Filed by Hovnanian Enterprises, Inc.
                           Pursuant to Rule 425 under the Securities Act of 1933

                                    Subject Company: Hovnanian Enterprises, Inc.
                                                   Commission File No. 001-08551
                                                                             and

                                         Subject Company: Washington Homes, Inc.
                                                   Commission File No. 001-07643

                              HOVNANIAN ENTERPRISES
                        DECEMBER 14, 2000, 3:00 P.M., EDT
                                Conference Call


Operator                        Good afternoon, ladies and gentlemen, and
                                welcome to the Hovnanian Enterprises,
                                Incorporated fourth quarter conference call. At
                                this time all participants are in a listen-only
                                mode. Later we will conduct a question and
                                answer session and instructions will follow at
                                that time. If anyone should require assistance
                                during the call, please press the star followed
                                by the zero on your touchtone phone. As a
                                reminder, ladies and gentlemen, this conference
                                is being recorded.

                                I would now like to introduce your host for
                                today's conference, Ms. Nicole Engel of the
                                Financial Relations Board. Please go ahead,
                                ma'am.

N. Engel                        Thank you all for joining us today for
                                Hovnanian's conference call to discuss the
                                company's fourth quarter results. By now you
                                should have all received a faxed copy of the
                                press release. However if anyone is missing a
                                copy and would like one, please contact our
                                office at 212-661-8030 and we will send one
                                right over to you and ensure that you are on
                                Hovnanian's distribution list. There will be a
                                replay for the call which will begin one hour
                                after the call and run for one week. The replay
                                can be accessed by dialing 1-800-696-1588 or
                                303-804-1727 passcode 876632.

                                On the line with us today is Ara Hovnanian,
                                President and Chief Executive Officer.
                                Management will make some opening remarks about
                                the quarter and then we'll open the line for
                                questions.

                                Before we begin, I would like to remind everyone
                                of the cautionary language about forward looking
                                statements contained in the release. The same
                                language applies to any comments made during the
                                call. Ara, would you like to begin?

A. Hovnanian                    Yes, good afternoon. I'm pleased to see that
                                the Bush/Gore tally is not the only one that's
                                been finalized and we're pleased to announce
                                our fourth quarter and annual results. The
                                first year of the millennium has been a year of
                                milestones for our company. In fiscal year 2000
                                which ended on October 31st, our revenues
                                exceeded $1 billion for the first time in our
                                41 year history. Our net earnings of $33.2
                                million, or $1.50 a share also set an all time
                                record for our company. We delivered 4,367
                                homes, more than in any other year. Our fourth
                                quarter was particularly strong. As we
                                anticipated before the year, the opening of
                                many new communities during the year weighted
                                our earnings toward the fourth quarter. We
                                accomplished what we said we would and more
                                than doubled our profit in the fourth quarter
                                to 84 cents per share from 41 cents per share
                                in the 1999 fourth quarter. We delivered 1,290
                                homes in the fourth quarter and 4,367 home for
                                the year - each a record for any quarter or
                                year in our past.

                                Our associates achieved this with a strong
                                resolve and a team effort and they really
                                deserve a heartfelt congratulations and sincere
                                word of thanks.

                                These record results were largely the result of
                                our hard work, as I said. Strong housing


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HOVNANIAN ENTERPRISES                                                     PAGE 1



                                markets particularly in the northeast region
                                and the many improvements we've made to our
                                operating efficiency under our strategic
                                initiatives have clearly also contributed.
                                Despite a slowing economy, our sales have
                                continued to show strength through the end of
                                the fiscal year with fourth quarter net
                                contracts up 27.4% year-to-year. This allowed
                                us to enter fiscal '01 with a record contract
                                backlog that positions us for further growth in
                                earnings and revenues. The dollar value of our
                                contract backlog on October 31, 2000 increased
                                17% from last year.

                                Our strong results are evidence that we are
                                successfully growing our company again after
                                focusing strictly on improving the bottom line
                                profitability for several years leading up to
                                last year.

                                About 18 months ago we set out to expand our
                                business through acquisitions that would allow
                                us to meet our strategic goals of concentrating
                                in a handful of select markets, and diversifying
                                our profits outside the Northeast region. We
                                made several in-market acquisitions in fiscal
                                '99 and then entered a new geographic market
                                late that year through the acquisition of
                                Goodman Homes in Dallas, Texas. Each of these
                                operations were structured at a fair price, each
                                has met our strategic objectives and each has
                                been meeting or exceeding our financial plan.
                                Now we are making a big step to the next level
                                by merging with Washington Homes. We announced
                                the merger in late August and we expect it to
                                close in mid to late January pending shareholder
                                approval. This transaction will greatly enhance
                                the company's market position in the metro
                                Washington, D.C., market and North Carolina.
                                It'll add great depth to our management team,
                                it'll increase our market capitalization and
                                increase liquidity of our shares.

