selling prices;

●

future home sales incentives;

●

future home construction and land development costs; and

●

future sales absorption pace and cancellation rates.

These estimates are dependent upon specific market conditions for each community. While we consider available information to determine what we believe to be our best estimates as of the end of a quarterly reporting period, these estimates are subject to change in future reporting periods as facts and circumstances change. Local market-specific conditions that may impact our estimates for a community include:

●

the intensity of competition within a market, including available home sales prices and home sales incentives offered by our competitors;

●

the current sales absorption pace for both our communities and competitor communities;

●

community-specific attributes, such as location, availability of lots in the market, desirability and uniqueness of our community, and the size and style of homes currently being offered;

●

potential for alternative product offerings to respond to local market conditions;

●

changes by management in the sales strategy of the community;

●

current local market economic and demographic conditions and related trends and forecasts; and

●

existing home inventory supplies, including foreclosures and short sales.

These and other local market-specific conditions that may be present are considered by management in preparing projection assumptions for each community. The sales objectives can differ between our communities, even within a given market. For example, facts and circumstances in a given community may lead us to price our homes with the objective of yielding a higher sales absorption pace, while facts and circumstances in another community may lead us to price our homes to minimize deterioration in our gross margins, although it may result in a slower sales absorption pace. In addition, the key assumptions included in our estimate of future undiscounted cash flows may be interrelated. For example, a decrease in estimated base sales price or an increase in homes sales incentives may result in a corresponding increase in sales absorption pace. Additionally, a decrease in the average sales price of homes to be sold and closed in future reporting periods for one community that has not been generating what management believes to be an adequate sales absorption pace may impact the estimated cash flow assumptions of a nearby community. Changes in our key assumptions, including estimated construction and development costs, absorption pace and selling strategies, could materially impact future cash flow and fair value estimates. Due to the number of possible scenarios that would result from various changes in these factors, we do not believe it is possible to develop a sensitivity analysis with a level of precision that would be meaningful to an investor.

If the undiscounted cash flows are more than the carrying value of the community, then the carrying amount is recoverable, and no impairment adjustment is required. However, if the undiscounted cash flows are less than the carrying amount, then the community is deemed impaired and is written down to its fair value. We determine the estimated fair value of each community by determining the present value of its estimated future cash flows at a discount rate commensurate with the risk of the respective community, or in limited circumstances, prices for land in recent comparable sale transactions, market analysis studies, which include the estimated price a willing buyer would pay for the land (other than in a forced liquidation sale), and recent bona fide offers received from outside third parties. Our discount rates used for all impairments recorded from October 31, 2018 to October 31, 2020 ranged from 16.8% to 19.8%. The estimated future cash flow assumptions are virtually the same for both our recoverability and fair value assessments. Should the estimates or expectations used in determining estimated cash flows or fair value, including discount rates, decrease or differ from current estimates in the future, we may be required to recognize additional impairments related to current and future communities. The impairment of a community is allocated to each lot on a relative fair value basis.

From time to time, we write off deposits and approval, engineering and capitalized interest costs when we determine that it is no longer probable that we will exercise options to buy land in specific locations or when we redesign communities and/or abandon certain engineering costs. In deciding not to exercise a land option, we take into consideration changes in market conditions, the timing of required land takedowns, the willingness of land sellers to modify terms of the land option contract (including timing of land takedowns), and the availability and best use of our capital, among other factors. The write-off is recorded in the period it is deemed not probable that the optioned property will be acquired. In certain instances, we have been able to recover deposits and other pre-acquisition costs that were previously written off. These recoveries have not been significant in comparison to the total costs written off.

Inventories held for sale are land parcels ready for sale in their current condition, where we have decided not to build homes but are instead actively marketing for sale. These land parcels represented $2.0 million of our total inventories at October 31, 2020 and are reported at the lower of carrying amount or fair value less costs to sell. There were no inventories held for sale at October 31, 2019. In determining fair value for land held for sale, management considers, among other things, prices for land in recent comparable sale transactions, market analysis studies, which include the estimated price a willing buyer would pay for the land (other than in a forced liquidation sale) and recent bona fide offers received from outside third parties.

Post-development Completion Warranty Costs and Insurance Deductible Reserves, Policy [Policy Text Block]

Warranty Costs and Construction Defect Reserves - We accrue for warranty costs that are covered under our existing general liability and construction defect policy as part of our general liability insurance deductible. This accrual is expensed as selling, general and administrative costs. For homes delivered in fiscal 2020 and 2019, our deductible under our general liability insurance was a $20 million aggregate for construction defect and warranty claims. For bodily injury claims, our deductible per occurrence in fiscal 2020 and 2019 was $0.25 million, up to a $5 million limit. Our aggregate retention for construction defect, warranty and bodily injury claims was $20 million for fiscal 2020 and 2019. We do not have a deductible on our worker's compensation insurance. Reserves for estimated losses for construction defects, warranty and bodily injury claims have been established using the assistance of a third-party actuary. We engage a third-party actuary that uses our historical warranty and construction defect data to assist our management in estimating our unpaid claims, claim adjustment expenses and incurred but not reported claims reserves for the risks that we are assuming under the general liability and construction defect programs. The estimates include provisions for inflation, claims handling and legal fees. These estimates are subject to a high degree of variability due to uncertainties such as trends in construction defect claims relative to our markets and the types of products we build, claim settlement patterns, insurance industry practices and legal interpretations, among others. Because of the high degree of judgment required in determining these estimated liability amounts, actual future costs could differ significantly from our currently estimated amounts. In addition, we establish a warranty accrual for lower cost-related issues to cover home repairs, community amenities and land development infrastructure that are not covered under our general liability and construction defect policy. We accrue an estimate for these warranty costs as part of cost of sales at the time each home is closed and title and possession have been transferred to the homebuyer. See Note 16 for additional information on the amount of warranty costs recognized in cost of goods sold and administrative expenses.

Inventory, Interest Capitalization Policy [Policy Text Block]

Interest - Interest attributable to properties under development during the land development and home construction period is capitalized and expensed along with the associated cost of sales as the related inventories are sold. Interest incurred in excess of interest capitalized, which occurs when assets qualifying for interest capitalization are less than our outstanding debt balances, is expensed as incurred in “Other interest.”

Interest costs incurred, expensed and capitalized were:

	*Year Ended*
	*October 31,*		*October 31,*		*October 31,*
(In thousands)	*2020*		*2019*		*2018*
Interest capitalized at beginning of year	$	71,264	$	68,117	$	71,051
Plus interest incurred(1)		176,457		165,906		161,048
Less cost of sales interest expensed		74,330		70,725		60,685
Less other interest expensed(2)(3)		103,801		90,056		103,297
Less interest contributed to unconsolidated joint venture(4)		4,580		1,978		-
Interest capitalized at end of year(5)	$	65,010	$	71,264	$	68,117

(1)

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

(2)

Other interest expensed includes interest that does not qualify for interest capitalization because our assets that qualify for interest capitalization (inventory under development) do not exceed our debt, which amounted to $61.9 million, $56.9 million and $76.2 million for the years ended October 31, 2020, 2019 and 2018, respectively. Other interest also includes interest on completed homes, land in planning and fully developed lots without homes under construction, which does not qualify for capitalization, and therefore, is expensed. This component of other interest was $41.9 million, $33.2 million and $27.1 million for the years ended October 31, 2020, 2019 and 2018, respectively.

(3)

	*Year Ended*
	*October 31,*			*October 31,*		*October 31,*
(In thousands)	*2020*			*2019*		*2018*
Other interest expensed	$	103,801		$	90,056	$	103,297
Interest paid by our mortgage and finance subsidiaries		2,165			2,536		2,478
(Increase) decrease in accrued interest		(16,482	)		16,515		6,241
Cash paid for interest, net of capitalized interest	$	89,484		$	109,107	$	112,016

(4)

Represents capitalized interest which was included as part of the assets contributed to the joint ventures the Company entered into in December 2019 and June 2019 during the years ended October 31, 2020 and 2019, respectively, as discussed in Note 20. There was no impact to the Consolidated Statement of Operations as a result of these transactions.

(5)

Capitalized interest amounts are shown gross before allocating any portion of impairments, if any, to capitalized interest.

Land under Option Arrangements, Policy [Policy Text Block]

Land Options - Costs incurred to obtain options to acquire improved or unimproved home sites are capitalized. Such amounts are either included as part of the purchase price if the land is acquired or charged to “Inventory impairments loss and land option write-offs” if we determine we will not exercise the option. In accordance with ASC 810-10 “Consolidation – Overall,” we record costs associated with other options on the Consolidated Balance Sheets under “Land and land options held for future development or sale.” If the options are with variable interest entities and we are the primary beneficiary, we record the land under option on the Consolidated Balance Sheets under “Consolidated inventory not owned” with an offset under “Liabilities from inventory not owned.” If the option has terms that require us to record it as financing, then we record the option on the Consolidated Balance Sheets under “Consolidated inventory not owned” with an offset under “Liabilities from inventory not owned.”

Equity Method Investments [Policy Text Block]

Unconsolidated Homebuilding and Land Development Joint Ventures - Investments in unconsolidated homebuilding and land development joint ventures are accounted for under the equity method of accounting. Under the equity method, we recognize our proportionate share of earnings and losses earned by the joint venture upon the delivery of lots or homes to third parties. Our ownership interests in the joint ventures vary but our voting interests are generally 50% or less. In determining whether or not we must consolidate joint ventures where we are the managing member of the joint venture, we assess whether the other partners have specific rights to overcome the presumption of control by us as the manager of the joint venture. In most cases, the presumption is overcome because the joint venture agreements require that both partners agree on establishing the significant operating and capital decisions of the partnership, including budgets, in the ordinary course of business. The evaluation of whether or not we control a venture can require significant judgment. In accordance with ASC 323-10, “Investments - Equity Method and Joint Ventures – Overall,” we assess our investments in unconsolidated joint ventures for recoverability, and if it is determined that a loss in value of the investment below its carrying amount is other than temporary, we write down the investment to its fair value. We evaluate our equity investments for impairment based on the joint venture’s projected cash flows. This process requires significant management judgment and estimates. During fiscal 2019, we wrote down certain unconsolidated joint venture investments by $0.9 million. There were no write-downs in fiscal 2020 or fiscal 2018.

Deferred Charges, Policy [Policy Text Block]

Deferred Bond Issuance Costs - Costs associated with borrowings under our credit facilities and terms loans and the issuance of senior secured and senior notes are capitalized and amortized over the term of each note’s issuance. The capitalization of the costs are recorded as a contra liability within our debt balances, except for the revolving credit facility costs, which are recorded as a prepaid asset.

Debt, Policy [Policy Text Block]

Debt Issued At a Discount/Premium - Debt issued at a discount or premium to the face amount is amortized up or down, as applicable, 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 Operations.

Advertising Cost [Policy Text Block]

Advertising Costs - Advertising costs are expensed as incurred. During the years ended October 31, 2020, 2019 and 2018, advertising costs expensed totaled $12.9 million, $17.1 million and $16.4 million, respectively.

Income Tax, Policy [Policy Text Block]

Deferred Income Taxes - Deferred income taxes are provided for temporary differences between amounts recorded for financial reporting and for income tax purposes. If 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 or carried forward to future years to recover the deferred tax assets. In accordance with ASC 740-10, “Income Taxes – Overall,” we evaluate our deferred tax assets quarterly to determine if valuation allowances are required. ASC 740-10 requires that companies assess whether valuation allowances should be established based on the consideration of all available evidence using a “more-likely-than-not” standard.

In evaluating the exposures associated with our various tax filing positions, we recognize tax liabilities in accordance with ASC 740-10, for more likely than not exposures. We re-evaluate the exposures associated with our tax positions on a quarterly basis. This evaluation is based on factors such as changes in facts or circumstances, changes in tax law, new audit activity by taxing authorities, and effectively settled issues. Determining whether an uncertain tax position is effectively settled requires judgment. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision. A number of years may elapse before a particular matter for which we have established a liability is audited and fully resolved or clarified. We adjust our liability for unrecognized tax benefits and income tax provision in the period in which an uncertain tax position is effectively settled, or the statute of limitations expires for the relevant taxing authority to examine the tax position or when more information becomes available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a liability that is materially different from our current estimate. Any such changes will be reflected as increases or decreases to income tax expense in the period in which they are determined.

Prepaid Expenses, Policy [Policy Text Block]

Prepaid Expenses - Prepaid expenses which relate to specific housing communities (model setup, architectural fees, homeowner warranty program fees, etc.) are amortized to cost 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.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

Allowance for Doubtful Accounts – We regularly review our receivable balances, which are included in Receivables, deposits and notes on the Consolidated Balance Sheets, for collectability and record an allowance against a receivable when it is deemed that collectability is uncertain. These receivables include receivables from our insurance carriers, receivables from municipalities related to the development of utilities or other infrastructure, and other miscellaneous receivables. The balance for allowance for doubtful accounts was $12.0 million and $12.2 million at October 31, 2020 and 2019, respectively, which primarily related to allowances for receivables from municipalities and an allowance for a receivable for a prior year land sale. During fiscal 2020 and 2019, we recorded $0.2 million and $0.5 million, respectively, in recoveries. During fiscal 2019, we recorded $1.3 million of additional reserves. There were no write-offs in fiscal 2020 or fiscal 2019.

Share-based Payment Arrangement [Policy Text Block]

Stock Options - We account for our stock options under ASC 718-10, “Compensation - Stock Compensation – Overall,” which requires the fair-value based method of accounting for stock awards granted to employees and measures and records the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award.

Compensation cost arising from nonvested stock granted to employees and from nonemployee stock awards is based on the fair value of the awards at the grant date recognized as expense using the straight-line method over the vesting period.

Earnings Per Share, Policy [Policy Text Block]

Per Share Calculations - Basic earnings per share is computed by dividing net income (loss) (the “numerator”) by the weighted-average number of common shares outstanding, adjusted for nonvested shares of restricted stock (the “denominator”) for the period. Computing diluted earnings per share is similar to computing basic earnings per share, except that the denominator is increased to include the dilutive effects of options and nonvested shares of restricted stock, as well as common shares issuable upon exchange of our Senior Exchangeable Notes issued as part of our 6.0% Exchangeable Note Units (which matured and were paid in full in fiscal 2018). Any options that have an exercise price greater than the average market price are considered to be anti-dilutive and are excluded from the diluted earnings per share calculation.

