What changed in this filing

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Item 1A. Risk Factors

2025-12-22 compared with 2024-12-18 · 112 added, 130 removed, 262 unchanged (48% of the section changed)

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employment levels and wage and job growth;

Labor shortages and increasing labor and materials costs, including because of changes in immigration laws and trends in labor migration;

labor shortages and increasing labor and materials costs, including because of changes in immigration laws or the enforcement thereof and trends in labor migration;

availability and affordability of financing for home buyers;

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We seek to mitigate this risk by depositing our cash in major financial institutions and diversifying our investments;

however, there can be no assurance that we will be able to fully mitigate this risk.

In addition, our homebuilding operations often require us to obtain letters of credit.

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If we are unable to obtain such additional letters of credit as needed to operate our business, we would be adversely affected.

In addition, geopolitical events, acts of war or terrorism, threats to national security, civil unrest, any outbreak or escalation of hostilities throughout the world, tariffs and international trade sanctions, and health pandemics may have a substantial impact on the economy, consumer confidence, the housing market, our associates and our customers, and therefore our business and financial results.

In addition, geopolitical events, acts of war or terrorism, threats to national security, civil unrest, any outbreak or escalation of hostilities throughout the world, changes in tariffs or trade policies and international trade sanctions, and health pandemics may have a substantial impact on the economy, consumer confidence, the housing market, our associates and our customers, and therefore our business and financial results.

The difficulties described above could cause us to take longer and incur more costs to build our homes.

In addition, our insurance may not fully cover business interruptions or losses caused by weather conditions and man-made or natural disasters and we may not be able to recapture increased costs by raising prices in many cases because we fix our prices up to 12 months in advance of delivery by signing home sales contracts.

In addition, our insurance may not fully cover business interruptions or losses caused by weather conditions and man-made or natural disasters.

We may not be able to recapture increased costs by raising prices in many cases because we fix our prices up to 12 months in advance of delivery when we sign home sales contracts.

Some buyers may also cancel or not honor their home sales contracts altogether.

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Such government-imposed tariffs and trade regulations on imported building supplies, and retaliatory measures by other countries, may in the future have significant impacts on the cost to construct our homes and on our customers’ budgets, including by causing disruptions or shortages in our supply chain.

have also experienced price fluctuations and increased labor costs, particularly

over the prior two fiscal years, before stabilizing in the current fiscal year, as a result

of a sharp rise in inflation across the United States.

availability of labor may be adversely affected by changes in immigration laws

and trends in labor migration.

In addition, increased demand could increase

material and labor costs.

Although much improved during the current fiscal year, we continued

to experience some construction delays due to shortages in the supply of

certain materials, as well as labor and subcontractor shortages in our markets.

These delays impact the timing of our expected home closings and may also

result in cost increases that we may not be able to pass to our current or

future customers.

Sustained increases in construction costs may, over time,

erode our margins, and impact our total contract or delivery volumes.

Interest rates increased

substantially in fiscal years 2022 and 2023 and remained volatile in 2024 leading

to uncertainty in the market about the direction rates will go in the future.

Because the large majority of our customers require mortgage financing, increases in

interest rates or the decreased availability of mortgage financing could

considerably impair the affordability of our homes, lower demand for our

products, limit our marketing effectiveness and limit our ability to fully

realize our backlog.

The large majority of our customers finance their acquisitions through lenders providing

mortgage financing.

Mortgage rates, up until recently, had been historically

low, which made the homes we sell more affordable.

Despite the Federal Reserve

lowering interest rates in September and November 2024, mortgage rates have significantly

increased since the beginning of fiscal year 2022 as a result of the Federal

Reserve raising interest rates in an effort to curtail inflation during fiscal

years 2023 and 2022.

When interest rates increase, the cost to own a home

increases, which reduces the number of potential homebuyers who can obtain

mortgage financing and can result in a decline in the demand for our homes.

cannot predict whether interest rates will rise further, or the paces of any increases,

but additional increases would likely have a considerable impact on housing

Increases in interest rates (or the perception that interest rates will rise, including as a result of government actions), have, and could in the future, increase the costs to obtain mortgages, decrease the availability of mortgage financing have, and lower demand for new homes because of the increased monthly mortgage costs and cash required to close on mortgages to potential home buyers.

Despite moderation in the rate of inflation during 2025, w e have also experienced price fluctuations and increased labor costs, particularly in recent fiscal years, as a result of a sharp rise in inflation across the United States.

The cost and availability of labor may be adversely affected by changes in immigration laws or the enforcement thereof and trends in labor migration.

In addition, increased demand could increase material and labor costs.

Although much improved during fiscal years 2024 and 2025 , we continue to experience some construction delays due to shortages in the supply of certain materials, as well as labor and subcontractor shortages in our markets.

These delays impact the timing of our expected home closings and may also result in cost increases that we may not be able to pass to our current or future customers.

