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                                                                   EXHIBIT 10.18
                                                                     [EXECUTION]


                                    GUARANTY

         THIS GUARANTY is made as of August 1, 2002, by TECHNICAL OLYMPIC USA,
INC., a Delaware corporation ("Guarantor"), in favor of GUARANTY BANK, a federal
savings bank ("Lender").

                                    RECITALS

         1.       Preferred Home Mortgage Company, a Florida corporation
("Preferred"), has executed in favor of Lender that certain promissory note of
even date herewith, payable to the order of Lender in the principal amount of
$30,000,000 and Technical Mortgage, L.P., a Texas limited partnership
("Technical Mortgage"), has executed in favor of Lender that certain promissory
note of even date herewith, payable to the order of Lender in the principal
amount of $30,000,000 (such promissory notes, as from time to time amended, and
all promissory notes given in substitution, renewal or extension therefor or
thereof, in whole or in part, being herein collectively called the "Notes").

         2.       The Notes were executed pursuant to a Credit Agreement of even
date herewith (herein, as from time to time amended, supplemented or restated,
called the "Credit Agreement"), by and among Preferred and Technical Mortgage
(collectively, "Borrowers") and Lender, pursuant to which Lender has agreed to
advance funds to Borrowers under the Notes.

         3.       Guarantor owns directly, or indirectly through one or more
subsidiaries, one hundred percent (100%) of the outstanding shares of capital
stock of Preferred and one hundred percent (100%) of the partnership interest in
Technical Mortgage.

         4.       Guarantor has determined that Guarantor's execution, delivery
and performance of this Guaranty may reasonably be expected to benefit
Guarantor, directly or indirectly, and are in the best interests of Guarantor.

         NOW, THEREFORE, in consideration of the premises, of the benefits which
will inure to Guarantor from Lender's advances of funds to Borrowers under the
Credit Agreement, and of Ten Dollars and other good and valuable consideration,
the receipt and sufficiency of all of which are hereby acknowledged, and in
order to induce Lender to advance funds under the Credit Agreement, Guarantor
hereby agrees with Lender as follows:

                                   AGREEMENTS

         SECTION 1.        Definitions. Reference is hereby made to the Credit
Agreement for all purposes. All terms used in this Guaranty which are defined in
the Credit Agreement and not otherwise defined herein shall have the same
meanings when used herein. All references herein to any Obligation Document,
Loan Document, or other document or instrument refer to the same as from time to
time amended, supplemented or restated. As used herein the following terms shall
have the following meanings:

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         "Obligations" means collectively all of the indebtedness, obligations,
and undertakings which are guaranteed by Guarantor and described in subsections
(a) and (b) of Section 2.

         "Obligation Documents" means this Guaranty, the Notes, the Credit
Agreement, the Loan Documents, all other documents and instruments under, by
reason of which, or pursuant to which any or all of the Obligations are
evidenced, governed, secured, or otherwise dealt with, and all other documents,
instruments, agreements, certificates, and other writings heretofore or
hereafter delivered in connection herewith or therewith.

         "Obligors" means Borrowers, Guarantor and any other endorsers,
guarantors or obligors, primary or secondary, of any or all of the Obligations.

         "Original Guaranty" means the Guaranty dated June 25, 2002 by Technical
Olympic USA, Inc. in favor of Guaranty Bank.

         "Security" means any rights, properties, or interests of Lender, under
the Obligation Documents or otherwise, which provide recourse or other benefits
to Lender in connection with the Obligations or the non-payment or
non-performance thereof, including collateral (whether real or personal,
tangible or intangible) in which Lender has rights under or pursuant to any
Obligation Documents, guaranties of the payment or performance of any
Obligation, bonds, surety agreements, keep-well agreements, letters of credit,
rights of subrogation, rights of offset, and rights pursuant to which other
claims are subordinated to the Obligations.

         Section 2.        Guaranty.