All outstanding nonvested shares that contain nonforfeitable rights to dividends or dividend equivalents that participate in undistributed earnings with common stock are considered participating securities and are included in computing earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings in periods where we have net income. The Company’s restricted common stock (“nonvested shares”) are considered participating securities.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which provides guidance for accounting for leases. ASU 2016-02 requires lessees to classify leases as either finance or operating leases and to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight-line basis over the term of the lease. Accounting for lessors remains largely unchanged from current GAAP. ASU 2016-02 was effective for the Company on November 1, 2019, and we applied the modified retrospective method of adoption, resulting in no restatement of prior period financial statements. We elected the practical expedient package which allows us to carry forward our original assessment of whether contracts contained leases, lease classification and the initial direct costs. We also elected the practical expedient that allows lessees the option to account for lease and non-lease components together as a single component for all classes of underlying assets. The adoption of ASU 2016-02 resulted in a gross up on our Condensed Consolidated Balance Sheets for right of use ("ROU") assets and lease liabilities of $23.3 million and $24.4 million, respectively, as of November 1, 2019. Existing prepaid rent and accrued rent were recorded as an offset to the gross operating ROU assets. Our ROU assets are included in “Prepaid expenses and other assets” and the corresponding lease liabilities are included in “Accounts payable and other liabilities” line items on our Consolidated Balance Sheets. The adoption of ASU 2016-02 had no impact on our consolidated statements of operations or cash flows, nor did it have a significant impact on our business processes, systems or internal controls.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820) - Disclosure Framework” (“ASU 2018-13”), which improves the disclosure requirements for fair value measurements. ASU 2018-13 is effective for us beginning November 1, 2020. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for us beginning November 1, 2020. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with reference rate reform on financial reporting. This guidance was effective for the Company beginning on March 12, 2020, and we may elect to apply the amendments prospectively from now through December 31, 2022. The Company has not yet adopted this guidance and is currently evaluating the potential impact of adoption on our Consolidated Financial Statements.

Note 3 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Oct. 31, 2020

Schedule of Real Estate Inventory, Capitalized Interest Costs [Table Text Block]

	*Year Ended*
	*October 31,*		*October 31,*		*October 31,*
(In thousands)	*2020*		*2019*		*2018*
Interest capitalized at beginning of year	$	71,264	$	68,117	$	71,051
Plus interest incurred(1)		176,457		165,906		161,048
Less cost of sales interest expensed		74,330		70,725		60,685
Less other interest expensed(2)(3)		103,801		90,056		103,297
Less interest contributed to unconsolidated joint venture(4)		4,580		1,978		-
Interest capitalized at end of year(5)	$	65,010	$	71,264	$	68,117

Cash Paid for Interest Net of Capitalized Interest [Table Text Block]

	*Year Ended*
	*October 31,*			*October 31,*		*October 31,*
(In thousands)	*2020*			*2019*		*2018*
Other interest expensed	$	103,801		$	90,056	$	103,297
Interest paid by our mortgage and finance subsidiaries		2,165			2,536		2,478
(Increase) decrease in accrued interest		(16,482	)		16,515		6,241
Cash paid for interest, net of capitalized interest	$	89,484		$	109,107	$	112,016

Note 4 - Leases (Tables)

12 Months Ended

Oct. 31, 2020

Lease, Cost [Table Text Block]

	Year Ended October 31,
(In thousands)	2020
Operating lease cost	$	10,507
Cash payments on lease liabilities	$	9,257

(In thousands)	*At October 31, 2020*
ROU assets	$	20,016
Lease liabilities	$	21,049
Weighted-average remaining lease term (in years)		3.5
Weighted-average discount rate (incremental borrowing rate)		9.6	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Year ending October 31,	*(in thousands)*
2021	$	8,880
2022		7,506
2023		4,298
2024		1,673
2025		1,324
Thereafter		1,107
Total payments		24,788
Less: imputed interest		(3,739	)
Present value of lease liabilities	$	21,049

Note 5 - Property, Plant and Equipment (Tables)

12 Months Ended

Oct. 31, 2020

Property, Plant and Equipment [Table Text Block]

	*October 31,*
(In thousands)	*2020*		*2019*

Land and land improvements	$	1,639	$	1,639
Buildings		9,497		9,155
Building improvements		13,281		11,552
Furniture		4,363		4,338
Equipment, including capitalized software		35,763		35,423
Total		64,543		62,107
Less accumulated depreciation		46,358		41,980
Total	$	18,185	$	20,127

Note 7 - Mortgage Loans Held for Sale (Tables)

12 Months Ended

Oct. 31, 2020

Financing Receivable, Allowance for Credit Loss [Table Text Block]

	*Year Ended*
	*October 31,*
(In thousands)	*2020*			*2019*

Loan origination reserves, beginning of period	$	1,268		$	2,563
Provisions for losses during the period		196			198
Adjustments to pre-existing provisions for losses from changes in estimates		(6	)		(143	)
Payments/settlements		-			(1,350	)
Loan origination reserves, end of period	$	1,458		$	1,268

Note 9 - Senior Notes and Credit Facilities (Tables)

12 Months Ended

Oct. 31, 2020

Schedule of Long-term Debt Instruments [Table Text Block]

	*October 31,*			*October 31,*
(In thousands)		*2020*			*2019*
Senior Secured Notes:
10.0% Senior Secured Notes due July 15, 2022	$	111,214		$	218,994
10.5% Senior Secured Notes due July 15, 2024		69,683			211,391
10.0% Senior Secured 1.75 Lien Notes due November 15, 2025		158,502			-
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		350,000			350,000
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		282,322			282,322
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		162,269			103,141
Total Senior Secured Notes	$	1,133,990		$	1,165,848
Senior Notes:
8.0% Senior Notes due November 1, 2027 (1)	$	-		$	-
13.5% Senior Notes due February 1, 2026		90,590			90,590
5.0% Senior Notes due February 1, 2040		90,120			90,120
Total Senior Notes	$	180,710		$	180,710
Senior Unsecured Term Loan Credit Facility due February 1, 2027	$	39,551		$	202,547
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028	$	81,498		$	-
Senior Secured Revolving Credit Facility (2)	$	-		$	-
Subtotal notes payable	$	1,435,749		$	1,549,105
Net (discounts) premiums	$	17,521		$	(49,145	)
Net debt issuance costs	$	(22,160	)	$	(19,970	)
Total notes payable, net of discounts, premiums and debt issuance costs	$	1,431,110		$	1,479,990

Schedule of Maturities of Long-term Debt [Table Text Block]

Fiscal Year Ended October 31, (1)
2021	$	-
2022		111,214
2023		-
2024		69,683
2025		-
Thereafter		1,254,852
Total	$	1,435,749

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
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-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Note 10 - Operating and Reporting Segments (Tables)

12 Months Ended

Oct. 31, 2020

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	*October 31,*
(In thousands)	*2020*		*2019*
Assets:
Northeast	$	107,748	$	163,342
Mid-Atlantic		271,867		264,894
Midwest		106,774		117,242
Southeast		248,506		281,654
Southwest		357,444		357,052
West		278,811		311,919
Total homebuilding		1,371,150		1,496,103
Financial services		140,607		199,275
Corporate and unallocated		315,585		186,046
Total assets	$	1,827,342	$	1,881,424

	*October 31,*
(In thousands)	*2020*		*2019*
Investments in and advances to unconsolidated joint ventures:
Northeast	$	14,646	$	49,340
Mid-Atlantic		11,055		9,166
Midwest		498		4,382
Southeast		66,234		52,983
Southwest		9,965		10,019
West		64		(33	)
Total homebuilding		102,462		125,857
Corporate and unallocated		702		1,181
Total investments in and advances to unconsolidated joint ventures	$	103,164	$	127,038

Operating Segments [Member]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	*Year Ended October 31,*
(In thousands)	*2020*			*2019*			*2018*
Revenues:
Northeast	$	192,069		$	124,372		$	116,296
Mid-Atlantic		403,669			357,247			354,690
Midwest		225,718			204,461			196,599
Southeast		232,730			220,082			241,620
Southwest		744,197			629,344			638,282
West		472,889			425,516			384,627
Total homebuilding		2,271,272			1,961,022			1,932,114
Financial services		72,162			54,152			53,355
Corporate and unallocated		467			1,742			5,764
Total revenues	$	2,343,901		$	2,016,916		$	1,991,233
Income (loss) before income taxes:
Northeast	$	30,371		$	20,954		$	20,869
Mid-Atlantic		34,570			14,327			18,757
Midwest		(1,805	)		(649	)		1,528
Southeast		1,355			(10,060	)		(9,914	)
Southwest		68,184			33,459			49,852
West		16,415			40,018			47,987
Total homebuilding		149,090			98,049			129,079
Financial services		32,102			17,627			18,227
Corporate and unallocated (1)		(125,789	)		(155,344	)		(139,160	)
Income (loss) before income taxes	$	55,403		$	(39,668	)	$	8,146

	*Year Ended October 31,*
(In thousands)	*2020*			*2019*		*2018*
Homebuilding interest expense:
Northeast	$	13,636		$	10,011	$	11,811
Mid-Atlantic		16,076			18,563		15,051
Midwest		9,377			7,121		5,874
Southeast		17,005			18,798		14,934
Southwest		29,898			27,731		21,820
West		30,222			23,051		18,309
Total homebuilding		116,214			105,275		87,799
Corporate and unallocated		61,917			55,506		76,183
Financial services interest expense (1)		(35	)		334		104
Total interest expense, net	$	178,096		$	161,115	$	164,086

	*Year Ended October 31,*
(In thousands)	*2020*		*2019*		*2018*
Depreciation:
Northeast	$	229	$	188	$	135
Mid-Atlantic		264		209		63
Midwest		1,112		1,097		1,106
Southeast		327		230		124
Southwest		699		331		70
West		801		326		45
Total homebuilding		3,432		2,381		1,543
Financial services		13		14		14
Corporate and unallocated		1,859		1,777		1,599
Total depreciation	$	5,304	$	4,172	$	3,156

	*Year Ended October 31,*
(In thousands)	*2020*		*2019*		*2018*
Net additions to operating properties and equipment:
Northeast	$	43	$	107	$	142
Mid-Atlantic		165		168		318
Midwest		861		237		621
Southeast		102		221		701
Southwest		776		741		23
West		846		921		55
Total homebuilding		2,793		2,395		1,860
Financial services		-		-		-
Corporate and unallocated		587		1,610		3,333
Total net additions to operating properties and equipment	$	3,380	$	4,005	$	5,193

	*Year Ended October 31,*
(In thousands)	*2020*			*2019*			*2018*
Equity in earnings (losses) from unconsolidated joint ventures:
Northeast	$	11,039		$	19,242		$	20,231
Mid-Atlantic		(292	)		3,404			799
Midwest		(103	)		(432	)		(775	)
Southeast		820			1,310			(2,032	)
Southwest		5,111			7,951			5,165
West		(10	)		(2,543	)		645
Total equity in earnings from unconsolidated joint ventures	$	16,565		$	28,932		$	24,033

Note 11 - Income Taxes (Tables)

12 Months Ended

Oct. 31, 2020

Schedule of Components of Income Tax Payable Receivable [Table Text Block]

	*Year Ended October 31,*
(In thousands)	*2020*		*2019*
State income taxes:
Current	$	3,832	$	2,301
Deferred		-		-
Federal income taxes:
Current		-		-
Deferred		-		-
Total	$	3,832	$	2,301

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	*Year Ended October 31,*
(In thousands)	*2020*		*2019*		*2018*
Current income tax expense:
Federal (1)	$	-	$	-	$	-
State (2)		4,475		2,449		3,626
Total current income tax expense:		4,475		2,449		3,626
Federal		-		-		-
State		-		-		-
Total deferred income tax expense:		-		-		-
Total	$	4,475	$	2,449	$	3,626

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	*Year Ended October 31,*
(In thousands)	*2020*			*2019*
Deferred tax assets:
Inventory impairment loss	$	42,120		$	47,000
Uniform capitalization of overhead		3,870			3,917
Warranty and legal reserves		4,848			4,404
Acquisition intangibles		-			424
Compensation		9,554			8,477
Deferred Income		3,793			5,167
Interest Expense		3,930			6,616
Restricted stock bonus		1,644			1,553
Stock options		4,026			4,288
Provision for losses		16,566			16,820
Joint venture loss		3,020			4,392
Federal net operating losses		299,854			334,142
State net operating losses		181,050			184,740
Other		3,259			1,280
Total deferred tax assets		577,534			623,220
Total deferred tax liabilities		-			-
Valuation allowance		(577,534	)		(623,220	)
Net deferred income taxes	$	-		$	-

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	*Year Ended October 31,*
	*2020*			*2019*			*2018*
Computed “expected” tax rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal income tax benefit		10.6			(5.0	)		17.2
Permanent differences, net		53.2			(42.4	)		74.0
Deferred tax asset valuation allowance impact		(83.3	)		20.8			(70.8	)
Tax contingencies		(0.5	)		0.5			1.0
Adjustments to prior years’ tax accruals		7.0			(1.0	)		2.1
Effective tax rate		8.0	%		(6.1	)%		44.5	%

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]


	*2020*			*2019*
Unrecognized tax benefit—November 1,	$	0.9		$	1.2
Gross increases—tax positions in current period		-			-
Lapse of statute of limitations		(0.2	)		(0.3	)
Unrecognized tax benefit—October 31,	$	0.7		$	0.9

Note 12 - Reduction of Inventory to Fair Value (Tables)

12 Months Ended

Oct. 31, 2020

Inventory Impairment [Table Text Block]

(Dollars in millions)	*Year Ended October 31, 2020*
			*Dollar*		*Pre-*
	*Number of*		*Amount of*		*Impairment*
	*Communities*		*Impairment*		*Value (1)*
Northeast		-	$	-	$	-
Mid-Atlantic		-		-		-
Midwest		2		2.0		4.8
Southeast		-		-		-
Southwest		-		-		-
West		-		-		-
Total		2	$	2.0	$	4.8

(Dollars in millions)	*Year Ended October 31, 2019*
			*Dollar*		*Pre-*
	*Number of*		*Amount of*		*Impairment*
	*Communities*		*Impairment*		*Value (1)*
Northeast		2	$	0.2	$	7.8
Mid-Atlantic		1		0.3		1.7
Midwest		1		1.4		4.6
Southeast		1		0.7		2.2
Southwest		1		0.1		1.2
West		-		-		-
Total		6	$	2.7	$	17.5

