<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
(Mark One)
[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2005

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXHANGE ACT OF 1934.

         FOR THE TRANSITION PERIOD__________ TO __________.

                           Commission File No. 1-6830

                           ORLEANS HOMEBUILDERS, INC.
             (Exact name of registrant as specified in its charter)


         Delaware                                       59-0874323
(State or other jurisdiction of                  (I.R.S. Employer I.D. No.)
 incorporation or organization)

                         One Greenwood Square, Suite 101
                                3333 Street Road
                               Bensalem, PA 19020
                    (Address of principal executive offices)
                            Telephone: (215) 245-7500
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes X No ___

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes No X

 Number of shares of common stock, par value $0.10 per share, outstanding as of
                          February 9, 2006: 18,484,446
                  (excluding 213,685 shares held in Treasury).


<PAGE>




                   ORLEANS HOMEBUILDERS, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
<S>                 <C>                                                                        <C>

                                                                                              PAGE
                         PART 1 - FINANCIAL INFORMATION

Item 1.           Financial Statements (unaudited)

                  Consolidated Balance Sheets at December 31, 2005
                    and June 30, 2005                                                            1

                  Consolidated Statements of Operations for the
                     Three and Six Months Ended December 31, 2005 and 2004                       2

                  Consolidated Statements of Shareholders' Equity for the
                    Six Months Ended December 31, 2005                                           3

                  Consolidated Statements of Cash Flows for the Six
                    Months Ended December 31, 2005 and 2004                                      4

                  Notes to Consolidated Financial Statements                                     5

Item 2.           Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                                         15

Item 3.           Quantitative and Qualitative Disclosures About Market
                    Risk                                                                        34

Item 4.           Controls and Procedures                                                       34



                           PART II - OTHER INFORMATION

Item 2.           Unregistered Sales of Equity Securities and Use of Proceeds                   35

Item 4.           Submission of Matters to a Vote of Secured Holders                            35

Item 6.           Exhibits                                                                      36

</TABLE>



<PAGE>

                   ORLEANS HOMEBUILDERS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                     December 31,            June 30,
                                                                                        2005                   2005
                                                                                    ------------            ---------
<S>                                                                                    <C>                   <C>
Assets
Cash and cash equivalents                                                              $ 42,699              $ 62,576
Restricted cash - due from title company                                                  9,007                28,785
Restricted cash - customer deposits                                                      22,279                20,100
Real estate held for development and sale:
    Residential properties completed or under construction                              257,297               190,855
    Land held for development or sale and improvements                                  490,018               398,290
    Inventory not owned - Variable Interest Entity                                      121,120                88,252
Property and equipment, at cost, less accumulated depreciation                            3,486                 3,420
Deferred taxes                                                                            3,106                 2,802
Intangible assets, net of amortization                                                    4,111                     6
Goodwill                                                                                 20,514                20,514
Receivables, deferred charges and other assets                                           21,341                18,532
Land deposits and costs of future development                                            29,390                27,408
                                                                                   ------------             ---------
    Total Assets                                                                    $ 1,024,368             $ 861,540
                                                                                   ============             =========

Liabilities and Shareholders' Equity
Liabilities:
Accounts payable                                                                       $ 35,559              $ 47,689
Accrued expenses                                                                         51,541                65,253
Customer deposits                                                                        31,645                27,738
Obligations related to inventory not owned                                              108,970                79,585
Mortgage and other note obligations primarily secured by real
    estate held for development and sale                                                431,652               399,030
Subordinated notes                                                                      105,000                     -
Other notes payable                                                                       5,894                 9,400
                                                                                   ------------             ---------
    Total Liabilities                                                                   770,261               628,695
                                                                                   ------------             ---------

Commitments and contingencies (See Note J)

Redeemable common stock                                                                     240                   889
                                                                                   ------------             ---------

