RESULTS FOR THE THREE AND SIX MONTH PERIODS ENDED APRIL 30, 2009:     --  Total revenues were $398.0 million for the second quarter of fiscal       2009 compared with $776.4 million in last year's second quarter.  For       the first six months of fiscal 2009, total revenues were $771.8       million compared with $1.9 billion for the same period in the prior       year.     --  For the second quarter of fiscal 2009, the after-tax net loss was       $118.6 million, or $1.50 per common share, compared with a net loss of       $340.7 million, or $5.29 per common share, in the prior year's second       quarter.  For the first half of fiscal 2009, the after-tax net loss       was $297.0 million, or $3.80 per share compared with a net loss of       $471.7 million, or $7.43, in the first six months a year ago.     --  During the second quarter of fiscal 2009, total repurchases of       unsecured senior and senior subordinated notes amounted to $525.0       million.  Excluding the $71.1 million of face value of the 6.0% senior       subordinated notes due in January 2010 that were purchased at an       average price of 92.2%, the average price of the remaining debt       repurchases was 31.5%.  As a result, a $311.3 million gain on       extinguishment of debt was recorded during the second quarter of       fiscal 2009.     --  Pre-tax land-related charges during the second quarter of fiscal 2009       were $318.9 million, including land impairments of $301.1 million,       write-offs of predevelopment costs and land deposits of $9.1 million       and $8.7 million representing the write down of our investments in       certain unconsolidated joint ventures.     --  Deliveries, excluding unconsolidated joint ventures, were 1,388 homes       for the 2009 second quarter, a 44% decline from 2,494 homes in the       same quarter a year ago.  For the first half of 2009, deliveries,       excluding unconsolidated joint ventures, declined 57% to 2,596 homes       compared with 6,098 home deliveries in the first six months of fiscal       2008.     --  The number of net contracts for the second quarter of fiscal 2009,       excluding unconsolidated joint ventures, declined 29% to 1,586 homes       compared with the second quarter of the prior year.  For the sixth       month period ended April 30, 2009, the number of net contracts,       excluding unconsolidated joint ventures, was 2,547 homes, a 32%       decline, compared with the same period a year ago.     --  At April 30, 2009, there were 215 active selling communities,       excluding unconsolidated joint ventures, a decline of 164 active       communities, or 43%, from the end of the prior year's second quarter.     --  Net contracts per community increased 25% from 5.9 in last year's       second quarter to 7.4 net contracts per community in the second       quarter of fiscal 2009.     --  The contract cancellation rate, excluding unconsolidated joint       ventures, for the second quarter of fiscal 2009 was 24%, compared with       the contract cancellation rate of 29% in last year's second quarter       and 31% in the first quarter of fiscal 2009.     --  The pre-tax loss was $97.4 million for the 2009 second quarter and       $275.2 million for the first six months of fiscal 2009.  Excluding       land-related charges and the gain from extinguishment of debt, the       pre-tax loss was $89.7 million and $215.0 million, respectively, for       the three month and six month periods ended April 30, 2009.     --  The FAS 109 current and deferred tax valuation allowance charge to       earnings was $42.2 million during the second quarter of 2009 and       $121.6 million year to date and as of April 30, 2009, the total       valuation allowance is $797.1 million.  This FAS 109 charge is a       non-cash valuation allowance against the tax assets for GAAP purposes.       For tax purposes, the tax deductions associated with the tax assets       may be carried forward for 20 years.    CASH AND INVENTORY AS OF APRIL 30, 2009:     --  At April 30, 2009, homebuilding cash was $779.2 million and the       balance on the revolving credit facility was $100.0 million.  Cash       flow during the second quarter of fiscal 2009, excluding the $208.4       million spent on debt repurchases, was $47.5 million, similar to $56.1       million of cash flow in the second quarter of the prior year.     --  The total land position, as of April 30, 2009, decreased by 17,303       lots, or 33%, compared to April 30, 2008, reflecting decreases of       3,411 owned lots and 13,892 optioned lots.     --  As of April 30, 2009, lots controlled under option contracts totaled       13,299 and owned lots totaled 21,853.  The total land position of       35,152 lots represents a 71% decline from the peak total land position       at April 30, 2006.     --  Started unsold homes, excluding models, declined 41%, to 892 at April       30, 2009 compared to 1,503 at April 30, 2008.    OTHER KEY OPERATING DATA:     --  Contract backlog, as of April 30, 2009, excluding unconsolidated joint       ventures, was 1,858 homes with a sales value of $592.8 million, a       decrease of 52% compared to April 30, 2008.     --  Homebuilding gross margin, before interest expense included in cost of       sales, was 8.3% for the second quarter of 2009, compared to 6.8% in       the fiscal 2008 second quarter and 5.7% in the 2009 first quarter.     --  Pre-tax income from Financial Services was $2.5 million in the second       quarter of fiscal 2009 and $4.1 million for the first half of fiscal       2009.     --  During the second quarter of fiscal 2009, home deliveries through       unconsolidated joint ventures were 71 homes, compared with 196 homes       in the second quarter of fiscal 2008.  During the first half of fiscal       2009, home deliveries through unconsolidated joint ventures were 146       homes compared with 351 homes during the same period in the prior       year.    COMMENTS FROM MANAGEMENT:   

"Although the home sales environment remains challenging amid increasingly high levels of unemployment and uncertainty about the overall US economy, our monthly net contracts per community have increased in each of the past two quarters and in six of the past seven months," commented Ara K. Hovnanian, President and Chief Executive Officer.

