##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 2005


Commission file number 1-32375





Comstock Homebuilding Companies, Inc.


(Exact Name of Registrant as Specified in Its Charter)


|                                                                   |  |                                     
|------------------------------------------------------------------ |  | ------------------------------------
|Delaware                                                           |  | 20-1164345                          
|(State or Other Jurisdiction of Incorporation or
    Organization) |  | (I.R.S. Employer Identification No.)

11465 Sunset Hills Road


Suite 510 Reston, Virginia 20190


(703) 883-1700


(Address, including zip code, and telephone number, including
area code, of principal executive offices)


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


Class A common stock, par value $.01 per share


(Title of Class)


o þ


o þ


þ o


S-K 10-K 10-K. o


12b-2 o þ o


12b-2 o þ






DOCUMENTS INCORPORATED BY REFERENCE


10-K.










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COMSTOCK HOMEBUILDING COMPANIES, INC.


ANNUAL REPORT ON
FORM 10-K


For the Fiscal Year Ended December 31, 2005







TABLE OF CONTENTS


|                                               |  |                                                                                                                          |     |      |    | 
|---------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------ | --- | ---- | -- | 
|                                               |  |                                                                                                                          |     | Page |   
|                                               |  |                                                                                                                          |     |      |   
|PART I                                        
|Item 1.                                        |  | Business                                                                                                                 |     |      | 3  | 
|Item 1A.                                       |  | Risk Factors                                                                                                             |     |      | 18 | 
|Item 1B.                                       |  | Unresolved Staff Comments                                                                                                |     |      | 29 | 
|Item 2.                                        |  | Properties                                                                                                               |     |      | 29 | 
|Item 3.                                        |  | Legal Proceedings                                                                                                        |     |      | 29 | 
|Item 4.                                        |  | Submission of Matters to a Vote of Security
    Holders                                                                  |     |      | 30 | 
|PART II                                       
|Item 5.                                        |  | Market for the Registrants Common
    Equity, Related Stockholder Matters and Issuer Purchases of
    Equity Securities |     |      | 30 | 
|Item 6.                                        |  | Selected Financial Data                                                                                                  |     |      | 30 | 
|Item 7.                                        |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                |     |      | 31 | 
|Item 7A.                                       |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                           |     |      | 43 | 
|Item 8.                                        |  | Financial Statements and Supplementary
    Data                                                                          |     |      | 44 | 
|Item 9.                                        |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                                 |     |      | 44 | 
|Item 9A.                                       |  | Controls and Procedures                                                                                                  |     |      | 44 | 
|Item 9B.                                       |  | Other Information                                                                                                        |     |      | 45 | 
|PART III                                      
|Item 10.                                       |  | Directors and Executive Officers of the
    Registrant                                                                   |     |      | 45 | 
|Item 11.                                       |  | Executive Compensation                                                                                                   |     |      | 45 | 
|Item 12.                                       |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                       |     |      | 45 | 
|Item 13.                                       |  | Certain Relationships and Related
    Transactions                                                                       |     |      | 45 | 
|Item 14.                                       |  | Principal Accountant Fees and Services                                                                                   |     |      | 46 | 
|PART IV                                       
|Item 15.                                       |  | Exhibits and Financial Statement
    Schedules                                                                           |     |      | 46 | 
|Signatures                                     |  |                                                                                                                          | 48  |     
|Index to Consolidated Financial
    Statements |  |                                                                                                                          | F-1 |     





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PART I







|        |         
|------- | --------
|Item 1. | Business

Overview






883-1700. www.comstockhomebuilding.com.


Recent Developments




Our Markets




3



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| |                                             
| | --------------------------------------------
| | Greater Washington, D.C. Metropolitan Market





| |                               
| | ------------------------------
| | Raleigh, North Carolina Market



Our Competitive Strengths




Committed and experienced management.


Public company status.


Attractive land position.


4



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Creative approach to land acquisition and development.


Broad customer base and a diversified product mix. move-up


Superior quality control and customer service. on-site


Our Growth Strategy




Build in and expand with the strong growth markets within the
Mid-Atlantic and Southeast regions.


5



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##### 





Acquire and develop a land inventory with potential for
above-average margins or returns.


Create opportunities in areas overlooked by our
competitors.


Focus on a broad segment of the home buying market. move-up


Expand into the growing active adult market.


Maximize our economies of scale.


6



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##### 





Our Operations






| |                                    
| | -----------------------------------
| | Land Identification and Acquisition













| |   |                                                           
| | - | ----------------------------------------------------------
| |  | supply and absorption rates of similar new home projects; 
|
| |  | supply and absorption rates of existing homes in the area;
|
| |  | projected equity requirements;                            
|
| |  | projected return on invested capital;                     
|
| |  | status of land development entitlements;                  
|
| |  | projected net margins of homes to be sold by us;          

7



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| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | projected absorption rates;                                                                    
|
| |  | demographics, school districts, transportation facilities and
    other locational factors; and
|
| |  | competitive market positioning.                                                                





| |                                 
| | --------------------------------
| | Land Entitlement and Development











| |                                
| | -------------------------------
| | Sales, Marketing and Production





8



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tm




| |   |                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | DownRighttm 
    a program designed to help identify ways to meet the down
    payment requirements of a new home purchase;                                                                                     
|
| |  | Tailor
    Madetm 
    a program with unique financing products and agreements with
    major lenders that tailor a monthly payment in order to make
    home ownership affordable in any interest rate climate;
|
| |  | Get It
    Soldtm 
    a program designed to help our customers sell their current home
    quickly and efficiently in order to facilitate their purchase of
    a new Comstock home;                           

9



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| |   |                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | All@Hometm 
    a program enabling our customers to design technology solutions
    for their new Comstock home to meet their individual
    specifications;                          
|
| |  | Built
    Righttm 
    a quality assurance program incorporating quality assurance
    inspections with high-quality materials; and                                                   
|
| |  | Home
    Styletm 
    an optional upgrade program providing hundreds of options to
    choose from to customize a new Comstock home to suit the
    specific desires of our customers.







on-site


Our Communities




10



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##### 





|                             |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             |  |  |       |       |  |   |         |         | 
|---------------------------- | --------------------------------------------- | ----------------------- | ----------- | --------- | ---------- |  | ----- | ------- | ---- |  | ---------- | ------ |  | ------ | --------- | --- | ------ | ------- | ----- | ----------- |  |  | ----- | ----- |  | - | ------- | ------- | 
|                             |                                               | As of December 31, 2005 |            
|                             |                                               |                         |            
|                             |                                               |                         |             | Lots      |            |  |      
|                             |                                               |                         |             | under     |            |  |      
|                             |                                               |                         |             | Estimated |            |  |       |         | Lots |  |            | Option |  |        |          
|                             |                                               |                         |             | Units at  |            |  | Units |         |      |  |            | Owned  |  |        | Agreement |     |        | Average |      
|Project                      |                                               | Status(1)               |             |           | Completion |  |       | Settled |      |  | Backlog(2) |        |  | Unsold |           |     | Unsold |         |       | Sales Price | 
|                             |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             | 
|Virginia                     |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             |  |  |       |       |  |   |         |        
|Barrington Park              |                                               |                         | Active      |           |            |  | 148   |         |      |  |           |        |  |        | 2         |     |        |         | 146   |             |  |  |      |       |  | $ | 279,900 |        
|Commons at Bellemeade        |                                               |                         | Active      |           |            |  | 316   |         |      |  | 21         |        |  |        | 8         |     |        |         | 287   |             |  |  |      |       |  | $ | 211,096 |        
|Blooms Mill TH 22           |                                               |                         | Active      |           |            |  | 113   |         |      |  | 83         |        |  |        | 3         |     |        |         | 27    |             |  |  |      |       |  | $ | 421,875 |        
|Blooms Mill Carriage         |                                               |                         | Active      |           |            |  | 91    |         |      |  | 75         |        |  |        | 10        |     |        |         | 6     |             |  |  |      |       |  | $ | 453,926 |        
|Commons on Potomac Sq        |                                               |                         | Active      |           |            |  | 192   |         |      |  |           |        |  |        | 19        |     |        |         | 173   |             |  |  |      |       |  | $ | 233,708 |        
|Commons on Williams Sq       |                                               |                         | Active      |           |            |  | 180   |         |      |  | 56         |        |  |        | 12        |     |        |         | 112   |             |  |  |      |       |  | $ | 356,269 |        
|Countryside                  |                                               |                         | Active      |           |            |  | 102   |         |      |  | 53         |        |  |        | 5         |     |        |         | 44    |             |  |  |      |       |  | $ | 288,471 |        
|The Eclipse on Center Park   |                                               |                         | Active      |           |            |  | 465   |         |      |  |           |        |  |        | 390       |     |        |         | 75    |             |  |  |      |       |  | $ | 399,723 |        
|Penderbrook                  |                                               |                         | Active      |           |            |  | 424   |         |      |  | 180        |        |  |        | 3         |     |        |         | 241   |             |  |  |      |       |  | $ | 251,893 |        
|River Club at Belmont Bay 5  |                                               |                         | Active      |           |            |  | 84    |         |      |  | 70         |        |  |        | 3         |     |        |         | 11    |             |  |  |      |       |  | $ | 461,451 |        
|Woodlands at Round Hill      |                                               |                         | Active      |           |            |  | 46    |         |      |  | 17         |        |  |        | 8         |     |        |         | 21    |             |  |  |      |       |  | $ | 747,921 |        
|                             | Total VA Active and Completed                 |                         |             |           |            |  |       | 2,161   |      |  |            | 555    |  |        |           | 463 |        |         |       | 1,143       |  |  |       |      |  |   | $       | 373,294 | 
|                             | Total VA Active and Completed Weighted Avg(3) |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             |  |  |       |       |  |   | $       | 324,560 | 
|Aldie Singles                |                                               |                         | Development |           |            |  | 15    |         |      |  |           |        |  |        |          |     |        |         |      |             |  |  | 15    |       |  |   | n/a     |        
|Blakes Crossing              |                                               |                         | Development |           |            |  | 130   |         |      |  |           |        |  |        |          |     |        |         | 130   |             |  |  |      |       |  |   | n/a     |        
|Brandy Station               |                                               |                         | Development |           |            |  | 350   |         |      |  |           |        |  |        |          |     |        |         |      |             |  |  | 350   |       |  |   | n/a     |        
|Commons on The Park          |                                               |                         | Development |           |            |  | 258   |         |      |  |           |        |  |        |          |     |        |         |      |             |  |  | 258   |       |  |   | n/a     |        
|Lake Pelham                  |                                               |                         | Development |           |            |  | 185   |         |      |  |           |        |  |        |          |     |        |         |      |             |  |  | 185   |       |  |   | n/a     |        
|Loudoun Station Condominiums |                                               |                         | Development |           |            |  | 484   |         |      |  |           |        |  |        |          |     |        |         |      |             |  |  | 484   |       |  |   | n/a     |        
|Beacon Park at Belmont Bay   |                                               |                         | Development |           |            |  | 600   |         |      |  |           |        |  |        |          |     |        |         |      |             |  |  | 600   |       |  |   | n/a     |        
|                             | Total VA Development                          |                         |             |           |            |  |       | 2,022   |      |  |            |       |  |        |           |    |        |         |       | 130         |  |  |       | 1,892 |  |   |         |         | 
|                             |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             | 
|                             | Total Virginia                                |                         |             |           |            |  |       | 4,183   |      |  |            | 555    |  |        |           | 463 |        |         |       | 1,273       |  |  |       | 1,892 |  |   |         |         | 
|Maryland                     |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             |  |  |       |       |  |   |         |        
|Emerald Farm                 |                                               |                         | Active      |           |            |  | 84    |         |      |  | 67         |        |  |        | 3         |     |        |         | 14    |             |  |  |      |       |  | $ | 447,291 |        
|                             |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             | 
|                             | Total Maryland                                |                         |             |           |            |  |       | 84      |      |  |            | 67     |  |        |           | 3   |        |         |       | 14          |  |  |       |      |  |   |         |         | 
|North Carolina               |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             |  |  |       |       |  |   |         |        
|Allyns Landing              |                                               |                         | Active      |           |            |  | 117   |         |      |  | 12         |        |  |        | 3         |     |        |         | 102   |             |  |  |      |       |  | $ | 212,685 |        
|Beckett Crossing             |                                               |                         | Completed   |           |            |  | 115   |         |      |  | 115        |        |  |        |          |     |        |         |      |             |  |  |      |       |  | $ | 315,024 |        
|Delta Rdge II Townhomes      |                                               |                         | Completed   |           |            |  | 41    |         |      |  | 41         |        |  |        |          |     |        |         |      |             |  |  |      |       |  | $ | 173,906 |        
|Kelton at Preston            |                                               |                         | Active      |           |            |  | 56    |         |      |  | 28         |        |  |        | 2         |     |        |         | 26    |             |  |  |      |       |  | $ | 307,536 |        
|Wakefield Plantation         |                                               |                         | Active      |           |            |  | 77    |         |      |  | 31         |        |  |        | 3         |     |        |         | 43    |             |  |  |      |       |  | $ | 474,955 |        
|                             | Total North Carolina Active                   |                         |             |           |            |  |       | 406     |      |  |            | 227    |  |        |           | 8   |        |         |       | 171         |  |  |       |      |  |   | $       | 296,821 | 
|                             | Total North Carolina Active                   |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             |  |  |       |       |  |   |         |         | 
|Weighted Average(3)          |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             |  |  |       |       |  | $ | 300,580 |        
|Holland Road                 |                                               |                         | Development |           |            |  | 81    |         |      |  |           |        |  |        |          |     |        |         |      |             |  |  | 81    |       |  |   | n/a     |        
|                             | Total North Carolina Development              |                         |             |           |            |  |       | 81      |      |  |            |       |  |        |           |    |        |         |       |            |  |  |       | 81    |  |   |         |         | 
|                             |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             | 
|                             | Total North Carolina                          |                         |             |           |            |  |       | 487     |      |  |            | 227    |  |        |           | 8   |        |         |       | 171         |  |  |       | 81    |  |   |         |         | 
|TOTAL ACTIVE AND COMPLETED   |                                               |                         |             |           |            |  | 2,651 |         |      |  | 849        |        |  |        | 474       |     |        |         | 1,328 |             |  |  |      |       |  |   |         |        
|TOTAL DEVELOPMENT            |                                               |                         |             |           |            |  | 2,103 |         |      |  |           |        |  |        |          |     |        |         | 130   |             |  |  | 1,973 |       |  |   |         |        
|                             |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             | 
|TOTAL                        |                                               |                         |             |           |            |  | 4,754 |         |      |  | 849        |        |  |        | 474       |     |        |         | 1,458 |             |  |  | 1,973 |       |  |   |         |        
|Joint Ventures               |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             |  |  |       |       |  |   |         |        
|North Shore Condominiums     |                                               |                         | Active      |           |            |  | 196   |         |      |  |           |        |  |        | 7         |     |        |         | 189   |             |  |  |      |       |  | $ | 286,361 |        
|North Shore Townhomes        |                                               |                         | Active      |           |            |  | 163   |         |      |  | 33         |        |  |        | 7         |     |        |         | 123   |             |  |  |      |       |  | $ | 239,107 |        
|                             | Total Joint Ventures                          |                         |             |           |            |  |       | 359     |      |  |            | 33     |  |        |           | 14  |        |         |       | 312         |  |  |       |      |  |   |         |         | 
|                             |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             | 
|GRAND TOTAL                  |                                               |                         |             |           |            |  | 5,113 |         |      |  | 882        |        |  |        | 488       |     |        |         | 1,770 |             |  |  | 1,973 |       |  |   |         |        
|                             |                                               |                         |             |           |            |  |       |         |      |  |            |        |  |        |           |     |        |         |       |             | 