Sustained increases in construction costs may, over time, erode our margins, and impact our total contract or delivery volumes.

Interest rates increased substantially in fiscal years 2022 and 2023 and remained volatile in 2024 leading to uncertainty in the market about the direction rates will go in the future.

Because the large majority of our customers require mortgage financing, increases in interest rates or the decreased availability of mortgage financing could considerably impair the affordability of our homes, lower demand for our products, limit our marketing effectiveness and limit our ability to fully realize our backlog.

The large majority of our customers finance their acquisitions through lenders providing mortgage financing.

Mortgage rates, up until late 2022, had been historically low, which made the homes we sell more affordable.

Despite the Federal Reserve lowering interest rates in 2024 and 2025, mortgage rates have significantly increased since the beginning of fiscal year 2022 as a result of the Federal Reserve raising interest rates in an effort to curtail inflation during fiscal years 2022 and 2023 .

When interest rates increase, the cost to own a home increases, which reduces the number of potential homebuyers who can obtain mortgage financing and can result in a decline in the demand for our homes.

We cannot predict whether interest rates will rise further, or the paces of any increases, but additional increases would likely have a considerable impact on housing demand.

Increases in interest rates (or the perception that interest rates will rise, including as a result of the actual or anticipated actions of the government), have, and could in the future, increase the costs to obtain mortgages, decrease the availability of mortgage financing, and lower demand for new homes because of the increased monthly mortgage costs and cash required to close on mortgages to potential home buyers.

Even if potential customers do not need financing, changes in interest rates and mortgage availability could make it harder for them to sell their existing homes to potential buyers who need financing.

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Any limitations or restrictions on the availability of mortgage financing (including due to any failure of lawmakers to agree on a budget or appropriation legislation to fund relevant programs or operations or as a result of instability in the banking sector) could reduce our sales.

Further, if we are unable to originate mortgages for any reason going forward, our customers may experience significant mortgage loan funding issues, which could have a material impact on our homebuilding business and our Consolidated Financial Statements.

Inflation may adversely affect us by increasing costs beyond what we can recover through price increases and by increasing mortgage rates for homebuyers.

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In addition, an oversupply of alternatives to new homes, such as rental properties, resale homes and foreclosures, depressed prices and reduced margins for the sale of new homes.

Industry conditions had a material adverse effect on our business and results of operations in fiscal 2007 through 2011.

Further, we had substantially increased our inventory through fiscal 2006, which required significant cash outlays and which increased our price and margin exposure as we worked through this inventory.

Industry conditions had a material adverse effect on our business and results of operations in fiscal years 2007 through 2011 .

Further, we substantially increased our inventory through fiscal year 2006 , which required significant cash outlays and which increased our price and margin exposure as we worked through this inventory.

If the homebuilding industry experiences another significant or sustained downturn, it would materially adversely affect our business and results of operations in future years.

During the second half of fiscal 2022 and into fiscal 2023, we experienced a decrease in housing demand due to a sharp increase in mortgage rates, a substantial increase in home prices resulting from the COVID-19 pandemic, significant inflation in the broader economy, stock market volatility, and other macro-economic conditions, which adversely impacted buyer sentiment and behavior.

The homebuilding industry is significantly affected by changes in weather and other environmental conditions and resulting governmental regulations and increased focus by stakeholders on sustainability issues.

Weather conditions and man-made or natural disasters such as hurricanes, tornadoes, earthquakes, floods or prolonged precipitation, droughts, fires and other environmental conditions have harmed us in the past, and may harm us in the future.

During fiscal 2024, we experienced disruptions from Hurricane Beryl in Texas, our largest state in terms of deliveries.

Additionally, the physical impacts of climate change may cause these occurrences to increase in frequency, severity and duration, which can delay home construction, increase costs by damaging inventories, reduce the availability of building materials, and adversely impact the demand for new homes in affected areas, as well as slow down or otherwise impair the ability of utilities and local governmental authorities to provide approvals and service to new housing communities.

During the second half of fiscal year 2022 and into fiscal year 2023 , we experienced a decrease in housing demand due to a sharp increase in mortgage rates, a substantial increase in home prices resulting from the COVID- 19 pandemic, significant inflation in the broader economy, stock market volatility, and other macro-economic conditions, which adversely impacted buyer sentiment and behavior.

Weather conditions and man-made or natural disasters such as hurricanes, tornadoes, earthquakes, floods or prolonged precipitation, droughts, fires and other severe environmental conditions have harmed us in the past and may harm us in the future.

During fiscal year 2024, we experienced disruptions from Hurricane Beryl in Texas, our largest state in terms of deliveries.

