4.	Land Under Development

As of December 31, 2012, NVR directly owned three separate raw parcels of land with a carrying value of $68,336 that it intends to develop into approximately 700 finished lots for use in its homebuilding operations. The Company capitalizes interest costs to land under development during the active development of finished lots. Capitalized interest is transferred to sold or unsold inventory as the development of finished lots is completed, then charged to cost of sales upon the Company’s settlement of homes and the respective lots. Interest incurred during the period in excess of the interest capitalizable based on the level of qualified assets is expensed in the period incurred. Interest cost incurred for the year ended December 31, 2012 was approximately $7,900 of which approximately $890 was capitalized. None of the raw parcels had any indicators of impairment as of December 31, 2012. Based on current market conditions, NVR may, on a very limited basis, directly acquire additional raw parcels to develop into finished lots. As of December 31, 2011, NVR directly owned three separate raw parcels of land with a carrying value of approximately $78,000 and expected to produce approximately 800 finished lots.