11



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|    |                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Active communities are open for sales.
    Development communities are in the development
    process and have not yet opened for sales.                                                                                                                                                                       
|   
|(2) | Backlog means we have an executed order with a
    buyer, inclusive of lot sales, but the settlement has not yet
    taken place.                                                                                                                                                                                
|   
|(3) | Weighted average is calculated as total estimated homes at
    completion for projects with average sales prices multiplied by
    average sales price divided by total of estimated homes at
    completion (i.e.: S (estimated homes at completion ×
    average sales price) ÷ S estimated homes at completion).



| |         
| | --------
| | Virginia

Barrington Park 148-unit


Commons at Bellemeade 316-unit


Blooms Mill 377-unit


Commons on Potomac Square 192-unit


Commons on William Square 180-unit


Countryside 102-unit


The Eclipse on Center Park 465-unit


12



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Penderbrook Square 424-unit


River Club at Belmont Bay 5 84-unit 28-unit


Woodlands at Round Hill


Aldie Singles 15-unit


Blakes Crossing 130-unit


Brandy Station 350-unit


Commons on the Park (formerly Carter Lake) 258-unit


Lake Pelham


Loudoun Station Condominiums


Beacon Park at Belmont Bay 600-unit


13



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| |         
| | --------
| | Maryland

Emerald Farm 84-unit




| |               
| | --------------
| | North Carolina

Allyns Landing 117-unit


Beckett Crossing 115-unit


Delta Ridge II 41-unit


Kelton at Preston 56-unit


Wakefield Plantation 77-unit


Holland Road 81-unit


North Shore


Warranty




14



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##### 





Competition








| |   |                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Washington, D.C. In the greater
    Washington, D.C. metropolitan market we compete against
    approximately 15 to 20 publicly-traded national home builders,
    approximately 10 to 15 privately-owned regional home builders,
    and many local home builders, some of whom are very small and
    may build as few as five to 25 homes per year.
|
| |  | Raleigh, North Carolina. In the Raleigh, North Carolina
    market we compete against approximately 10 to 15 publicly-traded
    national home builders, approximately 10 to 15 privately-owned
    regional home builders, and a large number of small, local home
    builders.                                                                     



Regulation








15



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##### 



Technology


tm www.comstockhomebuilding.com,




Intellectual Property and Other Proprietary Rights




Employees




Executive Officers




|                      |  |     |    |  |          |                                                
|--------------------- |  | --- | -- |  | -------- | -----------------------------------------------
|Name                  |  | Age |    |  | Position
|                      |  |     |    |  |         
|Christopher Clemente* |  |     | 45 |  |          | Chairman and Chief Executive Officer           
|Gregory V. Benson*    |  |     | 51 |  |          | President, Chief Operating Officer and Director
|Bruce J. Labovitz*    |  |     | 37 |  |          | Chief Financial Officer                        
|William P. Bensten    |  |     | 58 |  |          | Senior Vice President                          
|Jason Parikh*         |  |     | 34 |  |          | Chief Accounting Officer                       
|David D. Howell       |  |     | 55 |  |          | Vice President  Market Development            
|Jubal R. Thompson     |  |     | 36 |  |          | General Counsel and Secretary                  






|  |                     
|- | --------------------
|* | Section 16 officers.

Executive Officers and Key Employees


Christopher Clemente


Gregory V. Benson


16



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##### 





Bruce J. Labovitz


William P. Bensten


Jason Parikh


David D. Howell


Jubal R. Thompson


Other Information


1-800-SEC-0330. http://www.sec.gov.


www.comstockhomebuilding.com, 10-K, 10-Q, 8-K


CAUTIONARY NOTES REGARDING FORWARD-LOOKING STATEMENTS




17



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##### 










Item 1A.     Risk Factors


Risks Relating to Our Business




| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | We engage in construction and real estate activities which
    are speculative and involve a high degree of risk.





| |   |                           
| | - | --------------------------
| |  | employment levels;        
|
| |  | availability of financing;
|
| |  | interest rates; and       
|
| |  | consumer confidence.      





| |   |                                                                                  
| | - | ---------------------------------------------------------------------------------
| |  | delays in construction schedules;                                                
|
| |  | cost overruns;                                                                   
|
| |  | changes in governmental regulations (such as slow- or no-growth
    initiatives);
|
| |  | increases in real estate taxes and other local government fees;                  
|
| |  | labor strikes;                                                                   
|
| |  | transportation costs for delivery of materials; and                              
|
| |  | increases and/or shortages in raw materials and labor costs.                     



| |                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Fluctuations in market conditions may affect our ability
    to sell our land and home inventories at expected prices, if at
    all, which could adversely affect our revenues, earnings and
    cash flows.



18



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##### 







| |                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Home prices and sales activities in the
    Washington, D.C. and Raleigh, North Carolina geographic
    markets have a large impact on our profitability because we
    conduct substantially all of our business in these
    markets.





| |                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because our business depends on the acquisition of new
    land, the potential limitations on the supply of land could
    reduce our revenues or negatively impact our results of
    operations and cash flows.





| |                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our business is subject to governmental regulations that
    may delay, increase the cost of, prohibit or severely restrict
    our development and home building projects and reduce our
    revenues and cash flows.



19



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##### 





| |                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cities and counties in which we operate have adopted, or
    may adopt, slow or no-growth initiatives that would reduce our
    ability to build and sell homes in these areas and could
    adversely affect our revenues, earnings and cash flows.









| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our ability to sell homes, and, accordingly, our results
    of operations, will be affected by the availability of financing
    to potential home buyers.





| |   |                                                     
| | - | ----------------------------------------------------
| |  | increases in interest rates and/or related fees;    
|
| |  | increases in real estate transaction closing costs; 
|
| |  | decreases in the availability of mortgage financing;
|
| |  | increasing housing costs;                           
|
| |  | unemployment; and                                   
|
| |  | changes in federally sponsored financing programs.  





| |                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The competitive conditions in the home building industry
    could increase our costs, reduce our revenues and earnings and
    otherwise adversely affect our results of operations and cash
    flows.



20



---



##### 







| |   |                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | make it difficult for us to acquire suitable land or home sites
    in desirable locations at acceptable prices and terms, which
    could adversely affect our ability to build homes;
|
| |  | require us to increase selling commissions and other incentives,
    which could reduce our profit margins;                                                                            
|
| |  | result in delays in construction if we experience delays in
    procuring materials or hiring trades people or laborers;                                                               
|
| |  | result in lower sales volume and revenues; and                                                                                                                                         
|
| |  | increase our costs and reduce our earnings.                                                                                                                                            





| |                                                                                                            
| | -----------------------------------------------------------------------------------------------------------
| | Our business is concentrated in a few geographic areas
    which increases our exposure to localized risks.





| |                                                                         
| | ------------------------------------------------------------------------
| | Our growth strategy to expand into new geographic areas
    poses risks.





| |   |                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------
| |  | adjusting our construction methods to different geographies and
    climates;                              
|
| |  | obtaining the necessary construction materials and labor in
    sufficient amounts and on acceptable terms;
|
| |  | obtaining necessary entitlements and permits under unfamiliar
    regulatory regimes;                      
|
| |  | attracting potential customers in a market in which we do not
    have significant experience; and         
|
| |  | the cost of hiring new employees and increased infrastructure
    costs.                                   





| |                                                                                     
| | ------------------------------------------------------------------------------------
| | We may not be able to successfully identify, complete or
    integrate acquisitions.



21



---



##### 







| |   |                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------
| |  | difficulties in assimilating acquired management and operations;                                              
|
| |  | risks associated with investing the necessary resources in order
    to achieve profitability;                
|
| |  | the incurrence of significant due diligence expenses relating to
    acquisitions that are not completed;     
|
| |  | unforeseen expenses and liabilities;                                                                          
|
| |  | risks associated with entering new markets or sub-markets in
    which we have limited or no prior experience;
|
| |  | the diversion of our managements attention from our
    current business;                                    
|
| |  | the potential loss of key employees, including senior
    executives, of acquired organizations; and          
|
| |  | risks associated with transferred assets and liabilities.                                                     





| |                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------
| | We are dependent on the services of certain key employees
    and the loss of their services could harm our business.





| |                                                                        
| | -----------------------------------------------------------------------
| | Our growth requires additional capital, which may not be
    available.





| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | Our growth depends on the availability of construction,
    acquisition and development loans.



22



---



##### 







| |                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A significant portion of our business plan involves
    construction of mixed-use developments and high-rise projects
    with which we have less experience.





| |                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we experience shortages of labor or supplies or other
    circumstances beyond our control, there could be delays or
    increased costs in developing our projects, which would
    adversely affect our operating results and cash flows.





| |   |                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------
| |  | work stoppages, labor disputes and shortages of qualified trades
    people, such as carpenters, roofers, electricians and plumbers;
|
| |  | lack of availability of adequate utility infrastructure and
    services;                                                           
|
| |  | transportation cost increases;                                                                                                      
|
| |  | our need to rely on local subcontractors who may not be
    adequately capitalized or insured; and                                  
|
| |  | shortages or fluctuations in prices of building materials.                                                                          





| |                                                               
| | --------------------------------------------------------------
| | We depend on the availability and skill of
    subcontractors.



23



---



##### 





| |                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Product liability litigation and claims that arise in the
    ordinary course of business may be costly or negatively impact
    sales, which could adversely affect our results of operations
    and cash flows.





| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | Increased insurance risk could negatively affect our
    business, results of operations and cash flows.





| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | We are subject to warranty claims arising in the ordinary
    course of business that could be costly.





| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| | Our business, revenues, earnings and cash flows may be
    adversely affected by adverse weather conditions or natural
    disasters.



24



---



##### 





| |                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are subject to certain environmental laws and the cost
    of compliance could adversely affect our business, results of
    operations and cash flows.







| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| | If we are not able to develop our communities
    successfully, our earnings and cash flows could be
    diminished.





| |                                
| | -------------------------------
| | Our operating results may vary.





| |   |                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the uncertain timing of real estate closings;                                                                                                                                   
|
| |  | our ability to continue to acquire additional land or options
    thereon on acceptable terms and the timing of all necessary
    regulatory approvals required for development;
|
| |  | the condition of the real estate market and the general economy
    in the markets in which we operate;                                                                         
|
| |  | the cyclical nature of the home building industry;                                                                                                                              
|
| |  | the changing regulatory environment concerning real estate
    development and home building;                                                                                   
|
| |  | changes in prevailing interests rates and the availability of
    mortgage financing; and                                                                                       
|
| |  | costs of material and labor and delays in construction schedules.                                                                                                               



25



---



##### 



start-up




| |                                                              
| | -------------------------------------------------------------
| | Acts of war or terrorism may seriously harm our
    business.





| |                                                               
| | --------------------------------------------------------------
| | Being a public company increases our administrative
    costs.





| |                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We do not own the Comstock brand or trademark, but use the
    brand and trademark pursuant to the terms of a perpetual license
    granted by Christopher Clemente, our Chief Executive Officer and
    Chairman of the Board.



26



---



##### 



Risks Related to our Common Stock and the Securities
Markets




| |                                                                       
| | ----------------------------------------------------------------------
| | Volatility of our stock price could adversely affect
    stockholders.





| |   |                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | quarterly variations in our operating results;                                                                                                                                  
|
| |  | general conditions in the home building industry;                                                                                                                               
|
| |  | interest rate changes;                                                                                                                                                          
|
| |  | changes in the markets expectations about our operating
    results;                                                                                                           
|
| |  | our operating results failing to meet the expectation of
    securities analysts or investors in a particular period;                                                           
|
| |  | changes in financial estimates and recommendations by securities
    analysts concerning our Company or the home building industry in
    general;                              
|
| |  | operating and stock price performance of other companies that
    investors deem comparable to us;                                                                              
|
| |  | news reports relating to trends in our markets;                                                                                                                                 
|
| |  | changes in laws and regulations affecting our business;                                                                                                                         
|
| |  | material announcements by us or our competitors;                                                                                                                                
|
| |  | material announcements by our construction lenders or the
    manufacturers and suppliers we use;                                                                               
|
| |  | sales of substantial amounts of Class A common stock by our
    directors, executive officers or significant stockholders or the
    perception that such sales could occur; and
|
| |  | general economic and political conditions such as recessions and
    acts of war or terrorism.                                                                                  





| |                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Investors in our Class A common stock may experience
    dilution with the future exercise of stock options, the grant of
    restricted stock and issuance of stock in connection with our
    acquisitions of other homebuilders.





| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Substantial sales of our Class A common stock, or the
    perception that such sales might occur, could depress the market
    price of our Class A common stock.



27



---



##### 





| |                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | The holders of our Class B common stock exert control
    over us and thus limit the ability of other stockholders to
    influence corporate matters.





| |                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The limited voting rights of our Class A common stock
    could impact its attractiveness to investors and its liquidity
    and, as a result, its market value.





| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | It may be difficult for a third party to acquire us, which
    could inhibit stockholders from realizing a premium on their
    stock price.







| |   |                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a staggered board of directors, so that it would take three
    successive annual meetings to replace all directors;                                                                                           
|
| |  | a prohibition of stockholder action by written consent; and                                                                                                                                                    
|
| |  | advance notice requirements for the submission by stockholders
    of nominations for election to the board of directors and for
    proposing matters that can be acted upon by stockholders at a
    meeting.



| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | Our issuance of shares of preferred stock could delay or
    prevent a change of control of us.



28



---



##### 










|         |                          
|-------- | -------------------------
|Item 1B. | Unresolved Staff Comments








|        |           
|------- | ----------
|Item 2. | Properties








|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings









29



---



##### 








|        |                                                     
|------- | ----------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders.