The physical impacts of climate change may cause these occurrences to increase in frequency, severity and duration, which can delay home construction, increase costs by damaging inventories, reduce the availability of building materials, and adversely impact the demand for new homes in affected areas, and cause policymakers and industry stakeholders to adopt new and stricter building codes and standards, as well as slow down or otherwise impair the ability of utilities and local governmental authorities to provide approvals and service to new housing communities.

For example, wildfires in California and hurricanes in Texas and Florida in recent years have at various times caused utility company delays, slowing of our production process, increasing cost of operations and also impacting our sales and construction activity in affected markets during the related time periods.

Additionally, other coastal areas where we operate face increased risks of adverse weather or natural disasters.

Additionally, other coastal areas where we operate face increased risks of adverse weather conditions or natural disasters.

For example, adverse weather conditions and natural disasters may increase the cost of homeowner’s insurance, which could reduce the number of potential buyers who can afford, or who are willing to purchase homes we build in these affected areas, which could result in reduced demand for our homes in these markets.

In addition, there is a growing concern from advocacy groups and the general public that the emissions of greenhouse gases and other human activities have caused, or will cause, significant changes in weather patterns and temperatures and the frequency and severity of natural disasters.

Government mandates, standards and regulations enacted in response to these projected climate changes impacts could result in restrictions on land development in certain areas or increased energy, transportation and raw material costs that may adversely affect our financial condition and results of operations.

These concerns have also resulted in increasing government, investor and societal attention to environmental, social, and governance ( “ ESG ” ) matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, and could expand the nature, scope, and complexity of matters that we are required to control, assess, and report.

These and other rapidly changing laws, regulations, policies and related interpretations, as well as increased enforcement actions by various governmental and regulatory agencies, may create challenges for the Company, including with respect to our compliance and ethics programs, may alter the environment in which we do business, and may increase the ongoing costs of compliance, which could adversely impact our results of operations and cash flows.

These concerns have also resulted in increasing government, investor and societal attention to environmental, social, and governance ( “ ESG ” ) matters, including in certain cases expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, and could expand the nature, scope, and complexity of matters that we are required to control, assess, and report.

In recent years, certain U.S.

states and federal

officeholders have also proposed or enacted “anti-ESG” policies, legislation or

These and other rapidly changing laws, regulations, policies and related interpretations, as well as increased or varied enforcement actions by various governmental and regulatory agencies, may create challenges for the Company, including with respect to our compliance and ethics programs, may alter the environment in which we do business, and may increase the ongoing costs of compliance, which could adversely impact our results of operations and cash flows.

Our business is seasonal in nature and our quarterly operating results fluctuate.

Our quarterly operating results generally fluctuate by season.

The construction of a customer’s home typically begins after signing the agreement of sale and can take six to nine months or more to complete.

The construction of a customer’s home typically begins after signing the sale agreement and can take six to nine months or more to complete.

Weather-related problems, typically in the fall, winter and early spring, can delay starts or closings and increase costs and thus reduce profitability.

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Inventory carrying costs, including the costs of holding QMI homes, can be significant and can result in losses in a poorly performing project or market.

options also often include interest or other cost increase provisions which cause us to incur additional costs in the case of delays in land development and/or longer land takedown periods.

Land options also often include interest or other cost increase provisions which cause us to incur additional costs in the case of delays in land development and/or longer land takedown periods.

The assessment of communities for indicators of impairment is performed quarterly.

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See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Critical Accounting Policies.”

We conduct a significant portion of our business in Arizona, California, Delaware, Florida, New Jersey, South Carolina, Texas and Virginia, and accordingly, regional factors affecting home sales and activities in these markets may have a large impact on our results of operations.

We presently conduct a significant portion of our business in Arizona, California, Delaware, Florida, New Jersey, South Carolina, Texas and Virginia, which subjects us to risks associated with the regional and local economies of these markets.

We conduct a significant portion of our business in Arizona, California, Delaware, Florida, Maryland, New Jersey, Ohio, South Carolina, Texas and Virginia, and accordingly, regional factors affecting home sales and activities in these markets may have a large impact on our results of operations.

We presently conduct a significant portion of our business in Arizona, California, Delaware, Florida, Maryland, New Jersey, Ohio, South Carolina, Texas and Virginia, which subjects us to risks associated with the regional and local economies of these markets.

Home prices and sales activities in these markets and in most of the other markets in which we operate have declined from time to time, particularly as a result of slow economic growth.

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For example, to the extent the oil and gas industries, which can be very volatile, are negatively impacted by declining commodity prices, climate change, legislation or other factors, it could result in reduced employment, or other negative economic consequences, which in turn could adversely impact our home sales and activities in Texas.

Furthermore, precarious economic and budget situations at the state government level may adversely affect the market for our homes in the affected areas.

Furthermore, precarious economic and budget situations at the state government level or federal government shut-downs may adversely affect the market for our homes in the affected areas.

Weather-related or other events impacting these markets could also negatively affect these markets as well as the other markets in which we operate.

