SENIOR NOTE PURCHASE AND REDEMPTION AGREEMENT

Execution Version

Exhibit 10.1

SENIOR NOTE PURCHASE

AND REDEMPTION AGREEMENT

by and between

COMSTOCK HOMEBUILDING COMPANIES, INC.,

and

KODIAK WAREHOUSE JPM LLC

Dated as of March 15, 2007

TABLE OF CONTENTS

SENIOR NOTE PURCHASE AND REDEMPTION AGREEMENT

     This SENIOR NOTE PURCHASE AND REDEMPTION AGREEMENT, dated as of March 15, 2007 (this “ Purchase Agreement ”), is entered into by and among Comstock Homebuilding Companies, Inc., a Delaware corporation (the “ Company ”), and Kodiak Warehouse JPM LLC, a Delaware limited liability company, or its assignee (the “ Purchaser ”).

WITNESSETH:

     WHEREAS, pursuant to that certain Note Purchase Agreement, dated as of May 4, 2006, the Company issued and sold to Kodiak Warehouse LLC (the “ Initial Purchaser ”) Thirty Million Dollars ($30,000,000) in aggregate principal amount of the Company’s junior subordinated notes, bearing interest at a fixed rate of 9.72% per annum through the interest payment date in June 2011 and thereafter at a variable rate, reset quarterly, equal to LIBOR (as defined in the Junior Subordinated Indenture, dated as of May 4, 2006 (the “ Original Indenture ”) between the Company and Wells Fargo Bank, N.A. (the “ Original Trustee ”)) plus 4.20% per annum (the “ Original Notes ”);

     WHEREAS, the Initial Purchaser sold, transferred and assigned its rights, title and interests in and to the Original Notes to the Purchaser;

     WHEREAS, the Purchaser and the Company desire to provide for the redemption of the Original Notes and for the Company’s issuance and sale to the Purchaser of Thirty Million Dollars ($30,000,000) in aggregate principal amount of the Company’s senior unsecured notes, bearing interest at a fixed rate of 9.72% per annum through the interest payment date in June 2011 and thereafter at a variable rate, reset quarterly, equal to LIBOR (as defined in the Indenture (as defined below)) plus 4.20% per annum (the “ Senior Notes ”);

     WHEREAS, the Company, as of the date of this Purchase Agreement, is not insolvent, nor upon consummation of the transactions contemplated hereby will it be rendered insolvent, and the sum of the Company’s debts is less than the value of all of the Company’s property at a fair valuation;

     WHEREAS, the sale of the Senior Notes to the Purchaser constitutes an extension of new credit to the Company and is not a substitution for any existing obligation; and

     WHEREAS, the Senior Notes will be issued pursuant to an Indenture, dated as of the Closing Date (the “ Indenture ”), between the Company and Wells Fargo Bank, N.A., as indenture trustee (in such capacity, the “ Trustee ”).

     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and subject to the terms and conditions herein set forth, the parties hereto agree as follows:

          1. Definitions . This Purchase Agreement, the Control Agreement (as defined herein), the Indenture and the Senior Notes are collectively referred to herein as the “ Operative Documents .” All other capitalized terms used but not defined in this Purchase Agreement shall have the respective meanings ascribed thereto in the Indenture.

          2. Redemption of the Original Notes and Purchase and Sale of the Senior Notes .

          (a) Notwithstanding any restrictions in the Original Indenture relating to the redemption of the Original Notes, the Company agrees to redeem the Original Notes, and the Purchaser agrees to accept the redemption of the Original Notes (the “ Redemption ”), on the Closing Date (as defined below) at a redemption price equal to Thirty Million Six Hundred Seven Thousand Five Hundred Dollars ($30,607,500) (collectively the sum of (i) one hundred percent (100%) of the principal amount thereof, and (ii) all accrued and unpaid interest including Additional Interest (as defined in the Original Indenture) thereon as of March 15, 2007 (the “ Redemption Price ”).

          (b) On the Closing Date, the Redemption Price will become due and payable and any interest on the Original Notes shall cease to accrue on and after said date.