(Dollars in millions)	*Year Ended October 31, 2018*
			*Dollar*		*Pre-*
	*Number of*		*Amount of*		*Impairment*
	*Communities*		*Impairment*		*Value (1)*
Northeast		1	$	0.4	$	1.0
Mid-Atlantic		-		-		-
Midwest		1		0.1		0.5
Southeast		3		1.6		9.7
Southwest		-		-		-
West		-		-		-
Total		5	$	2.1	$	11.2

Write Offs and Lots Walked Away From [Table Text Block]

	*Year Ended October 31,*
(In millions)	*2020*		*2019*		*2018*
Northeast	$	1.5	$	0.6	$	0.6
Mid-Atlantic		-		0.5		0.2
Midwest		3.5		0.9		0.1
Southeast		0.8		0.3		-
Southwest		0.6		0.6		0.2
West		0.4		0.7		0.3
Total	$	6.8	$	3.6	$	1.4

Note 13 - Per Share Calculation (Tables)

12 Months Ended

Oct. 31, 2020

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	*Year Ended October 31,*
(In thousands, except per share data)	*2020*			*2019*			*2018*

Numerator:
Net earnings (loss) attributable to Hovnanian	$	50,928		$	(42,117	)	$	4,520
Less: undistributed earnings allocated to nonvested shares		(4,652	)		-			(159	)
Numerator for basic earnings (loss) per share	$	46,276		$	(42,117	)	$	4,361
Plus: undistributed earnings allocated to nonvested shares		4,652			-			159
Less: undistributed earnings reallocated to nonvested shares		(4,652	)		-			(159	)
Numerator for diluted earnings (loss) per share	$	46,276		$	(42,117	)	$	4,361
Denominator:
Denominator for basic earnings per share		6,189			5,968			5,941
Effect of dilutive securities:
Share-based payments		395			-			131
Denominator for diluted earnings per share – weighted-average shares outstanding		6,584			5,968			6,072
Basic earnings (loss) per share	$	7.48		$	(7.06	)	$	0.73
Diluted earnings (loss) per share	$	7.03		$	(7.06	)	$	0.72

Note 15 - Stock Plans (Tables)

12 Months Ended

Oct. 31, 2020

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	*October 31,*		*Weighted-Average*		*October 31,*		*Weighted-Average*		*October 31,*		*Weighted-Average*
	*2020*		*Exercise Price*		*2019*		*Exercise Price*		*2018*		*Exercise Price*
Options outstanding at beginning of period		331,481	$	53.93		278,569	$	73.76		274,423	$	85.22
Granted		-	$	-		110,975	$	9.44		37,825	$	56.30
Exercised		-	$	-		-	$	-		1,210	$	49.91
Forfeited		6,560	$	26.24		2,038	$	53.96		2,000	$	64.25
Expired		35,530	$	115.28		56,025	$	64.41		30,469	$	156.95
Options outstanding at end of period		289,391	$	47.02		331,481	$	53.93		278,569	$	73.76
Options exercisable at end of period		145,553				147,019				191,748

Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block]

					Weighted-
					Average
			Weighted-		Remaining
	Number		Average		Contractual
Range of Exercise Prices	Outstanding		Exercise Price		Life
$7.85 – $38.50		108,150	$	9.65		8.58
$38.75 – $58.13		96,995	$	50.07		3.76
$61.00 – $90.38		57,300	$	67.66		4.11
$118.25 – $157.00		26,946	$	142.17		2.76
		289,391	$	47.02		5.54

					Weighted-
					Average
			Weighted-		Remaining
	Number		Average		Contractual
Range of Exercise Prices	Exercisable		Exercise Price		Life
$7.85 – $38.50		850	$	24.08		3.25
$38.75 – $58.13		82,557	$	50.31		3.2
$61.00 – $90.38		35,200	$	71.46		1.95
$118.25 – $157.00		26,946	$	142.17		2.76
		145,553	$	72.28		2.81

Schedule of Nonvested Share Activity [Table Text Block]

	*October 31,*		*Weighted-Average Grant Date*		*October 31,*		*Weighted-Average Grant Date*		*October 31,*		*Weighted-Average Grant Date*
	*2020*		*Fair Value*		*2019*		*Fair Value*		*2018*		*Fair Value*
Nonvested Time-Based at beginning of period		231,210	$	23.01		105,594	$	61.77		96,091	$	60.50
Granted		142,231	$	19.48		164,050	$	7.66		37,888	$	54.95
Vested		62,309	$	17.04		21,329	$	45.52		22,821	$	55.19
Forfeited		22,267	$	57.81		17,106	$	86.96		5,564	$	20.87
Nonvested Time-Based at end of period		288,865	$	19.88		231,210	$	23.01		105,594	$	61.77

	*October 31,*		*Weighted-Average Grant Date*		*October 31,*		*Weighted-Average Grant Date*		*October 31,*		*Weighted-Average Grant Date*
	*2020*		*Fair Value*		*2019*		*Fair Value*		*2018*		*Fair Value*
Nonvested Performance-Based at beginning of period		136,316	$	44.22		101,407	$	69.28		150,881	$	50.26
Granted		183,825	$	15.11		56,400	$	10.10		47,277	$	70.41
Vested		4,284	$	57.22		8,655	$	42.69		5,390	$	72.52
Forfeited		21,385	$	70.44		12,836	$	93.31		91,361	$	38.27
Nonvested Performance-Based at end of period		294,472	$	24.64		136,316	$	44.22		101,407	$	69.28

Note 16 - Warranty Costs (Tables)

12 Months Ended

Oct. 31, 2020

Schedule of Product Warranty Liability [Table Text Block]

	*Year Ended October 31,*
(In thousands)	*2020*			*2019*

Balance, beginning of period	$	89,371		$	95,064
Additions – Selling, general and administrative		9,587			8,408
Additions – Cost of sales		10,273			6,260
Charges incurred during the period		(20,163	)		(18,757	)
Changes to pre-existing reserves		(2,651	)		(1,604	)
Balance, end of period	$	86,417		$	89,371

Note 20 - Investments in Unconsolidated Homebuilding and Land Development Joint Ventures (Tables)

12 Months Ended

Oct. 31, 2020

Equity Method Investments [Table Text Block]

	*October 31, 2020*
				*Land*
(Dollars in thousands)	*Homebuilding*			*Development*			*Total*
Assets:
Cash and cash equivalents	$	120,107		$	3,454		$	123,561
Inventories		389,001			91			389,092
Other assets		27,062			488			27,550
Total assets	$	536,170		$	4,033		$	540,203
Liabilities and equity:
Accounts payable and accrued liabilities	$	207,277		$	2,152		$	209,429
Notes payable		117,179			-			117,179
Total liabilities		324,456			2,152			326,608
Equity of:
Hovnanian Enterprises, Inc.		102,908			1,340			104,248
Others		108,806			541			109,347
Total equity		211,714			1,881			213,595
Total liabilities and equity	$	536,170		$	4,033		$	540,203
Debt to capitalization ratio		36	%		0	%		35	%

	*October 31, 2019*
				*Land*
(Dollars in thousands)	*Homebuilding*			*Development*			*Total*
Assets:
Cash and cash equivalents	$	108,520		$	2,203		$	110,723
Inventories		397,804			6,038			403,842
Other assets		24,896			233			25,129
Total assets	$	531,220		$	8,474		$	539,694
Liabilities and equity:
Accounts payable and accrued liabilities	$	71,297		$	592		$	71,889
Notes payable		186,882			-			186,882
Total liabilities		258,179			592			258,771
Equity of:
Hovnanian Enterprises, Inc.		120,891			4,747			125,638
Others		152,150			3,135			155,285
Total equity		273,041			7,882			280,923
Total liabilities and equity	$	531,220		$	8,474		$	539,694
Debt to capitalization ratio		41	%		0	%		40	%

	*For The Year Ended October 31, 2020*
				*Land*
(Dollars in thousands)	*Homebuilding*			*Development*			*Total*
Revenues	$	435,077		$	13,024		$	448,101
Cost of sales and expenses		(420,977	)		(11,225	)		(432,202	)
Joint venture net income	$	14,100		$	1,799		$	15,899
Our share of net income	$	16,904		$	17		$	16,921

	*For The Year Ended October 31, 2019*
				*Land*
(Dollars in thousands)	*Homebuilding*			*Development*			*Total*
Revenues	$	488,914		$	8,704		$	497,618
Cost of sales and expenses		(456,563	)		(7,948	)		(464,511	)
Joint venture net income	$	32,351		$	756		$	33,107
Our share of net income	$	28,761		$	378		$	29,139

	*For The Year Ended October 31, 2018*
				*Land*
(Dollars in thousands)	*Homebuilding*			*Development*			*Total*
Revenues	$	602,681		$	6,418		$	609,099
Cost of sales and expenses		(577,106	)		(5,173	)		(582,279	)
Joint venture net income	$	25,575		$	1,245		$	26,820
Our share of net income	$	23,904		$	623		$	24,527

Note 21 - Fair Value of Financial Instruments (Tables)

12 Months Ended

Oct. 31, 2020

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

		*Fair Value at*			*Fair Value at*
	*Fair Value*	*October 31,*			*October 31,*
(In thousands)	*Hierarchy*	*2020*			*2019*

Mortgage loans held for sale (1)	Level 2	$	104,378		$	166,007
Forward contracts	Level 2		(28	)		(64	)
Total		$	104,350		$	165,943
Interest rate lock commitments	Level 3		11		$	42
Total		$	104,361		$	165,985

Fair Value Option, Disclosures [Table Text Block]

Year Ended October 31, 2020

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

for Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

3,928

(28

)

Year Ended October 31, 2019

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

for Sale

Commitments

Contracts

Fair value included in net loss all reflected in financial services revenues

4,869

(64

)

Year Ended October 31, 2018

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

for Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

3,115

(28

)

Fair Value Measurements, Nonrecurring [Table Text Block]

	*Year Ended*
	*October 31, 2020*
(In thousands)	*Fair*	*Pre-*
	*Value*	*Impairment*
	*Hierarchy*	*Amount*		*Total Losses*			*Fair Value*

Sold and unsold homes and lots under development	Level 3	$	691	$	(276	)	$	415
Land and land options held for future development or sale	Level 3	$	4,089	$	(1,741	)	$	2,348

	*Year Ended*
	*October 31, 2019*
(In thousands)	*Fair*	*Pre-*
	*Value*	*Impairment*
	*Hierarchy*	*Amount*		*Total Losses*			*Fair Value*

Sold and unsold homes and lots under development	Level 3	$	9,670	$	(2,494	)	$	7,176
Land and land options held for future development or sale	Level 3	$	7,801	$	(185	)	$	7,616

Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis 2 [Table Text Block]

(In thousands)	*Level 1*		*Level 2*		*Level 3*		*Total*
Senior Secured Notes:
10.0% Senior Secured Notes due July 15, 2022	$	-	$	107,878	$	-	$	107,878
10.5% Senior Secured Notes due July 15, 2024		-		-		67,941		67,941
10.0% Senior Secured 1.75 Lien Notes due November 15, 2025		-		-		132,246		132,246
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		-		-		353,500		353,500
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		-		-		274,558		274,558
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		-		-		162,723		162,723
Senior Notes:
13.5% Senior Notes due February 1, 2026		-		54,354		-		54,354
5.0% Senior Notes due February 1, 2040		-		10,814		-		10,814
Senior Credit Facilities:
Senior Unsecured Term Loan Credit Facility due February 1, 2027		-		-		13,091		13,091
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028		-		-		64,465		64,465
Total fair value	$	-	$	173,046	$	1,068,524	$	1,241,570

Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis [Table Text Block]

(In thousands)	*Level 1*		*Level 2*		*Level 3*		*Total*
Senior Secured Notes:
10.0% Senior Secured Notes due July 15, 2022	$	-	$	189,430	$	-	$	189,430
10.5% Senior Secured Notes due July 15, 2024		-		166,999		-		166,999
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		-		-		350,000		350,000
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		-		-		282,322		282,322
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		-		-		103,141		103,141
Senior Notes:
13.5% Senior Notes due February 1, 2026						80,254		80,254
5.0% Senior Notes due February 1, 2040		-		-		31,993		31,993
Senior Unsecured Term Loan Credit Facility due February 1, 2027		-		-		106,499		106,499
Total fair value	$	-	$	356,429	$	954,209	$	1,310,638

Note 22 - Unaudited Summarized Consolidated Quarterly Information (Tables)

12 Months Ended

Oct. 31, 2020

Quarterly Financial Information [Table Text Block]

	*Three Months Ended*
	*October 31,*		*July 31,*		*April 30,*			*January 31,*
(In thousands, except per share data)	*2020*		*2020*		*2020*			*2020*
Revenues	$	683,358	$	628,136	$	538,351		$	494,056
Expenses		641,449		619,269		539,209			509,660
Inventory impairment loss and land option write-offs		2,611		2,364		1,010			2,828
Gain (loss) on extinguishment of debt		-		4,055		(174	)		9,456
Income from unconsolidated joint ventures		3,146		5,658		6,221			1,540
Income (loss) before income taxes		42,444		16,216		4,179			(7,436	)
State and federal income tax provision		1,810		853		100			1,712
Net income (loss)	$	40,634	$	15,363	$	4,079		$	(9,148	)
Per share data:
Basic:
Net income (loss) per common share	$	5.97	$	2.27	$	0.63		$	(1.49	)
Weighted-average number of common shares outstanding		6,221		6,201		6,172			6,161
Assuming dilution:
Net income (loss) per common share	$	5.54	$	2.16	$	0.60		$	(1.49	)
Weighted-average number of common shares outstanding		6,699		6,518		6,432			6,161

	*Three Months Ended*
	*October 31,*			*July 31,*			*April 30,*			*January 31,*
(In thousands, except per share data)	*2019*			*2019*			*2019*			*2019*
Revenues	$	713,590		$	482,041		$	440,691		$	380,594
Expenses		677,429			491,412			461,393			406,558
Inventory impairment loss and land option write-offs		2,687			1,435			1,462			704
Loss on extinguishment of debt		(42,436	)		-			-			-
Income from unconsolidated joint ventures		8,376			3,742			7,252			9,562
Loss before income taxes		(586	)		(7,064	)		(14,912	)		(17,106	)
State and federal income tax provision		1,221			537			345			346
Net (loss)	$	(1,807	)	$	(7,601	)	$	(15,257	)	$	(17,452	)
Per share data:
Basic and assuming dilution:
Net (loss) per common share	$	(0.30	)	$	(1.27	)	$	(2.56	)	$	(2.93	)
Weighted-average number of common shares outstanding		5,982			5,971			5,962			5,958