If home prices and sales activity decline in one or more of the markets in which we operate, our costs may not decline at all or at the same rate and the Company’s business, financial condition and results of operations could be materially adversely affected.

Increases in cancellations of agreements of sale could have an adverse effect on our business.

Our backlog reflects agreements of sale with our home buyers for homes that have not yet been delivered.

Increases in cancellations of sales agreements could have an adverse effect on our business.

Our backlog reflects sales agreements with our home buyers for homes that have not yet been delivered.

We have received a deposit from our home buyer for each home, which is reflected in our backlog, and we generally have the right to retain the deposit if the home buyer does not complete the purchase.

In some situations, however, a home buyer may cancel the agreement of sale and receive a complete or partial refund of the deposit for reasons related to state and local law, an inability to obtain mortgage financing at prevailing interest rates (including financing arranged or provided by us), an inability to sell their current home, or our inability to complete and deliver the new home within the specified time.

At October 31, 2024 , including unconsolidated joint ventures, we had a backlog of signed contracts for 2,328 homes with a sales value aggregating $1.3 billion.

If mortgage financing becomes less accessible, or if economic conditions deteriorate, more home buyers may cancel their agreements of sale with us, which could have an adverse effect on our business and results of operations.

In some situations, however, a home buyer may cancel the sale agreement and receive a complete or partial refund of the deposit for reasons related to state and local law, an inability to obtain mortgage financing at prevailing interest rates (including financing arranged or provided by us), an inability to sell their current home, or our inability to complete and deliver the new home within the specified time.

As of October 31, 2025 , including unconsolidated joint ventures, we had a backlog of signed contracts for 2,240 homes with a sales value aggregating $ 1.1 billion.

If mortgage financing becomes less accessible, or if economic conditions deteriorate, more home buyers may cancel their sale agreements with us, which could have an adverse effect on our business and results of operations.

Increases in the after-tax costs of owning a home could prevent potential customers from buying our homes and adversely affect our business or financial results.

Significant expenses of owning a home, including mortgage interest expenses and real estate taxes, have historically been deductible expenses for an individual’s federal, and in some cases state, income taxes, subject to limitations under tax law and policy.

The “ Tax Cuts and Jobs Act ” ( “ TCJA ” ) which was signed into law in December 2017 included provisions which impose significant limitations with respect to these income tax deductions.

For instance, through the end of 2025, the annual deduction for real estate taxes and state and local income taxes (or sales taxes in lieu of income taxes) is now generally limited to $10,000.

Furthermore, through the end of 2025, the deduction for mortgage interest is generally only available with respect to the first $750,000 of a new mortgage and there is no longer a federal deduction for interest on home equity loans.

is unclear whether the provisions of the TCJA described above will be allowed

to expire at the end of 2025, which would cause a reversion to the provisions

in effect prior to the TCJA, or whether some or all of such provisions will be

extended beyond 2025 by future legislation.

In addition, if the federal government or a state government further changes its income tax laws to further eliminate or substantially limit these income tax deductions, the after-tax cost of owning a new home would further increase for many of our potential customers.

The loss or reduction of these homeowner tax deductions that have historically been available has and could further reduce the perceived affordability of homeownership, and therefore the demand for and sales price of new homes, including ours, particularly in states with higher state income taxes or home prices, such as in California and New Jersey.

The “ Tax Cuts and Jobs Act ” ( “ TCJA ” ), which was signed into law in December 2017, included provisions which imposed significant limitations with respect to these income tax deductions through the end of 2025 .

In addition, the One Big Beautiful Bill Act (“OBBBA”), which was signed into law on July 4, 2025, includes provisions which extend and modify these limitations.

For instance, under OBBBA, the annual limitation on the deduction for real estate taxes and state and local income taxes (or sales taxes in lieu of income taxes) is permanently extended and the deduction is now generally limited to $40,000 for 2025 through 2029, subject to 1% increases from 2026 through 2029 and phasedown depending on the income of the taxpayer, and to $10,000 for 2030 and subsequent years.

The OBBBA also permanently extends the TCJA limitation that provided that, through the end of 2025 , the deduction for mortgage interest is generally only available with respect to the first $ 750,000 of a new mortgage.

If the federal government or a state government further changes its income tax laws to further eliminate or substantially limit these income tax deductions, the after-tax cost of owning a new home would further increase for many of our potential customers.

In addition, increases in property tax rates or fees on developers by local governmental authorities, as experienced in response to reduced federal and state funding or to fund local initiatives, such as funding schools or road improvements, or increases in insurance premiums can adversely affect the ability of potential customers to obtain financing or their desire to purchase new homes, and can have an adverse impact on our business and financial results.

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Further, an increase in the default rate on the mortgages we originate may adversely affect our ability to sell mortgages or the pricing we receive upon the sale of mortgages.