          (c) The Company agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Company, Thirty Million Dollars ($30,000,000) in aggregate principal amount of the Senior Notes for an amount (the “ Purchase Price ”) equal to Thirty Million Dollars ($30,000,000). The Purchaser shall be responsible for the rating agency costs and expenses.

          (d) Delivery or transfer of, and payment for, the Original Notes and the Senior Notes shall be made at 10:00 A.M. Chicago time (11:00 A.M. New York City time), on March 15, 2007 (such date and time of delivery and payment for the Original Notes and the Senior Notes being herein called the “ Closing Date ”). The Original Notes shall be redeemed and delivered to the Company upon receipt by the Purchaser of the Redemption Price by wire transfer in immediately available funds on the Closing Date to a U.S. account designated by the Purchaser at least two Business Days prior to the Closing Date. The Senior Notes shall be transferred and delivered to the Purchaser against the payment of the Purchase Price to the Company made by wire transfer in immediately available funds on the Closing Date to a U.S. account designated in writing by the Company at least two Business Days prior to the Closing Date.

          (e) Delivery of the Senior Notes shall be made at such location, and in such names and denominations, as the Purchaser shall designate at least two Business Days in advance of the Closing Date and surrender of the Original Notes shall occur at the same location. The Company agrees to have the Senior Notes available for inspection and checking by the Purchaser in Chicago, Illinois, not later than 1:00 P.M., Chicago time (2:00 P.M. New York City time), on the Business Day prior to the Closing Date. The closing for the purchase and sale of the Senior Notes (the “ Closing ”) shall occur at the offices of Winston & Strawn LLP, 35 West Wacker Drive, Chicago, Illinois 60601, or such other place as the parties hereto shall agree.

          3. Conditions . The obligations of the parties under this Purchase Agreement are subject to the following conditions:

          (a) The representations and warranties contained herein shall be accurate as of the date of delivery of the Senior Notes.

          (b) (i) Greenberg Traurig LLP, counsel for the Company (the “ Company Counsel ”), shall have delivered an opinion, dated the Closing Date, addressed to the Purchaser, its successors and assigns and the Trustee, in substantially the form set out in Exhibit A hereto and (ii) the Company shall have furnished to the Purchaser the opinion of the Company’s General Counsel or a certificate signed by the Company’s Chief Executive Officer, President or an Executive Vice President and the Company’s Chief Financial Officer, Treasurer or Assistant Treasurer, dated the Closing Date, addressed to the Purchaser, in substantially the form set out in Exhibit B hereto. In rendering their opinion, the Company Counsel may rely as to factual matters upon certificates or other documents furnished by officers and directors of the Company and by government officials ( provided , however , that copies of any such certificates or documents are delivered to the Purchaser) and by and upon such other documents as such counsel may, in their reasonable opinion, deem appropriate as a basis for the Company Counsel’s opinion. The Company Counsel may specify the jurisdictions in which they are admitted to practice and that they are not admitted to practice in any other jurisdiction and are not experts in the law of any other jurisdiction. Such Company Counsel opinions shall not state that they are to be governed or qualified by, or that they are otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).

          (c) The Purchaser shall have been furnished the opinion of Winston & Strawn LLP, special tax counsel for the Purchaser, dated the Closing Date, addressed to the Purchaser and the Trustee, addressing the matters set out in Exhibit C hereto (subject to customary assumptions and qualifications).

          (d) The Purchaser shall have received the opinion of Potter Anderson & Corroon LLP, special counsel for the Trustee, dated the Closing Date, addressed to the Purchaser and its successors and assigns, in substantially the form set out in Exhibit D hereto.

          (e) The Company shall have furnished to the Purchaser a certificate of the Company, signed by the Chief Executive Officer, President or an Executive Vice President, and Chief Financial Officer or Treasurer of the Company, dated the Closing Date, as to clauses (i) and (ii) below:

          (i) the representations and warranties of the Company in this Purchase Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date; and

          (ii) except as set forth in the Company’s 1934 Act Reports (as defined below), since the date of the Financial Statements (as defined in Section 4 (r) ), there has been no occurrence that has had or is reasonably expected to result in a material adverse change in or effect on the condition (financial or otherwise), earnings, business, liabilities

or assets of the Company and its subsidiaries, whether or not arising from transactions occurring in the ordinary course of business (a “ Material Adverse Effect ”).