Supplemental Disclosure of Noncash Investing and Financing Activities (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2018	Jan. 31, 2018	Oct. 31, 2020	Mar. 25, 2020	Jan. 31, 2020	Dec. 10, 2019	Nov. 01, 2019	Oct. 31, 2019	Jan. 15, 2019	May 29, 2018	Feb. 01, 2018
Fair Value of Assets Acquired		$ 13.0
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset					$ 23.3		$ 23.3
Operating Lease, Liability, Total					$ 24.4		$ 24.4
The 8.0% Senior Notes Due 2019 [Member]
Debt Conversion, Original Debt, Interest Rate of Debt	8.00%
Debt Instrument, Interest Rate, Stated Percentage										8.00%	8.00%
Debt Instrument, Face Amount											$ 170.2
The 13.5% Senior Notes Due 2026 [Member]
Debt Conversion, Original Debt, Interest Rate of Debt	13.50%
Debt Instrument, Interest Rate, Stated Percentage											13.50%
Debt Instrument, Face Amount											$ 90.6
The 5.0% Senior Notes due 2040 [Member]
Debt Conversion, Original Debt, Interest Rate of Debt	5.00%
Debt Instrument, Interest Rate, Stated Percentage											5.00%
Debt Instrument, Face Amount											$ 90.1
The 10.0% 2022 Notes [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage			10.00%	10.00%	10.00%	10.00%		10.00%
Debt Instrument Exchanged, Face Amount				$ 59.1	$ 23.2	$ 23.2
The 10.5% 2024 Notes [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage			10.50%		10.50%	10.50%		10.50%	10.50%
Debt Instrument, Face Amount									$ 25.0
Debt Instrument Exchanged, Face Amount					$ 141.7	$ 141.7
The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage			7.75%					7.75%
Debt Instrument, Face Amount								$ 350.0
The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member]
Debt Instrument, Interest Rate, Stated Percentage				11.25%				11.25%
Debt Instrument, Exchange, Amount Issued				$ 59.1
The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage			11.25%					11.25%
Debt Instrument Exchanged, Face Amount								$ 103.1
The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage			10.00%		10.00%	10.00%		10.00%
Debt Instrument, Face Amount					$ 158.5	$ 158.5
Senior Unsecured Term Loan Credit Facility [Member]
Debt Instrument Exchanged, Face Amount					163.0	163.0
The 10.0% Senior Secured 1.75 Lien Term Loans Due 2028 [Member]
Debt Instrument, Face Amount					$ 81.5	$ 81.5

Note 1 - Basis of Presentation (Details Textual)	Mar. 29, 2019 $ / shares	Mar. 19, 2019	Oct. 31, 2020 $ / shares	Oct. 31, 2019 $ / shares
Common Class A [Member]
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01		$ 0.01	$ 0.01
Common Class B [Member]
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01		$ 0.01	$ 0.01
Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	25	25
Reverse Stock Split [Member] \| Common Class A [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	25
Reverse Stock Split [Member] \| Common Class B [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	25
Consolidated Joint Venture [Member]
Noncontrolling Interest, Ownership Percentage by Parent			99.00%
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners			1.00%

Note 2 - Business (Details Textual)	12 Months Ended
Note 2 - Business (Details Textual)	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Number of Communities	116
Homebuilding [Member]
Number of Reportable Segments	6
Homebuilding [Member] \| Segment Concentration Risk [Member] \| Revenue Benchmark [Member]
Concentration Risk, Percentage	97.00%	97.00%	97.00%

Note 3 - Summary of Significant Accounting Policies (Details Textual)
$ in Thousands

12 Months Ended

Oct. 31, 2020

USD ($)

Oct. 31, 2019

USD ($)

Oct. 31, 2018

USD ($)

Jan. 31, 2020

USD ($)

Nov. 01, 2019

USD ($)

Cash Equivalents, at Carrying Value, Total

$ 15,500

$ 143,100

Number of Communities Mothballed

Inventory Real Estate Mothballed Communities

$ 11,400

$ 13,800

Inventory Real Estate Mothballed Communities Accumulated Impairment Charges

122,200

138,100

Inventory, Land Held-for-sale

2,000

General Liability Insurance Deductible

20,000

Bodily Injury Insurance Deductible

250

Bodily Injury Insurance Limit

5,000

Aggregate Retention for Construction Defects Warranty and Bodily Injury Claims

20,000

Real Estate Inventory Expense Not Eligible for Capitalization

^[1],[2]

103,801

90,056

$ 103,297

Equity Method Investment, Other than Temporary Impairment

Advertising Expense

12,900

17,100

$ 16,400

Accounts Receivable, Allowance for Credit Loss, Ending Balance

12,000

12,200

Accounts Receivable, Allowance for Credit Loss, Recovery

200

500

Accounts Receivable, Credit Loss Expense (Reversal)

1,300

Accounts Receivable, Allowance for Credit Loss, Writeoff

Accounting Standards Update 2016-02 [Member]

Operating Lease, Right-of-Use Asset

$ 23,300

Operating Lease, Liability, Total

$ 24,400

Senior Exchangeable Note Units [Member]

Joint Venture Investments [Member]

6.00%

Real Estate Inventory Expense Not Eligible for Capitalization

$ 0

Equity Method Investment, Other than Temporary Impairment

900

Qualifying Assets Not Exceeding Debt [Member]

Real Estate Inventory Expense Not Eligible for Capitalization

61,900

56,900

76,200

Completed Homes, Land in Planning and Fully Developed Lots without Homes under Construction [Member]

Real Estate Inventory Expense Not Eligible for Capitalization

$ 41,900

33,200

$ 27,100

Maximum [Member]

Joint Venture Voting Interest Percentage

50.00%

Measurement Input, Discount Rate [Member] | Minimum [Member]

Community, Measurement Input

0.168

Measurement Input, Discount Rate [Member] | Maximum [Member]

Community, Measurement Input

0.198

Number of Communities Mothballed During the Period

Number of Mothballed Communities Reactivated

Number of Mothballed Communities Partially Reactivated

Liabilities from Inventory Real Estate Not Owned

$ 131,204

141,033

Homebuilding [Member] | Model Sale Leaseback Financing Arrangements [Member]

Inventory Real Estate, Other Options

48,800

54,200

Liabilities from Inventory Real Estate Not Owned

47,200

51,200

Homebuilding [Member] | Land Banking Arrangement [Member]

Inventory Real Estate, Other Options

133,400

136,100

Liabilities from Inventory Real Estate Not Owned

$ 84,000

$ 89,800

[1]

[2]

Note 3 - Summary of Significant Accounting Policies - Interest Costs Incurred, Expensed and Capitalized (Details) - USD ($)
$ in Thousands

12 Months Ended

Oct. 31, 2020

Oct. 31, 2019

Oct. 31, 2018

Interest capitalized at beginning of year

$ 71,264

^[1]

$ 68,117

^[1]

$ 71,051

Plus interest incurred(1)

^[2]

176,457

165,906

161,048

Less cost of sales interest expensed

74,330

70,725

60,685

Less other interest expensed(2)(3)

^[3],[4]

103,801

90,056

103,297

Less interest contributed to unconsolidated joint venture(4)

^[5]

4,580

1,978

Interest capitalized at end of year(5)

^[1]

$ 65,010

$ 71,264

$ 68,117

[1]	Capitalized interest amounts are shown gross before allocating any portion of impairments, if any, to capitalized interest.
[2]	Data does not include interest incurred by our mortgage and finance subsidiaries.
[3]	Cash paid for interest, net of capitalized interest, is the sum of other interest expensed, as defined above, and interest paid by our mortgage and finance subsidiaries adjusted for the change in accrued interest on notes payable, which is calculated as follows: Year Ended October 31, October 31, October 31, (In thousands) 2020 2019 2018 Other interest expensed $ 103,801 $ 90,056 $ 103,297 Interest paid by our mortgage and finance subsidiaries 2,165 2,536 2,478 (Increase) decrease in accrued interest (16,482) 16,515 6,241 Cash paid for interest, net of capitalized interest $ 89,484 $ 109,107 $ 112,016
[4]	Other interest expensed includes interest that does not qualify for interest capitalization because our assets that qualify for interest capitalization (inventory under development) do not exceed our debt, which amounted to $61.9 million, $56.9 million and $76.2 million for the years ended October 31, 2020, 2019 and 2018, respectively. Other interest also includes interest on completed homes, land in planning and fully developed lots without homes under construction, which does not qualify for capitalization, and therefore, is expensed. This component of other interest was $41.9 million, $33.2 million and $27.1 million for the years ended October 31, 2020, 2019 and 2018, respectively.
[5]	Represents capitalized interest which was included as part of the assets contributed to the joint ventures the Company entered into in December 2019 and June 2019 during the years ended October 31, 2020 and 2019, respectively, as discussed in Note 20. There was no impact to the Consolidated Statement of Operations as a result of these transactions.

Note 3 - Summary of Significant Accounting Policies - Cash Paid for Interest, Net of Capitalized Interest (Details) - USD ($)
$ in Thousands

12 Months Ended

Oct. 31, 2020

Oct. 31, 2019

Oct. 31, 2018

Other interest expensed

^[1],[2]

$ 103,801

$ 90,056

$ 103,297

Interest paid by our mortgage and finance subsidiaries

2,165

2,536

2,478

(Increase) decrease in accrued interest

(16,482)

16,515

6,241

Cash paid for interest, net of capitalized interest

$ 89,484

$ 109,107

$ 112,016

[1]

[2]

Note 4 - Leases (Details Textual) - USD ($) $ in Millions	12 Months Ended
Note 4 - Leases (Details Textual) - USD ($) $ in Millions	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Increase (Decrease) in Operating Lease, Right-of-Use Asset	$ 2.8
Increase (Decrease) in Operating Lease, Liability	$ 2.8
Operating Leases, Rent Expense, Total		$ 14.8	$ 14.4
Minimum [Member] \| Office Leases [Member]
Lessee, Operating Lease, Term of Contract (Year)	3 years
Maximum [Member] \| Office Leases [Member]
Lessee, Operating Lease, Term of Contract (Year)	5 years

Note 4 - Leases - Lease Cost (Details) $ in Thousands	12 Months Ended
Note 4 - Leases - Lease Cost (Details) $ in Thousands	Oct. 31, 2020 USD ($)
Operating lease cost	$ 10,507
Cash payments on lease liabilities	$ 9,257
Weighted-average remaining lease term (Year)	3 years 6 months
Weighted-average discount rate (incremental borrowing rate)	9.60%
Prepaid Expenses and Other Current Assets [Member]
ROU assets	$ 20,016
Accounts Payable and Accrued Liabilities [Member]
Lease liabilities	$ 21,049

Note 4 - Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands	Oct. 31, 2020 USD ($)
2021	$ 8,880
2022	7,506
2023	4,298
2024	1,673
2025	1,324
Thereafter	1,107
Total payments	24,788
Less: imputed interest	(3,739)
Accounts Payable and Accrued Liabilities [Member]
Operating Lease, Liability, Total	$ 21,049

Note 5 - Property, Plant and Equipment - Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
Property, plant and equipment, gross	$ 64,543	$ 62,107
Less accumulated depreciation	46,358	41,980
Total	18,185	20,127
Land and Land Improvements [Member]
Property, plant and equipment, gross	1,639	1,639
Building [Member]
Property, plant and equipment, gross	9,497	9,155
Building Improvements [Member]
Property, plant and equipment, gross	13,281	11,552
Furniture and Fixtures [Member]
Property, plant and equipment, gross	4,363	4,338
Equipment, Including Capitalized Software [Member]
Property, plant and equipment, gross	$ 35,763	$ 35,423

Note 6 - Restricted Cash and Deposits (Details Textual) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Mortgage Warehouse Lines of Credit [Member]
Restricted Cash and Cash Equivalents, Total	$ 2,000	$ 2,000
Homebuilding [Member]
Restricted Cash and Cash Equivalents, Total	14,731	20,905	$ 12,808
Financial Services [Member]
Restricted Cash and Cash Equivalents, Total	27,386	24,807	$ 25,365
Financial Services [Member] \| Customer Deposits [Member]
Restricted Cash and Cash Equivalents, Total	25,400	22,800
Financial Services [Member] \| Other Assets [Member]
Restricted Cash and Cash Equivalents, Total	$ 27,400	$ 24,800

Note 7 - Mortgage Loans Held for Sale (Details Textual) $ in Millions	Oct. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)
Loans Pledged as Collateral	$ 87.9	$ 143.2
Number of Loans Reserved For	15	20

Note 7 - Mortgage Loans Held for Sale - Loan Origination Reserves (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Loan origination reserves, beginning of period	$ 1,268	$ 2,563
Provisions for losses during the period	196	198
Adjustments to pre-existing provisions for losses from changes in estimates	(6)	(143)
Payments/settlements	0	(1,350)
Loan origination reserves, end of period	$ 1,458	$ 1,268

Note 8 - Mortgages (Details Textual) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
JP Morgan Chase Bank [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 50,000
Warehouse Agreement Borrowings, Total	$ 23,500	$ 47,100
JP Morgan Chase Bank [Member] \| London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument Variable Rate Basis Adjusted London Interbank Offered Rate LIBOR	0.14%
JP Morgan Chase Bank [Member] \| London Interbank Offered Rate (LIBOR) [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	2.50%
Customers Bank [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 50,000
Warehouse Agreement Borrowings, Total	$ 31,100	47,600
Customers Bank [Member] \| London Interbank Offered Rate (LIBOR) [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	2.125%
Customers Bank [Member] \| London Interbank Offered Rate (LIBOR) [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate	4.75%
Nonrecourse Mortgages Secured By Inventory [Member] \| Mortgages [Member] \| Homebuilding [Member]
Secured Debt, Total	$ 135,122	203,585
Debt Instrument, Collateral Amount	$ 368,100	$ 410,200
Debt, Weighted Average Interest Rate	6.40%	8.30%
Comerica Master Repurchase Agreement [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 60,000
Warehouse Agreement Borrowings, Total	32,600	$ 45,500
Line of Credit Facility, Maximum Borrowing Capacity Reversion After Initial Period	$ 50,000
Comerica Master Repurchase Agreement [Member] \| London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument Variable Rate Basis Floor Rate	0.25%
Comerica Master Repurchase Agreement [Member] \| London Interbank Offered Rate (LIBOR) [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	1.875%
Comerica Master Repurchase Agreement [Member] \| London Interbank Offered Rate (LIBOR) [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate	3.25%