We compete on several levels with homebuilders that may have greater sales and financial resources, which could hurt future earnings.

We may not be able to compete with homebuilders that have greater sales and financial resources, which could hurt future earnings.

We compete not only for home buyers but also for desirable properties, financing, raw materials and skilled labor often within larger subdivisions designed, planned and developed by other homebuilders.

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Our financial services segment competes with other mortgage providers, primarily on the basis of fees, interest rates and other features of mortgage loan products.

In addition, the

homebuilding industry has been subject to increasing consolidation, which could result in existing competitors increasing their market share, create new competitors through business

combinations and/or result in stronger competitors.

We may be unable to compete

successfully in an increasingly consolidated industry and cannot predict how industry consolidation will affect us.

In addition, the homebuilding industry has been subject to increasing consolidation, which could result in existing competitors increasing their market share, create new competitors through business combinations and/or result in stronger competitors.

We may be unable to compete successfully in an increasingly consolidated industry and cannot predict how industry consolidation will affect us.

The competitive conditions in the homebuilding industry together with current market conditions have caused, and could continue to result in, difficulty in acquiring suitable land at acceptable prices;

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Cyber-attacks and other security threats could also originate from the malicious or accidental acts of insiders, such as employees, and other business partners and outside service providers.

In addition, cybersecurity risk is exacerbated with the advancement of technologies like artificial intelligence, which malicious third parties are using to create new, sophisticated and more frequent attacks.

As part of our normal business activities, we collect and store certain personal identifying and confidential information relating to our homebuyers, employees, vendors and suppliers, and maintain operational and financial information related to our business.

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While, to date, we have not had a significant cybersecurity breach or attack that has a material impact on our business or results of operations, our efforts to maintain the security and integrity of our IT networks and related systems may not be effective and attempted security breaches or disruptions could be successful or damaging.

Access to capital could be hindered if land banks are not able to raise necessary investor funds or if we are unable to create and maintain relationships with land banks.

As part of our land acquisition strategy, we have developed and expanded our land bank partner relationships to gain future access to land without taking ownership.

If we are unable to identify, develop or maintain the necessary relationships with suitable land banks in the future, we will not be able to fully implement our land-light business strategy.

Most land banks are funds that use financial investor capital to finance land acquisitions.

If returns to investors in land banks are not sufficient to attract investor funds and land banks are not able to identify alternative sources of funding, we would no longer have access to land banks and instead would have to increase our use of applicable local developers from which to source our finished lots or have to purchase land directly from landowners, which lots we would then have to develop on balance sheet.

This would impair our ability to carry out our strategy of reducing our inventory of owned land.

Negative publicity could adversely affect our reputation and our business, financial results and stock price.

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While we do not have any customer or direct supplier relationships in any of the foreign countries or regions involved in the current military conflicts, any related sanctions, export controls or actions that may be initiated by nations (e.g., potential cyberattacks, disruption of energy flows, etc.) and other potential uncertainties could adversely affect our supply chain by causing shortages or increases in costs for materials necessary to construct homes and/or increases to the price of gasoline and other fuels.

addition, a new public health crisis such as a major epidemic or pandemic, such

as COVID-19, could cause multiple disruptions in our supply chain and result

in shortages in certain building materials and tightness in the labor market,

which could cause our construction cycle times to lengthen.

In addition, a new public health crisis such as a major epidemic or pandemic, such as COVID- 19 , could cause multiple disruptions in our supply chain and result in shortages in certain building materials and tightness in the labor market, which could cause our construction cycle times to lengthen.

Such events could cause higher interest rates, inflation or general economic uncertainty, which could negatively impact our business partners, employees or customers, or otherwise adversely impact our business.

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Additionally, we have a $ 125.0 million senior secured revolving credit facility, which was fully available for borrowing as of October 31, 2025.

Our debt service payments for the year ended October 31, 2024, were $ 291.4 million, which represented interest incurred and payments on the principal of our debt and does not include principal and interest on nonrecourse secured debt, debt of our financial subsidiaries or fees under our letters of credit and other credit facilities and agreements.

Our debt service payments for the year ended October 31, 2025, were $ 946.8 million, which represented interest incurred and payments on the principal of our debt, but does not include principal and interest on nonrecourse secured debt, debt of our financial subsidiaries or fees under our letters of credit and other credit facilities and agreements.

As of October 31, 2025, we had an aggregate of $ 6.2 million outstanding under various letters of credit and other credit facilities and agreements, certain of which were collateralized by $ 6.3 million of cash.

Our fees for these letters of credit for the year ended October 31, 2024, which are based on both the used and unused portion of the facilities and agreements, were $ 0.1 million.

We also had substantial contractual commitments and contingent obligations, including $ 276.8 million of performance bonds as of October 31, 2025.