PART II







|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for the Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity Securities

Market for Common Stock




|                       |                |      |   |       |     |  |   |       | 
|---------------------- | -------------- | ---- | - | ----- | --- |  | - | ----- | 
|                       |                | High |   |       | Low | 
|                       |                |      |   |       |     | 
|Fiscal Year Ended 2004 |                |      |   |       |     |  |   |      
|                       | Fourth quarter |      | $ | 22.10 |     |  | $ | 16.00 | 
|Fiscal Year Ended 2005 |                |      |   |       |     |  |   |      
|                       | First quarter  |      | $ | 31.00 |     |  | $ | 18.39 | 
|                       | Second quarter |      | $ | 27.03 |     |  | $ | 18.80 | 
|                       | Third quarter  |      | $ | 29.42 |     |  | $ | 17.76 | 
|                       | Fourth quarter |      | $ | 19.97 |     |  | $ | 13.34 | 



Dividends









|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data



30



---



##### 





FIVE YEAR COMPARISON OF SELECTED FINANCIAL DATA


Dollars in thousands (except per share data)


|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |        |        |  |   |        |        | 
|-------------------------------------------------------------------------------------- | ----------------------------------- | ----------------------- | ------- | ------- | ---- | - | ------ | ------ |  | - | ------ | ------ |  | ---- | ------ | ------ |  | - | ------ | ------ | 
|                                                                                       |                                     | Year ended December 31, |        
|                                                                                       |                                     |                         |        
|                                                                                       |                                     | 2005                    |         |         | 2004 |   |        | 2003   |  |   | 2002   |        |  | 2001 |       
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       
|Revenues                                                                               |                                     | $                       | 224,305 |         |      | $ | 96,045 |        |  | $ | 55,521 |        |  | $    | 34,752 |        |  | $ | 50,929 |       
|Expenses                                                                               |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |        |        |  |   |        |       
|                                                                                       | Cost of sales                       |                         |         | 157,706 |      |   |        | 63,993 |  |   |        | 41,756 |  |      |        | 26,820 |  |   |        | 40,853 | 
|                                                                                       | Selling, general and administrative |                         |         | 24,190  |      |   |        | 11,940 |  |   |        | 5,712  |  |      |        | 3,725  |  |   |        | 3,900  | 
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       
|Operating income                                                                       |                                     |                         | 42,409  |         |      |   | 20,112 |        |  |   | 8,053  |        |  |      | 4,207  |        |  |   | 6,176  |       
|Other (income) expense, net                                                            |                                     |                         | (1,450  | )       |      |   | 908    |        |  |   | (44    | )      |  |      | 10     |        |  |   | (302   | )     
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       
|Income before minority interest and equity in earnings of real
    estate partnerships |                                     |                         | 43,859  |         |      |   | 19,204 |        |  |   | 8,097  |        |  |      | 4,197  |        |  |   | 6,478  |       
|Minority interest                                                                      |                                     |                         | 30      |         |      |   | 5,260  |        |  |   | 2,297  |        |  |      | 664    |        |  |   | 1965   |       
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       
|Income before equity in earnings of real estate partnerships                           |                                     |                         | 43,829  |         |      |   | 13,944 |        |  |   | 5,800  |        |  |      | 3,533  |        |  |   | 4,513  |       
|Equity in earnings of real estate partnerships                                         |                                     |                         | 99      |         |      |   | 118    |        |  |   | 139    |        |  |      | 51     |        |  |   | 6      |       
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       
|Income before income taxes                                                             |                                     |                         | 43,928  |         |      |   | 14,062 |        |  |   | 5,939  |        |  |      | 3,584  |        |  |   | 4,519  |       
|Income tax provision (benefit)                                                         |                                     |                         | 16,366  |         |      |   | (241   | )      |  |   |       |        |  |      |       |        |  |   |       |       
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       
|Net income                                                                             |                                     | $                       | 27,562  |         |      | $ | 14,303 |        |  | $ | 5,939  |        |  | $    | 3,584  |        |  | $ | 4,519  |       
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       
|Basic earnings per share                                                               |                                     | $                       | 2.14    |         |      | $ | 1.95   |        |  | $ | 0.84   |        |  | $    | 0.59   |        |  | $ | 0.74   |       
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       
|Basic weighted average shares outstanding(1)                                           |                                     |                         | 12,870  |         |      |   | 7,347  |        |  |   | 7,067  |        |  |      | 6,074  |        |  |   | 6,074  |       
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       
|Dilutive earnings per share                                                            |                                     | $                       | 2.12    |         |      | $ | 1.95   |        |  | $ | 0.84   |        |  | $    | 0.59   |        |  | $ | 0.59   |       
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       
|Dilutive weighted average shares outstanding(1)                                        |                                     |                         | 13,022  |         |      |   | 7,351  |        |  |   | 7,067  |        |  |      | 6,074  |        |  |   | 6,074  |       
|                                                                                       |                                     |                         |         |         |      |   |        |        |  |   |        |        |  |      |       

|                    |                                           |              |   |         |      |  |   |         |  |  |      |        |  |      |   |        |  |  |   |        | 
|------------------- | ----------------------------------------- | ------------ | - | ------- | ---- |  | - | ------- |  |  | ---- | ------ |  | ---- | - | ------ |  |  | - | ------ | 
|                    |                                           | December 31, |  
|                    |                                           |              |  
|                    |                                           | 2005         |   |         | 2004 |  |   | 2003    |  |  | 2002 |        |  | 2001 |  
|                    |                                           |              |   |         |      |  |   |         |  |  |      |        |  |      |  
|Balance Sheet Data: |                                           |              |   |         |      |  |   |         |  |  |      |        |  |      |   |        |  |  |   |       
|                    | Cash and cash equivalents                 |              | $ | 42,167  |      |  | $ | 67,559  |  |  | $    | 17,160 |  |      | $ | 8,695  |  |  | $ | 7,086  | 
|                    | Real estate held for development and sale |              |   | 263,802 |      |  |   | 104,326 |  |  |      | 65,272 |  |      |   | 20,192 |  |  |   | 8,573  | 
|                    | Total assets                              |              |   | 431,319 |      |  |   | 304,507 |  |  |      | 90,184 |  |      |   | 33,971 |  |  |   | 18,402 | 
|                    | Notes payable                             |              |   | 143,657 |      |  |   | 76,628  |  |  |      | 61,062 |  |      |   | 17,203 |  |  |   | 9,439  | 
|                    | Total liabilities                         |              |   | 285,843 |      |  |   | 239,586 |  |  |      | 71,746 |  |      |   | 21,574 |  |  |   | 13,035 | 
|                    | Minority interest                         |              |   | 400     |      |  |   | 2,695   |  |  |      | 11,413 |  |      |   | 8,790  |  |  |   | 2,390  | 






|    |                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Shares outstanding of the Predecessor for prior years have been
    adjusted to account for shares issued to Predecessor owners in
    connection with the initial public offering of Comstocks
    common stock.






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations



31



---



##### 





Overview






for-sale




36-month




32



---



##### 







|              |  |                                    |         |  |      |   |         |      |  |   |         | 
|------------- |  | ---------------------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|              |  | 12-month period ended December 31, |        
|              |  |                                    |        
|SUMMARY       |  | 2003                               |         |  | 2004 |   |         | 2005 | 
|              |  |                                    |         |  |      |   |         |      | 
|Townhouse     |  | $                                  | 271,430 |  |      | $ | 342,457 |      |  | $ | 438,845 | 
|Single Family |  | $                                  | 443,400 |  |      | $ | 460,066 |      |  | $ | 548,750 | 
|Condominium   |  | $                                  | 343,560 |  |      | $ | 380,548 |      |  | $ | 309,378 | 



Recent accounting pronouncements




04-05). 04-05


33



---



##### 



04-05, 04-05 04-05




Critical Accounting Policies and Estimates








| |                                            
| | -------------------------------------------
| | Consolidation of Variable Interest Entities



34



---



##### 









| |                    
| | -------------------
| | Revenue Recognition





| |                                                            
| | -----------------------------------------------------------
| | Impairment of Real Estate Held for Development and
    Sale





| |   |                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------
| |  | significant negative industry or economic trends;                                                            
|
| |  | a significant underperformance relative to historical or
    projected future operating results;             
|
| |  | a significant change in the manner in which an asset is
    used; and                                        
|
| |  | an accumulation of costs significantly in excess of the amount
    originally expected to construct an asset.



35



---



##### 







| |                 
| | ----------------
| | Warranty Reserve





| |                                 
| | --------------------------------
| | Environmental Liability Exposure



Results of Operations




| |                                                                          
| | -------------------------------------------------------------------------
| | Year ended December 31, 2005 compared to year ended
    December 31, 2004



| |                    
| | -------------------
| | Orders and Backlog.



36



---



##### 









| |          
| | ---------
| | Revenues.





| |               
| | --------------
| | Other Revenue.





| |                                                                    
| | -------------------------------------------------------------------
| | Cost of sales and selling, general and administrative
    expenses.



37



---



##### 













| |                  
| | -----------------
| | Operating income.



Other (income) expense, net.






| |                                 
| | --------------------------------
| | Income before minority interest.



38



---



##### 







| |                   
| | ------------------
| | Minority interest.





| |              
| | -------------
| | Income taxes.





| |                                                                          
| | -------------------------------------------------------------------------
| | Year ended December 31, 2004 compared to year ended
    December 31, 2003



| |                    
| | -------------------
| | Orders and Backlog.









| |          
| | ---------
| | Revenues.



39



---



##### 







| |                                                                    
| | -------------------------------------------------------------------
| | Cost of sales and selling, general and administrative
    expenses.







| |                  
| | -----------------
| | Operating income.





| |                             
| | ----------------------------
| | Other (income) expense, net.





| |                                 
| | --------------------------------
| | Income before minority interest.



40



---



##### 







| |                   
| | ------------------
| | Minority interest.





| |             
| | ------------
| | Income taxes



Liquidity and Capital Resources








| |                  
| | -----------------
| | Credit Facilities



41



---



##### 









| |          
| | ---------
| | Cash Flow









| |                    
| | -------------------
| | Recent Acquisitions



258-unit


42



---



##### 





| |                                                   
| | --------------------------------------------------
| | Contractual Obligations and Commercial Commitments



|                 |  |                        |         |           |        |   |        |           |     |   |         |           |  |         |       |  |  |  |   | 
|---------------- |  | ---------------------- | ------- | --------- | ------ | - | ------ | --------- | --- | - | ------- | --------- |  | ------- | ----- |  |  |  | - | 
|                 |  | Payments due by period |        
|                 |  |                        |        
|                 |  |                        |         | Less than |        |   |        |           | 3-5 |   |         | More than | 
|                 |  | Total                  |         |           | 1 Year |   |        | 1-3 Years |     |   | Years   |           |  | 5 Years |      
|                 |  |                        |         |           |        |   |        |           |     |   |         |           |  |         |      
|                 |  | (In thousands)         |        
|Notes payable(1) |  | $                      | 163,888 |           |        | $ | 36,270 |           |     | $ | 125,059 |           |  | $       | 2,559 |  |  |  |  | 
|Operating leases |  | $                      | 3,996   |           |        | $ | 978    |           |     | $ | 2,909   |           |  | $       | 109   |  |  |  |  | 
|                 |  |                        |         |           |        |   |        |           |     |   |         |           |  |         |      
|Total            |  | $                      | 167,884 |           |        | $ | 37,248 |           |     | $ | 127,968 |           |  | $       | 2,668 |  |  |  |  | 
|                 |  |                        |         |           |        |   |        |           |     |   |         |           |  |         |      






|    |                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------
|(1) | Notes payable includes estimated interest payments based on
    interest rates in effect at December 31, 2005.









Seasonality and Weather




Inflation









|         |                                                           
|-------- | ----------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures about Market Risk



43



---



##### 










|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on Accounting
    and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Evaluation of Disclosure Controls and Procedures


13a-15(e) 15d-15(e)


Limitations on the Effectiveness of Controls






44



---



##### 





Managements Report on Internal Control Over Financial
Reporting













|         |                  
|-------- | -----------------
|Item 9B. | Other Information



PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant








|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters








|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services



45



---



##### 



PART IV







|         |                                          
|-------- | -----------------------------------------
|Item 15. | Exhibit and Financial Statement Schedules

(a) Financial Statements




| |                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) Financial Statements are listed in the Index to
    Financial Statements on page F-1 of this report.                                                                                                                   
|
| | (2) Schedules have been omitted because they are not
    applicable or because the information required to be set forth
    therein is included in the consolidated and combined financial
    statements or notes thereto.