                                With the addition of Washington Homes, we expect
                                total revenues to grow by nearly 50% in fiscal
                                '01 to $1.7 billion, or close to 7,000 home
                                deliveries. On a combined basis, the two
                                companies had more than 43% of their deliveries
                                anticipated for the year in contract backlog at
                                October 31, giving us the confidence that we'll
                                be able to achieve our fiscal '01 business plan.
                                Our sales since the end of October have pushed
                                us now over the halfway mark toward our planned
                                deliveries for the year.

                                Joining me today from Washington Homes to
                                discuss the status of the merger are Geaton
                                DeCesaris, Chairman, President and CEO of
                                Washington Homes and Chris Spendley, Senior Vice
                                President and Chief Financial Officer of
                                Washington Homes. Also joining me from Hovnanian
                                are Larry Sorsby, Executive Vice President and
                                Chief Financial Officer, Paul Buchanan, Senior
                                Vice President and Corporate Controller, and
                                Kevin Hake, Vice President and Treasurer.

                                I'll make a few additional comments and then
                                turn it over to Geaton to update you on the
                                status of the merger, which I'm sure you're all
                                curious about and finally Larry will finish up
                                by going through the numbers in more detail.

                                We've now surpassed the billion dollar revenue
                                mark and with Washington Homes we'll be moving
                                rapidly toward the $2 billion level. Our
                                significant investment over the past few years
                                in systems and process improvements has been and
                                will continue to be essential for our continued
                                growth and profitability as well as revenues. We
                                expect to recover our investment in streamline
                                processes and systems many times over through
                                enhanced returns during the coming years.

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HOVNANIAN ENTERPRISES                                                     PAGE 2



                                We've made significant progress with our
                                financial services business in fiscal 2000 which
                                includes our title and mortgage operations. With
                                the help of new management we totally
                                restructured the operation mid-year,
                                dramatically improving efficiencies. Essentially
                                we're doing the same business with about half
                                the people. Customer satisfaction at the same
                                time is up. After all these changes, in the most
                                recent months the payoff has become clear and
                                the profitability has already begun. This has
                                been a particularly frustrating area since our
                                performance in financial services has lagged
                                behind our peers in the past. We finally have
                                the right format for the mortgage company in
                                particular to become a meaningful contributor to
                                our company going forward.

                                Overall we anticipate a modestly slower but
                                stable housing market going forward. Job growth
                                remains healthy and inflation seems to be in
                                check. Most of our markets continue to
                                experience strong demand for housing. The
                                increasingly difficult environment for
                                regulatory approvals in nearly all areas of the
                                country have kept the supply of new housing from
                                meeting demand in many of our markets. This
                                gives us the confidence that the housing market
                                will support our business plan, even with a
                                moderate downturn in job creation.

                                Despite the recent appreciation of our stock
                                price over the past few weeks, we believe it is
                                still significantly undervalued. Our closing
                                price yesterday of $9.19 represents a 26%
                                discount from our book value of $12.42 at year
                                end. This share price represents only six times
                                our earnings per share of $1.50 for the past
                                year and only five times consensus analysts'
                                estimates of $1.80 per share for our fiscal
                                2001. This is essentially at recession levels
                                already, yet the market remains quite strong. We
                                continue to believe that our shares represent
                                significant value for investors. Our stock price
                                doesn't reflect the improved scale, liquidity
                                and market position that our pending merger with
                                Washington Homes will bring.

                                While I believe that Hovnanian's stock price
                                still does not fairly reflect the tremendous
                                potential of our combined organization, I am
                                pleased that the value of the shares is at least
                                beginning to improve and is now trading at a
                                level which is 30% higher than the value at the
                                time we announced the transaction with
                                Washington Homes earlier in the year.

                                This, in part, is a reflection of increased
                                values for shares of homebuilding companies over
                                the past few months, but we think it's also a
                                validation of the value of our merger in our
                                combined companies. We purchased 1,026,000
                                shares of our Class A common stock during the
                                year at an average cost of $6.29 per share.
                                Based on our current price, we've already made a
                                healthy return on these investments. Longer
                                term, we're committed to increasing our market
                                float which would enhance market liquidity for
                                our shareholders and at the same time we'll
                                remain committed to continuing our path of
                                reducing leverage. Thus we'd prefer to be an
                                issuer of shares at some point when our shares
                                are fairly valued. However, as we are trading at
                                modest multiples and a discount to book value,
                                it's likely that we may be in the market from
                                time-to-time. We still have some room from our
                                prior approved Board authorization.

