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

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

During the first quarter of fiscal 2026, we assumed control of one of our unconsolidated joint ventures after the partner received their final cash distribution. We consolidated the remaining assets and liabilities that were in the unconsolidated joint venture at fair value. We also purchased an additional equity stake in one of our unconsolidated joint ventures that gave us a controlling financial interest. The total gain recorded from the two transactions was $26.8 million, which was recorded to “Other (income) expense, net."

During the first quarter of fiscal 2026, we contributed twelve communities, including eleven active selling communities and one community in planning, to a new unconsolidated joint venture for $134.3 million of net cash. The carrying value of the communities contributed approximated fair value.

The tables set forth below summarize the combined financial information related to our unconsolidated homebuilding joint ventures that are accounted for under the equity method. During the periods presented, we did not have an investment in any land development joint ventures.

(In thousands)	April 30, 2026		October 31, 2025
Assets:
Cash and cash equivalents	$	46,063	$	104,066
Inventories		550,260		487,965
Other assets		8,073		128,385
Total assets	$	604,396	$	720,416
Liabilities and equity:
Accounts payable and accrued liabilities	$	76,422	$	305,153
Notes payable		102,807		121,948
Total liabilities		179,229		427,101
Equity of:
Hovnanian Enterprises, Inc.		144,800		160,903
Others		280,367		132,412
Total equity		425,167		293,315
Total liabilities and equity	$	604,396	$	720,416
Debt to capitalization ratio		19%		29%

As of April 30, 2026 and October 31, 2025, we had outstanding advances to unconsolidated joint ventures of $3.7 million and $2.6 million, respectively. These amounts were included in “Accounts payable and accrued liabilities” in the tables above. In some cases, our net investment in unconsolidated joint ventures is less than our proportionate share of equity reflected in the tables above because of differences between asset impairments recorded against our unconsolidated joint venture investments and any impairments recorded in the applicable unconsolidated joint venture. During the six months ended April 30, 2026 and 2025, we did not write-down any of our unconsolidated joint venture investments.

	Three Months Ended April 30,
(In thousands)		2026		2025
Revenues	$	127,241	$	146,139
Cost of sales and expenses		(116,297)		(133,957)
Joint venture net income	$	10,944	$	12,182
Our share of net (loss) income	$	(1,106)	$	9,043

	Six Months Ended April 30,
(In thousands)		2026		2025
Revenues	$	200,951	$	280,052
Cost of sales and expenses		(185,575)		(254,215)
Joint venture net income	$	15,376	$	25,837
Our share of net income	$	2,334	$	18,248

The reason “Our share of net (loss) income” in homebuilding joint ventures is higher or lower than the “Joint venture net income” in the tables above is a result of our varying ownership percentages in each investment. As of April 30, 2026 and 2025, respectively, we had investments in five and seven unconsolidated joint ventures, respectively, and our ownership in these joint ventures ranged from 20% to over 50%. Therefore, depending on mix, if the unconsolidated joint ventures in which we have higher sharing percentages are more profitable than our other unconsolidated joint ventures, that results in us having a higher overall percentage of income in the aggregate than would occur if all joint ventures had the same sharing percentage; conversely, if the unconsolidated joint ventures in which we have lower sharing percentages are more profitable than our other unconsolidated joint ventures, that results in us having a lower overall percentage of income in the aggregate than would occur if all joint ventures had the same sharing percentage. For the three and six months ended April 30, 2026, “Our share of net (loss) income” was less than the "Joint venture net income" due to two unconsolidated joint ventures with increased losses during the period for which we currently recognize a higher sharing percentage of the losses based on the joint venture agreements and two unconsolidated joint ventures with increased income during the period for which we currently recognize a lower sharing percentage of the income based on the joint venture agreements, slightly offset by the recognition of income from one unconsolidated joint venture that was dissolved in the first quarter of fiscal 2026.

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 ventures' revenues. These management fees, which totaled $5.1 million and $6.2 million for the three months ended April 30, 2026 and 2025, respectively, and $8.0 million and $11.4 million for the six months ended April 30, 2026 and 2025, respectively, are recorded in “Selling, general and administrative” homebuilding expenses in the Condensed Consolidated Statements of Operations.

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

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

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

(In thousands)	January 1, 2026
Cash, cash equivalents and restricted cash	$	35,300
Property and equipment, net		469
Sold and unsold homes and lots under development		82,887
Land and land options held for future development or sale		5,379
Receivables, deposits and notes, net		16,315
Prepaid expenses and other assets		7,682
Accounts payable and accrued liabilities		(28,430)
Customers' deposits		(132,358)
Net liabilities assumed		(12,756)
Goodwill		31,705
Noncontrolling interests		(1,895)
Gain on consolidation		(9,474)
Purchase price consideration	$	7,580

The excess of purchase consideration over the fair value of the net liabilities acquired was recorded as goodwill, which is primarily attributed to the assembled workforce of KSA, and is not deductible for income tax purposes. The results of KSA were included in the Condensed Consolidated Statement of Operations from the date of acquisition and included $0.2 million of revenue for KSA and loss before income taxes of $2.8 million for KSA for the six months ended April 30, 2026.