(b) Exhibits


|        |    |         |  |                                                                                                                                                                                                                                                                                           
|------- | -- | ------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |        
|Number  |    | Exhibit
|        |    |        
|        | 3  | .1(2)   |  | Amended and Restated Certificate of Incorporation                                                                                                                                                                                                                                         
|        | 3  | .2(2)   |  | Amended and Restated Bylaws                                                                                                                                                                                                                                                               
|        | 4  | .1(1)   |  | Specimen Stock Certificate                                                                                                                                                                                                                                                                
|        | 10 | .1(1)   |  | Lease Agreement, dated as of January 31, 2004, with
    Comstock Partners, L.C.                                                                                                                                                                                                           
|        | 10 | .2(1)   |  | Agreement of Sublease, dated as of October 1, 2004, with
    Comstock Asset Management, L.C.                                                                                                                                                                                              
|        | 10 | .3(1)   |  | Loan Agreement, dated December 17, 1997, as amended, with
    Bank of America, N.A.                                                                                                                                                                                                       
|        | 10 | .4(1)   |  | Disbursement and Construction Loan Agreement and Disbursement
    and Development Loan Agreement, each dated October 10, 2002
    and as amended, with Branch Banking and Trust Company of Virginia                                                                                       
|        | 10 | .5(1)   |  | Disbursement and Construction Loan Agreement and Acquisition,
    Disbursement and Development Loan Agreement, each dated
    July 25, 2003, with Branch Banking and Trust Company of
    Virginia                                                                                        
|        | 10 | .6(2)   |  | Loan Agreement, dated January 25, 2005, with Corus Bank,
    N.A.                                                                                                                                                                                                                         
|        | 10 | .7(2)   |  | Completion Guaranty, dated January 25, 2005 in favor of
    Corus Bank, N.A.                                                                                                                                                                                                              
|        | 10 | .8(2)   |  | Carve-Out Guaranty, dated January 25, 2005, in favor of
    Corus Bank, N.A.                                                                                                                                                                                                              
|        | 10 | .9(1)   |  | Form of Indemnification Agreement                                                                                                                                                                                                                                                         
|        | 10 | .10(1)  |  | Form of Promissory Note to be issued to each of Christopher
    Clemente, Gregory Benson, James Keena and Lawrence Golub by each
    of Comstock Holding Company, Inc., Comstock Homes, Inc., Sunset
    Investment Corp., Inc. and Comstock Service Corp., Inc.                          
|        | 10 | .11(1)  |  | Form of Tax Indemnification Agreement to be entered into by each
    of Christopher Clemente, Gregory Benson, James Keena and
    Lawrence Golub with each of Comstock Holding Company, Inc.,
    Comstock Homes, Inc., Sunset Investment Corp., Inc. and Comstock
    Service Corp., Inc.
|        | 10 | .12(1)  |  | 2004 Long-Term Incentive Compensation Plan                                                                                                                                                                                                                                                
|        | 10 | .13(1)  |  | Form of Stock Option Agreement under the 2004 Long-Term
    Incentive Compensation Plan                                                                                                                                                                                                   
|        | 10 | .14(2)  |  | Form of Restricted Stock Grant Agreement under the 2004
    Long-Term Incentive Compensation Plan                                                                                                                                                                                         
|        | 10 | .15(1)  |  | Employee Stock Purchase Plan                                                                                                                                                                                                                                                              
|        | 10 | .16(1)  |  | Purchase and Sale Agreement, dated as of April 25, 2003, as
    amended, with Crescent Potomac Yard Development, LLC                                                                                                                                                                      
|        | 10 | .17(2)  |  | Purchase and Sale Agreement, dated as of November 9, 2004,
    as amended, with Fair Oaks Penderbrook Apartments L.L.C.                                                                                                                                                                   
|        | 10 | .18(2)  |  | Real Estate Purchase Contract, dated as of February 4,
    2005, with Westwick Apartments LLC                                                                                                                                                                                             
|        | 10 | .19(2)  |  | Services Agreement, dated March 4, 2005, with Comstock
    Asset Management, L.C.                                                                                                                                                                                                         
|        | 10 | .20(1)  |  | Employment Agreement with Christopher Clemente                                                                                                                                                                                                                                            
|        | 10 | .21(1)  |  | Employment Agreement with Gregory Benson                                                                                                                                                                                                                                                  
|        | 10 | .22(1)  |  | Employment Agreement with Bruce Labovitz                                                                                                                                                                                                                                                  
|        | 10 | .23(1)  |  | Confidentiality and Non-Competition Agreement with Christopher
    Clemente                                                                                                                                                                                                               
|        | 10 | .24(1)  |  | Confidentiality and Non-Competition Agreement with Gregory Benson                                                                                                                                                                                                                         
|        | 10 | .25(1)  |  | Confidentiality and Non-Competition Agreement with Bruce Labovitz                                                                                                                                                                                                                         

46



---



##### 



|        |    |         |  |                                                                                                                                                       
|------- | -- | ------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |        
|Number  |    | Exhibit
|        |    |        
|        | 10 | .26(2)  |  | Description of Arrangements with William Bensten                                                                                                      
|        | 10 | .27(2)  |  | Description of Arrangements with David Howell                                                                                                         
|        | 10 | .28(1)  |  | Trademark License Agreement                                                                                                                           
|        | 10 | .29(2)  |  | Purchase Agreement, dated as of November 12, 2004 with
    Comstock Asset Management, L.C.                                                            
|        | 10 | .30(3)  |  | Agreement of Purchase and Sale, dated June 23, 2005, by and
    between Comstock Carter Lake, L.C. and E.R. Carter, L.L.C.                            
|        | 10 | .31(3)  |  | Agreement of Purchase and Sale, dated September 28, 2005,
    by and between Comstock Bellemeade, L.C. and Bellemeade Farms
    Investors, LLC et. al.
|        | 10 | .32(3)  |  | Loan Agreement, dated September 28, 2005, by and between
    Comstock Bellemeade, L.C. and Bank of America, N.A.                                      
|        | 10 | .33(3)  |  | Guaranty Agreement, dated September 28, 2005, by the
    Registrant in favor of Bank of America, N.A.                                                 
|        | 10 | .34(4)  |  | Life Insurance Reimbursement Agreement with William P. Bensten                                                                                        
|        | 10 | .35(4)  |  | Life Insurance Reimbursement Agreement with Bruce Labovitz                                                                                            
|        | 10 | .36(4)  |  | Description of Reimbursement and Indemnification Arrangement
    with Christopher Clemente and Gregory Benson                                         
|        | 10 | .37(3)  |  | Agreement of Purchase and Sale, dated June 23, 2005, by and
    between Comstock Carter Lake, L.C. and E.R. Carter, L.L.C.                            
|        | 10 | .38*    |  | Stock Purchase Agreement with Parker-Chandler Homes, Inc. and
    the Selling Stockholders identified therein, dated as of
    January 19, 2006       
|        | 10 | .39*    |  | Loan Agreement, dated January 31, 2006, by and between
    Comstock Carter Lake, L.C. and Bank of America, N.A.                                       
|        | 10 | .40*    |  | Guaranty Agreement, dated January 31, 2006m by the
    Registrant in favor of Bank of America, N.A.                                                   
|        | 14 | .1(2)   |  | Code of Ethics                                                                                                                                        
|        | 21 | .1*     |  | List of subsidiaries                                                                                                                                  
|        | 23 | .1*     |  | Consent of PricewaterhouseCoopers LLP                                                                                                                 
|        | 24 | .1      |  | Power of Attorney (see signature page to this Annual Report on
    Form 10-K.)                                                                        
|        | 31 | .1*     |  | Certification of Chief Executive Officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 2002                                                    
|        | 31 | .2*     |  | Certification of Chief Financial Officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 2002                                                    
|        | 32 | .1*     |  | Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of Sarbanes-Oxley Act of
    2002                    






|  |                
|- | ---------------
|* | Filed herewith.



|    |                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to an exhibit to the Registrants
    Registration Statement on
    Form S-1, as
    amended, initially filed with the Commission on August 13,
    2004 (No. 333-118193).
|   
|(2) | Incorporated by reference to an exhibit to the Registrants
    Annual Report on
    Form 10-K filed
    with the Commission on March 31, 2005.                                                     
|   
|(3) | Incorporated by reference to an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q filed
    with the Commission on November 14, 2005.                                               
|   
|(4) | Incorporated by reference to an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q filed
    with the Commission on August 9, 2005.                                                  

47



---



##### 






INDEX TO FINANCIAL STATEMENTS


|                                                                                                                                      |  |      |     | 
|------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                                                      |  | Page |    
|                                                                                                                                      |  |      |    
|COMSTOCK HOMEBUILDING COMPANIES, INC.                                                                                                 |  |      |     | 
|Report of Independent Registered Public Accounting Firm                                                                               |  |      | F-2 | 
|Consolidated Balance Sheets as of December 31, 2005 and 2004                                                                          |  |      | F-4 | 
|Consolidated and Combined Statements of Operations for the Years
    Ended December 31, 2005, 2004 and 2002                           |  |      | F-5 | 
|Consolidated and Combined Statements of Changes in
    Shareholders Equity for the Years Ended December 31,
    2005, 2004, and 2003 |  |      | F-6 | 
|Consolidated and Combined Statements of Cash Flows for the Years
    Ended December 31, 2005, 2004 and 2003                           |  |      | F-7 | 
|Notes to Consolidated and Combined Financial Statements                                                                               |  |      | F-8 | 

F-1



---



##### 






Report of Independent Registered Public Accounting Firm






Consolidated financial statements




Internal control over financial reporting


Internal Control  Integrated Framework Internal Control 
Integrated Framework




F-2



---



##### 













F-3



---



##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES





CONSOLIDATED BALANCE SHEETS


(Amounts in thousands, except share data)


|                                     |                                                  |                                                                                                                              |   |         |              |  |   |         |    | 
|------------------------------------ | ------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------- | - | ------- | ------------ |  | - | ------- | -- | 
|                                     |                                                  | December 31,                                                                                                                 |   |         | December 31, | 
|                                     |                                                  | 2005                                                                                                                         |   |         | 2004         | 
|                                     |                                                  |                                                                                                                              |   |         |              | 
|ASSETS                              
|                                     | Cash and cash equivalents                        |                                                                                                                              | $ | 42,167  |              |  | $ | 67,559  |   
|                                     | Restricted cash                                  |                                                                                                                              |   | 10,800  |              |  |   | 7,500   |   
|                                     | Receivables                                      |                                                                                                                              |   | 6,365   |              |  |   | 239     |   
|                                     | Note receivables                                 |                                                                                                                              |   | 1,250   |              |  |   |        |   
|                                     | Due from related parties                         |                                                                                                                              |   | 2,899   |              |  |   | 1,447   |   
|                                     | Real estate held for development and sale        |                                                                                                                              |   | 263,802 |              |  |   | 104,326 |   
|                                     | Inventory not owned  variable interest entities |                                                                                                                              |   | 89,890  |              |  |   | 118,558 |   
|                                     | Property, plant and equipment                    |                                                                                                                              |   | 605     |              |  |   | 488     |   
|                                     | Investment in real estate partnerships           |                                                                                                                              |   | (35     | )            |  |   | 1,029   |   
|                                     | Deferred income tax                              |                                                                                                                              |   | 2,545   |              |  |   | 821     |   
|                                     | Other assets                                     |                                                                                                                              |   | 11,031  |              |  |   | 2,540   |   
|                                     |                                                  |                                                                                                                              |   |         |              | 
|                                     | TOTAL ASSETS                                     |                                                                                                                              | $ | 431,319 |              |  | $ | 304,507 |   
|                                     |                                                  |                                                                                                                              |   |         |              | 
|                                    
|LIABILITIES AND SHAREHOLDERS EQUITY
|                                     | Accounts payable and accrued liabilities         |                                                                                                                              |   | 59,131  |              |  | $ | 35,532  |   
|                                     | Income taxes payable                             |                                                                                                                              |   |        |              |  |   | 290     |   
|                                     | Due to related parties                           |                                                                                                                              |   | 40      |              |  |   | 148     |   
|                                     | Obligations related to inventory not owned       |                                                                                                                              |   | 83,015  |              |  |   | 114,333 |   
|                                     | Notes payable                                    |                                                                                                                              |   | 142,994 |              |  |   | 65,684  |   
|                                     | Notes payable  related parties                  |                                                                                                                              |   | 663     |              |  |   | 10,944  |   
|                                     | Distribution payable                             |                                                                                                                              |   |        |              |  |   | 12,655  |   
|                                     |                                                  |                                                                                                                              |   |         |              | 
|                                     | TOTAL LIABILITIES                                |                                                                                                                              |   | 285,843 |              |  |   | 239,586 |   
|                                     |                                                  |                                                                                                                              |   |         |              | 
|                                     | Commitments and contingencies (Note 15)          |                                                                                                                              |   |         |              |  |   |         |   
|                                     | Minority interest                                |                                                                                                                              |   | 400     |              |  |   | 2,695   |   
|                                     |                                                  |                                                                                                                              |   |         |              | 
|SHAREHOLDERS EQUITY                 |                                                  |                                                                                                                              |   |         |              |  |   |        
|                                     |                                                  | Class A common stock, $0.01 par value,
    77,266,500 shares authorized, 11,532,442 and 9,160,608
    issued and outstanding |   |         | 115          |  |   |         | 92 | 
|                                     |                                                  | Class B common stock, $0.01 par value,
    2,733,500 shares authorized, 2,733,500 issued and
    outstanding                 |   |         | 27           |  |   |         | 27 | 
|                                     | Additional paid-in capital                       |                                                                                                                              |   | 126,461 |              |  |   | 71,196  |   
|                                     | Retained earnings (accumulated deficit)          |                                                                                                                              |   | 18,473  |              |  |   | (9,089  | ) 
|                                     |                                                  |                                                                                                                              |   |         |              | 
|                                     | TOTAL SHAREHOLDERS EQUITY                       |                                                                                                                              |   | 145,076 |              |  |   | 62,226  |   
|                                     |                                                  |                                                                                                                              |   |         |              | 
|                                     | TOTAL LIABILITIES AND SHAREHOLDERS EQUITY       |                                                                                                                              | $ | 431,319 |              |  | $ | 304,507 |   
|                                     |                                                  |                                                                                                                              |   |         |              | 



F-4



---



##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES





CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS


(Amounts in thousands, except share data)


|                                                                                       |                                     |                                  |         |         |      |   |        |        |  |   |        |        | 
|-------------------------------------------------------------------------------------- | ----------------------------------- | -------------------------------- | ------- | ------- | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|                                                                                       |                                     | Twelve Months Ended December 31, |        
|                                                                                       |                                     |                                  |        
|                                                                                       |                                     | 2005                             |         |         | 2004 |   |        | 2003   | 
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Revenues                                                                               |                                     |                                  |         |         |      |   |        |        |  |   |        |       
|                                                                                       | Sale of real estate  Homes         |                                  | $       | 216,265 |      |   | $      | 87,003 |  |   | $      | 49,081 | 
|                                                                                       | Other revenue                       |                                  |         | 8,040   |      |   |        | 9,042  |  |   |        | 6,440  | 
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Total revenue                                                                          |                                     |                                  | 224,305 |         |      |   | 96,045 |        |  |   | 55,521 |       
|Expenses                                                                               |                                     |                                  |         |         |      |   |        |        |  |   |        |       
|                                                                                       | Cost of sales of real estate        |                                  |         | 154,102 |      |   |        | 57,339 |  |   |        | 36,620 | 
|                                                                                       | Cost of sales of other              |                                  |         | 3,604   |      |   |        | 6,654  |  |   |        | 5,136  | 
|                                                                                       | Selling, general and administrative |                                  |         | 24,190  |      |   |        | 11,940 |  |   |        | 5,712  | 
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Operating income                                                                       |                                     |                                  | 42,409  |         |      |   | 20,112 |        |  |   | 8,053  |       
|Other (income) expense, net                                                            |                                     |                                  | (1,450  | )       |      |   | 908    |        |  |   | (44    | )     
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Income before minority interest and equity in earnings of real
    estate partnerships |                                     |                                  | 43,859  |         |      |   | 19,204 |        |  |   | 8,097  |       
|Minority interest                                                                      |                                     |                                  | 30      |         |      |   | 5,260  |        |  |   | 2,297  |       
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Income before equity in earnings of real estate partnerships                           |                                     |                                  | 43,829  |         |      |   | 13,944 |        |  |   | 5,800  |       
|Equity in earnings of real estate partnerships                                         |                                     |                                  | 99      |         |      |   | 118    |        |  |   | 139    |       
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Total pre tax income                                                                   |                                     |                                  | 43,928  |         |      |   | 14,062 |        |  |   | 5,939  |       
|Income Taxes                                                                           |                                     |                                  | 16,366  |         |      |   | (241   | )      |  |   |       |       
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Net Income                                                                             |                                     | $                                | 27,562  |         |      | $ | 14,303 |        |  | $ | 5,939  |       
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Basic earnings per share                                                               |                                     |                                  | 2.14    |         |      |   | 1.95   |        |  |   | 0.84   |       
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Basic weighted average shares outstanding                                              |                                     |                                  | 12,870  |         |      |   | 7,347  |        |  |   | 7,067  |       
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Diluted earnings per share                                                             |                                     |                                  | 2.12    |         |      |   | 1.95   |        |  |   | 0.84   |       
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 
|Diluted weighted average shares outstanding                                            |                                     |                                  | 13,022  |         |      |   | 7,351  |        |  |   | 7,067  |       
|                                                                                       |                                     |                                  |         |         |      |   |        |        | 