Shareholders' Equity:
Common stock, $.10 par, 23,000,000 shares authorized,
    18,698,131 shares issued at December 31, 2005
    and June 30, 2005                                                                     1,870                 1,870
Capital in excess of par value - common stock                                            71,417                70,450
Retained earnings                                                                       182,859               160,407
Treasury stock, at cost (213,685 and 176,911 shares held at
    December 31, 2005 and June 30, 2005, respectively)                                   (2,279)                 (771)
                                                                                   ------------             ---------
Total Shareholders' Equity                                                              253,867               231,956
                                                                                   ------------             ---------
Total Liabilities and Shareholders' Equity                                          $ 1,024,368             $ 861,540
                                                                                   ============             =========

</TABLE>

              See accompanying notes which are an integral part of
                     the consolidated financial statements.


                                        1


<PAGE>
                   ORLEANS HOMEBUILDERS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        AND CHANGES IN RETAINED EARNINGS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>

                                                           Three Months Ended                   Six Months Ended
                                                               December 31,                        December 31,
                                                          2005               2004             2005              2004
                                                       ---------          ---------        ---------         ---------
<S>                                                    <C>                <C>              <C>               <C>
Earned revenues
    Residential properties                             $ 220,912          $ 178,278        $ 378,875         $ 316,590
    Land sales                                             1,353                 43            1,353                92
    Other income                                           2,386              1,687            4,064             3,488
                                                       ---------          ---------        ---------         ---------
                                                         224,651            180,008          384,292           320,170
                                                       ---------          ---------        ---------         ---------
Costs and expenses
    Residential properties                               169,302            141,954          292,587           251,545
    Land sales                                             1,150                 40            1,150                88
    Other                                                  1,615              1,384            3,224             2,321
    Selling, general and administrative                   27,228             23,160           48,575            39,255
    Interest
      Incurred                                             8,902              3,308           15,718             6,038
      Less capitalized                                    (8,902)            (3,293)         (15,718)           (6,009)
                                                       ---------          ---------        ---------         ---------
                                                         199,295            166,553          345,536           293,238
                                                       ---------          ---------        ---------         ---------

Income from operations before income taxes                25,356             13,455           38,756            26,932
Income tax expense                                         9,940              5,225           15,562            10,500
                                                       ---------          ---------        ---------         ---------

Net income                                              $ 15,416            $ 8,230         $ 23,194          $ 16,432
                                                       =========          =========        =========         =========

Basic earnings per share                                  $ 0.83             $ 0.47           $ 1.25            $ 0.94
                                                       =========          =========        =========         =========

Diluted earnings per share                                $ 0.82             $ 0.44           $ 1.23            $ 0.88
                                                       =========          =========        =========         =========
</TABLE>




              See accompanying notes which are an integral part of
                     the consolidated financial statements.


                                        2
<PAGE>
              ORLEANS HOMEBUILDERS, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                         (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                             Common Stock               Capital in
                                                Shares                  Excess of                 Treasury Stock
                                              Issued and               Par Value -      Retained      Share
                                             Outstanding     Amount    Common Stock     Earnings       Held       Amount   Total
                                            ------------    -------    ------------    ---------  --------------  ------   -----
<S>                                          <C>           <C>           <C>         <C>             <C>        <C>      <C>
Balance at June 30, 2005                      18,698,131    $ 1,870       $ 70,450    $ 160,407       176,911    $ (771)  $ 231,956

Redeemable common stock sold / expired                                         648                                              648

Shares awarded under Stock Award Plan                                          365                    (14,126)       62         427

Fair market value of stock options issued                                       69                                               69

Stock options, net                                                            (115)                   (40,000)      174          59

Treasury stock purchase                                                                                90,900    (1,744)     (1,744)

Dividends declared                                                                         (742)                               (742)

Net income                                                                               23,194                              23,194
                                             -----------   --------       --------     --------      --------   -------     -------
Balance at December 31, 2005                  18,698,131    $ 1,870       $ 71,417     $182,859       213,685   $(2,279)    253,867
                                             ===========   ========       ========     ========      ========   =======     =======

</TABLE>




              See accompanying notes which are an integral part of
                     the consolidated financial statements.