          (f) Subsequent to the execution of this Purchase Agreement, with the exception of matters disclosed by the Company to Purchaser in the Company’s 1934 Act Reports, there shall not have been any change in or affecting the condition (financial or otherwise), earnings, business, liabilities or assets of the Company and its subsidiaries, whether or not occurring in the ordinary course of business, the effect of which is, in the Purchaser’s judgment, so material and adverse as to make it impractical or inadvisable to proceed with the purchase of the Senior Notes.

          (g) The redemption of the Original Notes and the purchase of and payment for the Senior Notes as described in this Purchase Agreement shall (a) not be prohibited by any applicable law or governmental regulation, (b) not subject the Purchaser to any penalty or, in the reasonable judgment of the Purchaser, other onerous conditions under or pursuant to any applicable law or governmental regulation and (c) be permitted by the laws and regulations of the jurisdictions to which the Purchaser is subject.

          (h) The Company shall have received all consents, permits and other authorizations, and made all such filings and declarations, as may be required on or before the Closing Date from any person or entity pursuant to any law, statute, regulation or rule (federal, state, local and foreign), or pursuant to any agreement, order or decree to which the Company is a party or to which it is subject, in connection with the transactions contemplated by this Purchase Agreement.

          (i) The Purchaser and the Trustee shall have received a fully executed copy of a Control Agreement in the form of Exhibit F hereto.

          (j) The Purchaser and the Original Trustee shall have received (i) a copy of the resolution of the board of directors of the Company authorizing the transactions contemplated by this Purchase Agreement, including the redemption of the Original Notes, and (ii) an officers’ certificate and opinion of counsel, in each case in accordance with the terms Section 11.3 of the Original Indenture.

          (k) Prior to the Closing Date, the Company shall have furnished to the Purchaser and its counsel such further information, certificates and documents as the Purchaser or its counsel may reasonably request.

          If any of the conditions specified in this Section 3 shall not have been fulfilled when and as required by this Purchase Agreement, or if any of the opinions, certificates and documents mentioned above or elsewhere in this Purchase Agreement shall not be reasonably satisfactory in form and substance to the Purchaser or its counsel, this Purchase Agreement and all the Purchaser’s obligations hereunder may be canceled at, or at any time prior to, the Closing Date by the Purchaser. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing.

          Each certificate signed by any officer of the Company and delivered to the Purchaser or its counsel in connection with the Operative Documents and the transactions

contemplated hereby and thereby shall be deemed to be a representation and warranty of the Company and not by such officer in any individual capacity.

          4. Representations and Warranties of the Company . The Company represents and warrants to, and agrees with the Purchaser, as of the date hereof and as of the Closing Date, as follows:

          (a) Neither the Company nor any of its “Affiliates” (as defined in Rule 501(b) of Regulation D (“ Regulation D ”) under the Securities Act (as defined below)), nor any person acting on its or their behalf, has, directly or indirectly, made offers or sales of any security, or solicited offers to buy any security, under circumstances that would require the registration of any of the Senior Notes under the Securities Act of 1933, as amended (the “ Securities Act ”).

          (b) Neither the Company nor any of its Affiliates, nor any person acting on its or their behalf, has (i) offered for sale or solicited offers to purchase the Senior Notes or (ii) engaged in any form of “general solicitation” or “general advertising” (within the meaning of Regulation D) in connection with any offer or sale of any of the Senior Notes.

          (c) The Senior Notes (i) are not and have not been listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or quoted on a U.S. automated inter-dealer quotation system and (ii) are not of an open-end investment company, unit investment trust or face-amount certificate company that is, or is required to be, registered under Section 8 of the Investment Company Act of 1940, as amended (the “ Investment Company Act ”), and the Senior Notes otherwise satisfy the eligibility requirements of Rule 144A(d)(3) promulgated pursuant to the Securities Act (“ Rule 144A(d)(3) ”).