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require us to dedicate a substantial portion of our cash flow from operations to the payment of our debt and reduce our ability to use our cash flow for other purposes, including land investments;

expose us to the risk of increased interest rates as certain of our borrowings are at variable rates of interest;

require us to pay higher interest rates upon refinancing debt if interest rates rise or due to the concentration of debt maturities or our overall leverage levels;

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We are largely dependent on our current cash balance and future cash flows from operations (which may not be positive) to enable us to service our indebtedness, to cover our operating expenses and/or to fund our other liquidity needs.

Cash provided by operating activities in fiscal 2024 and 2023 was $ 23.6 million and $ 435.3 million, respectively.

Cash provided by operating activities in fiscal years 2025 and 2024 was $ 188.3 million and $ 23.6 million, respectively.

Depending on the levels of our land purchases, we could generate positive or negative cash flow in future years.

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For additional information about capital resources and liquidity, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Liquidity.”

Our cash flows, liquidity and consolidated financial statements could be materially and adversely affected if we are unable to obtain letters of credit.

Our cash flows, liquidity and financial condition could be materially and adversely affected if we are unable to obtain letters of credit.

Our homebuilding operations often require us to obtain letters of credit.

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If we are not successful in obtaining sufficient capital, it could reduce our sales and may hinder our future growth and results of operations.

In addition, pledging substantially all of our assets to support our senior secured revolving credit facility and our senior secured notes may make it more difficult to raise additional financing in the future.

In addition, substantially all of our assets are pledged to support our senior secured revolving credit facility, which may make it more difficult to raise additional financing in the future.

We could be adversely affected by a negative change in our credit rating.

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Therefore, any downgrade by any of the principal credit agencies may exacerbate these difficulties.

There can be no assurances that our credit ratings will not be downgraded in the future, whether as a result of deteriorating general economic conditions, a protracted downturn in the housing industry, failure to successfully implement our operating strategy, the adverse impact on our results of operations or liquidity position of any of the above, or otherwise.

Restrictive covenants in our debt instruments may restrict our and certain of our subsidiaries’ ability to operate, and if our financial performance worsens, we may not be able to undertake transactions within the restrictions of our debt instruments.

The indentures governing our outstanding debt securities and the agreements governing our credit facilities impose certain restrictions on our and certain of our subsidiaries’ operations and activities.

Restrictive covenants in our debt instruments may restrict our and certain of our subsidiaries’ ability to operate, and we may not be able to undertake transactions within the restrictions of our debt instruments, in particular if our financial performance worsens.

The indentures governing our outstanding debt securities and the agreement governing our senior secured revolving credit facility impose certain restrictions on our and certain of our subsidiaries’ operations and activities.

The most significant restrictions relate to debt incurrence, creation of liens, repayment of certain indebtedness prior to its respective stated maturity, sales of assets (including in certain land banking transactions), cash distributions, (including paying dividends on common and preferred stock), capital stock repurchases, and investments by us and certain of our subsidiaries (including in joint ventures).

Because of these restrictions, we could be prohibited from paying dividends.

Any other debt instruments that we may enter into in the future may contain similar or additional restrictions on our operations and activities.

Because of these restrictions, we could be prohibited from paying dividends or repurchasing shares of our common stock.

The restrictions in our debt instruments could prohibit or restrict our and certain of our subsidiaries’ activities, such as undertaking capital raising or restructuring activities or entering into other transactions.

In addition, if we fail to comply with these restrictions or to make timely payments on this debt and other material indebtedness, an event of default could occur and our debt under these debt instruments could become due and payable prior to maturity and the lenders under our senior secured revolving credit facility could terminate their commitments thereunder.

Any such event of default could lead to cross defaults under certain of our other debt instruments or negatively impact other debt-related covenants.

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The terms of our debt instruments allow us to incur additional indebtedness.

Under the terms of our indebtedness under our indentures and credit facilities, we have the ability, subject to our debt covenants, to incur additional amounts of debt, including secured debt.

Under the terms of our indebtedness under our indentures and senior secured revolving credit facility, we have the ability, subject to our debt and liens covenants, to incur additional amounts of debt, including secured debt.

The incurrence of additional indebtedness could magnify the risks described above.

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Regulatory and Legal Risks

Homebuilders are subject to a number of federal, local, state, and foreign laws and regulations concerning the development of land and homebuilding, sales and customer financing processes and the protection of the environment, which can cause us to incur delays and costs associated with compliance and which can prohibit or restrict our activity in some regions or areas.

Homebuilders are subject to a number of federal, local, state, and foreign laws and regulations concerning the development of land and homebuilding, sales and customer financing processes, and environmental, health and safety matters, which can cause us to incur delays and costs associated with compliance and which can prohibit or restrict our activity in some regions or areas.

We are subject to extensive and complex laws and regulations that affect the development of land and homebuilding, sales and customer financing processes, including laws and regulations relating to zoning, density, accessibility, anti-discrimination, building standards and mortgage financing.