                                        3







<PAGE>
                   ORLEANS HOMEBUILDERS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>


                                                                                      Six Months Ended
                                                                                         December 31,
                                                                                   2005                2004
                                                                                 ---------          ---------
<S>                                                                              <C>                 <C>
Cash flows from operating activities:
    Net income                                                                   $  23,194           $  16,432
    Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
    Depreciation and amortization                                                      729                 766
    Amortization of note discount                                                       34                   -
    Deferred taxes                                                                    (304)                (89)
    Stock based compensation expense                                                   267                 139
Changes in operating assets and liabilities:
    Restricted cash - due from title company                                        19,778                   -
    Restricted cash - customer deposits                                             (2,179)              2,597
    Real estate held for development and sale                                     (158,170)           (144,204)
    Receivables, deferred charges and other assets                                  (2,809)             (6,822)
    Land deposits and costs of future developments                                  (5,465)             (8,153)
    Accounts payable and other liabilities                                         (30,491)            (22,169)
    Customer deposits                                                                3,907               3,007
                                                                                 ---------           ---------
Net cash used in operating activities                                             (151,509)           (158,496)
                                                                                 ---------           ---------

Cash flows from investing activities:
    Purchases of property and equipment                                               (678)               (341)
    Acquisitions, net of cash acquired                                                   -             (56,945)
                                                                                 ---------           ---------
Net cash used in investing activities                                                 (678)            (57,286)
                                                                                 ---------           ---------

Cash flows from financing activities:
    Borrowings from loans secured by real estate assets                            124,000             580,811
    Repayment of loans secured by real estate assets                               (91,378)           (384,649)
    Borrowings from unsecured line of credit                                             -             135,948
    Repayments of unsecured line of credit                                               -            (135,948)
    Borrowings from subordinated notes                                             105,000                   -
    Borrowings from other note obligations                                               -               5,179
    Repayment of other note obligations                                             (3,540)                (25)
    Sale/(purchase) of treasury stock                                               (1,744)                267
    Proceeds from Stock Award Plan                                                     284                   -
    Proceeds from stock options exercised                                               59                   -
    Common stock dividend paid                                                        (371)                  -
                                                                                 ---------           ---------
Net cash provided by financing activities                                          132,310             201,583
                                                                                 ---------           ---------

Net increase (decrease) in cash and cash equivalents                               (19,877)            (14,199)
Cash and cash equivalents at beginning of year                                      62,576              32,962
                                                                                 ---------           ---------
Cash and cash equivalents at end of period                                       $  42,699           $  18,763
                                                                                 =========           =========

Supplemental disclosure of cash flow activities:
    Interest paid, net of amounts capitalized                                    $       -           $      29
                                                                                 =========           =========
    Income taxes paid                                                            $  25,112           $  14,243
                                                                                 =========           =========

</TABLE>

              See accompanying notes which are an integral part of
                     the consolidated financial statements.

                                        4


<PAGE>

                   ORLEANS HOMEBUILDERS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(A)           Summary of Significant Accounting Policies:

              The accompanying unaudited consolidated financial statements are
              presented in accordance with the requirements for Form 10-Q and do
              not include all the disclosures required by generally accepted
              accounting principles for complete financial statements. Reference
              is made to Form 10-K as of and for the year ended June 30, 2005
              for Orleans Homebuilders, Inc. and subsidiaries (the "Company")
              for additional disclosures, including a summary of the Company's
              accounting policies.

              In the opinion of management, the consolidated financial
              statements contain all adjustments, consisting only of normal
              recurring accruals, necessary to present fairly the consolidated
              financial position of the Company for the periods presented. The
              interim operating results of the Company may not be indicative of
              operating results for the full year.