F-5



---



##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES





CONSOLIDATED AND COMBINED STATEMENT OF CHANGES IN


SHAREHOLDERS EQUITY


(Amounts in thousands, except share data)


|                                 |                                                                                                |                        |       |         |        |                       |         |        |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |        |         |   |   |        |         |   |   |        |         |  
|-------------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------- | ----- | ------- | ------ | --------------------- | ------- | ------ | - | ---------- | ------ | ------ | -------- | ------ | -- | --- | ------ |  | ----- | ------- |  | - | --------- | -- |  | ----- | ------ | ------- | - | - | ------ | ------- | - | - | ------ | ------- | -
|                                 |                                                                                                |                        |       |         |        | Comstock Homebuilding |         |        |   |            |        |        |         
|                                 |                                                                                                |                        |       |         |        | Companies, Inc.       |         |        |   |            |        |        |         
|                                 |                                                                                                |                        |       |         |        |                       |         |        |   |            |       
|                                 |                                                                                                | The Comstock           |       |         |        |                       |         |        |  
|                                 |                                                                                                | Companies Common stock |       |         |        |                       |         |        |  
|                                 |                                                                                                |                        |       |         |        |                       |         |        |  
|                                 |                                                                                                |                        |       |         |        |                       |         |        |  
|                                 |                                                                                                |                        |       | Class A |        |                       | Class B |        |   | Additional |        |        | Retained |        |    |    
|                                 |                                                                                                |                        |       |         |        |                       |         |        |   | Paid-In    |        |        | earnings |        |    |    
|                                 |                                                                                                | Shares                 |       |         | Amount |                       |         | Shares |   |            | Amount |        |          | Shares |    |     | Amount |  |       | Capital |  |   | (deficit) |    |  | Total |       
|                                 |                                                                                                |                        |       |         |        |                       |         |        |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |       
|Balance at December 31,
    2002 |                                                                                                |                        | 3,558 |         |        | $                     | 3       |        |   |            |       |        |          | $      |   |     |        |  |      |         |  | $ |          |    |  | $     | 1,493  |         |   | $ | 2,111  |         |   | $ | 3,607  |        
|                                 | Distributions                                                                                  |                        |       |        |        |                       |         |       |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |        |        |   |   |        | (2,521  | ) |   |        | (2,521  | )
|                                 | Net Income                                                                                     |                        |       |        |        |                       |         |       |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |        |        |   |   |        | 5,939   |   |   |        | 5,939   |  
|                                 |                                                                                                |                        |       |         |        |                       |         |        |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |       
|Balance at December 31,
    2003 |                                                                                                |                        | 3,558 |         |        |                       | 3       |        |   |            |       |        |          |        |   |     |        |  |      |         |  |   |          |    |  |       | 1,493  |         |   |   | 5,529  |         |   |   | 7,025  |        
|                                 | Distributions                                                                                  |                        |       |        |        |                       |         |       |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |        |        |   |   |        | (5,668  | ) |   |        | (5,668  | )
|                                 | Issuance of common stock in Homebuilding on June 7, 2004                                       |                        |       |         |        |                       |         |       |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |        |         |   |   |        |         |   |   |        |        |  
|                                 | Recapitalization by virtue of merger                                                           |                        |       | (3,558  | )      |                       |         | (3     | ) |            |        | 4,333  |          |        |    | 43  |        |  |       | 2,733   |  |   |           | 27 |  |       |        | 4       |   |   |        |         |   |   |        | 71      |  
|                                 | Acquisition of Service on December 17, 2004                                                    |                        |       |         |        |                       |         |        |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |        | 4,756   |   |   |        |         |   |   |        | 4,756   |  
|                                 | Issuance of common stock of Homebuilding on December 17,
    2004 (less transaction costs)     |                        |       |         |        |                       |         |        |   |            |        | 3,960  |          |        |    | 40  |        |  |       |         |  |   |           |    |  |       |        | 56,012  |   |   |        |         |   |   |        | 56,052  |  
|                                 | Issuance of common stock  overallotment                                                       |                        |       |         |        |                       |         |        |   |            |        | 594    |          |        |    | 6   |        |  |       |         |  |   |           |    |  |       |        | 8,833   |   |   |        |         |   |   |        | 8,839   |  
|                                 | Distribution following IPO                                                                     |                        |       |         |        |                       |         |        |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |        |         |   |   |        | (23,253 | ) |   |        | (23,253 | )
|                                 | Issuance of restricted common stock                                                            |                        |       |         |        |                       |         |        |   |            |        | 275    |          |        |    | 3   |        |  |       |         |  |   |           |    |  |       |        | (3      | ) |   |        |         |   |   |        |        |  
|                                 | Stock-based compensation                                                                       |                        |       |         |        |                       |         |        |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |        | 101     |   |   |        |         |   |   |        | 101     |  
|                                 | Net income                                                                                     |                        |       |        |        |                       |         |       |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |        |        |   |   |        | 14,303  |   |   |        | 14,303  |  
|                                 |                                                                                                |                        |       |         |        |                       |         |        |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |       
|Balance at December 31,
    2004 |                                                                                                |                        |      |         |        |                       |        |        |   |            | 9,162  |        |          |        | 92 |     |        |  | 2,733 |         |  |   | 27        |    |  |       | 71,196 |         |   |   | (9,089 | )       |   |   | 62,226 |        
|                                 | Net Income                                                                                     |                        |       |         |        |                       |         |        |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |        |         |   |   |        | 27,562  |   |   |        | 27,562  |  
|                                 | Stock compensation and issuances                                                               |                        |       |         |        |                       |         |        |   |            |        | 3      |          |        |    | 0   |        |  |       |        |  |   |           |   |  |       |        | 2,346   |   |   |        |        |   |   |        | 2,346   |  
|                                 | Issuance of common stock under employee stock purchase plans                                   |                        |       |         |        |                       |         |        |   |            |        | 8      |          |        |    | 0   |        |  |       |        |  |   |           |   |  |       |        | 133     |   |   |        |        |   |   |        | 133     |  
|                                 | Issuances of common stock in follow on offering on June 22,
    2005 (less transactions costs) |                        |       |        |        |                       |         |       |   |            |        | 2,360  |          |        |    | 23  |        |  |       |        |  |   |           |   |  |       |        | 52,786  |   |   |        |        |   |   |        | 52,809  |  
|                                 |                                                                                                |                        |       |         |        |                       |         |        |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |       
|                                 | Balance at December 31, 2005                                                                   |                        |       |        |        |                       | $       |       |   |            |        | 11,533 |          |        | $  | 115 |        |  |       | 2,733   |  |   | $         | 27 |  |       | $      | 126,461 |   |   | $      | 18,473  |   |   | $      | 145,076 |  
|                                 |                                                                                                |                        |       |         |        |                       |         |        |   |            |        |        |          |        |    |     |        |  |       |         |  |   |           |    |  |       |       



F-6



---



##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES





CONSOLIDATED AND COMBINED STATEMENT OF CASH FLOWS


(Amounts in thousands, except share data)


|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |       |         |        |         |       |         |         |  
|-------------------------------------------------- | ----------------------------------------------------------------------------------- | --------------------------------------------------------- | ----------------------------------------- | --------------------------------------------------- | ------ | -------- | -------- | ------- | ----- | ------- | ------ | ------- | ----- | ------- | ------- | -
|                                                   |                                                                                     | Twelve Months Ended December 30,                          |                                          
|                                                   |                                                                                     |                                                           |                                          
|                                                   |                                                                                     | 2005                                                      |                                           |                                                     | 2004   |          |          | 2003    |      
|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |      
|Cash flows from operating activities:              |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |       |         |        |        
|                                                   | Net income                                                                          |                                                           | $                                         | 27,562                                              |        |          | $        | 14,303  |       |         | $      | 5,939   |      
|                                                   | Adjustment to reconcile net income to net cash provided by
    operating activities |                                                           |                                           |                                                     |        |          |          |         |       |         |        |         |      
|                                                   |                                                                                     | Depreciation                                              |                                           |                                                     | 172    |          |          |         | 106   |         |        |         | 67    |        
|                                                   |                                                                                     | Loss on disposal of assets                                |                                           |                                                     | 9      |          |          |         | 1     |         |        |         |      |        
|                                                   |                                                                                     | Minority interest                                         |                                           |                                                     | 30     |          |          |         | 5,260 |         |        |         | 2,297 |        
|                                                   |                                                                                     | Equity in earnings of real estate partnerships            |                                           |                                                     | (99    | )        |          |         | (118  | )       |        |         | (139  | )      
|                                                   |                                                                                     | Distributions from investment in real estate partnerships |                                           |                                                     | 163    |          |          |         | 120   |         |        |         | 157   |        
|                                                   |                                                                                     | Amortization of stock compensation                        |                                           |                                                     | 2,346  |          |          |         | 101   |         |        |         |      |        
|                                                   |                                                                                     | Deferred income tax                                       |                                           |                                                     | (1,724 | )        |          |         | (531  | )       |        |         |      |        
|                                                   |                                                                                     | Changes in operating assets and liabilities:              |                                           |                                                     |        |          |          |         |       |         |        |         |       |        
|                                                   |                                                                                     |                                                           | Restricted Cash                           |                                                     |        | (3,300   | )        |         |       | (7,500  | )      |         |       |        |        
|                                                   |                                                                                     |                                                           | Receivables                               |                                                     |        | (6,126   | )        |         |       | 2,107   |        |         |       | (1,736  | )      
|                                                   |                                                                                     |                                                           | Note Receivables                          |                                                     |        | (1,250   | )        |         |       |        |        |         |       |        |        
|                                                   |                                                                                     |                                                           | Due from related parties                  |                                                     |        | (1,452   | )        |         |       | 1,693   |        |         |       | (1,832  | )      
|                                                   |                                                                                     |                                                           | Real estate held for development and sale |                                                     |        | (159,476 | )        |         |       | (23,081 | )      |         |       | (44,260 | )      
|                                                   |                                                                                     |                                                           | Other assets                              |                                                     |        | (11,141  | )        |         |       | (5,428  | )      |         |       | 1,005   |        
|                                                   |                                                                                     |                                                           | Accounts payable and accrued liabilities  |                                                     |        | 23,599   |          |         |       | 24,025  |        |         |       | 6,237   |        
|                                                   |                                                                                     |                                                           | Income tax payable                        |                                                     |        | (290     | )        |         |       | 290     |        |         |       |        |        
|                                                   |                                                                                     |                                                           | Due to related parties                    |                                                     |        | (108     | )        |         |       | (82     | )      |         |       | (24     | )      
|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |      
|                                                   |                                                                                     |                                                           |                                           | Net cash (used in) provided by operating activities |        |          | (131,085 | )       |       |         | 11,266 |         |       |         | (32,289 | )
|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |      
|Cash flows from investing activities:              |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |       |         |        |        
|                                                   | Purchase of property, plant, and equipment                                          |                                                           |                                           | (298                                                | )      |          |          | (372    | )     |         |        | (90     | )    
|                                                   | Distributions of capital from investments in real estate
    partnerships           |                                                           |                                           | 1,000                                               |        |          |          |        |       |         |        |        |      
|                                                   | Acquisition of Comstock Service                                                     |                                                           |                                           |                                                    |        |          |          | 1,215   |       |         |        |        |      
|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |      
|                                                   |                                                                                     |                                                           |                                           | Net cash provided by investing activities           |        |          | 702      |         |       |         | 843    |         |       |         | (90     | )
|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |      
|Cash flows from financing activities:              |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |       |         |        |        
|                                                   | Proceeds from notes payable                                                         |                                                           |                                           | 212,408                                             |        |          |          | 81,747  |       |         |        | 74,521  |      
|                                                   | Proceeds from related party notes payable                                           |                                                           |                                           | 444                                                 |        |          |          | 4,646   |       |         |        | 6,300   |      
|                                                   | Payments on notes payable                                                           |                                                           |                                           | (135,098                                            | )      |          |          | (78,716 | )     |         |        | (37,782 | )    
|                                                   | Payments on related party notes payable                                             |                                                           |                                           | (10,725                                             | )      |          |          | (6,000  | )     |         |        |        |      
|                                                   | Contribution from minority shareholders                                             |                                                           |                                           | 87                                                  |        |          |          |        |       |         |        | 2,000   |      
|                                                   | Payment of distribution payable                                                     |                                                           |                                           | (12,655                                             | )      |          |          |        |       |         |        |        |      
|                                                   | Distributions paid to minority shareholders                                         |                                                           |                                           | (2,412                                              | )      |          |          | (14,181 | )     |         |        | (1,674  | )    
|                                                   | Distributions paid to shareholders                                                  |                                                           |                                           |                                                    |        |          |          | (14,168 | )     |         |        | (2,521  | )    
|                                                   | Proceeds from shares issued under employee stock purchase plan                      |                                                           |                                           | 133                                                 |        |          |          |        |       |         |        |        |      
|                                                   | Net proceeds from offerings                                                         |                                                           |                                           | 52,809                                              |        |          |          | 64,962  |       |         |        |        |      
|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |      
|                                                   |                                                                                     |                                                           |                                           | Net cash provided by financing activities           |        |          | 104,991  |         |       |         | 38,290 |         |       |         | 40,844  |  
|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |      
|                                                   | Net (decrease) increase in cash and cash equivalents                                |                                                           |                                           | (25,392                                             | )      |          |          | 50,399  |       |         |        | 8,465   |      
|                                                   | Cash and cash equivalents, beginning of period                                      |                                                           |                                           | 67,559                                              |        |          |          | 17,160  |       |         |        | 8,695   |      
|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |      
|                                                   | Cash and cash equivalents, end of period                                            |                                                           | $                                         | 42,167                                              |        |          | $        | 67,559  |       |         | $      | 17,160  |      
|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |      
|Supplemental disclosures of cash flow information: |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |       |         |        |        
|                                                   | Income taxes paid                                                                   |                                                           | $                                         | 23,044                                              |        |          | $        |        |       |         | $      |        |      
|                                                   |                                                                                     |                                                           |                                           |                                                     |        |          |          |         |      