"Our contract cancellation rate of 24% for the second quarter is at a more normalized level, the likes of which we have not reported since the third quarter of 2005," continued Mr. Hovnanian. "The combination of historically low mortgage rates and steep corrections in home prices have pushed affordability close to an all time high across the country. Although we lowered our sales prices further which resulted in the land impairments we took during the second quarter, we have seen more stability in home prices over the most recent six weeks. In spite of these encouraging signs, we remain concerned that the combination of the expiration of the $8,000 federal tax credit in November of this year, the depletion of the state funds allocated for the $10,000 California state tax credit for new home buyers and the potential increase in existing home listings due to another wave of foreclosures as the recent moratoriums on foreclosures have ended could have a dampening effect on our future contract pace. We are hopeful that our government will realize the importance of taking action to both increase the amount of the tax credit and extend its term."

"Notwithstanding the presence of a small number of positive trends, we remain extremely focused on maximizing liquidity and reducing our debt levels," stated J. Larry Sorsby, Chief Financial Officer. "Through a debt exchange and the repurchases of debt in the open market this fiscal year, we reduced both our future principal payments and annual interest payments by $620 million and $41 million, respectively. Our near-term maturities consist of only $29 million in face value that comes due in 2010 and another $159 million that matures in 2012. Going forward, we have debt covenants that limit the amount of additional debt we may repurchase. While we are pleased with the reduction in debt we have achieved to date, we are cognizant of our deteriorating stockholders' equity and the resulting increase to our already highly leveraged position."

"We will continue to make every operational decision with cash flow implications in mind. A laser focus on generating and preserving cash, coupled with a modestly improving macro homebuilding environment will enable us to weather the remainder of the downturn and position ourselves to take advantage of opportunities that will abound in the eventual housing market recovery," concluded Mr. Hovnanian.

WEBCAST INFORMATION:

Hovnanian Enterprises will webcast its fiscal 2009 second quarter financial results conference call at 11:00 a.m. E.T. on Wednesday, June 3, 2009. The webcast can be accessed live through the "Investor Relations" section of Hovnanian Enterprises' Website at http://www.khov.com/. For those who are not available to listen to the live webcast, an archive of the broadcast will be available under the "Audio Archives" section of the Investor Relations page on the Hovnanian Website at http://www.khov.com/. The archive will be available for 12 months.

ABOUT HOVNANIAN ENTERPRISES:

Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, Chairman, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes, First Home Builders of Florida and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes.

Additional information on Hovnanian Enterprises, Inc., including a summary investment profile and the Company's 2008 annual report, can be accessed through the "Investor Relations" section of the Hovnanian Enterprises' website at http://www.khov.com/. To be added to Hovnanian's investor e-mail or fax lists, please send an e-mail to IR@khov.com or sign up at http://www.khov.com/.

NON-GAAP FINANCIAL MEASURES:

Consolidated earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") and before inventory impairment loss and land option write-offs and gain on extinguishment of debt ("Adjusted EBITDA") are not U.S. generally accepted accounting principles (GAAP) financial measures. The most directly comparable GAAP financial measure is net income (loss). The reconciliation of EBITDA and Adjusted EBITDA to net loss is presented in a table attached to this earnings release.

Cash flow is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Net Cash provided by (or used in) Operating Activities. The Company uses cash flow to mean the amount of Net Cash provided by (or used in) Operating Activities for the period, as reported on the Consolidated Statement of Cash Flows, excluding changes in mortgage notes receivable at the mortgage company, plus (or minus) the amount of Net Cash provided by (or used in) Investing Activities. For the second quarter of 2009, cash flow was $47.5 million, which was derived from $73.9 million from net cash provided by operating activities less the change in mortgage notes receivable of $24.4 million less $2.0 million of net cash used in investing activities. For the second quarter of 2008, cash flow was $56.1 million, which was derived from $34.1 million from net cash provided by operating activities plus the decrease in mortgage notes receivable of $31.6 million less $9.6 million of net cash used in investing activities.

Loss Before Income Taxes Excluding Land-Related Charges, Intangible Impairments and Gain on Extinguishment of Debt is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Loss Before Income Taxes. The reconciliation of Loss Before Income Taxes Excluding Land-Related Charges, Intangible Impairments and Gain on Extinguishment of Debt to Loss Before Income Taxes is presented in a table attached to this earnings release.

Note: All statements in this Press Release that are not historical facts should be considered as "forward-looking statements" within the meaning of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic and industry and business conditions, (2) adverse weather conditions and natural disasters, (3) changes in market conditions and seasonality of the Company's business, (4) changes in home prices and sales activity in the markets where the Company builds homes, (5) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, and the environment, (6) fluctuations in interest rates and the availability of mortgage financing, (7) shortages in, and price fluctuations of, raw materials and labor, (8) the availability and cost of suitable land and improved lots, (9) levels of competition, (10) availability of financing to the Company, (11) utility shortages and outages or rate fluctuations, (12) levels of indebtedness and restrictions on the Company's operations and activities imposed by the agreements governing the Company's outstanding indebtedness, (13) operations through joint ventures with third parties, (14) product liability litigation and warranty claims, (15) successful identification and integration of acquisitions, (16) significant influence of the Company's controlling stockholders, (17) geopolitical risks, terrorist acts and other acts of war and (18) other factors described in detail in the Company's Form 10-K for the year ended October 31, 2008 and in the Company's Form 10-Q for the quarter ended January 31, 2009.

   (Financial Tables Follow)    Hovnanian Enterprises, Inc.