              Accounting for variable interest entities:

              In January 2003, the FASB issued FASB Interpretation No. 46
              "Consolidation of Variable Interest Entities, an interpretation of
              ARB No. 51" ("FIN 46"). The FASB issued a revised FIN 46 in
              December 2003 which modifies and clarifies various aspects of the
              original interpretations. A Variable Interest Entity ("VIE") is
              created when (i) the equity investment at risk is not sufficient
              to permit the entity to finance its activities without additional
              subordinated financial support from other parties or (ii) equity
              holders either (a) lack direct or indirect ability to make
              decisions about the entity, (b) are not obligated to absorb
              expected losses of the entity or (c) do not have the right to
              receive expected residual returns of the entity if they occur. If
              an entity is deemed to be a VIE, pursuant to FIN 46, an enterprise
              that absorbs a majority of the expected losses of the VIE is
              considered the primary beneficiary and must consolidate the VIE.
              For VIEs created before January 31, 2003, FIN 46 was deferred to
              the end of the first interim or annual period ending after March
              15, 2004. The Company fully adopted FIN 46 effective March 31,
              2004.

              Based on the provisions of FIN 46, the Company has concluded that
              whenever it enters into an option agreement to acquire land or
              lots from an entity and pays a significant deposit that is not
              unconditionally refundable, a VIE is created under condition (ii)
              (b) of the previous paragraph. The Company has been deemed to have
              provided subordinated financial support, which refers to variable
              interests that will absorb some or all of an entity's expected
              theoretical losses if they occur. For each VIE created the Company
              will compute expected losses and residual returns based on the
              probability of future cash flows as outlined in FIN 46. If the
              Company is deemed to be the primary beneficiary of the VIE it will
              consolidate the VIE on its balance sheet. The fair value of the
              VIEs inventory will be reported as "Inventory Not Owned - Variable
              Interest Entities."

                                       5
<PAGE>

              At December 31, 2005, the Company consolidated twenty VIEs as a
              result of its options to purchase land or lots from the selling
              entities. The Company paid cash or issued letters of credit
              deposits to these twenty VIEs totaling $10,660,000 and incurred
              additional pre-acquisition costs totaling $3,440,000. The
              Company's deposits and any costs incurred prior to acquisition of
              the land or lots, represent the Company's maximum exposure to
              loss. The fair value of the VIEs inventory is reported as
              "Inventory Not Owned - Variable Interest Entities." The Company
              recorded $121,120,000 in Inventory Not Owned - Variable Interest
              Entities as of December 31, 2005. The fair value of the property
              to be acquired less cash deposits and pre-acquisition costs, which
              totaled $108,970,000 at December 31, 2005, was reported on the
              balance sheet as "Obligations related to inventory not owned."
              Creditors, if any, of these VIEs have no recourse against the
              Company.

              The Company will continue to secure land and lots using options.
              Including the deposits and other costs capitalized in connection
              with the VIEs above, the Company had total costs incurred to
              acquire land and lots at December 31, 2005 of approximately
              $41,570,000, including $26,861,000 of cash deposits. The total
              purchase price under these cancelable contracts or options is
              approximately $574,603,000. The maximum exposure to loss is
              limited to the deposits, although some deposits are refundable,
              and costs incurred prior to the acquisition of the land or lots.

              Recent accounting pronouncements:

              In December 2004, the FASB revised FAS No. 123 through the
              issuance of FAS No. 123-R "Share Based Payment", revised ("FAS
              123-R"). FAS 123-R was effective for the Company commencing July
              1, 2005. FAS 123-R, among other things, eliminates the alternative
              to use the intrinsic value method of accounting for stock based
              compensation and requires entities to recognize the cost of
              employee services received in exchange for awards of equity
              instruments based on the grant-date fair value of those awards
              (with limited exceptions). The fair value based method in FAS
              123-R is similar to the fair-value-based method in FAS No. 123 in
              most respects, subject to certain key differences. As the Company
              previously adopted the fair value recognition provisions of FAS
              No. 123 prospectively for all stock awards granted, commencing on
              July 1, 2002, the impact of the modified prospective adoption of
              FAS 123-R did not have a significant impact on the financial
              position or results of operations of the Company. The Company
              amortizes compensation expense on a straight line basis over the
              vesting period of each option grant. For the six months ended
              December 31, 2005, the Company recorded pretax compensation
              expense associated with stock awards of $267,000. Total
              compensation cost related to nonvested awards not yet recognized
              of $3,920,000 will be recognized according to vesting schedules
              through March 2015. The Company utilizes the Black-Scholes option
              pricing model to calculate the compensation expense associated
              with stock options.