Note 9 - Senior Notes and Credit Facilities (Details Textual) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

9 Months Ended

12 Months Ended

Dec. 10, 2019

Jan. 15, 2019

May 29, 2018

Feb. 01, 2018

Dec. 01, 2017

Oct. 31, 2020

Jul. 31, 2020

Apr. 30, 2020

Jan. 31, 2020

Oct. 31, 2019

Jul. 31, 2019

Apr. 30, 2019

Jan. 31, 2019

Jul. 31, 2018

Oct. 31, 2020

Oct. 31, 2019

Oct. 31, 2018

Mar. 25, 2020

Jan. 29, 2018

Dec. 28, 2017

Debt Covenant Fixed Charge Coverage Ratio Minimum

2.0

Secured Debt Leverage Ratio

4.0

$ 1,435,749

^[1]

$ 1,549,105

$ 1,435,749

^[1]

$ 1,549,105

Senior Secured Notes [Member]

$ 4,055

$ (174)

$ 9,456

(42,436)

$ 0

13,337

(42,436)

$ (7,536)

Proceeds from Secured Notes Payable

$ 1,133,990

1,165,848

1,133,990

1,165,848

$ 0

578,231

Senior Secured Notes [Member] | The 10.0% 2022 Notes [Member]

Senior Exchangeable Notes [Member]

10.00%

Repayments of Senior Debt, Total

6.00%

$ 53,900

Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

The Secured Credit Facility, the New Secured Notes, and the Second Lien Notes [Member] | Cash and Cash Equivalents Collateral [Member]

$ 180,710

The Secured Credit Facility, the New Secured Notes, and the Second Lien Notes [Member] | Restricted Cash [Member]

258,900

The Secured Credit Facility, the New Secured Notes, and the Second Lien Notes [Member] | Real Property [Member]

11,600

The Secured Credit Facility, the New Secured Notes, and the Second Lien Notes [Member] | Equity Interests in Joint Venture Holding Companies Collateral [Member]

435,500

Series A Preferred Stock [Member]

185,500

$ 185,500

Preferred Stock, Dividend Rate, Percentage

7.625%

GSO [Member] | Unsecured Senior Notes [Member]

GSO [Member] | Delayed Draw Term Loans [Member]

$ 132,500

Debt Agreement Maximum Borrowing Capacity

80,000

Senior Secured Revolving Credit Facility [Member]

Line of Credit Facility, Maximum Borrowing Capacity

7.75%

125,000

$ 125,000

Long-term Line of Credit, Total

Revolving Credit Facility [Member] | GSO [Member]

Line of Credit Facility, Maximum Borrowing Capacity

125,000

$ 125,000

Long-term Line of Credit, Total

Stand-alone Cash Collateralized Letter of Credit Agreements and Facilities [Member]

Letters of Credit Outstanding, Amount

11,300

19,200

11,300

19,200

Stand-alone Cash Collateralized Letter of Credit Agreements and Facilities [Member] | Restricted Cash [Member]

The 8.0% Senior Notes Due 2027 [Member]

$ 11,600

$ 19,900

$ 11,600

$ 19,900

$ 26,000

The 8.0% Senior Notes Due 2027 [Member] | Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

8.00%

^[2]

8.00%

The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] | Debt Instrument, Redemption, Period One [Member]

^[2]

$ 0

The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] | Debt Instrument, Redemption, Period One [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

100.00%

Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed

110.00%

35.00%

The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] | Debt Instrument, Redemption, Period Two [Member]

The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] | Debt Instrument, Redemption, Period Three [Member]

105.00%

The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] | Debt Instrument, Redemption, Period Four [Member]

102.50%

The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] | Senior Secured Notes [Member]

100.00%

$ 158,500

10.00%

The 10.0% 2022 Notes [Member] | Senior Secured Notes [Member]

$ 158,502

$ 0

$ 158,502

$ 0

10.00%

$ 23,200

$ 59,100

$ 111,214

$ 218,994

$ 111,214

$ 218,994

Debt Instrument, Repurchased Face Amount

4,100

25,500

Repayments of Secured Debt

$ 21,400

The 10.0% 2022 Notes [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period One [Member]

The 10.0% 2022 Notes [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Two [Member]

102.50%

The 10.5% 2024 Notes [Member] | Senior Secured Notes [Member]

100.00%

$ 25,000

10.50%

$ 141,700

Proceeds from Secured Notes Payable

$ 69,683

$ 211,391

$ 69,683

$ 211,391

$ 21,300

The 10.5% 2024 Notes [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period One [Member]

The 10.5% 2024 Notes [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Two [Member]

105.25%

The 10.5% 2024 Notes [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Three [Member]

102.625%

Senior Unsecured Term Loan Credit Facility [Member]

100.00%

163,000

Debt Instrument, Additional Borrowings

(4,300)

$ 70,000

The 10.0% Senior Secured 1.75 Lien Term Loans Due 2028 [Member]

The 10.0% Senior Secured 1.75 Lien Term Loans Due 2028 [Member] | Debt Instrument, Redemption, Period One [Member]

$ 81,500

The 10.0% Senior Secured 1.75 Lien Term Loans Due 2028 [Member] | Debt Instrument, Redemption, Period Two [Member]

100.00%

The 10.0% Senior Secured 1.75 Lien Term Loans Due 2028 [Member] | Debt Instrument, Redemption, Period Three [Member]

105.00%

The 10.0% Senior Secured 1.75 Lien Term Loans Due 2028 [Member] | Debt Instrument, Redemption, Period Four [Member]

102.50%

Second Lien Notes [Member]

100.00%

Secured Term Loan Facility [Member]

$ 164,900

Second Lien Notes and Unsecured Term Loan Credit Facility [Member]

$ 148,800

Gain (Loss) on Extinguishment of Debt, Per Share, Excluding Taxes (in dollars per share)

$ 9,200

$ 1.40

The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member]

11.25%

Debt Instrument, Exchange, Amount Issued

$ 103,100

$ 162,300

59,100

Debt Instrument, Maximum Secured Amount

$ 162,300

The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member]

11.25%

$ 103,100

The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period One [Member]

$ 162,269

103,141

$ 162,269

103,141

The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member]

100.00%

$ 350,000

7.75%

The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

$ 350,000

Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed

35.00%

The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period One [Member]

The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period One [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

100.00%

The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Two [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

107.75%

The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Three [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

103.875%

The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Four [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

101.937%

The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member]

100.00%

$ 282,300

10.50%

The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

$ 282,322

Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed

35.00%

The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period One [Member]

The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period One [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

100.00%

The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Two [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

110.50%

The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Three [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

105.25%

The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Four [Member] | Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]

102.625%

The 10.0% 2022 Senior Secured Notes Exchanged for 1.125 Lien Notes [Member] | Senior Secured Notes [Member]

100.00%

The 10.5% 2024 Senior Secured Notes Exchanged for 1.125 Lien Notes [Member] | Senior Secured Notes [Member]

221,000

The 10.5% 2024 Notes Exchanged for 11.25% Senior Secured 1.5 Lien Notes [Member] | Senior Secured Notes [Member]

114,000

The 9.50% 2020 Notes [Member] | Senior Secured Notes [Member]

$ 99,600

The 2.0% 2021 Notes [Member] | Senior Secured Notes [Member]

9.50%

9.5 % Senior Secured Notes [Member] | Senior Secured Notes [Member]

2.00%

The 11.0% 2017 Amortizing Note [Member] | Senior Amortizing Notes [Member]

5.00%

Repayments of Senior Debt, Total

11.00%

$ 2,100

The 8.0% Senior Notes Due 2019 [Member]

$ 170,200

8.00%

Repayments of Long-term Debt, Total

$ (900)

$ 65,700

Debt Instrument, Aggregate Principal Outstanding, Percentage

72.14%

The 8.0% Senior Notes Due 2019 [Member] | K. Hovnanian at Sunrise Trail III, LLC [Member]

Repayments of Senior Debt, Total

$ 26,500

The 8.0% Senior Notes Due 2019 [Member] | Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

The 7.0% 2019 Notes [Member] | Senior Secured Notes [Member]

8.00%

The 7.0% 2019 Notes [Member] | Senior Notes [Member]

$ (500)

The 5.0% Notes Due 2027 [Member]

7.00%

The 13.5% Senior Notes Due 2026 [Member]

5.00%

$ 90,600

The 13.5% Senior Notes Due 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period One [Member]

13.50%

The 13.5% Senior Notes Due 2026 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Two [Member]

100.00%

The 13.5% Senior Notes Due 2026 [Member] | Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

100.00%

13.50%

The 5.0% Senior Notes due 2040 [Member]

$ 90,590

$ 90,100

The 5.0% Senior Notes due 2040 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period One [Member]

5.00%

The 5.0% Senior Notes due 2040 [Member] | Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Two [Member]

102.50%

The 5.0% Senior Notes due 2040 [Member] | Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

100.00%

5.00%

The Purchased 8% Notes [Member] | K. Hovnanian at Sunrise Trail III, LLC [Member]

$ 90,120

Debt Instrument, Repurchased Face Amount

8.00%

$ 26,000

[1]	Does not include our $125.0 million Senior Secured Revolving Credit Facility under which there were no borrowings outstanding as of October 31, 2020.
[2]	$26.0 million of 8.0% Senior Notes due 2027 are owned by a wholly-owned consolidated subsidiary of HEI. Therefore, in accordance with GAAP, such notes are not reflected on the Consolidated Balance Sheets of HEI. On November 1, 2019, the maturity of the 8.0% Senior Notes was extended to November 1, 2027.

Note 9 - Senior Notes and Credit Facilities - Senior Notes and Credit Facilities Balances (Details) - USD ($)
$ in Thousands

Oct. 31, 2020

Mar. 25, 2020

Oct. 31, 2019

Total notes payable, net of discounts, premiums and debt issuance costs

$ 1,435,749

^[1]

$ 1,549,105

Net (discounts) premiums

17,521

(49,145)

Net debt issuance costs

(22,160)

(19,970)

1,431,110

1,479,990

The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member]

Senior Secured Notes [Member]

$ 162,300

103,100

Senior Secured Notes [Member] | The 10.0% 2022 Notes [Member]

1,133,990

1,165,848

Senior Secured Notes [Member] | The 10.5% 2024 Notes [Member]

111,214

218,994

Senior Secured Notes [Member] | The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member]

69,683

211,391

Senior Secured Notes [Member] | The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member]

158,502

Senior Secured Notes [Member] | The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member]

350,000

Senior Secured Notes [Member] | The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member]

282,322

Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

162,269

103,141

Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member] | The 8.0% Senior Notes Due 2027 [Member]

180,710

Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member] | The 13.5% Senior Notes Due 2026 [Member]

^[2]

Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member] | The 5.0% Senior Notes due 2040 [Member]

90,590

Senior Unsecured Term Loan Credit Facility Due 2027 [Member]

90,120

Senior Secured Term Loan [Member] | The 10.0% Senior Secured 1.75 Lien Term Loans Due 2028 [Member]

39,551

202,547

Senior Secured Revolving Credit Facility [Member]

81,498

Senior Unsecured Term Loan Credit Facility Due 2027 [Member]

^[3]

$ 0

[1]	Does not include our $125.0 million Senior Secured Revolving Credit Facility under which there were no borrowings outstanding as of October 31, 2020.
[2]	$26.0 million of 8.0% Senior Notes due 2027 are owned by a wholly-owned consolidated subsidiary of HEI. Therefore, in accordance with GAAP, such notes are not reflected on the Consolidated Balance Sheets of HEI. On November 1, 2019, the maturity of the 8.0% Senior Notes was extended to November 1, 2027.
[3]	At October 31, 2020, provides for up to $125.0 million in aggregate amount of senior secured first lien revolving loans. Availability thereunder will terminate on December 28, 2022.

Note 9 - Senior Notes and Credit Facilities - Senior Notes and Credit Facilities Balances (Details) (Parentheticals)

12 Months Ended

Oct. 31, 2020

Oct. 31, 2019

Apr. 30, 2020

Mar. 25, 2020

Jan. 31, 2020

Dec. 10, 2019

Jan. 15, 2019

Feb. 01, 2018

The 10.0% 2022 Notes [Member] | Senior Secured Notes [Member]

Feb. 01, 2027

10.00%

The 10.5% 2024 Notes [Member] | Senior Secured Notes [Member]

Jul. 15, 2022

10.50%

The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] | Senior Secured Notes [Member]

Jul. 15, 2024

10.00%

The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member]

Nov. 15, 2025

7.75%

The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member]

Feb. 15, 2026

10.50%

The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member]

Feb. 15, 2026

The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member]

11.25%

11.25%

The 8.0% Senior Notes Due 2027 [Member]

Feb. 15, 2026

The 8.0% Senior Notes Due 2027 [Member] | Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

8.00%

^[1]

8.00%

The 13.5% Senior Notes Due 2026 [Member]

^[1]

Nov. 01, 2027

The 13.5% Senior Notes Due 2026 [Member] | Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

13.50%

13.50%

The 5.0% Senior Notes due 2040 [Member]

Feb. 01, 2026

The 5.0% Senior Notes due 2040 [Member] | Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

5.00%

5.00%

The 10.0% Senior Secured 1.75 Lien Term Loans Due 2028 [Member] | Senior Secured Term Loan [Member]

Feb. 01, 2040

Jan. 31, 2028

[1]

$26.0 million of 8.0% Senior Notes due 2027 are owned by a wholly-owned consolidated subsidiary of HEI. Therefore, in accordance with GAAP, such notes are not reflected on the Consolidated Balance Sheets of HEI. On November 1, 2019, the maturity of the 8.0% Senior Notes was extended to November 1, 2027.