         (a)      Guarantor hereby irrevocably, absolutely, and unconditionally
guarantees to Lender the prompt, complete, and full payment when due, and no
matter how the same shall become due, of:

                  (i)      the Notes, including all principal, all interest
         thereon and all other sums payable thereunder; and

                  (ii)     All other sums payable under the other Obligation
         Documents, whether for principal, interest, fees or otherwise; and

Without limiting the generality of the foregoing, Guarantor's liability
hereunder shall extend to and include all post-petition interest, expenses, and
other duties and liabilities of Borrowers described above in this subsection
(a), or below in the following subsection (b), which would be owed by Borrowers
but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization, or similar proceeding involving
Borrowers.

         (b)      Guarantor hereby irrevocably, absolutely, and unconditionally
guarantees to Lender the prompt, complete and full performance, when due, and no
matter how the same shall become due, of all obligations and undertakings of
each Borrower to Lender under, by reason of, or pursuant to any of the
Obligation Documents.

         (c)      If any Borrower shall for any reason fail to pay any
Obligation, as and when such Obligation shall become due and payable, whether at
its stated maturity, as a result of the exercise of any power to accelerate, or
otherwise, Guarantor will, forthwith upon demand by Lender, pay such Obligation
in full to Lender. If any Borrower shall for any reason fail to perform promptly
any Obligation, Guarantor will, forthwith upon demand by Lender, cause such
Obligation to be performed or, if specified

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by Lender, provide sufficient funds, in such amount and manner as Lender shall
in good faith reasonably determine, for the prompt, full and faithful
performance of such Obligation by Lender or such other Person as Lender shall
designate.

         (d)      If any of Borrowers or Guarantor fails to pay or perform any
Obligation as described in the immediately preceding subsections (a), (b), or
(c) Guarantor will incur the additional obligation to pay to Lender, and
Guarantor will forthwith upon demand by Lender pay to Lender, the amount of any
and all expenses, including fees and disbursements of Lender's counsel and of
any experts or agents retained by Lender, which Lender may reasonably incur as a
result of such failure.

         (e)      As between Guarantor and Lender, this Guaranty shall be
considered a primary and liquidated liability of Guarantor.

         Section 3.        Unconditional Guaranty.

         (a)      No action which Lender may take or omit to take in connection
with any of the Obligation Documents, any of the Obligations (or any other
indebtedness owing by any Borrower to Lender), or any Security, and no course of
dealing of Lender with any Obligor or any other Person, shall release or
diminish Guarantor's obligations, liabilities, agreements or duties hereunder,
affect this Guaranty in any way, or afford Guarantor any recourse against
Lender, regardless of whether any such action or inaction may increase any risks
to or liabilities of Lender or any Obligor or increase any risk to or diminish
any safeguard of any Security. Without limiting the foregoing, Guarantor hereby
expressly agrees that Lender may, from time to time, without notice to or the
consent of Guarantor, do any or all of the following:

                  (i)      Amend, change or modify, in whole or in part, any one
         or more of the Obligation Documents (other than this Guaranty) and give
         or refuse to give any waivers or other indulgences with respect to the
         Obligation Documents.

                  (ii)     Neglect, delay, fail, or refuse to take or prosecute
         any action for the collection or enforcement of any of the Obligations,
         to foreclose or take or prosecute any action in connection with any
         Security or Obligation Document, to bring suit against any Obligor or
         any other Person, or to take any other action concerning the
         Obligations or the Obligation Documents.

                  (iii)    Accelerate, change, rearrange, extend, or renew the
         time, rate, terms, or manner for payment or performance of any one or
         more of the Obligations (whether for principal, interest, fees,
         expenses, indemnifications, affirmative or negative covenants, or
         otherwise).

                  (iv)     Compromise or settle any unpaid or unperformed
         Obligation or any other obligation or amount due or owing, or claimed
         to be due or owing, under any one or more of the Obligation Documents.

                  (v)      Take, exchange, amend, eliminate, surrender, release,
         or subordinate any or all Security for any or all of the Obligations,
         accept additional or substituted Security therefor, and perfect or fail
         to perfect Lender's rights in any or all Security.

                  (vi)     Discharge, release, substitute or add Obligors.

                  (vii)    Apply all monies received from Obligors or others, or
         from any Security for any of the Obligations, as Lender may determine
         to be in its best interest, without in any way being

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         required to marshall Security or assets or to apply all or any part of
         such monies upon any particular Obligations.

         (b)      No action or inaction of any Obligor or any other Person, and
no change of law or circumstances, shall release or diminish Guarantor's
obligations, liabilities, agreements, or duties hereunder, affect this Guaranty
in any way, or afford Guarantor any recourse against Lender. Without limiting
the foregoing, the obligations, liabilities, agreements, and duties of Guarantor
under this Guaranty shall not be released, diminished, impaired, reduced, or
affected by the occurrence of any or all of the following from time to time,
even if occurring without notice to or without the consent of Guarantor:

                  (i)      Any voluntary or involuntary liquidation,
         dissolution, sale of all or substantially all assets, marshalling of
         assets or liabilities, receivership, conservatorship, assignment for
         the benefit of creditors, insolvency, bankruptcy, reorganization,
         arrangement, or composition of any Obligor or any other proceedings
         involving any Obligor or any of the assets of any Obligor under laws
         for the protection of debtors, or any discharge, impairment,
         modification, release, or limitation of the liability of, or stay of
         actions or lien enforcement proceedings against, any Obligor, any
         properties of any Obligor, or the estate in bankruptcy of any Obligor
         in the course of or resulting from any such proceedings.

                  (ii)     The failure by Lender to file or enforce a claim in
         any proceeding described in the immediately preceding subsection (i) or
         to take any other action in any proceeding to which any Obligor is a
         party.

                  (iii)    The release by operation of law of any Obligor from
         any of the Obligations or any other obligations to Lender.

                  (iv)     The invalidity, deficiency, illegality, or
         unenforceability of any of the Obligations or the Obligation Documents,
         in whole or in part, any bar by any statute of limitations or other law
         of recovery on any of the Obligations, or any defense or excuse for
         failure to perform on account of force majeure, act of God, casualty,
         impossibility, impracticability, or other defense or excuse whatsoever.

                  (v)      The failure of any Obligor or any other Person to
         sign any guaranty or other instrument or agreement within the
         contemplation of any Obligor or Lender.

                  (vi)     The fact that Guarantor may have incurred directly
         part of the Obligations or is otherwise primarily liable therefor.

                  (vii)    Without limiting any of the foregoing, any fact or
         event (whether or not similar to any of the foregoing) which in the
         absence of this provision would or might constitute or afford a legal
         or equitable discharge or release of or defense to a guarantor or
         surety other than the actual payment and performance by Guarantor under
         this Guaranty.

         (c)      Lender may invoke the benefits of this Guaranty before
pursuing any remedies against any Obligor or any other Person and before
proceeding against any Security now or hereafter existing for the payment or
performance of any of the Obligations. Lender may maintain an action against
Guarantor on this Guaranty without joining any other Obligor therein and without
bringing a separate action against any other Obligor.

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         (d)     If any payment to Lender by any Obligor is held to constitute
a preference or a voidable transfer under applicable state or federal laws, or
if for any other reason Lender is required to refund such payment to the payor
thereof or to pay the amount thereof to any other Person, such payment to Lender
shall not constitute a release of Guarantor from any liability hereunder, and
Guarantor agrees to pay such amount to Lender on demand and agrees and
acknowledges that this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, to the extent of any such payment or payments.
Any transfer by subrogation which is made as contemplated in Section 6 prior to
any such payment or payments shall (regardless of the terms of such transfer) be
automatically voided upon the making of any such payment or payments, and all
rights so transferred shall thereupon revert to and be vested in Lender.

         (e)      This is a continuing guaranty and shall apply to and cover all
Obligations and renewals and extensions thereof and substitutions therefor from
time to time.

         Section 4.        Waiver. Guarantor hereby waives, with respect to the
Obligations, this Guaranty, and the other Obligation Documents:

         (a)      notice of the incurrence of any Obligation by any Borrower,
and notice of any kind concerning the assets, liabilities, financial condition,
creditworthiness, businesses, prospects, or other affairs of Borrowers (it being
understood and agreed that: (i) Guarantor shall take full responsibility for
informing itself of such matters, (ii) Lender shall have no responsibility of
any kind to inform Guarantor of such matters, and (iii) Lender is hereby
authorized to assume that Guarantor, by virtue of its relationships with
Borrowers which are independent of this Guaranty, has full and complete
knowledge of such matters at each time when Lender extends credit to Borrowers
or takes any other action which may change or increase Guarantor's liabilities
or losses hereunder).

         (b)      notice that Lender, any Obligor, or any other Person has taken
or omitted to take any action under any Obligation Document or any other
agreement or instrument relating thereto or relating to any Obligation.

         (c)      notice of acceptance of this Guaranty and all rights of
Guarantor under Section.34.02 of the Texas Business and Commerce Code, as
amended.

         (d)      default, demand, presentment for payment, and notice of
default, demand, dishonor, nonpayment, or nonperformance.

         (e)      notice of intention to accelerate, notice of acceleration,
protest, notice of protest, notice of any exercise of remedies (as described in
the following Section 5 or otherwise), and all other notices of any kind
whatsoever.

         Section 5.        Exercise of Remedies. Lender shall have the right to
enforce, from time to time, in any order and at Lender's sole discretion, any
rights, powers and remedies which Lender may have under the Obligation Documents
or otherwise, including judicial foreclosure, the exercise of rights of power of
sale, the taking of a deed or assignment in lieu of foreclosure, the appointment
of a receiver to collect rents, issues and profits, the exercise of remedies
against personal property, or the enforcement of any assignment of leases,
rentals, oil or gas production, or other properties or rights, whether real or
personal, tangible or intangible; and Guarantor shall be liable to Lender
hereunder for any deficiency resulting from the exercise by Lender of any such
right or remedy even though any rights which Guarantor may have against
Borrowers or others may be destroyed or diminished by exercise of any such right
or remedy. No failure on the part of Lender to exercise, and no delay in
exercising, any right hereunder or under any other Obligation Document shall
operate as a waiver thereof; nor shall any single or partial exercise of

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any right preclude any other or further exercise thereof or the exercise of any
other right. The rights, powers and remedies of Lender provided herein and in
the other Obligation Documents are cumulative and are in addition to, and not
exclusive of, any other rights, powers or remedies provided by law or in equity.
The rights of Lender hereunder are not conditional or contingent on any attempt
by Lender to exercise any of its rights under any other Obligation Document
against any Obligor or any other Person.

         Section 6.        Limited Subrogation. Until all of the Obligations
have been paid and performed in full Guarantor shall have no right to exercise
any right of subrogation, reimbursement, indemnity, exoneration, contribution or
any other claim which it may now or hereafter have against or to any Obligor or
any Security in connection with this Guaranty (including any right of
subrogation under Section 34.04 of the Texas Business and Commerce Code, as
amended), and Guarantor hereby waives any rights to enforce any remedy which
Guarantor may have against any Borrower and any right to participate in any
Security until such time. If any amount shall be paid to Guarantor on account of
any such subrogation or other rights, any such other remedy, or any Security at
any time when all of the Obligations and all other expenses guaranteed pursuant
hereto shall not have been paid in full, such amount shall be held in trust for
the benefit of Lender, shall be segregated from the other funds of Guarantor and
shall forthwith be paid over to Lender to be held by Lender as collateral for,
or then or at any time thereafter applied in whole or in part by Lender against,
all or any portion of the Obligations, whether matured or unmatured, in such
order as Lender shall elect. If Guarantor shall make payment to Lender of all or
any portion of the Obligations and if all of the Obligations shall be finally
paid in full, Lender will, at Guarantor's request and expense, execute and
deliver to Guarantor (without recourse, representation or warranty) appropriate
documents necessary to evidence the transfer by subrogation to Guarantor of an
interest in the Obligations resulting from such payment by Guarantor; provided
that such transfer shall be subject to Section 3(d) above and that without the
consent of Lender (which Lender may withhold in its discretion) Guarantor shall
not have the right to be subrogated to any claim or right against any Obligor
which has become owned by Lender, whose ownership has otherwise changed in the
course of enforcement of the Obligation Documents, or which Lender otherwise has
released or wishes to release from its Obligations.

         Section 7.        Assigns. Guarantor's rights or obligations hereunder
may not be assigned or delegated, but this Guaranty and such obligations shall
pass to and be fully binding upon the successors of Guarantor, as well as
Guarantor. This Guaranty shall apply to and inure to the benefit of Lender and
its successors or assigns. Without limiting the generality of the immediately
preceding sentence, Lender may assign, grant a participation in, or otherwise
transfer any Obligation held by it or any portion thereof, and Lender may assign
or otherwise transfer its rights or any portion thereof under any Obligation
Document, to any other Person, and such other Person shall thereupon become
vested with all of the benefits in respect thereof granted to Lender hereunder
unless otherwise expressly provided by Lender in connection with such assignment
or transfer.

         Section 8.        Subordination. Guarantor hereby subordinates and
makes inferior to the Obligations any and all indebtedness now or at any time
hereafter owed by any Borrower to Guarantor. Guarantor agrees that after the
occurrence of any Default or Event of Default it will not permit any Borrower to
repay such indebtedness or any part thereof or accept payment from any Borrower
of such indebtedness or any part thereof without the prior written consent of
Lender. If Guarantor receives any such payment without the prior written consent
of Lender, the amount so paid shall be held in trust for the benefit of Lender,
shall be segregated from the other funds of Guarantor, and shall forthwith be
paid over to Lender to be held by Lender as collateral for, or then or at any
time thereafter applied in whole or in part by Lender against, all or any
portions of the Obligations, whether matured or unmatured, in such order as
Lender shall elect.

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         Section 9.        Offset. Guarantor hereby grants to Lender a right of
offset to secure the payment of the Obligations and Guarantor's obligations and
liabilities hereunder, which right of offset shall be upon any and all monies,
securities and other property (and the proceeds therefrom) of Guarantor now or
hereafter held or received by or in transit to Lender from or for the account of
Guarantor, whether for safekeeping, custody, pledge, transmission, collection or
otherwise, and also upon any and all deposits (general or special), credits and
claims of Guarantor at any time existing against Lender. Upon the occurrence of
any Default or Event of Default Lender is hereby authorized at any time and from
time to time, without notice to Guarantor, to offset, appropriate and apply any
and all items hereinabove referred to against the Obligations and Guarantor's
obligations and liabilities hereunder irrespective of whether or not Lender
shall have made any demand under this Guaranty and although such obligations and
liabilities may be contingent or unmatured. Lender agrees promptly to notify
Guarantor after any such offset and application made by Lender, provided that
the failure to give such notice shall not affect the validity of such offset and
application. The rights of Lender under this section are in addition to, and
shall not be limited by, any other rights and remedies (including other rights
of offset) which Lender may have.

         Section 10.       Representations and Warranties. Guarantor hereby
represents and warrants to Lender as follows:

         (a)      The Recitals at the beginning of this Guaranty are true and
correct in all respects.

         (b)      Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation as set
forth in the Recitals to this Guaranty; and Guarantor has all requisite power
and authority to execute, deliver and perform this Guaranty.

         (c)      The execution, delivery and performance by Guarantor of this
Guaranty have been duly authorized by all necessary corporate action and do not
and will not contravene its certificate or articles of incorporation or bylaws.

         (d)      The execution, delivery and performance by Guarantor of this
Guaranty do not and will not contravene any law or governmental regulation or
any contractual restriction binding on or affecting Guarantor or any of its
Affiliates or properties, and do not and will not result in or require the
creation of any lien, security interest or other charge or encumbrance upon or
with respect to any of its properties.

         (e)      No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or other regulatory body or third
party is required for the due execution, delivery and performance by Guarantor
of this Guaranty.

         (f)      This Guaranty is a legal, valid and binding obligation of
Guarantor, enforceable against Guarantor in accordance with its terms except as
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights and general principles of
equity.

         (g)      There is no action, suit or proceeding pending or, to the
knowledge of Guarantor, threatened against or otherwise affecting Guarantor
before any court, arbitrator or governmental department, commission, board,
bureau, agency or instrumentality which may materially and adversely affect
Guarantor's financial condition or its ability to perform its obligations
hereunder.

         (h)      The direct or indirect value of the consideration received and
to be received by Guarantor in connection herewith is reasonably worth at least
as much as the liability and obligations of Guarantor hereunder, and the
incurrence of such liability and obligations in return for such consideration
may reasonably be expected to benefit Guarantor, directly or indirectly.

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         (i)      Guarantor is not "insolvent" on the date hereof (that is, the
sum of Guarantor's absolute and contingent liabilities, including the
Obligations, does not exceed the fair market value of Guarantor's assets).
Guarantor's capital is adequate for the businesses in which Guarantor is engaged
and intends to be engaged. Guarantor has not incurred (whether hereby or
otherwise), nor does Guarantor intend to incur or believe that it will incur,
debts which will be beyond its ability to pay as such debts mature.

         (j)      All balance sheets, earning statements, financial data and
other information concerning Guarantor which have been furnished to Lender to
induce it to accept this Guaranty (or otherwise furnished to Lender in
connection with the transactions contemplated hereby or associated herewith)
fairly represent the financial condition of Guarantor as of the dates and the
results of Guarantor's operations for the periods for which the same are
furnished. None of such balance sheets, earnings and cash flow statements,
financial data and other information contains any untrue statement of a material
fact or omits to state any material fact which is necessary to make any
statements contained therein not misleading.

         Section 11.       No Oral Change. No amendment of any provision of this
Guaranty shall be effective unless it is in writing and signed by Guarantor and
Lender, and no waiver of any provision of this Guaranty, and no consent to any
departure by Guarantor therefrom, shall be effective unless it is in writing and
signed by Lender, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

         Section 12.       Invalidity of Particular Provisions. If any term or
provision of this Guaranty shall be determined to be illegal or unenforceable
all other terms and provisions hereof shall nevertheless remain effective and
shall be enforced to the fullest extent permitted by applicable law.

         Section 13.       Headings and References. The headings used herein are
for purposes of convenience only and shall not be used in construing the
provisions hereof. The words "this Guaranty," "this instrument," "herein,"
"hereof," "hereby" and words of similar import refer to this Guaranty as a whole
and not to any particular subdivision unless expressly so limited. The phrases
"this section" and "this subsection" and similar phrases refer only to the
subdivisions hereof in which such phrases occur. The word "or" is not exclusive,
and the word "including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.

         Section 14.       Term. This Guaranty shall be irrevocable until all of
the Obligations have been completely and finally paid and performed, Lender has
no obligation to make any loans or other advances to any Borrower, and all
obligations and undertakings of Borrowers under, by reason of, or pursuant to
the Obligation Documents have been completely performed, and this Guaranty is
thereafter subject to reinstatement as provided in Section 3(d). All extensions
of credit and financial accommodations heretofore or hereafter made by Lender to
Borrowers shall be conclusively presumed to have been made in acceptance hereof
and in reliance hereon.

         Section 15.       Notices. Any notice or communication required or
permitted hereunder shall be given in writing, sent by personal delivery, by
telecopy, by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, addressed to the appropriate
party as follows:

         To Guarantor:     4000 Hollywood Blvd., Suite 500 N
                           Hollywood, Florida 33021

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                           Attention: Tommy McAden
                           Fax: (954) 364-4010
                           Tel: (954) 364-4004

                           with a copy to:
                           Holly Hubenak
                           Technical Olympic U.S.A., Inc.
                           1200 Soldiers Field Drive, Suite 200
                           Sugarland, Texas 77479
                           FAX: (281) 243-0116
                           TEL: (281) 243-0127

         To Lender:        8333 Douglas Avenue
                           Dallas, Texas 75225
                           Attention: Carolyn Eskridge
                           Fax: (214) 360-1660
                           Tel: (214) 360-3357

or to such other address or to the attention of such other individual as
hereafter shall be designated in writing by the applicable party sent in
accordance herewith. Any such notice or communication shall be deemed to have
been given (a) in the case of personal delivery or delivery service, as of the
date of first attempted delivery at the address or in the manner provided
herein, (b) in the case of telecopy, upon receipt, or (b)) in the case of
registered or certified United States mail, three days after deposit in the
mail.

         Section 16.       Limitation on Interest. Lender and Guarantor intend
to contract in strict compliance with applicable usury law from time to time in
effect, and the provisions of the Credit Agreement limiting the interest for
which Guarantor is obligated are expressly incorporated herein by reference.

         Section 17.       Loan Document. This Guaranty is a Loan Document, as
defined in the Credit Agreement, and is subject to the provisions of the Credit
Agreement governing Loan Documents. Guarantor hereby ratifies, confirms and
approves the Credit Agreement and the other Loan Documents and, in particular,
any provisions thereof which relate to Guarantor.

         Section 18.       Counterparts. This Guaranty may be executed in any
number of counterparts, each of which when so executed shall be deemed to
constitute one and the same Guaranty. This Agreement may be validly executed and
delivered by facsimile or other electronic transmission.

         Section 19.       WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY, THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER

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SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT AND ANY OTHER LOAN DOCUMENTS.

         Section 20.       CONSEQUENTIAL DAMAGES. NEITHER GUARANTOR NOR LENDER
SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND EACH SUCH PERSON HEREBY WAIVES,
RELEASES AND AGREES NOT TO SUE EACH OTHER SUCH PERSON FOR, ANY SPECIAL, INDIRECT
OR CONSEQUENTIAL DAMAGES SUFFERED BY SUCH OTHER PERSON IN CONNECTION WITH ANY
CLAIM RELATED TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREIN.

         Section 21.       CHOICE OF LAW; VENUE. THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF TEXAS. ANY LEGAL ACTION OR PROCEEDING
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT AND
MAINTAINED IN THE APPLICABLE STATE OR FEDERAL COURT IN DALLAS COUNTY, TEXAS.
THIS AGREEMENT IS PERFORMABLE IN DALLAS COUNTY, TEXAS AND THE PARTIES HERETO
WAIVE ANY RIGHT THEY MAY HAVE TO BE SUED ELSEWHERE. THE PARTIES HERETO CONSENT
TO PERSONAL JURISDICTION IN DALLAS COUNTY, TEXAS.

         Section 22.       ENTIRE AGREEMENT. THE GUARANTY AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND THERETO
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.

         Section 23.       Amendment and Restatement. This Guaranty amends and
restates in its entirety the Original Guaranty, and from and after the date
hereof, the terms and provisions of the Original Guaranty shall be superseded by
the terms and provisions of this Guaranty.

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                                       10

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         IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty
as of the date first written above.

                                       TECHNICAL OLYMPIC USA, INC.

                                       By: /s/ Holly Hubenak
                                           ______________________________
                                           Holly Hubenak

                                           Vice President

THE STATE OF TEXAS)

COUNTY OF__________________)

         This instrument was acknowledged before me on August ____, 2002, by
Holly Hubenak, Vice President of TECHNICAL OLYMPIC USA, INC., a Delaware
corporation, on behalf of said corporation.

                                       Notary Public, State of_____________

                                       (printed name)

My Commission Expires:

_______________________