              In December 2004, the FASB issued FASB Staff Position No. FAS
              109-1, "Application of FASB Statement No. 109, Accounting for
              Income Taxes, for the Tax Deduction on Qualified Production
              Activities Provided by the American Jobs Creation Act of 2004"
              (FSP FAS 109-1). FSP FAS 109-1 clarifies that the deduction will
              be treated as a "special deduction" as described in Statement of
              Financial Accounting Standards No. 109, "Accounting for Income
              Taxes." As such, the special deduction has no effect on deferred
              tax assets and liabilities existing at the date of enactment. The
              impact of the deduction will be reported in the period in which
              the deduction is claimed. The Company files a consolidated return
              on a calendar year. Accordingly, the Company began reflecting the
              special deduction with respect to its operations effective January
              1, 2005. Its expected impact was and will be to lower the
              effective tax provision in the periods in which the deduction may
              be claimed and that this benefit will increase as the deduction is
              phased in under the statute.

                                       6
<PAGE>


(B)           Acquisitions:

              PEACHTREE ACQUISIITON:

              On December 23, 2004, pursuant to an Asset Purchase Agreement of
              the same date, the Company acquired, through a wholly-owned
              subsidiary, the real estate assets described below (the "Assets")
              from Peachtree Residential Properties, LLC, a North Carolina
              limited liability company and Peachtree Townhome Communities, LLC,
              a North Carolina limited liability company, which at the time the
              Company acquired the assets were wholly-owned subsidiaries of
              Peachtree Residential Properties, Inc., a Georgia corporation
              (collectively, "Peachtree Residential Properties").

              The Assets include: (a) improved and unimproved real property, (b)
              rights to acquire real estate under options or agreements, (c)
              equipment, (d) rights under certain contracts for the sale of
              homes to be sold and leases for real property, (e) rights to
              certain tradenames and other intangibles, including contract
              backlog, (f) homes and other improvements under construction as of
              the closing, (g) certain plans, drawings, specifications, permits
              and rights under warranties and (h) governmental approvals and
              books and records associated with, or relating to the foregoing.

              The Company paid $29,300,000 in cash, to acquire the Assets. The
              Company also assumed certain liabilities of Peachtree Residential
              Properties, less $200,000 to be retained by the Company and
              applied towards the administration of certain home warranty
              claims.

              REALEN ACQUISITION:

              On July 28, 2004, pursuant to a Purchase Agreement of the same
              date, the Company completed its acquisition of all of the issued
              and outstanding partnership interests in Realen Homes L. P., a
              Pennsylvania limited partnership ("Realen Homes"), from Realen
              General Partner, LLC, a Pennsylvania limited liability company,
              and DB Homes Venture L.P., a Pennsylvania limited partnership. The
              Company acquired the limited partner's interest in Realen Homes
              and a subsidiary of the Company, RHGP LLC, acquired the general
              partner's interest and serves as the general partner of Realen
              Homes.

              In accordance with the Purchase Agreement, the consideration paid
              by the Company consisted of: (i) $53,348,000 in cash delivered at
              closing, (ii) a promissory note of the Company in the aggregate
              principal amount of $5 million, payable over a period of up to two
              years, with an interest rate of 3% per year and (iii) a warranty
              holdback of $1.5 million retained by the Company to be applied
              toward the administration of any warranty claims made against
              Realen Homes in excess of certain predetermined amounts. The
              purchase price was determined based on Realen Homes' book value at
              June 30, 2004, its management personnel, its profitability, its
              backlog and its land position.



                                       7
<PAGE>

              The Company evaluated the $5,000,000 3% note in accordance with
              APB 21 and determined that it was a below market rate note. In
              accordance with APB 21, the Company estimated, based on current
              market conditions that the Company would likely have been able to
              obtain similar fixed-rate financing from a third party at
              approximately 150 basis points higher than the note actually
              obtained. The Company imputed interest on the note at 4.5% and
              reduced the carrying value of the note from $5,000,000 to
              $4,863,000. The discount of $137,000 will be recorded as interest
              expense over the life of the note.

              The acquisition included, subject to specified exceptions, all
              assets and liabilities of Realen Homes, including land owned or
              under contract, homes under construction but not sold or sold but
              not delivered, sales offers and reservations, and model homes and
              furnishings. The acquired assets were used by Realen Homes in the
              homebuilding business in Pennsylvania and Illinois. The Company
              intends to continue to use the acquired assets in the homebuilding
              business.

              The Company accounted for the acquisition as a purchase in
              accordance with SFAS No. 141, "Business Combinations." The
              purchase price was allocated to goodwill for $13,327,000 which is
              defined as the fair value of assets and liabilities acquired in
              excess of the purchase price and to intangible assets for
              $500,000. The intangible assets represent the intangible value of
              the backlog acquired from Realen Homes. The intangible value of
              the backlog will be amortized into cost of sales as the acquired
              backlog is delivered. The Company amortized the remaining $6,000
              of the intangible value of the backlog acquired from Realen Homes
              during the three months ended September 30, 2005.

              MASTERPIECE ACQUISITION:

              On July 28, 2003, the Company acquired all of the issued and
              outstanding shares of Masterpiece Homes and entered into an
              employment agreement with the president of Masterpiece Homes.
              Masterpiece Homes is an established homebuilder located in Orange
              City, Florida. The terms of the stock purchase agreement and
              employment agreement are as follows: (i) $3,900,000 in cash, at
              closing; and (ii) $2,130,000 payable January 1, 2005, unless prior
              to that date the president is terminated for cause or terminates
              his employment without good reason, as defined in the employment
              agreement; (iii) sale of 30,000 shares of the Company's common
              stock at $8 per share with a put option at the same price, (iv)
              stock options to purchase 45,000 shares of the Company's common
              stock at $10.64 per share vesting equally on December 31, 2004,
              2005 and 2006; and (v) contingent payments representing 25% of the
              pre-tax profits of Masterpiece Homes for the calendar years ended
              December 31, 2004, 2005 and 2006. The Company also incurred
              approximately $405,000 in acquisition costs to complete this
              transaction. The aforementioned costs are considered part of the
              purchase price of Masterpiece Homes, except for the following
              items that are considered part of, and contingent upon, the
              employment agreement: (a) $710,000 of the $2,130,000 paid January
              10, 2005; (b) stock options to purchase 45,000 shares of the
              Company's common stock at $10.64 per share; and (c) contingent
              payments representing 25% of the pre-tax profits of Masterpiece
              Homes for the calendar years ended December 31, 2004, 2005 and
              2006.

              The Company accounted for these transactions in accordance with
              SFAS No. 141, "Business Combinations", whereby approximately
              $5,700,000 was considered to be part of the purchase price of the
              business and the remainder part of employee compensation. That
              portion related to employee compensation will be charged to
              expense over the period to which it relates. With respect to the
              amounts allocated to the purchase, such amounts were allocated to
              the fair value of assets and liabilities acquired with the excess
              of approximately $3,007,000 allocated to goodwill.

                                       8
<PAGE>

(C)           Mortgage, Other Note Obligations, and Revolving Credit Facility:

              The $536,652,000 outstanding balance at December 31, 2005 consists
              of $429,000,000 outstanding under the Revolving Credit Facility,
              which is discussed below, $105,000,000 outstanding pursuant to the
              sale and issuance of trust preferred securities discussed below,
              and $2,652,000 under mortgage obligations secured by land held for
              development and sale and improvements. The maximum balance
              outstanding under construction and inventory loan agreements at
              any month end during the six months ended December 31, 2005 was
              $536,652,000. The average month end balance during the six months
              ended December 31, 2005 was $456,611,000.