Note 9 - Senior Notes and Credit Facilities - Future Maturities of Borrowings (Details) - USD ($)
$ in Thousands

Oct. 31, 2020

Oct. 31, 2019

2021

^[1]

$ 0

2022

^[1]

111,214

2023

^[1]

2024

^[1]

69,683

2025

^[1]

Thereafter

^[1]

1,254,852

Real Estate Inventory Expense Not Eligible for Capitalization

$ 1,435,749

^[1]

$ 1,549,105

[1]	Does not include our $125.0 million Senior Secured Revolving Credit Facility under which there were no borrowings outstanding as of October 31, 2020.

Note 10 - Operating and Reporting Segments (Details Textual)
$ in Thousands

3 Months Ended

12 Months Ended

Oct. 31, 2020

USD ($)

Jul. 31, 2020

USD ($)

Apr. 30, 2020

USD ($)

Jan. 31, 2020

USD ($)

Oct. 31, 2019

USD ($)

Jul. 31, 2019

USD ($)

Apr. 30, 2019

USD ($)

Jan. 31, 2019

USD ($)

Oct. 31, 2020

USD ($)

Oct. 31, 2019

USD ($)

Oct. 31, 2018

USD ($)

^[1],[2]

$ 103,801

$ 90,056

$ 103,297

Qualifying Assets Not Exceeding Debt [Member]

$ 0

$ 4,055

$ (174)

$ 9,456

$ (42,436)

$ 0

13,337

(42,436)

(7,536)

Real Estate Inventory Expense Not Eligible for Capitalization

61,900

56,900

76,200

Corporate, Non-Segment [Member]

General and Administrative Expense, Total

80,500

66,400

69,600

Other Nonoperating Income (Expense), Total

13,300

(42,400)

(7,500)

3,300

9,000

14,100

Corporate, Non-Segment [Member] | Qualifying Assets Not Exceeding Debt [Member]

Real Estate Inventory Expense Not Eligible for Capitalization

$ 61,900

$ 55,500

$ 76,200

Number of Reportable Segments

[1]

[2]

Note 10 - Operating and Reporting Segments - Financial Information Relating to Segment Operations (Details) - USD ($)
$ in Thousands

3 Months Ended

12 Months Ended

36 Months Ended

Oct. 31, 2020

Jul. 31, 2020

Apr. 30, 2020

Jan. 31, 2020

Oct. 31, 2019

Jul. 31, 2019

Apr. 30, 2019

Jan. 31, 2019

Oct. 31, 2020

Oct. 31, 2019

Oct. 31, 2018

Oct. 31, 2020

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total

$ 683,358

$ 628,136

$ 538,351

$ 494,056

$ 713,590

$ 482,041

$ 440,691

$ 380,594

$ 2,343,901

$ 2,016,916

$ 1,991,233

42,444

16,216

4,179

(7,436)

(586)

(7,064)

(14,912)

(17,106)

55,403

(39,668)

8,146

$ 23,800

178,096

161,115

164,086

Net additions to operating properties and equipment

5,304

4,172

3,156

3,380

4,005

5,193

Corporate, Non-Segment [Member]

$ 3,146

$ 5,658

$ 6,221

$ 1,540

$ 8,376

$ 3,742

$ 7,252

$ 9,562

16,565

28,932

24,033

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total

467

1,742

5,764

^[1]

(125,789)

(155,344)

(139,160)

61,917

55,506

76,183

Net additions to operating properties and equipment

1,859

1,777

1,599

587

1,610

3,333

Homebuilding [Member] | Operating Segments [Member]

2,271,739

1,962,764

1,937,878

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total

2,271,272

1,961,022

1,932,114

149,090

98,049

129,079

116,214

105,275

87,799

Net additions to operating properties and equipment

3,432

2,381

1,543

2,793

2,395

1,860

Homebuilding [Member] | Northeast [Member] | Operating Segments [Member]

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total

192,069

124,372

116,296

30,371

20,954

20,869

13,636

10,011

11,811

Net additions to operating properties and equipment

229

188

135

107

142

Homebuilding [Member] | Mid-Atlantic [Member] | Operating Segments [Member]

11,039

19,242

20,231

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total

403,669

357,247

354,690

34,570

14,327

18,757

16,076

18,563

15,051

Net additions to operating properties and equipment

264

209

165

168

318

Homebuilding [Member] | Midwest [Member] | Operating Segments [Member]

(292)

3,404

799

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total

225,718

204,461

196,599

(1,805)

(649)

1,528

9,377

7,121

5,874

Net additions to operating properties and equipment

1,112

1,097

1,106

861

237

621

Homebuilding [Member] | Southeast [Member] | Operating Segments [Member]

(103)

(432)

(775)

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total

232,730

220,082

241,620

1,355

(10,060)

(9,914)

17,005

18,798

14,934

Net additions to operating properties and equipment

327

230

124

102

221

701

Homebuilding [Member] | Southwest [Member] | Operating Segments [Member]

820

1,310

(2,032)

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total

744,197

629,344

638,282

68,184

33,459

49,852

29,898

27,731

21,820

Net additions to operating properties and equipment

699

331

776

741

Homebuilding [Member] | West [Member] | Operating Segments [Member]

5,111

7,951

5,165

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total

472,889

425,516

384,627

16,415

40,018

47,987

30,222

23,051

18,309

Net additions to operating properties and equipment

801

326

846

921

Financial Services [Member]

(10)

(2,543)

645

Financial Services [Member] | Operating Segments [Member]

72,162

54,152

53,355

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total

72,162

54,152

53,355

32,102

17,627

18,227

Financial services interest expense

^[2]

(35)

334

104

Net additions to operating properties and equipment

$ 0

[1]

Corporate and unallocated for the year ended October 31, 2020 included corporate general and administrative costs of $80.5 million, interest expense of $61.9 million (a component of Other interest on our Consolidated Statements of Operations), gain on extinguishment of debt of $13.3 million, and $3.3 million of other income and expenses, along with the adjustment to our insurance reserves. Corporate and unallocated for the year ended October 31, 2019 included corporate general and administrative costs of $66.4 million, interest expense of $55.5 million (a component of Other interest on our Consolidated Statements of Operations), loss on extinguishment of debt of $42.4 million, and $9.0 million of other income and expenses, along with the adjustment to our insurance reserves. Corporate and unallocated for the year ended October 31, 2018 included corporate general and administrative costs of $69.6 million, interest expense of $76.2 million (a component of Other interest on our Consolidated Statements of Operations), loss on extinguishment of debt of $7.5 million, $14.1 million of other income and expenses primarily related to interest income and gain on the sale of our former corporate headquarters building, along with the adjustment to our insurance reserves.

[2]

Financial services interest expenses are included in the Financial services lines on the Consolidated Statements of Operations in the respective revenues and expenses sections.

Note 10 - Operating and Reporting Segments - Financial Information Relating to Segment Financial Position (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
Assets	$ 1,827,342	$ 1,881,424
Investments in and advances to unconsolidated joint ventures	103,164	127,038
Corporate, Non-Segment [Member]
Assets	315,585	186,046
Investments in and advances to unconsolidated joint ventures	702	1,181
Homebuilding [Member]
Assets	1,686,735	1,682,149
Investments in and advances to unconsolidated joint ventures	103,164	127,038
Homebuilding [Member] \| Operating Segments [Member]
Assets	1,371,150	1,496,103
Investments in and advances to unconsolidated joint ventures	102,462	125,857
Homebuilding [Member] \| Northeast [Member] \| Operating Segments [Member]
Assets	107,748	163,342
Investments in and advances to unconsolidated joint ventures	14,646	49,340
Homebuilding [Member] \| Mid-Atlantic [Member] \| Operating Segments [Member]
Assets	271,867	264,894
Investments in and advances to unconsolidated joint ventures	11,055	9,166
Homebuilding [Member] \| Midwest [Member] \| Operating Segments [Member]
Assets	106,774	117,242
Investments in and advances to unconsolidated joint ventures	498	4,382
Homebuilding [Member] \| Southeast [Member] \| Operating Segments [Member]
Assets	248,506	281,654
Investments in and advances to unconsolidated joint ventures	66,234	52,983
Homebuilding [Member] \| Southwest [Member] \| Operating Segments [Member]
Assets	357,444	357,052
Investments in and advances to unconsolidated joint ventures	9,965	10,019
Homebuilding [Member] \| West [Member] \| Operating Segments [Member]
Assets	278,811	311,919
Investments in and advances to unconsolidated joint ventures	64
Homebuilding [Member] \| West [Member] \| Consolidation, Eliminations [Member]
Investments in and advances to unconsolidated joint ventures		(33)
Financial Services [Member]
Assets	140,607	199,275
Financial Services [Member] \| Operating Segments [Member]
Assets	$ 140,607	$ 199,275

Note 11 - Income Taxes (Details Textual) $ in Thousands	3 Months Ended								12 Months Ended			36 Months Ended
Note 11 - Income Taxes (Details Textual) $ in Thousands	Oct. 31, 2020 USD ($)	Jul. 31, 2020 USD ($)	Apr. 30, 2020 USD ($)	Jan. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)	Jul. 31, 2019 USD ($)	Apr. 30, 2019 USD ($)	Jan. 31, 2019 USD ($)	Oct. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)	Oct. 31, 2018 USD ($)	Oct. 31, 2020 USD ($)	Oct. 31, 2010 USD ($)
Income Tax Expense (Benefit), Total	$ 1,810	$ 853	$ 100	$ 1,712	$ 1,221	$ 537	$ 345	$ 346	$ 4,475	$ 2,449	$ 3,626
Deferred Tax Assets, Valuation Allowance, Total	577,534				623,220				577,534	623,220		$ 577,534	$ 577,500
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total	$ 42,444	$ 16,216	$ 4,179	$ (7,436)	(586)	$ (7,064)	$ (14,912)	$ (17,106)	$ 55,403	(39,668)	8,146	23,800
Contract Pace Per Average Active Selling Community	16.4	17.8
Increase (Decrease) in Dollar Value of Backlog, Percentage									61.30%
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	$ 300				400				$ 300	400		300
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense, Total									60	32	41
Unrecognized Tax Benefits, Period Increase (Decrease), Total									(200)
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	$ 700				$ 900				700	900		$ 700
Domestic Tax Authority [Member]
Operating Income (Loss), Total									(183,000)	(4,000)
Operating Income (Loss), Tax Effect									38,400	800
Income Tax Expense (Benefit), Total									$ 0	0	0
Open Tax Year									2016 2017 2018 2019
Domestic Tax Authority [Member] \| Between 2028 and 2038 [Member]
Operating Loss Carryforwards, Total													1,400
Domestic Tax Authority [Member] \| Indefinite Tax Period [Member]
Operating Loss Carryforwards, Total													15,700
State and Local Jurisdiction [Member]
Operating Income (Loss), Total									$ (72,500)	(1,300)	(4,400)
Income Tax Expense (Benefit), Total									$ 4,475	$ 2,449	$ 3,626
Operating Loss Carryforwards, Total													2,400,000
State and Local Jurisdiction [Member] \| Indefinite Tax Period [Member]
Operating Loss Carryforwards, Total													48,800
State and Local Jurisdiction [Member] \| Between 2021 and 2025 [Member]
Operating Loss Carryforwards, Total													232,600
State and Local Jurisdiction [Member] \| Between 2026 and 2030 [Member]
Operating Loss Carryforwards, Total													1,300,000
State and Local Jurisdiction [Member] \| Between 2031 and 2035 [Member]
Operating Loss Carryforwards, Total													587,900
State and Local Jurisdiction [Member] \| Between 2036 and 2040 [Member]
Operating Loss Carryforwards, Total													$ 239,200

Note 11 - Income Taxes - Income Taxes Payable (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
Deferred	$ 0	$ 0
Total	3,832	2,301
State and Local Jurisdiction [Member]
Current	3,832	2,301
Deferred	0	0
Domestic Tax Authority [Member]
Current	0	0
Deferred	$ 0	$ 0

Note 11 - Income Taxes - Provision for Income Taxes (Details) - USD ($)
$ in Thousands

3 Months Ended

12 Months Ended

Oct. 31, 2020

Jul. 31, 2020

Apr. 30, 2020

Jan. 31, 2020

Oct. 31, 2019

Jul. 31, 2019

Apr. 30, 2019

Jan. 31, 2019

Oct. 31, 2020

Oct. 31, 2019

Oct. 31, 2018

Federal (1)

^[1]

$ 0

State (2)

^[2]

4,475

2,449

3,626

Total current income tax expense:

4,475

2,449

3,626

Federal

State

Total deferred income tax expense:

$ 1,810

$ 853

$ 100

$ 1,712

$ 1,221

$ 537

$ 345

$ 346

$ 4,475

$ 2,449

$ 3,626

[1]	The current federal income tax expense is net of the use of federal net operating losses totaling $183.0 million (tax effected $38.4 million) and $4.0 million (tax effected $0.8 million) for the years ended October 31, 2020 and 2019, respectively. The current federal income tax expense did not include the use of federal net operating losses for the year ended October 31, 2018.
[2]	The current state income tax expense is net of the use of state net operating losses totaling $72.5 million, $1.3 million and $4.4 million for the years ended October 31, 2020, 2019 and 2018, respectively.