F-7



---



##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES





NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS


(Amounts in thousands, unless otherwise indicated)




|   |             
|-- | ------------
|1. | ORGANIZATION



















F-8



---



##### 





|   |                                           
|-- | ------------------------------------------
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis of Presentation






Principles of
consolidation




Cash and cash
equivalents




Receivables




F-9



---



##### 



Real estate held for
development and sale








Capitalized interest and
real estate taxes






|                                                        |  |                          |        |   |      |   |        |      |  |   |        |  
|------------------------------------------------------- |  | ------------------------ | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                        |  | Years Ended December 31, |       
|                                                        |  |                          |       
|                                                        |  | 2005                     |        |   | 2004 |   |        | 2003 | 
|                                                        |  |                          |        |   |      |   |        |      | 
|Total interest incurred                                 |  |                          | 12,272 |   |      | $ | 4,686  |      |  | $ | 1,944  |  
|                                                        |  |                          |        |   |      |   |        |      | 
|Beginning interest capitalized                          |  | $                        | 4,524  |   |      | $ | 1,428  |      |  | $ | 586    |  
|Plus: Interest incurred on notes payable                |  |                          | 11,752 |   |      |   | 2,847  |      |  |   | 1,782  |  
|Plus: Interest incurred on related party notes payable  |  |                          | 310    |   |      |   | 1,461  |      |  |   | 154    |  
|Less: Interest expensed as a component of cost of sales |  |                          | (4,996 | ) |      |   | (1,212 | )    |  |   | (1,094 | )
|                                                        |  |                          |        |   |      |   |        |      | 
|Ending interest capitalized                             |  | $                        | 11,590 |   |      | $ | 4,524  |      |  | $ | 1,428  |  
|                                                        |  |                          |        |   |      |   |        |      | 

Environmental remediation
costs




F-10



---



##### 



Property, plant, and
equipment




|                        |  |  |         | 
|----------------------- |  |  | ------- | 
|Furniture and equipment |  |  | 7 years | 
|Computer equipment      |  |  | 3 years | 
|Office equipment        |  |  | 7 years | 



Investment in real estate
partnerships




Warranty reserve




|                                 |  |                          |       |   |      |   |      |      |  |   |      |  
|-------------------------------- |  | ------------------------ | ----- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                 |  | Years Ended December 31, |      
|                                 |  |                          |      
|                                 |  | 2005                     |       |   | 2004 |   |      | 2003 | 
|                                 |  |                          |       |   |      |   |      |      | 
|Balance at beginning of period   |  | $                        | 916   |   |      | $ | 541  |      |  | $ | 460  |  
|Additions                        |  |                          | 888   |   |      |   | 823  |      |  |   | 344  |  
|Releases and/or charges incurred |  |                          | (598  | ) |      |   | (448 | )    |  |   | (263 | )
|                                 |  |                          |       |   |      |   |      |      | 
|Balance at end of period         |  | $                        | 1,206 |   |      | $ | 916  |      |  | $ | 541  |  
|                                 |  |                          |       |   |      |   |      |      | 

Minority interest




Revenue recognition






F-11



---



##### 



Advertising costs




Stock compensation




Income taxes




Earnings per share




|                            |                                              |                         |   |        |      |  |   |        |  |  |   |       | 
|--------------------------- | -------------------------------------------- | ----------------------- | - | ------ | ---- |  | - | ------ |  |  | - | ----- | 
|                            |                                              | Year Ended December 31, |  
|                            |                                              |                         |  
|                            |                                              | 2005                    |   |        | 2004 |  |   | 2003   | 
|                            |                                              |                         |   |        |      |  |   |        | 
|Basic earnings per share    |                                              |                         |   |        |      |  |   |        |  |  |   |      
|                            | Net Income                                   |                         | $ | 27,562 |      |  | $ | 14,303 |  |  | $ | 5,939 | 
|                            |                                              |                         |   |        |      |  |   |        | 
|                            | Basic weighted-average shares outstanding    |                         |   | 12,870 |      |  |   | 7,347  |  |  |   | 7,067 | 
|                            |                                              |                         |   |        |      |  |   |        | 
|                            | Per share amounts                            |                         | $ | 2.14   |      |  | $ | 1.95   |  |  | $ | 0.84  | 
|                            |                                              |                         |   |        |      |  |   |        | 
|Dilutive Earnings Per Share |                                              |                         |   |        |      |  |   |        |  |  |   |      
|                            | Net Income                                   |                         | $ | 27,562 |      |  | $ | 14,303 |  |  | $ | 5,939 | 
|                            |                                              |                         |   |        |      |  |   |        | 
|                            | Basic weighted-average shares outstanding    |                         |   | 12,870 |      |  |   | 7,347  |  |  |   | 7,067 | 
|                            | Stock options and restricted stock grants    |                         |   | 152    |      |  |   | 4      |  |  |   |      | 
|                            |                                              |                         |   |        |      |  |   |        | 
|                            | Dilutive weighted-average shares outstanding |                         |   | 13,022 |      |  |   | 7,351  |  |  |   | 7,067 | 
|                            |                                              |                         |   |        |      |  |   |        | 
|                            | Per share amounts                            |                         | $ | 2.12   |      |  | $ | 1.95   |  |  | $ | 0.84  | 
|                            |                                              |                         |   |        |      |  |   |        | 

F-12



---



##### 





Comprehensive income




Segment reporting




Use of estimates




Recent accounting
pronouncements


04-05). 04-05 04-05, 04-05 04-05




F-13



---



##### 





|   |                                            
|-- | -------------------------------------------
|3. | CONSOLIDATION OF VARIABLE INTEREST ENTITIES



46-R.






|   |             
|-- | ------------
|4. | ACQUISITIONS





F-14



---



##### 





|                                          |  |   |         |  
|----------------------------------------- |  | - | ------- | -
|Cash                                      |  | $ | 1,216   |  
|Notes receivable                          |  |   | 2,506   |  
|Real estate held for development and sale |  |   | 19,338  |  
|Other assets                              |  |   | 25      |  
|                                          |  |   |        
|Total assets acquired                     |  |   | 23,085  |  
|Less: Accounts payable                    |  |   | (1,052  | )
|Less: Notes payable                       |  |   | (13,889 | )
|Less: Minority interest                   |  |   | (2,717  | )
|Less: Other liabilities                   |  |   | (671    | )
|                                          |  |   |        
|Net assets acquired                       |  | $ | 4,756   |  
|                                          |  |   |        





|                                                                                       |  |                      |         |  |      |   |        |  
|-------------------------------------------------------------------------------------- |  | -------------------- | ------- |  | ---- | - | ------ | -
|                                                                                       |  | Proforma (unaudited) |        
|                                                                                       |  | Years Ended          |        
|                                                                                       |  | December 31,         |        
|                                                                                       |  |                      |        
|                                                                                       |  | 2004                 |         |  | 2003 |  
|                                                                                       |  |                      |         |  |      |  
|Revenues                                                                               |  | $                    | 102,135 |  |      | $ | 62,359 |  
|Operating income                                                                       |  |                      | 19,456  |  |      |   | 8,695  |  
|Other (income) expense, net                                                            |  |                      | 1,018   |  |      |   | (70    | )
|Income before minority interest and equity in earnings of real
    estate partnerships |  |                      | 18,438  |  |      |   | 8,765  |  
|Minority interest                                                                      |  |                      | 5,157   |  |      |   | 3,713  |  
|                                                                                       |  |                      |         |  |      |  
|Income before equity in earnings of real estate partnerships                           |  |                      | 13,281  |  |      |   | 5,052  |  
|Equity in earnings of real estate partnerships                                         |  |                      | 118     |  |      |   | 139    |  
|                                                                                       |  |                      |         |  |      |  
|Net Income before income taxes                                                         |  | $                    | 13,399  |  |      | $ | 5,191  |  
|                                                                                       |  |                      |         |  |      |  





|   |                                          
|-- | -----------------------------------------
|5. | REAL ESTATE HELD FOR DEVELOPMENT AND SALE



|                                                                                |  |              |         |  |      |   |         | 
|------------------------------------------------------------------------------- |  | ------------ | ------- |  | ---- | - | ------- | 
|                                                                                |  | December 31, |        
|                                                                                |  |              |        
|                                                                                |  | 2005         |         |  | 2004 |  
|                                                                                |  |              |         |  |      |  
|Land and land development costs                                                 |  | $            | 119,530 |  |      | $ | 65,545  | 
|Cost of construction (including capitalized interest and real
    estate taxes) |  |              | 144,272 |  |      |   | 38,781  | 
|                                                                                |  |              |         |  |      |  
|                                                                                |  | $            | 263,802 |  |      | $ | 104,326 | 
|                                                                                |  |              |         |  |      |  



F-15



---



##### 







|   |                                    
|-- | -----------------------------------
|6. | PROPERTY, PLANT, AND EQUIPMENT, NET



|                               |  |              |       |  |      |   |     | 
|------------------------------ |  | ------------ | ----- |  | ---- | - | --- | 
|                               |  | December 31, |      
|                               |  |              |      
|                               |  | 2005         |       |  | 2004 |  
|                               |  |              |       |  |      |  
|Computer equipment             |  | $            | 540   |  |      | $ | 498 | 
|Furniture and fixtures         |  |              | 296   |  |      |   | 152 | 
|Office equipment               |  |              | 243   |  |      |   | 271 | 
|                               |  |              |       |  |      |  
|                               |  |              | 1,079 |  |      |   | 921 | 
|Less: accumulated depreciation |  |              | 474   |  |      |   | 433 | 
|                               |  |              |       |  |      |  
|                               |  | $            | 605   |  |      | $ | 488 | 
|                               |  |              |       |  |      |  





|   |                                        
|-- | ---------------------------------------
|7. | INVESTMENTS IN REAL ESTATE PARTNERSHIPS



|                              |  |              |     |   |      |   |       | 
|----------------------------- |  | ------------ | --- | - | ---- | - | ----- | 
|                              |  | December 31, |    
|                              |  |              |    
|                              |  | 2005         |     |   | 2004 |  
|                              |  |              |     |   |      |  
|TCG Fund I, L.C.(1)           |  | $            |    |   |      | $ | 1,029 | 
|North Shore Investors, LLC(2) |  |              | (35 | ) |      |   |      | 
|                              |  |              |     |   |      |  
|                              |  | $            | (35 | ) |      | $ | 1,029 | 
|                              |  |              |     |   |      |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | TCG Fund I, L.C. (Fund I) 
    During 2002, the Predecessor had made a $1,000 investment in
    Fund I. Under the terms of the investment, the Company had
    a 9.58% member interest in Fund I and a 33.18% interest in
    the Loan Class of Fund I. Fund I provided funds
    for real estate projects being developed, managed or built by
    entities in which the Company had an interest. For the years
    ended December 31, 2005, 2004, and 2003 the Company
    recorded earnings of $135, $120, $120 respectively. The Company
    received its share of distribution of profits in the amount of
    $164, $120 and $156 during the year ended December 31,
    2005, 2004, 2003 respectively. During September 2005, the fund
    ceased operations and the Company received its initial
    investment of $1,000 as a final distribution.
|   
|(2) | Prior to the Companys acquisition of Comstock Service as
    discussed in Note 1, Comstock Service in 2001 had invested
    $41 in North Shore Investors, LLC (North Shore) for
    a 50% ownership interest. North Shore was formed to acquire and
    develop residential lots and construct single family and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-16



---



##### 



| |                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | townhouse units. In 2002, as a result of recognizing its share
    of net losses incurred by North Shore, Comstock Service reduced
    its investment in North Shore, to $0. The Company, as part of
    the acquisition of Comstock Service on December 17, 2004
    recorded this investment in North Shore at $0.







|                                             |  |   |       |  
|-------------------------------------------- |  | - | ----- | -
|Investment in real estate partnerships       |  | $ | (35   | )
|Due from affiliates                          |  | $ | 1,272 |  
|Development and construction loan receivable |  | $ | 1,563 |  





Condensed Combined Balance Sheets


|                                          |                                         |              |        |        |      |   |        |        | 
|----------------------------------------- | --------------------------------------- | ------------ | ------ | ------ | ---- | - | ------ | ------ | 
|                                          |                                         | December 31, |       
|                                          |                                         |              |       
|                                          |                                         | 2005         |        |        | 2004 |  
|                                          |                                         |              |        |        |      |  
|Real estate held for development and sale |                                         | $            | 11,263 |        |      | $ | 10,556 |       
|Other assets                              |                                         |              | 75     |        |      |   | 4,037  |       
|                                          |                                         |              |        |        |      |  
|                                          | Total assets                            |              | $      | 11,338 |      |   | $      | 14,593 | 
|                                          |                                         |              |        |        |      |  
|Mortgage notes payable                    |                                         | $            | 10,921 |        |      | $ | 10,659 |       
|Notes payable to related parties          |                                         |              | 1,547  |        |      |   | 1,432  |       
|Other liabilities                         |                                         |              | 143    |        |      |   | 181    |       
|                                          |                                         |              |        |        |      |  
|                                          | Total liabilities                       |              |        | 12,611 |      |   |        | 12,272 | 
|Partners capital                         |                                         |              | (1,273 | )      |      |   | 2,321  |       
|                                          |                                         |              |        |        |      |  
|                                          | Total liabilities and partners capital |              | $      | 11,338 |      |   | $      | 14,593 | 
|                                          |                                         |              |        |        |      |  

F-17



---



##### 



Condensed Combined Statements of Operations


|                                     |  |                          |       |  |      |   |        |      |  |   |        | 
|------------------------------------ |  | ------------------------ | ----- |  | ---- | - | ------ | ---- |  | - | ------ | 
|                                     |  | Years Ended December 31, |      
|                                     |  |                          |      
|                                     |  | 2005                     |       |  | 2004 |   |        | 2003 | 
|                                     |  |                          |       |  |      |   |        |      | 
|Revenues                             |  | $                        | 3,920 |  |      | $ | 22,157 |      |  | $ | 11,349 | 
|                                     |  |                          |       |  |      |   |        |      | 
|Operating income (loss)              |  | $                        | 111   |  |      |   | 4,573  |      |  |   | 1,691  | 
|Other (income) and expense           |  |                          | 7     |  |      |   | 99     |      |  |   | 21     | 
|                                     |  |                          |       |  |      |   |        |      | 
|Net income (loss)                    |  | $                        | 104   |  |      | $ | 4,474  |      |  | $ | 1,670  | 
|                                     |  |                          |       |  |      |   |        |      | 
|Companys share of net income (loss) |  | $                        | 99    |  |      | $ | 118    |      |  | $ | 139    | 
|                                     |  |                          |       |  |      |   |        |      | 



|   |             
|-- | ------------
|8. | OTHER ASSETS



|                           |  |              |        |  |      |   |       | 
|-------------------------- |  | ------------ | ------ |  | ---- | - | ----- | 
|                           |  | December 31, |       
|                           |  |              |       
|                           |  | 2005         |        |  | 2004 |  
|                           |  |              |        |  |      |  
|Contract land deposits     |  | $            | 2,825  |  |      | $ | 630   | 
|Restricted escrow deposits |  |              | 1,915  |  |      |   | 776   | 
|Prepaid income taxes(1)    |  |              | 4,708  |  |      |   |      | 
|Other                      |  |              | 1,583  |  |      |   | 1,134 | 
|                           |  |              |        |  |      |  
|                           |  | $            | 11,031 |  |      | $ | 2,540 | 
|                           |  |              |        |  |      |  






|    |                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Prepaid income taxes represent an overpayment of federal and
    state income taxes due to lower actual taxable income than
    originally estimated. The Company expects to apply these
    overpayments against 2006 taxable income.



|   |                                         
|-- | ----------------------------------------
|9. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES



|                  |  |              |        |  |      |   |        | 
|----------------- |  | ------------ | ------ |  | ---- | - | ------ | 
|                  |  | December 31, |       
|                  |  |              |       
|                  |  | 2005         |        |  | 2004 |  
|                  |  |              |        |  |      |  
|Trade payables    |  | $            | 35,163 |  |      | $ | 15,318 | 
|Warranty          |  |              | 1,206  |  |      |   | 916    | 
|Customer deposits |  |              | 17,817 |  |      |   | 16,678 | 
|Other             |  |              | 4,945  |  |      |   | 2,620  | 
|                  |  |              |        |  |      |  
|                  |  | $            | 59,131 |  |      | $ | 35,532 | 
|                  |  |              |        |  |      |  

F-18



---



##### 





|    |              
|--- | -------------
|10. | NOTES PAYABLE



|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |         |         |      |   |        |        | 
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ------- | ------- | ---- | - | ------ | ------ | 
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2005 |         |         | 2004 |  
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |         |         |      |  
|Notes payable to non-related parties |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |         |         |      |   |        |       
|                                     | Shared construction and development loans with approximately
    $178,499 available to be drawn for planned development
    expenditures, with monthly interest payments ranging from prime
    + 0.5% to 16% or 30 day libor + 1.9% to 90 day libor +
    3.75% (the prime rate at December 31, 2005 and 2004, was
    7.25% and 5.25%, respectively; the 30/90 day libor rate at
    December 31, 2005 and 2004, 4.39%/4.54% and 2.40%/2.56%,
    respectively) |      | $       | 140,143 |      |   | $      | 63,071 | 
|                                     | Interest bearing deferred purchase money deed of trust note
    issued in exchange for land, with interest at a rate of 5.39%.
    The note matured in December 2005                                                                                                                                                                                                                                                                                              |      |         |        |      |   |        | 1,512  | 
|                                     | Subordinated second trust loan of $2,500 and $228 with quarterly
    interest only payments of 7% and monthly interest only payments
    of 14%, respectively. The remaining note matures March 2010. At
    December 31, 2005 the accrued interest on the note is $15                                                                                                                                                                                            |      |         | 2,515   |      |   |        | 228    | 
|                                     | Non-interest bearing deferred purchase money notes issued in
    exchange for land                                                                                                                                                                                                                                                                                                                                                                                |      |         | 336     |      |   |        | 873    | 
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |         |         |      |  
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |      | 142,994 |         |      |   | 65,684 |       
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |         |         |      |  
|Notes payable to related parties     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |         |         |      |   |        |       
|                                     | Subordinated second trust loan of $300 with monthly interest
    only payments of 14%. The note was paid in full in April 2005                                                                                                                                                                                                                                                                                                                                    |      |         |        |      |   |        | 300    | 
|                                     | Note payable of up to $5,000 with quarterly interest only
    payments of 12% per annum. The note was paid in full in
    June 2005                                                                                                                                                                                                                                                                                                                               |      |         |        |      |   |        | 2,500  | 
|                                     | Note payable of $2,400 with monthly interest only payments of
    12% per annum maturing in August 2006                                                                                                                                                                                                                                                                                                                                                           |      |         | 663     |      |   |        | 2,400  | 
|                                     | Note payable to TCG Fund I LC, an equity method investee
    for a loan up to $4,000 with interest only payments at
    12% per annum. The note was paid in full in June 2005. At
    December 31, 2004 the accrued interest on the note is $106                                                                                                                                                                                                                  |      |         |        |      |   |        | 3,323  | 
|                                     | Note payable to TCG Debt Fund II LC, a related party due to
    common ownership, for a loan up to $2,600 with interest only
    payments at 12% per annum. The note was paid in full in
    November 2005. At December 31, 2004 the accrued interest on
    the note is $49                                                                                                                                                                                      |      |         |        |      |   |        | 2,421  | 
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |         |         |      |  
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $    | 143,657 |         |      | $ | 76,628 |       
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |         |         |      |  



|                          |  |   |         | 
|------------------------- |  | - | ------- | 
|Years ending December 31, |  |  
|                          |  |  
|2006                      |  | $ | 24,610  | 
|2007                      |  |   | 116,533 | 
|2008 and thereafter       |  |   | 2,514   | 
|                          |  |   |        
|                          |  | $ | 143,657 | 
|                          |  |   |        



F-19



---



##### 



debt-to






|    |             
|--- | ------------
|11. | COMMON STOCK











|    |                           
|--- | --------------------------
|12. | RELATED PARTY TRANSACTIONS





father-in


F-20



---



##### 







father-in


father-in






mother-in




F-21



---



##### 





father-in














F-22



---



##### 





|    |                       
|--- | ----------------------
|13. | EMPLOYEE BENEFIT PLANS







|    |                                                      
|--- | -----------------------------------------------------
|14. | RESTRICTED STOCK, STOCK OPTIONS AND OTHER STOCK PLANS









|                                |  |      |         |  |      |  |         | 
|------------------------------- |  | ---- | ------- |  | ---- |  | ------- | 
|                                |  | 2005 |         |  | 2004 | 
|                                |  |      |         |  |      | 
|Stock options                   |  |      | 213,993 |  |      |  | 107,144 | 
|Restricted stock grants         |  |      | 273,891 |  |      |  | 275,317 | 
|                                |  |      |         |  |      | 
|Total outstanding equity awards |  |      | 487,884 |  |      |  | 382,461 | 



|                                                   |  |  |       |  
|-------------------------------------------------- |  |  | ----- | -
|Shares Available for issuance at December 14, 2004 |  |  | 1,550 |  
|Adjustments:                                       |  |  |       |  
|Restricted stock grants  Issued                   |  |  | (275  | )
|Options  issued                                   |  |  | (107  | )
|                                                   |  |  |      
|Shares available for issuance at December 31, 2004 |  |  | 1,168 |  
|Adjustments:                                       |  |  |       |  
|Restricted stock Grants  issued                   |  |  | (16   | )
|Options  issued                                   |  |  | (107  | )
|Restricted stock grants  forfeited                |  |  | 14    |  
|                                                   |  |  |      
|Shares available for issuance at December 31, 2005 |  |  | 1,059 |  

F-23



---



##### 





|                                               |  |      |            |   |      |   |      |  
|---------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---- | -
|                                               |  | 2005 |            |   | 2004 |  
|                                               |  |      |            |   |      |  
|Weighted average fair value of options granted |  | $    | 7.61       |   |      | $ | 6.58 |  
|Dividend yields                                |  |      | N/A        |   |      |   | N/A  |  
|Expected volatility                            |  |      | 41-48      | % |      |   | 48   | %
|Weighted average expected volatility           |  |      | 45         | % |      |   | 48   | %
|Risk free interest rates                       |  |      | 3.56- 3.63 | % |      |   | 3.35 | %
|Weighted average expected lives (in years)     |  |      | 2.5        |   |      |   | 4    |  



|                                 |  |        |         |          |                |   |       | 
|-------------------------------- |  | ------ | ------- | -------- | -------------- | - | ----- | 
|                                 |  |        |         | Weighted |               
|                                 |  |        |         | Average  |               
|                                 |  | Shares |         |          | Exercise Price |  
|                                 |  |        |         |          |                |  
|Outstanding at December 14, 2004 |  |        |        |          |                |   |      | 
|Granted                          |  |        | 107,144 |          |                | $ | 16.00 | 
|Outstanding at December 31, 2004 |  |        | 107,144 |          |                |   | 16.00 | 
|Granted                          |  |        | 106,849 |          |                |   | 23.90 | 
|Exercised                        |  |        |        |          |                |   |      | 
|Forfeited or expired             |  |        |        |          |                |   |      | 
|                                 |  |        |         |          |                |  
|Outstanding at December 31, 2005 |  |        | 213,993 |          |                | $ | 19.94 | 
|                                 |  |        |         |          |                |  
|Exercisable at December 31, 2005 |  |        |        |          |                | $ |      | 
|                                 |  |        |         |          |                |  





|                                                   |  |        |         |                       |                        |   |       | 
|-------------------------------------------------- |  | ------ | ------- | --------------------- | ---------------------- | - | ----- | 
|                                                   |  |        |         | Weighted average fair |                       
|                                                   |  | Shares |         |                       | value at date of grant |  
|                                                   |  |        |         |                       |                        |  
|Restricted shares outstanding at December 14, 2004 |  |        |        |                       |                        |   |      | 
|Granted                                            |  |        | 275,317 |                       |                        | $ | 16.00 | 
|                                                   |  |        |         |                       |                        |  
|Restricted shares outstanding at December 31, 2004 |  |        | 275,317 |                       |                        |   | 16.00 | 
|Granted                                            |  |        | 16,188  |                       |                        |   | 24.55 | 
|Vested                                             |  |        | (4,068  | )                     |                        |   | 18.12 | 
|Forfeited                                          |  |        | (13,545 | )                     |                        |   | 16.28 | 
|                                                   |  |        |         |                       |                        |  
|Restricted shares outstanding at December 31, 2005 |  |        | 273,891 |                       |                        | $ | 16.46 | 
|                                                   |  |        |         |                       |                        |  





F-24



---



##### 







|    |                              
|--- | -----------------------------
|15. | COMMITMENTS AND CONTINGENCIES



| |           
| | ----------
| | Litigation











| |                        
| | -----------------------
| | Lot purchase agreements





| |                                        
| | ---------------------------------------
| | Letters of credit and performance bonds



F-25



---



##### 





| |                 
| | ----------------
| | Operating leases



|            |  |        |       | 
|----------- |  | ------ | ----- | 
|Year Ended: |  | Amount |      
|            |  |        |      
|2006        |  | $      | 978   | 
|2007        |  |        | 1,029 | 
|2008        |  |        | 1,030 | 
|2009        |  |        | 850   | 
|2010        |  |        | 109   | 
|Thereafter  |  |        | 0     | 
|            |  |        |      
|Total       |  | $      | 3,996 | 
|            |  |        |      





|    |                                    
|--- | -----------------------------------
|16. | FAIR VALUE OF FINANCIAL INSTRUMENTS





|                |  |              |        |  |      |   |        | 
|--------------- |  | ------------ | ------ |  | ---- | - | ------ | 
|                |  | December 31, |       
|                |  |              |       
|                |  | 2005         |        |  | 2004 |  
|                |  |              |        |  |      |  
|Carrying amount |  | $            | 31,609 |  |      | $ | 11,172 | 
|Fair value      |  | $            | 36,233 |  |      | $ | 12,789 | 





|    |             
|--- | ------------
|17. | INCOME TAXES





|                         |  |      |        |   |      |   |      |  
|------------------------ |  | ---- | ------ | - | ---- | - | ---- | -
|                         |  | 2005 |        |   | 2004 |  
|                         |  |      |        |   |      |  
|Current:                 |  |      |        |   |      |   |      |  
|Federal                  |  | $    | 15,160 |   |      | $ | 242  |  
|State                    |  |      | 2,885  |   |      |   | 48   |  
|                         |  |      |        |   |      |  
|                         |  |      | 18,045 |   |      |   | 290  |  
|Deferred:                |  |      |        |   |      |   |      |  
|Federal                  |  |      | (1,417 | ) |      |   | (472 | )
|State                    |  |      | (262   | ) |      |   | (59  | )
|                         |  |      |        |   |      |  
|                         |  |      | (1,679 | ) |      |   | (531 | )
|Total Income Tax Expense |  | $    | 16,366 |   |      | $ | (241 | )
|                         |  |      |        |   |      |  

F-26



---



##### 





|                          |                               |      |       |       |      |   |       |        |  
|------------------------- | ----------------------------- | ---- | ----- | ----- | ---- | - | ----- | ------ | -
|                          |                               | 2005 |       |       | 2004 |  
|                          |                               |      |       |       |      |  
|Deferred tax assets:      |                               |      |       |       |      |   |       |       
|                          | Inventory                     |      | $     | 2,246 |      |   | $     | 2,067  |  
|                          | Warranty                      |      |       | 417   |      |   |       | 293    |  
|                          | Deferred rent                 |      |       | 27    |      |   |       | 8      |  
|                          | Accrued expenses              |      |       | 73    |      |   |       | 96     |  
|                          | Stock based compensation      |      |       | 790   |      |   |       | 39     |  
|                          |                               |      |       |       |      |  
|                          |                               |      | 3,552 |       |      |   | 2,503 |       
|                          | Less  valuation allowance    |      |       | (840  | )    |   |       | (1,508 | )
|                          |                               |      |       |       |      |  
|                          | Net deferred tax assets       |      |       | 2,712 |      |   |       | 995    |  
|Deferred tax liabilities: |                               |      |       |       |      |   |       |       
|                          | Investment in Affiliates      |      |       | (8    | )    |   |       |       |  
|                          | Depreciation and amortization |      |       | (159  | )    |   |       | (174   | )
|                          |                               |      |       |       |      |  
|                          | Net deferred tax liabilities  |      |       | (167  | )    |   |       | (174   | )
|                          |                               |      |       |       |      |  
|Net deferred tax assets   |                               | $    | 2,545 |       |      | $ | 821   |       
|                          |                               |      |       |       |      |  





|                                                                                              |  |      |       |    |      |  |        |   
|--------------------------------------------------------------------------------------------- |  | ---- | ----- | -- | ---- |  | ------ | --
|                                                                                              |  | 2005 |       |    | 2004 | 
|                                                                                              |  |      |       |    |      | 
|Statutory Rate                                                                                |  |      | 35.00 | %  |      |  | 34.00  | % 
|Income attributable to period during which the Predecessor was
    under S Corporation status |  |      | 0.00  | %  |      |  | (37.19 | )%
|State income taxes  net of federal benefit                                                   |  |      | 3.95  | %  |      |  | 4.26   | % 
|Permanent differences                                                                         |  |      | (1.75 | )% |      |  | 0.02   | % 
|Change in effective tax rate                                                                  |  |      | (0.03 | )% |      |  |        |   
|Tax reserve                                                                                   |  |      | 1.67  | %  |      |  | 0.35   | % 
|Deferred tax assets resulting from a change in tax status, net                                |  |      | 0.00  | %  |      |  | (10.96 | )%
|Change in valuation allowance                                                                 |  |      | (1.58 | )% |      |  | 7.81   | % 
|                                                                                              |  |      |       |    |      | 
|                                                                                              |  |      | 37.26 | %  |      |  | (1.71  | )%
|                                                                                              |  |      |       |    |      | 

F-27



---



##### 





|    |                              
|--- | -----------------------------
|18. | QUARTERLY RESULTS (unaudited)



|                           |  |                    |        |  |          |   |        |               |  |   |              |  |  |   |        | 
|-------------------------- |  | ------------------ | ------ |  | -------- | - | ------ | ------------- |  | - | ------------ |  |  | - | ------ | 
|                           |  | Three months ended |       
|                           |  |                    |       
|                           |  | March 31,          |        |  | June 30, |   |        | September 30, |  |   | December 31, | 
|                           |  | 2005               |        |  | 2005     |   |        | 2005          |  |   | 2005         | 
|                           |  |                    |        |  |          |   |        |               |  |   |              | 
|Revenues                   |  | $                  | 28,729 |  |          | $ | 39,911 |               |  | $ | 78,437       |  |  | $ | 77,228 | 
|Operating income           |  |                    | 6,075  |  |          |   | 4,636  |               |  |   | 17,919       |  |  |   | 13,779 | 
|Pretax income              |  |                    | 6,140  |  |          |   | 4,787  |               |  |   | 18,424       |  |  |   | 14,578 | 
|Net Income                 |  |                    | 3,809  |  |          |   | 3,066  |               |  |   | 11,483       |  |  |   | 9,204  | 
|Basic earnings per share   |  |                    | 0.33   |  |          |   | 0.26   |               |  |   | 0.82         |  |  |   | 0.66   | 
|Diluted earnings per share |  |                    | 0.32   |  |          |   | 0.26   |               |  |   | 0.81         |  |  |   | 0.65   | 

|                           |  |                    |        |  |          |   |        |               |  |   |              |  |  |   |        | 
|-------------------------- |  | ------------------ | ------ |  | -------- | - | ------ | ------------- |  | - | ------------ |  |  | - | ------ | 
|                           |  | Three months ended |       
|                           |  |                    |       
|                           |  | March 31,          |        |  | June 30, |   |        | September 30, |  |   | December 31, | 
|                           |  | 2004               |        |  | 2004     |   |        | 2004          |  |   | 2004         | 
|                           |  |                    |        |  |          |   |        |               |  |   |              | 
|Revenues                   |  | $                  | 17,881 |  |          | $ | 30,947 |               |  | $ | 25,739       |  |  | $ | 21,478 | 
|Operating income           |  |                    | 3,110  |  |          |   | 4,553  |               |  |   | 7,503        |  |  |   | 4,946  | 
|Pretax income              |  |                    | 2,106  |  |          |   | 3,002  |               |  |   | 5,508        |  |  |   | 3,446  | 
|Net Income                 |  |                    | 2,106  |  |          |   | 3,002  |               |  |   | 5,508        |  |  |   | 3,687  | 
|Basic earnings per share   |  |                    | 0.30   |  |          |   | 0.42   |               |  |   | 0.78         |  |  |   | 0.45   | 
|Diluted earnings per share |  |                    | 0.30   |  |          |   | 0.42   |               |  |   | 0.78         |  |  |   | 0.45   | 





|    |                  
|--- | -----------------
|19. | SUBSEQUENT EVENTS





F-28



---



##### 






SIGNATURES






| |                                      
| | -------------------------------------
| | COMSTOCK HOMEBUILDING COMPANIES, INC.



| |     |                         
| | --- | ------------------------
| | By: | /s/ Christopher Clemente

| |                                     
| | ------------------------------------
| |                                     
| | Christopher Clemente                
| | Chairman and Chief Executive Officer



10-K


|                                                 |  |                                                                                                  |  |                |  | 
|------------------------------------------------ |  | ------------------------------------------------------------------------------------------------ |  | -------------- |  | 
|Signature                                        |  | Capacity                                                                                         |  | Date          
|                                                 |  |                                                                                                  |  |               
|                                                
|/s/ Christopher
    ClementeChristopher Clemente |  | Chairman of the Board of Directors and Chief Executive Officer
    (Principal Executive Officer) |  | March 15, 2006
|                                                
|/s/ Gregory V. BensonGregory V. Benson           |  | President, Chief Operating Officer and Director                                                  |  | March 15, 2006
|                                                
|/s/ Bruce J. LabovitzBruce J. Labovitz           |  | Chief Financial Officer (Principal Financial Officer)                                            |  | March 15, 2006
|                                                
|/s/ Jason ParikhJason Parikh                     |  | Chief Accounting Officer (Principal Accounting Officer)                                          |  | March 15, 2006
|                                                
|/s/ A. Clayton PerfallA. Clayton Perfall         |  | Director                                                                                         |  | March 15, 2006
|                                                
|/s/ David M. GuernseyDavid M. Guernsey           |  | Director                                                                                         |  | March 15, 2006
|                                                
|/s/ James A.
    MacCutcheonJames A. MacCutcheon |  | Director                                                                                         |  | March 15, 2006
|                                                
|/s/ Norman D. ChiriteNorman D. Chirite           |  | Director                                                                                         |  | March 15, 2006



---



##### 



|                                   |  |          |  |                |  | 
|---------------------------------- |  | -------- |  | -------------- |  | 
|Signature                          |  | Capacity |  | Date          
|                                   |  |          |  |               
|                                  
|Robert P. Pincus                   |  | Director |  |               
|                                  
|/s/ Socrates VersesSocrates Verses |  | Director |  | March 15, 2006



---



##### 



|        |    |         |  |                                                                                                                                                                                                                                                                                           
|------- | -- | ------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |        
|Number  |    | Exhibit
|        |    |        
|        | 3  | .1(2)   |  | Amended and Restated Certificate of Incorporation                                                                                                                                                                                                                                         
|        | 3  | .2(2)   |  | Amended and Restated Bylaws                                                                                                                                                                                                                                                               
|        | 4  | .1(1)   |  | Specimen Stock Certificate                                                                                                                                                                                                                                                                
|        | 10 | .1(1)   |  | Lease Agreement, dated as of January 31, 2004, with
    Comstock Partners, L.C.                                                                                                                                                                                                           
|        | 10 | .2(1)   |  | Agreement of Sublease, dated as of October 1, 2004, with
    Comstock Asset Management, L.C.                                                                                                                                                                                              
|        | 10 | .3(1)   |  | Loan Agreement, dated December 17, 1997, as amended, with
    Bank of America, N.A.                                                                                                                                                                                                       
|        | 10 | .4(1)   |  | Disbursement and Construction Loan Agreement and Disbursement
    and Development Loan Agreement, each dated October 10, 2002
    and as amended, with Branch Banking and Trust Company of Virginia                                                                                       
|        | 10 | .5(1)   |  | Disbursement and Construction Loan Agreement and Acquisition,
    Disbursement and Development Loan Agreement, each dated
    July 25, 2003, with Branch Banking and Trust Company of
    Virginia                                                                                        
|        | 10 | .6(2)   |  | Loan Agreement, dated January 25, 2005, with Corus Bank,
    N.A.                                                                                                                                                                                                                         
|        | 10 | .7(2)   |  | Completion Guaranty, dated January 25, 2005 in favor of
    Corus Bank, N.A.                                                                                                                                                                                                              
|        | 10 | .8(2)   |  | Carve-Out Guaranty, dated January 25, 2005, in favor of
    Corus Bank, N.A.                                                                                                                                                                                                              
|        | 10 | .9(1)   |  | Form of Indemnification Agreement                                                                                                                                                                                                                                                         
|        | 10 | .10(1)  |  | Form of Promissory Note to be issued to each of Christopher
    Clemente, Gregory Benson, James Keena and Lawrence Golub by each
    of Comstock Holding Company, Inc., Comstock Homes, Inc., Sunset
    Investment Corp., Inc. and Comstock Service Corp., Inc.                          
|        | 10 | .11(1)  |  | Form of Tax Indemnification Agreement to be entered into by each
    of Christopher Clemente, Gregory Benson, James Keena and
    Lawrence Golub with each of Comstock Holding Company, Inc.,
    Comstock Homes, Inc., Sunset Investment Corp., Inc. and Comstock
    Service Corp., Inc.
|        | 10 | .12(1)  |  | 2004 Long-Term Incentive Compensation Plan                                                                                                                                                                                                                                                
|        | 10 | .13(1)  |  | Form of Stock Option Agreement under the 2004 Long-Term
    Incentive Compensation Plan                                                                                                                                                                                                   
|        | 10 | .14(2)  |  | Form of Restricted Stock Grant Agreement under the 2004
    Long-Term Incentive Compensation Plan                                                                                                                                                                                         
|        | 10 | .15(1)  |  | Employee Stock Purchase Plan                                                                                                                                                                                                                                                              
|        | 10 | .16(1)  |  | Purchase and Sale Agreement, dated as of April 25, 2003, as
    amended, with Crescent Potomac Yard Development, LLC                                                                                                                                                                      
|        | 10 | .17(2)  |  | Purchase and Sale Agreement, dated as of November 9, 2004,
    as amended, with Fair Oaks Penderbrook Apartments L.L.C.                                                                                                                                                                   
|        | 10 | .18(2)  |  | Real Estate Purchase Contract, dated as of February 4,
    2005, with Westwick Apartments LLC                                                                                                                                                                                             
|        | 10 | .19(2)  |  | Services Agreement, dated March 4, 2005, with Comstock
    Asset Management, L.C.                                                                                                                                                                                                         
|        | 10 | .20(1)  |  | Employment Agreement with Christopher Clemente                                                                                                                                                                                                                                            
|        | 10 | .21(1)  |  | Employment Agreement with Gregory Benson                                                                                                                                                                                                                                                  
|        | 10 | .22(1)  |  | Employment Agreement with Bruce Labovitz                                                                                                                                                                                                                                                  
|        | 10 | .23(1)  |  | Confidentiality and Non-Competition Agreement with Christopher
    Clemente                                                                                                                                                                                                               
|        | 10 | .24(1)  |  | Confidentiality and Non-Competition Agreement with Gregory Benson                                                                                                                                                                                                                         
|        | 10 | .25(1)  |  | Confidentiality and Non-Competition Agreement with Bruce Labovitz                                                                                                                                                                                                                         
|        | 10 | .26(2)  |  | Description of Arrangements with William Bensten                                                                                                                                                                                                                                          
|        | 10 | .27(2)  |  | Description of Arrangements with David Howell                                                                                                                                                                                                                                             
|        | 10 | .28(1)  |  | Trademark License Agreement                                                                                                                                                                                                                                                               
|        | 10 | .29(2)  |  | Purchase Agreement, dated as of November 12, 2004 with
    Comstock Asset Management, L.C.                                                                                                                                                                                                
|        | 10 | .30(3)  |  | Agreement of Purchase and Sale, dated June 23, 2005, by and
    between Comstock Carter Lake, L.C. and E.R. Carter, L.L.C.                                                                                                                                                                
|        | 10 | .31(3)  |  | Agreement of Purchase and Sale, dated September 28, 2005,
    by and between Comstock Bellemeade, L.C. and Bellemeade Farms
    Investors, LLC et. al.                                                                                                                                    
|        | 10 | .32(3)  |  | Loan Agreement, dated September 28, 2005, by and between
    Comstock Bellemeade, L.C. and Bank of America, N.A.                                                                                                                                                                          



---



##### 



|        |    |         |  |                                                                                                                                                
|------- | -- | ------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |        
|Number  |    | Exhibit
|        |    |        
|        | 10 | .33(3)  |  | Guaranty Agreement, dated September 28, 2005, by the
    Registrant in favor of Bank of America, N.A.                                          
|        | 10 | .34(4)  |  | Life Insurance Reimbursement Agreement with William P. Bensten                                                                                 
|        | 10 | .35(4)  |  | Life Insurance Reimbursement Agreement with Bruce Labovitz                                                                                     
|        | 10 | .36(4)  |  | Description of Reimbursement and Indemnification Arrangement
    with Christopher Clemente and Gregory Benson                                  
|        | 10 | .37(3)  |  | Agreement of Purchase and Sale, dated June 23, 2005, by and
    between Comstock Carter Lake, L.C. and E.R. Carter, L.L.C.                     
|        | 10 | .38*    |  | Stock Purchase Agreement with Parker-Chandler Homes, Inc. and
    the Selling Stockholders identified therein, dated as of
    January 19, 2006
|        | 10 | .39*    |  | Loan Agreement, dated January 31, 2006, by and between
    Comstock Carter Lake, L.C. and Bank of America, N.A.                                
|        | 10 | .40*    |  | Guaranty Agreement, dated January 31, 2006m by the
    Registrant in favor of Bank of America, N.A.                                            
|        | 14 | .1(2)   |  | Code of Ethics                                                                                                                                 
|        | 21 | .1*     |  | List of subsidiaries                                                                                                                           
|        | 23 | .1*     |  | Consent of PricewaterhouseCoopers LLP                                                                                                          
|        | 24 | .1      |  | Power of Attorney (see signature page to this Annual Report on
    Form 10-K.)                                                                 
|        | 31 | .1*     |  | Certification of Chief Executive Officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 2002                                             
|        | 31 | .2*     |  | Certification of Chief Financial Officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 2002                                             
|        | 32 | .1*     |  | Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of Sarbanes-Oxley Act of
    2002             






|  |                
|- | ---------------
|* | Filed herewith.



|    |                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to an exhibit to the Registrants
    Registration Statement on
    Form S-1 filed
    with the Commission on August 13, 2004 (No.
    333-118193).
|   
|(2) | Incorporated by reference to an exhibit to the Registrants
    Annual Report on
    Form 10-K filed
    with the Commission on March 31, 2005.                              
|   
|(3) | Incorporated by reference to an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q filed
    with the Commission on November 14, 2005.                        
|   
|(4) | Incorporated by reference to an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q filed
    with the Commission on August 9, 2005.