KB Home Completes $650 Million Debt Redemption

Business Wire, August 7, 2007

LOS ANGELES -- KB Home (NYSE:KBH) announced today that on July 27, 2007, it completed the previously announced redemption of all $250 million of its 91/2% Senior Subordinated Notes due in 2011 (the "2011 Notes"), plus accrued interest to the date of redemption. Additionally, on July 31, 2007, the Company repaid in full its unsecured $400 million term loan (the "Term Loan"), together with accrued interest to the date of repayment. The Term Loan was scheduled to mature on April 11, 2011.

"With the significant free cash flow generated from operations and the proceeds from the sale of our interest in Kaufman & Broad SA, we have reduced outstanding debt by more than 33% or by approximately $1.1 billion since the end of our second fiscal quarter in 2006, and currently have over $400 million in cash and no outstanding borrowings under our $1.5 billion revolving credit facility," said Jeffrey Mezger, KB Home's president and chief executive officer. "The redemption of our 2011 Notes and repayment of the Term Loan underscore our ongoing strategy to strengthen our balance sheet while employing a balanced approach to the use of cash to enhance the Company's ability to make investments in our business that we believe will provide future value for our investors," said Mezger.

About KB Home

Celebrating its 50th anniversary in the homebuilding industry, KB Home is one of America's largest homebuilders. Headquartered in Los Angeles, the Company has operating divisions in 15 states, building communities from coast to coast. KB Home is a Fortune 500 company listed on the New York Stock Exchange under the ticker symbol "KBH."

For more information about any of KB Home's new home communities or complete mortgage services through Countrywide KB Home Loans, call 888-KB-HOMES or visit www.kbhome.com.

Certain matters discussed in this press release, including any statements that are predictive in nature or concern future market and economic conditions, business and prospects, our future financial and operational performance, or our future actions and their expected results are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current

expectations and projections about future events and are not guarantees of future performance. We do not have a specific policy or intent of updating or revising forward-looking statements. Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The most important risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to: general economic and business conditions; material prices and availability; labor costs and availability; changes in interest rates; our debt level; declines in consumer confidence; increases in competition; weather conditions, significant natural disasters and other environmental factors; government regulations; the availability and cost of land in desirable areas; violations of our policies; the consequences of our past stock option grant practices and the restatement of certain of our financial statements; government investigations and shareholder lawsuits regarding our past stock option grant practices; other legal or regulatory proceedings or claims; conditions in the capital, credit and homebuilding markets; and other events outside of our control. Please see our periodic reports and other filings with the Securities and Exchange Commission for a further discussion of these and other risks and uncertainties applicable to our business.