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Note 11 - Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2010
Inventory impairment loss	$ 42,120	$ 47,000
Uniform capitalization of overhead	3,870	3,917
Warranty and legal reserves	4,848	4,404
Acquisition intangibles	0	424
Compensation	9,554	8,477
Deferred Income	3,793	5,167
Interest Expense	3,930	6,616
Other	3,259	1,280
Joint venture loss	3,020	4,392
Federal net operating losses	299,854	334,142
State net operating losses	181,050	184,740
Total deferred tax assets	577,534	623,220
Total deferred tax liabilities	0	0
Valuation allowance	(577,534)	(623,220)	$ (577,500)
Net deferred income taxes	0	0
Provision for Losses [Member]
Other	16,566	16,820
Restricted Stock [Member]
Share based compensation	1,644	1,553
Share-based Payment Arrangement, Option [Member]
Share based compensation	$ 4,026	$ 4,288

Note 11 - Income Taxes - Effective Tax Rate (Details)	12 Months Ended
Note 11 - Income Taxes - Effective Tax Rate (Details)	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Computed “expected” tax rate	21.00%	21.00%	21.00%
State income taxes, net of federal income tax benefit	10.60%	(5.00%)	17.20%
Permanent differences, net	53.20%	(42.40%)	74.00%
Deferred tax asset valuation allowance impact	(83.30%)	20.80%	(70.80%)
Tax contingencies	(0.50%)	0.50%	1.00%
Adjustments to prior years’ tax accruals	7.00%	(1.00%)	2.10%
Effective tax rate	8.00%	(6.10%)	44.50%

Note 11 - Income Taxes - Unrecognized Benefits (Details) - USD ($) $ in Millions	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Unrecognized tax benefit—November 1,	$ 0.9	$ 1.2
Gross increases—tax positions in current period	0.0	0.0
Lapse of statute of limitations	(0.2)	(0.3)
Unrecognized tax benefit—October 31,	$ 0.7	$ 0.9

Note 12 - Reduction of Inventory to Fair Value (Details Textual) $ in Millions	12 Months Ended
	Oct. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)	Oct. 31, 2018 USD ($)
Number of Communities Evaluated for Impairment	354	393
Number of Communities Performed Detailed Impairment Calculations	3	9
Carrying Value of Communities Tested for Impairment	$ 5.4	$ 58.9
Impairment of Real Estate	2.0	2.7	$ 2.1
Land Option Write Offs	$ 6.8	$ 3.6	$ 1.4
Homebuilding [Member]
Number of Communities Impaired	2	6	5
Impairment of Real Estate	$ 2.0	$ 2.7	$ 2.1
Number of Communities Tested for Impairment for Which Undiscounted Future Cash Flow that Did Not Exceed Carrying Amount By Less Than 20 Percent	1
Carrying Value of Communities Tested for Impairment for Which Undiscounted Future Cash Flow Did Not Exceed Carrying Amount by Less than 20 Percent	$ 0.6
Percentage Undiscounted Cash Flow Exceeds Carrying Amount	20.00%	20.00%
Number of Communities Tested for Impairment for Which Undiscounted Future Cash Flow Only Exceeded Carrying Amount By Less Than 20 Percent		3
Carrying Value of Communities Tested for Impairment for Which Undiscounted Future Cash Flow Only Exceeded Carrying Amount by Less than 20 Percent		$ 41.3
Land Option Write Offs	$ 6.8	$ 3.6	$ 1.4
Homebuilding [Member] \| Measurement Input, Discount Rate [Member]
Inventory, Measurement Input	17.3
Homebuilding [Member] \| Measurement Input, Discount Rate [Member] \| Minimum [Member]
Inventory, Measurement Input		17.3	16.8
Homebuilding [Member] \| Measurement Input, Discount Rate [Member] \| Maximum [Member]
Inventory, Measurement Input		18.3	19.8

Note 12 - Reduction of Inventory to Fair Value - Inventory Impairments by Homebuilding Segment (Details)
$ in Millions

12 Months Ended

Oct. 31, 2020

USD ($)

Oct. 31, 2019

USD ($)

Oct. 31, 2018

USD ($)

$ 2.0

$ 2.7

$ 2.1

$ 2.0

$ 2.7

$ 2.1

Homebuilding [Member] | Northeast [Member]

^[1]

$ 4.8

$ 17.5

$ 11.2

$ 0.0

$ 0.2

$ 0.4

Homebuilding [Member] | Mid-Atlantic [Member]

^[1]

$ 0.0

$ 7.8

$ 1.0

$ 0.0

$ 0.3

$ 0.0

Homebuilding [Member] | Midwest [Member]

^[1]

$ 0.0

$ 1.7

$ 0.0

$ 2.0

$ 1.4

$ 0.1

Homebuilding [Member] | Southeast [Member]

^[1]

$ 4.8

$ 4.6

$ 0.5

$ 0.0

$ 0.7

$ 1.6

Homebuilding [Member] | Southwest [Member]

^[1]

$ 0.0

$ 2.2

$ 9.7

$ 0.0

$ 0.1

$ 0.0

Homebuilding [Member] | West [Member]

^[1]

$ 0.0

$ 1.2

$ 0.0

$ 0.0

^[1]

$ 0.0

[1]	Represents carrying value, net of prior period impairments, if any, at the time of recording the applicable period's impairments.

Note 12 - Reduction of Inventory to Fair Value - Write-offs and Lots Walked Away From (Details) - USD ($) $ in Millions	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Amount of write-offs	$ 6.8	$ 3.6	$ 1.4
Homebuilding [Member]
Amount of write-offs	6.8	3.6	1.4
Homebuilding [Member] \| Northeast [Member]
Amount of write-offs	1.5	0.6	0.6
Homebuilding [Member] \| Mid-Atlantic [Member]
Amount of write-offs	0.0	0.5	0.2
Homebuilding [Member] \| Midwest [Member]
Amount of write-offs	3.5	0.9	0.1
Homebuilding [Member] \| Southeast [Member]
Amount of write-offs	0.8	0.3	0.0
Homebuilding [Member] \| Southwest [Member]
Amount of write-offs	0.6	0.6	0.2
Homebuilding [Member] \| West [Member]
Amount of write-offs	$ 0.4	$ 0.7	$ 0.3

Note 13 - Per Share Calculation (Details Textual) - shares	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Non Vested Stock and Outstanding Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)		300,000
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)			33
Exchangeable Note Unit Rate Stated Percentage			6.00%
Out of the Money Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	200,000	200,000	200,000

Note 13 - Per Share Calculations - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 31, 2020	Jul. 31, 2020	Apr. 30, 2020	Jan. 31, 2020	Oct. 31, 2019	Jul. 31, 2019	Apr. 30, 2019	Jan. 31, 2019	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Net earnings (loss) attributable to Hovnanian	$ 40,634	$ 15,363	$ 4,079	$ (9,148)	$ (1,807)	$ (7,601)	$ (15,257)	$ (17,452)	$ 50,928	$ (42,117)	$ 4,520
Less: undistributed earnings allocated to nonvested shares									(4,652)	0	(159)
Numerator for basic earnings (loss) per share									46,276	(42,117)	4,361
Plus: undistributed earnings allocated to nonvested shares									4,652	0	159
Less: undistributed earnings reallocated to nonvested shares									(4,652)	0	(159)
Numerator for diluted earnings (loss) per share									$ 46,276	$ (42,117)	$ 4,361
Denominator for basic earnings per share (in shares)					5,982	5,971	5,962	5,958	6,189	5,968	5,941
Share-based payments (in shares)									395	0	131
Denominator for diluted earnings per share – weighted-average shares outstanding (in shares)	6,699	6,518	6,432	6,161					6,584	5,968	6,072
Basic earnings (loss) per share (in dollars per share)									$ 7.48	$ (7.06)	$ 0.73
Diluted earnings (loss) per share (in dollars per share)	$ 5.54	$ 2.16	$ 0.60	$ (1.49)					$ 7.03	$ (7.06)	$ 0.72

Note 14 - Capital Stock (Details Textual)				12 Months Ended
Note 14 - Capital Stock (Details Textual)	Mar. 29, 2019 $ / shares shares	Mar. 19, 2019	Jul. 12, 2005 $ / shares shares	Oct. 31, 2020 USD ($) $ / shares shares	Oct. 31, 2019 USD ($) $ / shares shares	Oct. 31, 2018 USD ($)	Jan. 11, 2018	Aug. 15, 2008	Jul. 03, 2001 shares
Common Stock Dividends Percent of Increase from Class A to Class B				110.00%
Conversion of Stock From Class B to Class A Conversion Ratio	1			1
Shareholder Ownership Percentage of Increase							50.00%
Stock Issued During Period, Value, New Issues \| $				$ 0	$ 4,475,000
Preferred Stock, Shares Issued, Total (in shares)				5,600	5,600
Defined Benefit Plan, Plan Assets, Contributions by Employer \| $				$ 7,400,000	$ 7,300,000	$ 7,000,000.0
Senior Secured Notes [Member] \| The 7.75% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member]
Common Stock, Par or Stated Value Per Share (in dollars per share) \| $ / shares					$ 0.01
Debt Instrument, Interest Rate, Stated Percentage					7.75%
Stock Issued During Period, Shares, New Issues (in shares)					178,427
Stock Issued During Period, Value, New Issues \| $					$ 1,784.27
Minimum [Member]
Shareholder Ownership Percentage							5.00%
Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	25	25
Number of Fractional Shares Issued (in shares)	0
Common Class A [Member]
Common Stock Voting Rights Votes per Share Number				1
Common Stock, Par or Stated Value Per Share (in dollars per share) \| $ / shares	$ 0.01			$ 0.01	$ 0.01
Shareholder Ownership Percentage								4.90%
Number of Rights								1
Shareholders Pre Existing Ownership Percentage							5.00%
Shareholders Current Ownership Percentage							5.00%
Shareholders Ownership Percentage on Transfers							5.00%
Shareholders Ownership Percentage Threshold							5.00%
Stock Repurchase Program, Number of Shares Authorized to be Repurchased (in shares)									200,000
Stock Repurchased During Period, Shares (in shares)				0
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased (in shares)				22,000
Common Class A [Member] \| Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	25
Common Class B [Member]
Common Stock Voting Rights Votes per Share Number				10
Common Stock, Par or Stated Value Per Share (in dollars per share) \| $ / shares	$ 0.01			$ 0.01	$ 0.01
Common Class B [Member] \| Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	25
Preferred Class A [Member]
Preferred Stock, Shares Issued, Total (in shares)			5,600
Preferred Stock, Dividend Rate, Percentage			7.625%
Preferred Stock, Liquidation Preference Per Share (in dollars per share) \| $ / shares			$ 25,000
Preferred Stock, Depositary Shares, Number of Shares of Preferred Stock in Each Depositary Share (in shares)			1
Payments of Dividends, Total \| $				$ 0	$ 0	$ 0

Note 15 - Stock Plans (Details Textual) $ / shares in Units, $ in Thousands	12 Months Ended
	Oct. 31, 2020 USD ($) $ / shares shares	Oct. 31, 2019 USD ($) $ / shares shares	Oct. 31, 2018 USD ($) $ / shares shares	Jul. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)	0	110,975	37,825
Share-based Payment Arrangement, Expense \| $	$ 2,800	$ 700	$ 3,700
Share-based Payment Arrangement, Expense, after Tax \| $	$ 2,600		$ 2,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Installments	4
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares)	0	0	1,210
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit (in dollars per share) \| $ / shares	$ 7.85
Share-based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit (in dollars per share) \| $ / shares	$ 157.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value \| $			$ 26
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) \| $ / shares		$ 4.46	$ 27.09
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price (in dollars per share) \| $ / shares		$ 36.07	$ 69.56
Share-based Compensation Arrangement by Share-based Payment Award, Participants Years of Service (Year)	15 years
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)	200,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total \| $	$ 6,200
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	1 year 9 months 18 days
Nonemployee Director [Member]
Number of Directors				5
Share-based Payment Arrangement, Option [Member]
Share-based Payment Arrangement, Expense \| $	$ 400	$ 800	$ 700
Restricted Stock [Member]
Share-based Compensation, Reverse of Previously Recognized Expense \| $	$ 2,400	$ 2,600	$ 800
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in shares)	142,231	107,650	20,292
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period (in shares)	5,567	656
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options Vested, Number (in shares)	60,446	33,643	21,609
Restricted Stock [Member] \| Prior Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in shares)	11,503	8,380	5,936
Restricted Stock [Member] \| Participants With Service Requirement [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Participants Age (Year)	58 years
Restricted Stock [Member] \| Nonemployee Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Installments	3
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in shares)	36,731	103,612	15,904
Restricted Stock [Member] \| Participants Without Service Requirement [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Participants Age (Year)	60 years
Awards Other Than Options [Member]
Share-based Payment Arrangement, Noncash Expense, Total \| $	$ 2,400		$ 2,800
Share-based Payment Arrangement, Noncash Income \| $		$ 200
Performance-based Market Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.19%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	108.15%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance (in shares)	142,500	81,250
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)		56,400
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Adjustment for Shares Grants in Previous Period (in shares)	20,350
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%
Time-based Market Share Units [Member]
Share-based Compensation, Reverse of Previously Recognized Expense \| $	$ 2,400
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance (in shares)		81,850
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)		56,400
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Adjustment for Shares Grants in Previous Period (in shares)	16,700
Market Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Installments	4
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	0
Share-based Compensation Arrangement By Share-based Compensation Award Fair Value Measurement Period (Day)	60 days
Market Stock Units [Member] \| Two Year [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		62.51%	48.41%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate			0.00%
Market Stock Units [Member] \| Two and a Half Year [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate		1.80%	2.56%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		59.60%	51.92%
Market Stock Units [Member] \| Three Year [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		57.04%	56.11%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate		0.00%
Market Stock Units [Member] \| Four Year [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate		1.81%	2.68%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		60.03%	52.59%
Market Stock Units [Member] \| Five Year [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		56.86%	49.57%
Market Stock Units [Member] \| Minimum [Member]
Percentage of Target Number of Shares Covered by MSU Awards	0.00%
Market Stock Units [Member] \| Maximum [Member]
Percentage of Target Number of Shares Covered by MSU Awards	200.00%
Performance Based MSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Installments	4
Performance Based MSUs [Member] \| Share-based Payment Arrangement, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	50.00%
Equity Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate		1.99%	2.80%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		0.56%	0.50%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term (Year)		7 years 11 months 23 days	8 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Estimated Forfeiture Rate		7.84%	9.90%

Note 15 - Stock Plans - Stock Option Activity (Details) - $ / shares	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Options outstanding at beginning of period (in shares)	331,481	278,569	274,423
Options outstanding at beginning of period (in dollars per share)	$ 53.93	$ 73.76	$ 85.22
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)	0	110,975	37,825
Granted (in dollars per share)	$ 0	$ 9.44	$ 56.30
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares)	0	0	1,210
Exercised (in dollars per share)	$ 0	$ 0	$ 49.91
Forfeited (in shares)	6,560	2,038	2,000
Forfeited (in dollars per share)	$ 26.24	$ 53.96	$ 64.25
Expired (in shares)	35,530	56,025	30,469
Expired (in dollars per share)	$ 115.28	$ 64.41	$ 156.95
Options outstanding at end of period (in shares)	289,391	331,481	278,569
Options outstanding at end of period (in dollars per share)	$ 47.02	$ 53.93	$ 73.76
Options exercisable at end of period (in shares)	145,553	147,019	191,748