                                Our main focus is to continue to improve our
                                performance and we remain confident

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HOVNANIAN ENTERPRISES                                                     PAGE 3



                                that the market will recognize our improved
                                profitability, scale, liquidity and market
                                position over time, particularly as we
                                demonstrate the benefits of the merger. Our
                                shareholders' equity will exceed $300 million
                                at closing with the issuance of an additional
                                5.7 million shares. This will increase market
                                float in our shares by approximately 50% and
                                add significant liquidity for our shareholders.

                                In return for issuing these shares, we are
                                getting an excellent operating company and a
                                management team that has been earning superior
                                returns. We expect to gain tremendous strategic
                                benefit that we've only begun to quantify, some
                                of which Geaton will go into further in a
                                minute. The combination is a perfect fit with
                                our strategy of having a dominant presence in a
                                handful of select markets. We're anxious to get
                                the merger closed and begin achieving the many
                                benefits the combination of our two companies
                                will have. We anticipate being able to close by
                                the end of January, assuming that the necessary
                                shareholder approvals are obtained.

                                We've been holding many planning meetings and
                                market review meetings with senior management
                                from Washington Homes and we're quickly finding
                                that the strategic and cultural fit of our two
                                organizations is as strong as we expected. We've
                                already begun to identify opportunities for
                                improvement in our construction operations,
                                additional savings with our national purchasing
                                programs, improved product offerings with the
                                combined market offerings of both companies,
                                savings in marketing and numerous other areas
                                that are beyond what we had initially
                                anticipated. There's much work to be done in
                                integrating these two companies, but we can
                                already feel the increased power from shared
                                ideas that the merger will provide.

                                I'd like to turn it to Geaton now who will
                                provide a few more specifics on the merger.
                                Geaton?

G. DeCesaris                    Thank you, Ara. I'd like to now talk on the
                                transition of Washington Homes to becoming a K.
                                Hovnanian company. We have created transition
                                teams of both Hovnanian and Washington Homes
                                personnel to plan for the integration of our
                                operations in the Washington, D.C., and North
                                Carolina markets. The operational teams are
                                being led by Tom Pellerito, our current Chief
                                Operating Officer, who will be President of the
                                Southeast Region of Hovnanian and Chris
                                Spendley, our CFO, who'll be the Chief
                                Financial Officer for the Southeast region,
                                both of whom willing continue reporting
                                directly to me.

                                As we have studied the decision of combining
                                these operations, we have focused on identifying
                                both operating efficiencies and cost savings. We
                                are making progress and have already made a
                                number of key decisions which will be
                                implemented as soon as practical after the
                                merger closes. We have made these decisions as a
                                team, with the involvement of key personnel for
                                both companies on the basis of careful
                                evaluations of the strengths of both operations
                                and the associates involved. By taking the
                                strengths of both companies, we believe we are
                                building a powerful team in our North Carolina
                                and Washington, D.C. markets which will make us
                                the number one and number two homebuilder,
                                respectively, in each market.

                                We are working diligently on our plans to blend
                                our two pools of talented associates at every
                                level, from division managers down to sales
                                associates and superintendents at the

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HOVNANIAN ENTERPRISES                                                     PAGE 4





                                communities. The growth prospects and increased
                                market presence of the combined company have
                                improved the opportunities for the vast majority
                                of our associates. We feel there is a general
                                level of excitement building in both of our
                                current operations in these markets. We plan to
                                eliminate areas of redundancy among divisional
                                and regional offices which will result in some
                                personnel reductions and cost savings.

                                As both Hovnanian and Washington Homes have
                                always done in similar situations, we will treat
                                these individuals fairly and assist them in
                                finding new opportunities. We plan to reduce the
                                number of operating offices located in Virginia
                                and North Carolina from 11 to 5. We will combine
                                five separate computer systems with different
                                application software into one system. Chris
                                Spendley will oversee this consolidation effort
                                along with implementing Hovnanian's standardized
                                reporting for each division and area within the
                                former Washington Homes operations. We will
                                eliminate two duplicate design centers in North
                                Carolina and we will consolidate our sales and
                                marketing efforts wherever practical. We will
                                market under the Washington Homes' name in both
                                Maryland and Virginia and we'll use both the
                                Westminster Homes and Fortis Homes brand names
                                in North Carolina. This will allow us to segment
                                the North Carolina market by price and product
                                with Fortis aimed at a slightly higher price
                                point. We plan to introduce the Fortis product
                                into certain Westminster communities and vice
                                versa in order to increase our overall sales in
                                existing communities.