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Any of the above delays or costs could have a negative effect on our future revenues and earnings.

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 or take corrective action, 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 also are subject to a variety of local, state, federal and foreign laws and regulations concerning environmental, health and safety matters, 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, and impacts to wetlands and other sensitive environments.

Certain environmental laws and regulations also impose obligations for the cleanup of properties affected by hazardous substance spills or releases on a joint and several basis and without regard to fault and liability.

We may become liable, either contractually or by operation of law, for remediation costs at any properties currently or formerly owned, leased or operated by us, or at third-party sites, such as off-site disposal facilities.

We may also be subject to third-party claims arising from the presence of hazardous substances, including claims for hazardous substances that have migrated offsite (e.g., property damage) or exposure to hazardous substances (e.g., personal injury).

In addition, we are generally required to obtain permits and other approvals under environmental laws and regulations to carry out our operations, and our ability to obtain or renew permits or approvals and the continued effectiveness of permits or approvals already granted is dependent upon many factors, some of which are beyond our control, such as changes in policies, rules or regulations, or the implementation thereof, or opposition from local governments, environmental advocacy groups, neighboring property owners or other possibly interested parties.

The particular laws and regulations that apply to a site may vary greatly according to the specific factors at each site, for example, due to the type of community, the environmental conditions at or near the site, and the present and former uses of the site.

These and other environmental, health and safety laws and regulations, which are subject to change and may become more stringent, can result in delays, substantial costs, fines or penalties and can prohibit or severely restrict development and homebuilding activity.

We anticipate that increasingly stringent requirements will continue to be imposed on developers and homebuilders in the future.

In addition, some of these laws and regulations that significantly affect how certain properties may be developed are contentious, attract intense political attention, and may be subject to significant changes over time.

For example, regulations governing wetlands permitting under the federal Clean Water Act have been the subject of extensive rulemakings for many years, resulting in several major joint rulemakings by the Environmental Protection Agency ( “ EPA ” ) and the U.S.

Army Corps of Engineers that have expanded and contracted the scope of wetlands subject to regulation;

and such rulemakings have been the subject of many legal challenges, some of which remain pending.

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.

We may be liable for

claims for damages as a result of use of hazardous materials.

As a homebuilding and land development business

with a wide variety of historical homebuilding, land development, and

construction activities, we could be liable for future claims for damages as a

result of the past or present use of hazardous materials, including building

materials or fixtures known or suspected to be hazardous, to contain hazardous

materials, or to be associated with mold.

Any such claims may adversely affect

our business, prospects, financial condition or operating results.

coverage for such claims may be limited or non-existent.

For example, over time several major joint rulemakings and formal guidance by the Environmental Protection Agency ( “ EPA ” ) and the U.S.

Army Corps of Engineers have expanded and contracted the scope of “waters of the United States” (i.e., wetlands and streams) subject to regulation under the Clean Water Act (“CWA”), which impacts, among other things, permitting requirements applicable to the homebuilding industry;

such rulemakings have been the subject of many legal challenges, some of which remain pending.

On November 17, 2025, the EPA and U.S.

Army Corps of Engineers announced a proposed rule that would revise the

definition of “waters of the United States.” The proposed rule is currently

subject to a public comment period ending on January 5, 2026.

proposed rule appears to narrow the scope of properties subject to certain

Clean Water Act permitting obligations, there is ongoing legal uncertainty due

to potential future regulatory developments, including at the state or local

level, and any legal challenges that may arise in response to the revised

definition, and we cannot reliably predict the extent of any effect these regulatory

developments and legal challenges may take effect, may have on us.

We may be liable for claims for damages as a result of the use or presence of hazardous materials in our operations or developments.

As a homebuilding and land development business with a wide variety of historical homebuilding, land development, and construction activities, we have in the past been and could in the future be liable for claims for damages as a result of the past or present use or presence of hazardous materials in our operations and developments, including building materials or fixtures known or suspected to be hazardous, to contain hazardous materials (such as asbestos, lead or per- and polyfluoroalkyl substances), or to be associated with mold.

Any such claims may adversely affect our business, prospects, financial condition or operating results.

Insurance coverage for such claims may be limited or non-existent.

Legal claims not resolved in our favor, such as product liability litigation and warranty claims, may be costly.

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In addition, the amount and scope of coverage offered by insurance companies is currently limited, and this coverage may be further restricted and become more costly.

If we are not able to obtain adequate insurance against such claims, if the costs associated with such claims significantly exceed the amount of our insurance coverage, or if our insurers do not pay on claims under our policies (whether because of dispute, inability, or otherwise), we may experience losses that could hurt our financial results.

If we are not able to obtain adequate insurance against such claims, the costs associated with such claims significantly exceed the amount of our insurance coverage, or if our insurers do not pay on claims under our policies (whether because of dispute, inability, or otherwise), we may experience losses that could negatively impact our financial results.