Note 15 - Stock Plans - Stock Options Outstanding and Exercisable (Details)	12 Months Ended
	Oct. 31, 2020 $ / shares shares
Lower limit exercise price (in dollars per share)	$ 7.85
Upper limit exercise price (in dollars per share)	157.00
Range One [Member]
Lower limit exercise price (in dollars per share)
Upper limit exercise price (in dollars per share)
Number outstanding (in shares) \| shares	108,150
Weighted-average exercise price - outstanding (in dollars per share)	$ 9.65
Weighted-average remaining contractual life - outstanding (Year)	8 years 6 months 29 days
Number exercisable (in shares) \| shares	850
Weighted-average exercise price - exercisable (in dollars per share)	$ 24.08
Weighted-average remaining contractual life - exercisable (Year)	3 years 3 months
Range Two [Member]
Lower limit exercise price (in dollars per share)
Upper limit exercise price (in dollars per share)
Number outstanding (in shares) \| shares	96,995
Weighted-average exercise price - outstanding (in dollars per share)	$ 50.07
Weighted-average remaining contractual life - outstanding (Year)	3 years 9 months 3 days
Number exercisable (in shares) \| shares	82,557
Weighted-average exercise price - exercisable (in dollars per share)	$ 50.31
Weighted-average remaining contractual life - exercisable (Year)	3 years 2 months 12 days
Range Three [Member]
Lower limit exercise price (in dollars per share)
Upper limit exercise price (in dollars per share)
Number outstanding (in shares) \| shares	57,300
Weighted-average exercise price - outstanding (in dollars per share)	$ 67.66
Weighted-average remaining contractual life - outstanding (Year)	4 years 1 month 9 days
Number exercisable (in shares) \| shares	35,200
Weighted-average exercise price - exercisable (in dollars per share)	$ 71.46
Weighted-average remaining contractual life - exercisable (Year)	1 year 11 months 12 days
Range Four [Member]
Lower limit exercise price (in dollars per share)
Upper limit exercise price (in dollars per share)
Number outstanding (in shares) \| shares	26,946
Weighted-average exercise price - outstanding (in dollars per share)	$ 142.17
Weighted-average remaining contractual life - outstanding (Year)	2 years 9 months 3 days
Number exercisable (in shares) \| shares	26,946
Weighted-average exercise price - exercisable (in dollars per share)	$ 142.17
Weighted-average remaining contractual life - exercisable (Year)	2 years 9 months 3 days
Range Five [Member]
Number outstanding (in shares) \| shares	289,391
Weighted-average exercise price - outstanding (in dollars per share)	$ 47.02
Weighted-average remaining contractual life - outstanding (Year)	5 years 6 months 14 days
Number exercisable (in shares) \| shares	145,553
Weighted-average exercise price - exercisable (in dollars per share)	$ 72.28
Weighted-average remaining contractual life - exercisable (Year)	2 years 9 months 21 days

Note 15 - Stock Plans - Nonvested Share Awards (Details) - $ / shares	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Time-based Share Units [Member]
Nonvested, time-based (in shares)	231,210	105,594	96,091
Nonvested, weighted average grant date fair value, time-based (in dollars per share)	$ 23.01	$ 61.77	$ 60.50
Granted, time-based (in shares)	142,231	164,050	37,888
Granted, weighted average grant date fair value, time-based (in dollars per share)	$ 19.48	$ 7.66	$ 54.95
Vested, time-based (in shares)	62,309	21,329	22,821
Vested, weighted average grant date fair value, time-based (in dollars per share)	$ 17.04	$ 45.52	$ 55.19
Forfeited, time-based (in shares)	22,267	17,106	5,564
Forfeited, weighted average grant date fair value, time-based (in dollars per share)	$ 57.81	$ 86.96	$ 20.87
Nonvested, time-based (in shares)	288,865	231,210	105,594
Nonvested, weighted average grant date fair value, time-based (in dollars per share)	$ 19.88	$ 23.01	$ 61.77
Performance Shares [Member]
Nonvested, time-based (in shares)	136,316	101,407	150,881
Nonvested, weighted average grant date fair value, time-based (in dollars per share)	$ 44.22	$ 69.28	$ 50.26
Granted, time-based (in shares)	183,825	56,400	47,277
Granted, weighted average grant date fair value, time-based (in dollars per share)	$ 15.11	$ 10.10	$ 70.41
Vested, time-based (in shares)	4,284	8,655	5,390
Vested, weighted average grant date fair value, time-based (in dollars per share)	$ 57.22	$ 42.69	$ 72.52
Forfeited, time-based (in shares)	21,385	12,836	91,361
Forfeited, weighted average grant date fair value, time-based (in dollars per share)	$ 70.44	$ 93.31	$ 38.27
Nonvested, time-based (in shares)	294,472	136,316	101,407
Nonvested, weighted average grant date fair value, time-based (in dollars per share)	$ 24.64	$ 44.22	$ 69.28

Note 16 - Warranty Costs (Details Textual) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2020	Oct. 31, 2019
Cash Received from Subcontractors for Owner Controlled Insurance Program			$ 4,400	$ 4,800
General Liability Insurance Deductible	$ 20,000	$ 20,000	20,000	20,000
Aggregate Retention for Construction Defects Warranty and Bodily Injury Claims	20,000	20,000	20,000	20,000
Bodily Injury Insurance Deductible	250	250	250	250
Bodily Injury Insurance Limit	5,000	5,000	5,000	5,000
Increase (Decrease) In Construction Defect Reserves	$ (2,500)	$ (6,900)
Payments by Insurance Companies for Claims			$ 100	$ 100

Note 16 - Warranty Costs - Warranty and General Liability Reserve (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Balance, beginning of period	$ 89,371	$ 95,064
Charges incurred during the period	(20,163)	(18,757)
Changes to pre-existing reserves	(2,651)	(1,604)
Balance, end of period	86,417	89,371
Selling, General and Administrative Expenses [Member]
Additions	9,587	8,408
Cost of Sales [Member]
Additions	$ 10,273	$ 6,260

Note 17 - Transactions With Related Parties (Details Textual) - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Tavit Najarian [Member]
Related Party Transaction, Amounts of Transaction	$ 700,000	$ 900,000	$ 700,000
Carson Sorsby [Member] \| Compensation [Member]
Related Party Transaction, Amounts of Transaction	265,000	223,000	148,000
Alexander Hovnanian [Member] \| Compensation [Member]
Related Party Transaction, Amounts of Transaction	$ 1,152,000	$ 609,000	$ 514,000

Note 18 - Commitments and Contingent Liabilities (Details Textual) - USD ($) $ in Millions		12 Months Ended
	May 02, 2018	Oct. 31, 2020
EPA Case Involving a Housing Redevelopment Project in Newark, New Jersey [Member]
Loss Contingency, Percentage of Plaintiff's Costs for Which Reimbursement is Demanded	100.00%
Loss Contingency, Damages Sought, Value	$ 2.7
Great Notch Condominium Claims[Member]
Loss Contingency, Damages Sought, Value		$ 119.5

Note 19 - Variable Interest Entities (Details Textual) $ in Millions	Oct. 31, 2020 USD ($)
Deposits Associated with Land and Lot Options of Unconsolidated Variable Interest Entities	$ 88.9
Purchase Price Associated with Land and Lot Options of Unconsolidated Variable Interest Entities	$ 1,300.0

Note 20 - Investments in Unconsolidated Homebuilding and Land Development Joint Ventures (Details Textual) $ in Thousands	3 Months Ended									12 Months Ended
	Oct. 31, 2020 USD ($)	Jul. 31, 2020 USD ($)	Apr. 30, 2020 USD ($)	Jan. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)	Jul. 31, 2019 USD ($)	Apr. 30, 2019 USD ($)	Jan. 31, 2019 USD ($)	Jan. 31, 2018 USD ($)	Oct. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)	Oct. 31, 2018 USD ($)
Fair Value of Assets Acquired									$ 13,000
Number of Owned Communities Transferred to the Joint Venture				8		1
Proceeds from Transfer of Land to Joint Venture				$ 29,800		$ 15,900
Number of Owned Active Communities Transferred to the Joint Venture				4
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures, Total	$ 103,164				$ 127,038					$ 103,164	$ 127,038
Equity Method Investment, Other than Temporary Impairment										0
Revenues, Total	$ 683,358	$ 628,136	$ 538,351	$ 494,056	713,590	$ 482,041	$ 440,691	$ 380,594		$ 2,343,901	2,016,916	$ 1,991,233
Joint Venture Total Debt to Capitalization Ratio	35.00%									35.00%
Joint Ventures in West [Member]
Equity Method Investment, Other than Temporary Impairment											900
Homebuilding [Member]
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures, Total	$ 103,164				127,038					$ 103,164	127,038
Revenues, Total										2,271,739	1,962,764	1,937,878
Homebuilding [Member] \| Management Fees [Member]
Revenues, Total										16,000	16,900	$ 21,100
Corporate Joint Venture [Member]
Due to Affiliate	$ 1,100									$ 1,100
Advances to Affiliate					$ 1,400						$ 1,400

Note 20 - Investments in Unconsolidated Homebuilding and Land Development Joint Ventures - Unconsolidated Homebuilding and Land Development Joint Ventures (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 31, 2020	Jul. 31, 2020	Apr. 30, 2020	Jan. 31, 2020	Oct. 31, 2019	Jul. 31, 2019	Apr. 30, 2019	Jan. 31, 2019	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018	Oct. 31, 2017
Assets	$ 1,827,342				$ 1,881,424				$ 1,827,342	$ 1,881,424
Liabilities	2,263,436				2,371,200				2,263,436	2,371,200
Hovnanian Enterprises, Inc.	(436,929)				(490,463)				(436,929)	(490,463)
Others	835				687				835	687
Total equity deficit	(436,094)				(489,776)				(436,094)	(489,776)	$ (453,504)	$ (460,371)
Total liabilities and equity	$ 1,827,342				1,881,424				$ 1,827,342	1,881,424
Debt to capitalization ratio	35.00%								35.00%
Revenues, Total	$ 683,358	$ 628,136	$ 538,351	$ 494,056	713,590	$ 482,041	$ 440,691	$ 380,594	$ 2,343,901	2,016,916	1,991,233
Joint venture net income	40,634	15,363	4,079	(9,148)	(1,807)	(7,601)	(15,257)	(17,452)	50,928	(42,117)	4,520
Our share of net income	3,146	$ 5,658	$ 6,221	$ 1,540	8,376	$ 3,742	$ 7,252	$ 9,562	16,565	28,932	24,033
Corporate Joint Venture [Member] \| Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]
Cash and cash equivalents	123,561				110,723				123,561	110,723
Inventories	389,092				403,842				389,092	403,842
Other assets	27,550				25,129				27,550	25,129
Assets	540,203				539,694				540,203	539,694
Accounts payable and accrued liabilities	209,429				71,889				209,429	71,889
Notes payable	117,179				186,882				117,179	186,882
Liabilities	326,608				258,771				326,608	258,771
Hovnanian Enterprises, Inc.	104,248				125,638				104,248	125,638
Others	109,347				155,285				109,347	155,285
Total equity deficit	213,595				280,923				213,595	280,923
Total liabilities and equity	$ 540,203				$ 539,694				$ 540,203	$ 539,694
Debt to capitalization ratio	35.00%				40.00%				35.00%	40.00%
Revenues, Total									$ 448,101	$ 497,618	609,099
Cost of sales and expenses									(432,202)	(464,511)	(582,279)
Joint venture net income									15,899	33,107	26,820
Our share of net income									16,921	29,139	24,527
Homebuilding Joint Venture [Member] \| Corporate Joint Venture [Member] \| Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]
Cash and cash equivalents	$ 120,107				$ 108,520				120,107	108,520
Inventories	389,001				397,804				389,001	397,804
Other assets	27,062				24,896				27,062	24,896
Assets	536,170				531,220				536,170	531,220
Accounts payable and accrued liabilities	207,277				71,297				207,277	71,297
Notes payable	117,179				186,882				117,179	186,882
Liabilities	324,456				258,179				324,456	258,179
Hovnanian Enterprises, Inc.	102,908				120,891				102,908	120,891
Others	108,806				152,150				108,806	152,150
Total equity deficit	211,714				273,041				211,714	273,041
Total liabilities and equity	$ 536,170				$ 531,220				$ 536,170	$ 531,220
Debt to capitalization ratio	36.00%				41.00%				36.00%	41.00%
Revenues, Total									$ 435,077	$ 488,914	602,681
Cost of sales and expenses									(420,977)	(456,563)	(577,106)
Joint venture net income									14,100	32,351	25,575
Our share of net income									16,904	28,761	23,904
Land Development Joint Venture [Member] \| Corporate Joint Venture [Member] \| Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]
Cash and cash equivalents	$ 3,454				$ 2,203				3,454	2,203
Inventories	91				6,038				91	6,038
Other assets	488				233				488	233
Assets	4,033				8,474				4,033	8,474
Accounts payable and accrued liabilities	2,152				592				2,152	592
Notes payable	0				0				0	0
Liabilities	2,152				592				2,152	592
Hovnanian Enterprises, Inc.	1,340				4,747				1,340	4,747
Others	541				3,135				541	3,135
Total equity deficit	1,881				7,882				1,881	7,882
Total liabilities and equity	$ 4,033				$ 8,474				$ 4,033	$ 8,474
Debt to capitalization ratio	0.00%				0.00%				0.00%	0.00%
Revenues, Total									$ 13,024	$ 8,704	6,418
Cost of sales and expenses									(11,225)	(7,948)	(5,173)
Joint venture net income									1,799	756	1,245
Our share of net income									$ 17	$ 378	$ 623

Note 21 - Fair Value of Financial Instruments (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Loans Held for Sale Mortgages Unpaid Principal	$ 100,400	$ 161,100
Other Commitment, Total	20,000
Impairment of Real Estate	2,000	2,700	$ 2,100
Senior Secured Revolving Credit Facility [Member]
Long-term Line of Credit, Total	0	$ 0
Loan Origination Commitments [Member]
Loan Applications in Process	$ 890,800
Loan Origination Commitments [Member] \| Maximum [Member]
Number of Days in Committment (Day)	60 days
Interest Rate Committed Loan Applications [Member]
Interest Rate Committed Loan Applications	$ 57,200

Note 21 - Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($)
$ in Thousands

Oct. 31, 2020

Oct. 31, 2019

Fair Value, Inputs, Level 2 [Member]

$ 104,361

$ 165,985

Mortgage loans held for sale

^[1]

104,378

166,007