                                All three brand names will carry the tagline of
                                a "K. Hovnanian Company" so that we can continue
                                to build on our national reputation for quality
                                and value. We are in the process of reviewing
                                both companies' existing national contracts and
                                have already identified and renegotiated
                                several, resulting in additional savings,
                                whether it be from cost reductions or
                                participation in rebate programs.

                                At the corporate level, we will consolidate both
                                our payroll operations and 401K plans and we'll
                                eliminate the cost of operating as two separate
                                public companies. We are working to adopt the
                                best practices of each organization as we strive
                                for standardization throughout our combined
                                company. For example, we will adopt Hovnanian's
                                safety program in the former Washington Homes'
                                operations and we will rapidly implement
                                Hovnanian's extensive associate training and
                                career development programs. We plan to complete
                                the planning process for the integration of our
                                two companies by mid-January and to begin
                                implementation of the plan immediately upon
                                closing the transaction. We believe that
                                although we have a monumental task ahead of us,
                                we are convinced this integration can be dealt
                                with in a reasonable timeframe because of a well
                                thought out plan and the caliber of our
                                associates in these markets.

                                We think there are tremendous opportunities for
                                further cost savings and gross margin
                                enhancements that can be realized from merging
                                our operations. So we are first only grabbing
                                what we consider the low hanging fruit. We have
                                identified many operating synergies of combining
                                these two companies. However, since we also
                                realize the additional short term cost of
                                consolidation and the risk associated with
                                combining 11 offices into five and five
                                operating systems into one, we have not included
                                any of these savings in our 2001 numbers and we
                                expect to update you in future calls of our
                                progress.

                                The management of Washington Homes is excited to
                                become part of the K. Hovnanian


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HOVNANIAN ENTERPRISES                                                     PAGE 5



                                company which has many similarities in culture
                                and operating focus. As Ara has suggested, we
                                are finding that one plus one can truly add up
                                to more than two.

                                At this time I would like to turn the call over
                                to Larry Sorsby who will take you through the
                                financial results of the company.

L. Sorsby                       Thank you, Geaton. Fourth quarter performance
                                for the quarter ended October 31st, 2000: the
                                company reported net income of $18.2 million,
                                more than two times the net income of $8.9
                                million achieved in the 1999 fiscal fourth
                                quarter. On a per share basis, this equates to
                                84 cents per fully diluted share for the fourth
                                quarter compared to 41 cents per share for the
                                comparable 1999 period.

                                Revenues for the 2000 fourth quarter were $353.8
                                million, an 18.6% increase from 1999's fourth
                                quarter revenue of $298.4 million. Homebuilding
                                gross margins excluding land sales increased to
                                22.1% in the fourth quarter of fiscal 2000, up
                                substantially from 19.7% in the fourth quarter
                                of 1999 and continuing a trend of improvement
                                from 18.2% in the first quarter of fiscal 2000,
                                20.2% in the second quarter and 20.9% in the
                                third quarter of 2000.

                                Fiscal 2000 results: Net income increased to
                                $33.2 million, or $1.50 per fully diluted share
                                for fiscal 2000 compared to $30.1 million, or
                                $1.39 for fully diluted share in fiscal 1999.
                                Total revenues grew to $1.14 billion, compared
                                to $946.7 million in fiscal 1999 on a 15.9%
                                increase in deliveries to 4,367 homes.

                                As anticipated, homebuilding gross margins fell
                                by 40 basis points for the year to 20.5% from
                                20.9% last year. We projected such a decline a
                                year ago due to the acquisition of Goodman Homes
                                in Texas which was included for only one month
                                of fiscal 1999. Goodman has historically
                                operated with lower gross margins than our other
                                divisions but they achieve excellent returns on
                                investment as a result of a high land inventory
                                turnover. Excluding Texas, the company's
                                consolidated gross margin increased for the year
                                to 21.3% from 21.0% in fiscal 1999. Average
                                sales price per home increased 5% to $253,000
                                from $241,000 last year, partly as a result of
                                an increase in the number of more expensive move
                                up homes we're offering for sale in certain
                                communities in the Northeast and in California,
                                but it's also a reflection of our ability to
                                increase prices in select communities this year.

                                Total SG&A, including corporate, was 12.1% of
                                total revenues for the year, an increase over
                                last year's 11.6%. We anticipate that SG&A cost
                                as a percent of revenues will decrease in fiscal
                                2001.

                                In terms of operations, fourth quarter net
                                contracts were up 27.4% year-to-year from 876
                                homes last year to 1,116 homes this year.
                                Deliveries in 2000's final quarter were 1,290
                                homes, or $342.3 million compared to 1,153
                                homes, or $287.5 million in 1999.

                                For the full year, deliveries increased 15.9% to
                                a record 4,367 home deliveries. Net contracts
                                climbed to 4,542 homes valued at $1.1 billion,
                                an increase of 38.4% from last year's results.
                                The dollar value of contract backlog on October
                                31, 2000, increased 16.9% to $538.5 million, or
                                2,096 homes compared to $460.7 million, or 1,921
                                homes in 1999.


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HOVNANIAN ENTERPRISES                                                     PAGE 6



                                Shareholders' equity grew to $263.4 million, or
                                $12.42 per share at fiscal year end compared to
                                $236.4 million, or $10.67 at year end fiscal
                                1999.

                                The company's debt to equity ratio was 1.41 to 1
                                at the end of fiscal 2000 after taking into
                                account approximately $25 million of cash on the
                                company's balance sheet.

                                As expected, this ratio was modestly higher than
                                the ratio of 1.35 to 1 at year end 1999, which
                                was a result of the Texas acquisition, growth in
                                our California market and the company's
                                repurchase of 1,026,000 shares of its Class A
                                common stock during the year at an average cost
                                of $6.29 per share. The debt to equity ratio
                                declined from its peak of 1.72 to 1 at July 31,
                                2000, as a result of extremely strong fourth
                                quarter cash flow. Even with the Washington
                                Homes transaction, which was essentially
                                leverage neutral, we expect our average ratio of
                                debt to equity to decline modestly in fiscal
                                2001.

                                The company reported EBITDA of $98.4 million for
                                the year, up from 1999's $91.3 million. In
                                September Hovnanian issued $150 million of 10.5%
                                senior notes due in 2007 in order to maintain an
                                appropriate level of long term capital to
                                support the company's significantly larger
                                operations and balance sheet. Combined with
                                strong fourth quarter cash flow, this enabled us
                                to end the year with no balance outstanding on
                                our $375 million unsecured revolving credit
                                facility and we had about $25 million
                                [CORRECTION THE NUMBER SHOULD HAVE BEEN
                                $40 MILLION] of cash on the balance sheet.

                                Interest expense as a percent of total revenues
                                decreased to 3.1% from 3.2% last year. Our Board
                                of Directors is authorized to purchase up to 4
                                million shares of Class A common stock. As of
                                October 31, 2000, we had repurchased
                                approximately 3.4 million shares under this
                                program.

                                At this point I'd like to give you a brief
                                update on what we see for fiscal 2001. We are
                                comfortable that we'll be able to meet or exceed
                                the consensus analysts' estimates of earnings
                                for the combined company of approximately $1.80
                                per share in fiscal 2001, including the effect
                                of adding Washington Homes operations for
                                slightly more than three full quarters in fiscal
                                2001, which is expected to add approximately 5
                                to 10 cents per share to the company's net
                                earnings. This represents a healthy 20% increase
                                from the record year we just finished. We expect
                                total revenues of approximately $1.7 billion and
                                deliveries close to 7,000 homes. All of these
                                projections assume that economic conditions for
                                the next six to nine months remain fairly
                                similar to current conditions. Our pattern of
                                quarterly earnings and year-over-year
                                comparisons will be distorted by the timing of
                                the merger. We expect our first quarter, which
                                is historically our weakest, to reflect results
                                similar to fiscal 2000's prior to the effect of
                                any one time charges associated with the merger.
                                The next two quarters, the second and third
                                quarters, should show significant improvement in
                                earnings per share over the prior year period.

                                The fourth quarter of fiscal 2000 that we're now
                                reporting 84 cents per share will be difficult
                                to match in the fourth quarter of fiscal 2001,
                                but we expect to exceed 1999's fourth quarter
                                earnings of 41 cents per share by a very
                                comfortable margin.

                                The benefits of the merger should increase
                                substantially in subsequent years as we realize
                                the full efficiencies of market concentration
                                resulting from the merger. This is

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HOVNANIAN ENTERPRISES                                                     PAGE 7



                                particularly true in the areas of national
                                purchasing contracts, shared cost data and
                                methodologies and consolidation of our
                                subcontractor basis which enables us to smooth
                                out the timing of our construction schedules,
                                thereby provide tremendous savings for both our
                                company and our trade partners.

                                Now I'll turn it back to Ara for some concluding
                                remarks.

A. Hovnanian                    We're pleased to have achieved our goal of
                                becoming a billion dollar homebuilder and we'll
                                now set our targets on an even more exclusive
                                level of $2 billion in revenues while adhering
                                to our efficiency initiatives and conservative
                                land acquisition philosophies. The combination
                                of the two companies will elevate Hovnanian to
                                the next level with continuing improvement in
                                our bottom line performance. Our improvement
                                initiatives have positioned us to grow better
                                through this merger, not just bigger.

                                This concludes our formal comments and we'll now
                                be pleased to open it up for questions.

Operator                        Thank you. Ladies and gentlemen, at this time if
                                you have a question, you will need to press the
                                one on your touchtone phone and you will hear a
                                tone acknowledging your request. Your questions
                                will be taken in the order that they are
                                received. If your question has already been
                                answered you may remove yourself from queue by
                                pressing the pound key. Also if using a
                                speakerphone, please pick up your handset before
                                pressing the buttons. One moment for the first
                                question.

                                Steve Percoco of Lark Research, please state
                                your question.

S. Percoco                      Thank you. Could you give us the number of lots
                                that you owned and controlled at the end of the
                                year?

A. Hovnanian                    Kevin or Paul, do you have that number handy?

P. Buchanan                     We'll get to you in a few minutes, Steve, if
                                you give us a minute and maybe if you have a
                                different question, we'll answer that in the
                                meantime.

S. Percoco                      Secondly, could you talk about your California
                                business. The average price I guess has been
                                moving up in terms of deliveries and I wonder
                                if that reflects a change in the business. I
                                know you've talked about doing an infill
                                project which I don't think is on stream yet
                                and also you've got I think an active adult
                                community going there. How has your business
                                changed in California and what do you see going
                                forward?

A. Hovnanian                    Our California operation, on average price,
                                you're right, did move up. This past year we
                                are about $320,000 roughly and our backlog is
                                slightly up from that. That was up compared to
                                $220,000. It really wasn't a strategic and
                                conscious move, Steve. It was really a matter
                                of where particular land parcels were that we
                                were delivering in a given year and whether
                                they were lower price Inland Empire or higher
                                priced San Diego or Orange County properties.

                                Overall we're seeing some good strength in
                                recent years. Our performance there was really
                                hurt last year because we had several properties
                                that we had planned to bring

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HOVNANIAN ENTERPRISES                                                     PAGE 8




                                online far earlier, but we ran into a few
                                regulatory delays that really cost us quite a
                                bit of carrying cost. Fortunately we've made it
                                through those delays and three very significant
                                communities have opened, and those were very
                                recent, in the last six or seven weeks, I'm
                                pleased to say all three have done very well,
                                so that should help improve our results in that
                                marketplace. We're seeing some pretty good
                                strength there right now.

S. Percoco                      So the increase in the average price was due to
                                a higher proportion of homes delivered say in
                                Orange County and San Diego?

A. Hovnanian                    A little more in San Diego and the pricing of
                                what we delivered in the Inland Empire was up a
                                little higher.

S. Percoco                      Do you expect that that's going to continue
                                in the next year? In other words I guess this
                                week it was announced, UCLA came out and said
                                that they expect some kind of a pullback in
                                the economy in California. I wonder what your
                                sense is of how that might affect the housing
                                market there.

A. Hovnanian                    I'm not sure if those comments were geared
                                toward Northern California or Southern. We're
                                operating in a pretty tight geographic market
                                only in Southern California and basically
                                south of L.A. As I mentioned at this point
                                we're seeing pretty good strength there. Part
                                of it's related to opening some new
                                communities which have done nicely for us.

                                We do anticipate a little richer mix of higher
                                priced product. As I mentioned, we have at year
                                end, we've got about 150 homes in backlog which
                                is up from about 129 last year and the average
                                price in our backlog is about $384,000.

                                We'll take just one question more, Steve, and
                                then I'll give a few other people a chance and
                                then come back if you have more at the end.

S. Percoco                      I guess could you also talk about the Northeast
                                and what you're seeing there? I assume just
                                looking at the regions, that given the
                                increases that you've experienced in California
                                and Northeast that the margin improvement has
                                been centered in those areas. Is that a
                                reasonable assumption?

A. Hovnanian                    No, the margin improvement absolutely has
                                happened in the Northeast region. That hasn't
                                happened, did not happen last year in
                                California but we do expect improvements in
                                California in this coming year largely related,
                                as I mentioned, to some of these new
                                communities that we've finally gotten online.

                                The Northeast region has continued to hold at
                                very strong levels. The issue is not at all
                                sales. We're continuing to focus on getting our
                                many properties online and open for sales and
                                that's our only limiting factor right now. We're
                                actually projecting a slight decrease in fiscal
                                '01 in the Northeast region in our main
                                operation and again it's really due to the
                                timing of openings. The Matzel and Mumford
                                operation, however, will be reporting a slight
                                increase. I am happy to say that as we continue
                                to get our approvals during the year, while it
                                may be late to have them delivered this year,
                                we're expecting to go back into a growth mode
                                based simply based on the number of storefronts
                                we'll have

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HOVNANIAN ENTERPRISES                                                     PAGE 9




                                and properties we'll have in the Northeast
                                region by the following year and we think
                                there's some excellent properties. They're
                                properties that have been in the approval
                                pipeline for a good number of years and
                                represent some good values.

L. Sorsby                       Let me answer your first question, Steve, then
                                we'll take another question from someone else
                                and you can come back if you have more.

                                We control 31,802 total homesites as of October
                                31, 2000. Of that 31,802 we own about 10,000 and
                                we optioned 21,790.

S. Percoco                      Okay, thank you.

Operator                        Elya Schwartzman, please state your company name
                                followed by your question.

E. Schwartzman                  State Street Global Advisors. I was wondering
                                when combining your statements with Washington
                                Homes for our modeling purposes, can you talk
                                about either margins or average housing price
                                for Washington Homes on a relative basis?

A. Hovnanian                    Geaton, would you comment on what your outlook
                                is for average prices for Washington Homes?

G. DeCesaris                    Yes, our average price at the end of our most
                                recently completed quarter, October 31, was
                                $184,811 and our average margin was 19.6%.

L. Sorsby                       The margins are not reported on an identical
                                basis between the two companies and we're going
                                to get it both on a common methodology for
                                reporting margins going forward.

A. Hovnanian                    Our average price in the year we just ended was
                                about $242,000. Our backlog was about $257,000,
                                so ours will be going up just a bit. Obviously
                                when we average with Washington Homes it would
                                be trending down just a little lower. Does that
                                answer your question?

E. Schwartzman                  Yeah, and just quickly in terms of the bank
                                agreement, that's still a $375 million
                                agreement?

L. Sorsby                       That's correct.

E. Schwartzman                  Do you expect a certain level of seasonal draw
                                or is that primarily there for opportunities
                                that might arise?

A. Hovnanian                    We have well over $300 million available to
                                draw, so there's plenty of dry powder there,
                                even after the acquisition since at least half
                                will be in stock. Even at our peak times, we'll
                                be operating with well over a $200 million
                                cushion. We don't really have any particular
                                opportunity that we're looking at. We just like
                                to make sure we have ample ability to draw cash
                                if we ever need it in the market slowdown or
                                any other condition. In general, our plan is to
                                be gradually deleveraging and even with the
                                Washington Homes transaction, we anticipate a
                                slight deleveraging during this coming fiscal
                                year.


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HOVNANIAN ENTERPRISES                                                    PAGE 10




E. Schwartzman                  Okay. Thank you very much.

Operator                        Daniel Nassimi, please state your company name
                                followed by your question.

D. Nassimi                      Paloma Partners. I just wanted to ask, I
                                guess according to your merger agreement with
                                Washington Homes you have the right to walk if
                                the stock price is above $8.47. Assuming your
                                stock continues to do well, I was just wondering
                                what management is going to do, if they're going
                                to go ahead anyway?

A. Hovnanian                    Our plan is to move forward at this point. Of
                                course I can't speak for all shareholders but I
                                can say our plan right now is to move forward.
                                We think it's an excellent transaction both for
                                Washington shareholders and Hovnanian
                                shareholders, a real win/win and we plan on
                                moving forward.

D. Nassimi                      Okay but there's also I guess an opportunity to
                                renegotiate. Is that also an option being
                                considered?

L. Sorsby                       If in fact any renegotiation takes place and at
                                this point it's not anticipated that it will,
                                but if there is any renegotiation, we have to
                                refile additional proxy materials, so we'd
                                certainly let everyone know at that time, but
                                at this point we're not anticipating changes in
                                the terms.

D. Nassimi                      Thank you very much.

Operator                        Anthony Iorfino, please state your company name
                                followed by your question.

A. Iorfino                      Muszinich. You've sort of answered one of my
                                questions. I was going to ask you what you
                                anticipated your seasonal borrowing peak to be
                                and you kind of made it sound like around
                                $100,000 - I mean $100 million. Is that right?

L. Sorsby                       Anthony, I think after the Washington Homes
                                merger, we peak at something under $200
                                million, somewhere between $150 and $175 -
                                something along those lines.

A. Hovnanian                    Though I liked the $100,000 number.

L. Sorsby                       $100,000 would be good.

A. Iorfino                      My other question was you gave I believe around
                                the time of your high yield offering, sort of a
                                proforma EBITDA number. I was wondering if you
                                have something more updated, what the combined
                                EBITDA might be around this time?

A Hovnanian                     For '01 basically what we've said is at this
                                point we haven't finalized all of the number
                                reconciliations between Washington Homes and
                                ourselves. Consensus is $1.80 and we're
                                comfortable with that number. You'd have to
                                translate that back to EBITDA.

A. Iorfino                      Oh, yeah, I was just even thinking proforma for
                                the present time, not even looking forward.

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HOVNANIAN ENTERPRISES                                                    PAGE 11




L. Sorsby                       I don't think we've taken our October and their
                                October and done that yet, but both of our
                                numbers are public. We could ...

A. Hovnanian                    If you give Kevin Hake a call afterwards, it's
                                publicly released data, we'd be pleased to get
                                that to you.

A. Iorfino                      That's fine. Thank you.

Operator                        Ladies and gentlemen, if there are any
                                additional questions, please press the one on
                                your touchtone phone at this time. Remember to
                                pick up your handset before doing so. One
                                moment, please.

                                Tim Sommers, please state your company name
                                followed by your question.

T. Sommers                      Financial Management Advisors. Just real
                                quickly wanted to get the depreciation and
                                amortization number from you? I don't see it in
                                the press release.

A. Hovnanian                    Paul will just take a minute or so to get that
                                exact number for you.

K. Hake                         For the year, depreciation was $6,423,000.

T. Sommers                      Great. Thank you very much.

Operator                        Gentlemen, I'm showing no additional questions
                                at this time. Please continue.

A. Hovnanian                    Well thank you very much. We're pleased to give
                                you the results. Hopefully our next conference
                                call we'll be speaking to you as a larger and
                                better company. As usual, we'll be around to
                                answer any individual questions you think of
                                afterwards. Please feel free to call Kevin Hake
                                or Larry Sorsby. Thank you very much.

Operator                        Ladies and gentlemen, that does conclude our
                                conference for today. You may all disconnect and
                                thank you for participating.



FORWARD-LOOKING STATEMENTS This document may contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Any such statements may involve unstated risks, uncertainties and
other factors that may cause actual results to differ materially from those
described in any forward-looking statements. Any such risks, uncertainties
and other factors include, but are not limited to, the risk that the
businesses of Hovnanian and Washington Homes will not be combined
successfully, the risk that the growth opportunities and cost savings from
the merger may not be fully realized or may take longer to realize than
expected, changes in general economic conditions, fluctuations in interest
rates, increase in costs of materials, supplies and labor, adverse
governmental or regulatory policies, and general competitive conditions. This
list of risk factors may not be exhaustive. Actual results could differ
materially from those set forth in any forward-looking statements for many
reasons, including the risk factors listed above. Any forward-looking
statements speak only as of the date they are made, and Hovnanian and
Washington Homes each disclaims any obligation to provide updates or revise
any forward-looking statements.

     In connection with the proposed merger, Hovnanian has filed with the SEC
a registration statement on SEC Form S-4 and the definitive joint proxy
statement/prospectus of Hovnanian and Washington Homes, which describe the
proposed merger and the proposed terms and conditions of the merger.
Stockholders are urged to read the definitive joint proxy statement/prospectus
because it contains important information. The registration statement filed
by Hovnanian, the definitive joint proxy statement/prospectus and the SEC
filings that are incorporated by reference in the definitive joint proxy
statement/prospectus, are available for free, both on the SEC's web site
(www.sec.gov) and by contacting either Washington Homes, Inc, 1802 Brightseat
Road, Landover, Maryland 20785-4235, Attention: Christopher Spendley, telephone
(301) 772-8900; or Hovnanian Enterprises, Inc., 10 Highway 35, P.O. Box 500, Red
Bank, New Jersey 07701, Attention: J. Larry Sorsby, telephone (732) 747-7800.

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HOVNANIAN ENTERPRISES                                                    PAGE 12