Our financial results could also be adversely affected if we were to experience an unusually high number of claims or unusually severe claims.

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Tax increases and changes in tax rules may adversely affect our financial results.

As a company conducting business with physical operations throughout the U.S., we are exposed, both directly and indirectly, to the effects of changes in U.S., state and local tax rules.

As a company conducting business with physical operations throughout the United States, we are exposed, both directly and indirectly, to the effects of changes in federal, state and local tax rules.

Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax rules.

Such changes may put us at a competitive disadvantage compared to some of our major competitors, to the extent we are unable to pass the tax costs through to our customers.

Such changes may put us at a competitive disadvantage compared to some of our larger peers, to the extent we are unable to pass the tax costs through to our customers.

Risks Related to Our Organization and Structure

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We currently operate through a number of unconsolidated homebuilding joint ventures with independent third parties in which we do not have a controlling interest.

At October 31, 2024, we had invested an aggregate of $ 142.9 million in these unconsolidated joint ventures, including outstanding net advances to these unconsolidated joint ventures of $ 2.4 million.

In addition, as part of our strategy, we intend to continue to evaluate additional joint venture opportunities;

however, we may be limited in pursuing all such desirable opportunities because the indentures governing our outstanding debt securities and agreements governing our credit facilities impose certain restrictions, among others, on investments by us and certain of our subsidiaries (including in joint ventures).

As of October 31, 2025, we had invested an aggregate of $ 163.5 million in these unconsolidated joint ventures.

As part of our strategy, we intend to continue to evaluate additional joint venture opportunities;

however, we may be limited in pursuing any such desirable opportunities because the indentures governing our outstanding debt securities and agreements governing our senior secured revolving credit facility impose certain restrictions, among others, on investments by us and certain of our subsidiaries (including in joint ventures).

These investments involve risks and are highly illiquid.

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In addition, we lack a controlling interest in these joint ventures and, therefore, are usually unable to require that our joint ventures sell assets or return invested capital, make additional capital contributions, or take any other action without the vote of at least one of our venture partners.

Therefore, absent partner agreement, we will be unable to liquidate our joint venture investments to generate cash.

Therefore, absent partner agreement, we will be unable to liquidate our joint venture investments to generate cash or take other actions to protect our investment.

The Hovnanian family is able to exercise significant influence over us.

The combined ownership of members of the Hovnanian family, including Ara K.

Hovnanian, our Chairman of the Board, President, and Chief Executive Officer, through personal holdings, the limited partnership and the limited liability company established for members of Mr.

Hovnanian, our Chairman of the Board and Chief Executive Officer, through personal holdings, the limited partnership and the limited liability company established for members of Mr.

Hovnanian’s family and family trusts of Class A and Class B common stock, enables them to exert significant control over us, including power to control the election of the Board of Directors and to approve matters presented to our stockholders.

Such holdings represented approximately 58 % of the votes that could be cast by the holders of our outstanding Class A and Class B common stock combined as of October 31, 2024.

As of October 31, 2025, such holdings represented approximately 60.2 % of the votes that could be cast by the holders of our outstanding Class A and Class B common stock on a combined basis.

This concentration of ownership may also make some transactions, including mergers or other changes in control, more difficult or impossible without their support.

Also, because of their combined voting power, circumstances may occur in which their interests could be in conflict with the interests of other stakeholders.

Also, because of their combined voting power, circumstances may occur in which their interests could conflict with the interests of other stakeholders.

Our net operating loss carryforwards could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code.

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The value of our deferred tax assets is also dependent upon the tax rates expected to be in effect at the time the taxable income is expected to be generated.

A decrease in enacted corporate tax rates in our major jurisdictions, especially the U.S.

federal corporate rate, would decrease the value of our deferred tax assets, which could be material.

A decrease in enacted corporate tax rates in our major jurisdictions, especially the federal corporate rate, would decrease the value of our deferred tax assets, which could be material.

Our Board of Directors has adopted, and our shareholders have approved, a shareholder rights plan (the “Rights Plan”) designed to preserve shareholder value and the value of certain tax assets primarily associated with net operating loss carryforwards and built-in losses under Section 382 of the Code.

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Treasury regulations).

We could be adversely impacted by the loss of key management personnel or if we fail to attract qualified personnel.

To a significant degree, our future success depends on the efforts of our senior management, many of whom have been with the Company for a significant number of years, and our ability to attract qualified personnel.

Our operations could be adversely affected if key members of our senior management leave the Company or if we cannot attract qualified personnel to manage growth in our business.

We could be adversely impacted by the loss of key management personnel or if we fail to attract and retain qualified personnel.

Our operations could be adversely affected if key members of our senior management leave the Company or if we cannot attract and retain qualified personnel to manage growth in our business.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors