Hovnanian Enterprises Inc. (HOV) is about to learn if its high-rise gamble pays off.

Back in the boom, the home builder launched its biggest tower, a 48-story, 420-unit condo tower in Jersey City, N.J., offering Big Apple views just feet from the Hudson River.

But the market deteriorated dramatically during construction, and, with closings expected to start within the next month, it's likely some contracted buyers won't make it to the closing table. That could mean cancellations and fights over deposits as the company - which has seen 11 consecutive quarterly losses and its shares plunge by more than 60% in the 12 months - works to unload inventory in an ailing market battered by financial turmoil.

What's more, Hovnanian can't turn the project into a rental tower, said Marty McKenna, spokesman for Equity Residential (EQR), which is finishing and seeing strong demand for 480 apartments that share common areas including the pool deck and the parking garage with 77 Hudson.

Red Bank, N.J.-based Hovnanian, the nation's sixth-largest builder by annual closings, could be preparing itself. In its recent second-quarter results, the market came up as it discussed its eye-popping land-related charges of roughly $319 million.

"Impairments in the Northeast are due to recent weaknesses in this market primarily in the suburbs of Manhattan, which is a direct result of recent increases in unemployment in that market, especially as it relates to Wall Street," the company said in its June 3 conference call. " ...The New York City market held up much longer than other markets during this downturn, but with the perils of the financial market sector that really hit home in the fall of 2008, the declines in this market have occurred rapidly."

Like most builders, the company does not break out impairments by community.

Hovnanian did say that it recorded $8.7 million of write-downs associated with its investment in joint ventures, which show up on the income statement's loss from unconsolidated joint ventures line. "This joint venture where we had a write-down is in New Jersey and is also on the Hudson River waterfront with views of Manhattan," said Chief Financial Officer J. Larry Sorsby in the earnings conference call.

Hovnanian previously said Strategic Real Estate Advisors advised a joint-venture partner on the project, where prices now start in the $300,000 range. Hovnanian would not reveal the partner. It does, however, have a second joint venture on the Hudson, and would not say Wednesday if this impairment was for 77 Hudson.

Hovnanian isn't the only home builder better known for single-family construction selling condos in this Garden State market. Toll Brothers Inc. (TOL) just announced that, at its 12-story, 230-unit 700 Grove project in Jersey City, buyers can get in for 3.5% down - as little as $17,500 - through new Federal Housing Administration qualified loans.

"FHA is a big selling point," said Ben Jogodnik, senior vice president for Toll's City Living division in Hoboken and Jersey City.

The development is more than 85% sold and closed, making it eligible for loans guaranteed by government-backed mortgage agencies Freddie Mac (FRE) and Fannie Mae (FNM), he added.

In March, Hovnanian said 77 Hudson was not eligible, but it was offering competitive rates through various partnerships.

It could not say Wednesday if that has changed.

- By Dawn Wotapka; Dow Jones Newswires; 201-938-5248; dawn.wotapka@dowjones.com