SecProbe.io

March 7, 2013

Via E -mail
J. Larry Sorsby
Executive Vice President and Chief Financial Officer
Hovnanian Enterprises, Inc.
110 West Front Street
P.O. Box 500
Red Bank, New Jersey 07701

Re: Hovnanian Enterprises, Inc.
 Form 10-K for the Year Ended October 31, 2012
Filed December 20, 2012
File No. 1 -8551

Dear Mr. Sorsby :

We have reviewed your filing an d have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by providing the requested
information  or by advising us when you will provide the requested response.   If you do not
believe o ur comments apply to your facts and circumstances, please tell us why in your response.

After reviewing the information you provide in response to these  comments, we may
have  additional comments.

General

1. Where a comment below requests add itional disclosures or other revisions to be made, these
revisions should be included in your future filings, including your interim filings, if
applicable.

Backlog, page 9

2. Please present your backlog information excluding unconsolidated joint ventures.  In this
regard we note that your current presentation includes sales values that will not be reflected
as revenues in your financial statements.

J. Larry Sorsby
Hovnanian Enterprises, Inc.
March 7, 2013
Page 2

 Item 6. Selected Financial Data, page 22

3. It appears that the line item titled “expenses” in your table on  page 23 does not include
inventory impairment and land option write -off charges which are shown separately in the
line below.  Therefore, the line item, as currently presented represents a non -GAAP measure.
Please revise your description of this line ite m to clearly indicate that it excludes inventory
impairment loss and land option write -offs.  Please refer to Item 10(e)(1)(ii)(E) of Regulation
S-K.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 24

Critical Accounting Policies, page 24

Inventories, page 25

4. We note the assessment of communities for indication of impairment is performed quarterly,
primarily by completing detailed budgets for all of your communities and identifying those
communities wi th a projected operating loss for any projected fiscal year or for the entire
projected community life. For those communities with projected losses, you 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.  In order to provide
readers with an understanding of your inventory that may be at risk of impairment please
revise both your annual and interim critical accounting policy disclosure s to:
 Quantify the number of communities you analyzed for impairment as of each balance
sheet date presented;
 Of the communities analyzed for impairment, quantify both the number of communities
with projected operating losses and the aggregate carrying va lue of those communities;
and
 For those communities for which you estimated the remaining undiscounted future cash
flows, quantify both the number of communities for which the remaining undiscounted
cash flows are not substantially in excess of the carry ing value of the community and
disclose the aggregate carrying value of those communities.

Results of Operations, page 39

4. With reference to your cost of sales and gross margin information on page 43, to the extent
that homes sold include inventory for wh ich you recognized  valuation adjustments in prior
periods and the corresponding revenues recognized  exceeded your estimate s when
determining such valuation adjustments, please provide  investors with a discussion and
analysis regarding the favorable impact to gross profit,  including the corresponding amount.
Please refer to Items 303(A)(3)(i) and (ii) of  Regulation S -K for guidance.

J. Larry Sorsby
Hovnanian Enterprises, Inc.
March 7, 2013
Page 3

 Homebuilding Operations by Segment, page 46

5. In the interest of transparency to investors, please revise to also explain that  reasons for
material changes in your contract cancellation rates between periods presented.  For example,
although your Northeast division was able to generate more revenue on an increased number
of home deliveries, it also experienced a 45% increase in i ts contract cancellation rate which
increased from 18% in fiscal 2011 to 26% in 2012.

Note 3 – Summary of Significant Accounting Policies, page 72

Inventories, page 73

6. During fiscal 2012, you entered into a land banking arrangement with GSO C apital Par tners
LP (“GSO”).   You sold a portfolio of your land parcels to GSO, and GSO provided you an
option to purchase back finished lots on a quarterly basis.   For accounting purposes,  you
considered this transaction a financing rather than a sale.   For purposes  of our Consolidated
Balance Sheet, the inventory of $56.9 million was reclassified to consolidated inventory not
owned, with a $44.8 million liability from inventory not owned recorded for the amount of
net cash received.   We also see from your Consolidat ed Statements of Cash Flows you
recorded deferred financing costs related to this arrangement.   With reference to the
authoritative literature you relied on, please tell us supplementally and revise your
disclosures to clarify how you accounted for this tr ansaction.

Post Development Completion and Warranty Costs, page 77

7. You estimate and accrue warranty costs as part of cost of sales for repair costs under $5,000
per occurrence to homes, community amenities and land development infrastructure.  You
also a ccrue for warranty costs over $5,000 per occurrence as part of your general liability
insurance deductible as selling, general, and administrative costs.   Please explain your basis
for recording warranty costs in excess of $5,000 in selling, general and a dministrative costs.