          (d) Neither the Company nor any of its Affiliates, nor any person acting on its or their behalf, has engaged, or will engage, in any “directed selling efforts” within the meaning of Regulation S under the Securities Act with respect to the Senior Notes.

          (e) The Company is not, and, immediately following consummation of the transactions contemplated hereby and the other Operative Documents and the application of the net proceeds from the purchase and sale of the Senior Notes, will not be, an “investment company” or an entity “controlled” by an “investment company,” in each case within the meaning of Section 3(a) of the Investment Company Act.

          (f) The Company has not paid or agreed to pay to any person or entity, directly or indirectly, any fees or other compensation for soliciting another to purchase any of the Senior Notes.

          (g) The Indenture has been duly authorized by the Company and, on the Closing Date, will have been duly executed and delivered by the Company and, assuming due authorization, execution and delivery thereof by the Trustee, will be a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity (the “ Enforceability Exceptions ”).

          (h) The Senior Notes have been duly authorized by the Company and, on the Closing Date, will have been duly executed and delivered to the Trustee for authentication in accordance with the Indenture and, when authenticated in the manner provided for in the Indenture and delivered to the Purchaser against payment therefor in accordance with this Purchase Agreement, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture, enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions.

          (i) This Purchase Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions and the effect of any applicable public policy against the enforcement of the indemnification provisions of this Purchase Agreement set forth in Section 8 .

          (j) The Control Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions and the effect of any applicable public policy against the enforcement of the indemnification provisions of the Control Agreement.

          (k) Neither the redemption of the Original Notes, nor the issuance and sale of the Senior Notes, nor the execution and delivery of and compliance with the Operative Documents by the Company, nor the consummation of the transactions contemplated hereby or thereby, or the use of the proceeds therefrom, (i) will conflict with or constitute a violation or breach of the charter or bylaws or similar organizational documents of the Company or any subsidiary of the Company or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, governmental authority, agency or instrumentality or court, domestic or foreign (collectively, the “ Governmental Entities ”), or of any arbitrator, in each case having jurisdiction over the Company or any of its subsidiaries or their respective properties or assets, (ii) will conflict with or constitute a violation or breach of, or a default or Repayment Event (as defined below) under, or result in the creation or imposition of any pledge, security interest, claim, lien or other encumbrance of any kind (each, a “ Lien ”) upon any property or assets of the Company or any of its subsidiaries (other than to the extent of the amounts subject to the Lien of the Control Agreement) pursuant to, any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which (A) the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or (B) any of the property or assets of the Company or any of its subsidiaries is subject, except, in the case of this clause (ii), for such conflicts, violations, breaches, defaults, Repayment Events or Liens which (X) would not, singly or in the aggregate, adversely affect the consummation of the transactions contemplated by the Operative Documents and (Y) would not, singly or in the aggregate, have a Material Adverse Effect or (iii) require the consent, approval, authorization or order of any court or Governmental Entity. As used herein, a “ Repayment Event ” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries prior to its scheduled maturity.

          (l) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws Delaware, with all requisite corporate power and authority to own, lease and operate its properties and conduct the business it transacts and proposes to transact, and is duly qualified to transact business and is in good standing as a foreign corporation in each jurisdiction where the nature of its activities requires such qualification, except where the failure of the Company to be so qualified would not, singly or in the aggregate, have a Material Adverse Effect.

          (m) The Company has no subsidiaries that are material to its business, financial condition or earnings other than those subsidiaries listed in Schedule 4(1) hereto (collectively, the “ Significant Subsidiaries ”). Each Significant Subsidiary has been duly organized and is validly existing as a corporation, limited liability company, limited partnership or statutory trust in good standing under the laws of the jurisdiction in which it is chartered, organized or formed, with all requisite power and authority to own, lease and operate its properties and conduct the business it transacts and proposes to transact. Each Significant Subsidiary is duly qualified to transact business and is in good standing as a foreign corporation, limited liability company, limited partnership or statutory trust in each jurisdiction where the nature of its activities requires such qualification, except where the failure to be so qualified would not, singly or in the aggregate, have a Material Adverse Effect. Except as set forth on Schedule 4(1) hereto, no subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock or other Equity Interests, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.

          (n) The Company and each of the Company’s subsidiaries hold all necessary approvals, authorizations, orders, licenses, consents, registrations, qualifications, certificates and permits (collectively, the “ Governmental Licenses ”) of and from Governmental Entities necessary to conduct their respective businesses as now being conducted, and neither the Company nor any of the Company’s subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Government License, except where the failure to be so licensed or approved or the receipt of an unfavorable decision, ruling or finding, would not, singly or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity or the failure of such Governmental Licenses to be in full force and effect, would not, singly or in the aggregate, have a Material Adverse Effect; and the Company and its subsidiaries are in compliance with all applicable laws, rules, regulations, judgments, orders, decrees and consents, except where the failure to be in compliance would not, singly or in the aggregate, have a Material Adverse Effect.

          (o) All of the issued and outstanding Equity Interests of the Company and each of its subsidiaries are validly issued, fully paid and nonassessable; all of the issued and outstanding Equity Interests of each subsidiary of the Company is owned by the Company, directly or through subsidiaries, free and clear of any Lien, claim or equitable right; and none of the issued and outstanding Equity Interests of the Company or any subsidiary of the

Company was issued in violation of any preemptive or similar rights arising by operation of law, under the charter, by-laws, certificate of formation, limited liability company agreement, certificate of limited partnership, agreement of limited partnership or similar organizational document of such entity or under any agreement to which the Company or any of its subsidiaries is a party.

          (p) Except as otherwise disclosed to the Purchaser in writing, neither the Company nor any of its subsidiaries is (i) in violation of its respective charter, by-laws, certificate of formation, limited liability company agreement, certificate of limited partnership, agreement of limited partnership or similar organizational document, (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument relating to Debt or (iii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company or any such subsidiary is a party or by which it or any of them may be bound or to which any of the property or assets of any of them is subject,, except, in the case of clause (ii), where such violation or default would not, singly or in the aggregate, have a Material Adverse Effect. No default by the Company has occurred and is continuing in the payment of any principal of or premium or interest on any Senior Debt (as such term is defined in the Original Indenture).

          (q) Except as set forth on Schedule 4(p) hereto, there is no action, suit or proceeding before or by any Governmental Entity or arbitrator, now pending or, to the knowledge of the Company, threatened against or affecting the Company or any of the Company’s subsidiaries, except for such actions, suits or proceedings that, if adversely determined, would not, singly or in the aggregate, adversely affect the consummation of the transactions contemplated by the Operative Documents or have a Material Adverse Effect; and the aggregate of all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective properties or assets is subject, including ordinary routine litigation incidental to the Company’s and its subsidiaries’ business, are not expected to result in a Material Adverse Effect.

          (r) The accountants of the Company who certified the Financial Statements are independent public accountants of the Company and its subsidiaries within the meaning of the Securities Act, and the rules and regulations of the Securities and Exchange Commission (the “ Commission ”) thereunder.

          (s) The audited consolidated financial statements (including the notes thereto) and schedules of the Company and its consolidated subsidiaries for the three (3) fiscal years ended December 31, 2005 (the “ Financial Statements ”) and the interim unaudited consolidated financial statements of the Company and its consolidated subsidiaries for the three and nine months periods ended September 30, 2006 (the “ Interim Financial Statements ”) provided to the Purchaser are the most recent available audited and unaudited consolidated financial statements of the Company and its consolidated subsidiaries, respectively, and fairly present in all material respects, in accordance with U.S. generally accepted accounting principles (“ GAAP ”), the financial position of the Company and its consolidated subsidiaries, and the results of operations and changes in financial condition as of the dates and for the periods

therein specified subject, in the case of the Interim Financial Statements, to year-end adjustments (which are expected to consist solely of recurring adjustments in the normal course of business). Such consolidated financial statements and schedules have been prepared in accordance with GAAP consistently applied throughout the periods involved (except as otherwise noted therein).

          (t) Neither the Company nor any of its subsidiaries has any material liability, whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due, including any liability for taxes (and there is no past or present fact, situation, circumstance, condition or other basis for any present or future action, suit, proceeding, hearing, charge, complaint