Allowance for Doubtful Accounts, page 78

8. We note that at October 31, 2012 your balance for allowance for doubtful accounts of  $8.2
million was primarily related to the allowance for receivables from your insurance carriers
for cer tain warranty claims which may not be fully recoverable , allowances for receivables
from municipalities and an allowance for a receivable related to a legal settlement.  Please
quantify the amount of receivables from insurance carriers and legal settlement s as of
October 31, 2012 and 2011 and with reference to ASC 450 -30, please address the
appropriateness of recognizing these receivables.

J. Larry Sorsby
Hovnanian Enterprises, Inc.
March 7, 2013
Page 4

 Per Share Calculation, page 79

9. We note that you have included 8.8 million shares related to Purchase Contracts which are
issuable in the future with no additional cash required to be paid by the holder thereof in your
basic weighted -average number of shares outstanding.  Please expand your disclosure to
clarify, if true, that there are no circumstances under which those shares will not be issued.
Refer to  ASC 260 -10-45-12 and 45 -13.

Note 9 - Senior Secured, Senior, Senior Amortizing, Senior Exchangeable and Senior
Subordinate Amortizing Notes, page 83

10. With reference to the guidance set forth in ASC 470, please ex pand your disclosures to
clarify why the November 1, 2011 K. Hovnanian  debt exchange discussed on the bottom of
page 85 was accounted for as a troubled debt restructuring.

Note 17 – Warranty Costs

11. We note that you introduced an owner controlled insurance program for certain of your
subcontractors whereby the subcontractors pay you an insurance premium based on the value
of their services and you absorb the liability associated with their work on you r homes as part
of your overall general liability insurance.  Please (i) quantify the amount of premiums
received from your subcontractors, (ii) disclose how you account for the receipt of premiums
and your basis for that accounting; and (iii) quantify the  related liability you absorbed
associated with their work.

12. Please separately present (i) warranties issued during the period , (ii) adjustments to pre -
existing warranties from changes in estimates and (iii) payments made during the period .

Note 20 – Investments in Unconsolidated Homebuilding and Land Development Joint Ventures,
page 102

13. We note that you  entered into a joint venture agreement to acquire a portfolio of
homebuilding projects, including land you previously owned in the consolidated group. You
sold the land you owned to the joint venture for net proceeds of $36.1 million, which was
equal to  your basis in the land at that time, and recorded an investment in unconsolidated
joint ventures of $19.7 million.   During the three months ended April 3 0, 2011,  you
expanded this joint venture, selling additional land you owned to the joint venture for net
proceeds of $27.2 million, which was equal to your book value in the land at that time, and
recorded an additio nal investment of $11.4 million  in the v enture.   Please clarify how you
accounted for these transactions and identify the authoritative literature you relied on.

14. Please clarify what consideration you gave to your land development joint venture partner  for
the transfer of its interest in the ve nture to  you as well as how you accounted for this transfer.
Refer to the authoritative literature you relied on.

J. Larry Sorsby
Hovnanian Enterprises, Inc.
March 7, 2013
Page 5

 Note 22.  Financial Information of Subsidiary Issuer and Subsidiary Guarantors, page 108

15. Please confirm, and if true, revise your disclosure to indicate, that all the subsidiary
guarantors are “100% owned” as defined by Rule 3 -10(h)(1) of Regulation S -X.  Note that
“wholly -owned,” as defined in Rule 1 -02(aa) of Regulation S -X, is not the same as “100%
owned.”

16. Please disclose any sig nificant restrictions on the ability of the parent company or any
guarantor to obtain funds from its subsidiaries by dividend or loan pursuant to Rule 3 -
10(i)(9) of Regulation S -X.

17. With reference to the instructions for preparation of condensed consolidat ing financial
information set forth in Rule 3 -10(i) of Regulation S -X, please address the following
comments:
 Please confirm that your Parent’s Investments in consolidated subsidiaries represents the
parent company’s investment in all its subsidiaries unde r the equity method of
accounting.  With reference to the Stockholders’ (deficit) equity amounts presented in
your Issuer Subsidiary, Guarantor Subsidiary and Nonguarantor Subsidiary columns
please reconcile such amounts to Parent’s Investment in consolida ted subsidiaries of
$25,000 as of October 31, 2012 and $(467 million) as of October 31, 2011.  Please also
address this comment as it relates to your Parent’s Equity in (loss)  income from
subsidiaries; and
 Clarify the nature of the Investment in consolidated subsidiaries reflected in your
Guarantor Subsidiary and Nonguarantor Subsidiary columns.  Clarify why there does not
appear to be Equity in loss (income) from subsidiaries related to these investments in the
respective Consolidating Condensed Statement of Operations.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules  require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a wri tten statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

J. Larry Sorsby
Hovnanian Enterprises, Inc.
March 7, 2013
Page 6

 You may contact Lisa Etheredge, S taff Accountant,  at (202) 551 -3424 or Jeanne Baker,
Assistant Chief Accountant, at  (202) 551 -3691  if you have questions.

Sincerely,

 /s/ Rufus Decker

Rufus Decker
Accounting Branch Chief