              At December 31, 2005, the Company had approximately $429,000,000
              outstanding under the Revolving Credit Facility. In addition,
              approximately $41,874,000 of letters of credit and other
              assurances of the availability of funds have been provided under
              the Revolving Credit Facility.

              On December 22, 2004, Greenwood Financial, Inc., a wholly-owned
              subsidiary of the Company and other wholly-owned subsidiaries of
              the Company, as borrowers, and Orleans Homebuilders, Inc. as
              guarantor, entered into a Revolving Credit and Loan Agreement (the
              "Credit Agreement") for a $500,000,000 Senior Secured Revolving
              Credit and Letter of Credit Facility (the "Revolving Credit
              Facility") with various banks as lenders. The Revolving Credit
              Facility may be increased to $650,000,000 under certain
              circumstances. Under and subject to the terms of the Revolving
              Credit Facility, the borrowers may borrow and re-borrow for the
              purpose of financing the acquisition and development of real
              estate, the construction of homes and improvements, for investment
              in joint ventures, for working capital and for such other
              appropriate purposes as may be approved by the lenders.
              Capitalized terms used below and not otherwise defined have the
              meanings set forth in the Revolving Credit Agreement.

              The Revolving Credit Facility has a three-year term and borrowings
              and advances bear interest on a per annum basis equal to the LIBOR
              Market Index Rate plus a non-default variable spread ranging from
              175 basis points to 237.5 basis points, depending upon the
              Company's leverage ratio. During the term of the Revolving Credit
              Facility, interest is payable monthly in arrears. The December 31,
              2005 interest rate was 6.76% which includes the 237.5 basis point
              spread.

              The Company is required to maintain certain financial ratios and
              customary covenants as set forth in the Revolving Credit Facility.
              See Note (K) of Notes to Consolidated Financial Statements for
              disclosure of subsequent event related to the amended and restated
              Revolving Credit Facility, effective January 24, 2006.

              On November 23, 2005, the Company issued $75,000,000 of trust
              preferred securities which mature on January 30, 2036 and are
              callable, in whole or in part, at par plus accrued interest on or
              after January 30, 2011. For the first ten years, the securities
              have a fixed interest rate of 8.61% per annum. Thereafter, the
              securities have a floating interest rate equal to three-month
              LIBOR plus 360 basis points per annum, resetting quarterly. In the
              event the Company fails to meet certain financial covenants, the
              applicable rate of interest will be increased by 300 basis points
              until such time as the Company is in compliance with the financial
              covenants, then the interest rate will return to its original
              amount. The transaction is treated as debt for financial statement
              purposes. The Company used proceeds from the sale of these
              securities to repay outstanding obligations under the Revolving
              Credit Facility discussed above.



                                       9
<PAGE>

              On September 20, 2005, the Company issued $30,000,000 of trust
              preferred securities which mature on September 30, 2035 and are
              callable, in whole or in part, at par plus accrued interest on or
              after September 30, 2010. For the first ten years, the securities
              have a fixed interest rate of 8.52% per annum. Thereafter, the
              securities have a floating interest rate equal to three-month
              LIBOR plus 380 basis points per annum, resetting quarterly. The
              transaction is treated as debt for financial statement purposes.
              The Company used proceeds from the sale of these securities for
              land purchases and general corporate purposes. The obligations
              relating to the trust preferred securities are subordinated to the
              Revolving Credit Facility.

              On December 21, 2004 and in accordance with the terms of the
              Company's Convertible Subordinated 7% Note issued to Jeffrey P.
              Orleans, Chairman and Chief Executive Officer of the Company, the
              third and final installment due of $1,000,000 was converted, at
              $1.50 per share, into 666,668 shares of the Company's common
              stock.

(D)           Redeemable Common Stock:

              In connection with the Company's acquisition of Parker and
              Lancaster Corporation on October 13, 2000, the Company issued
              300,000 shares of common stock of the Company to the former
              shareholders of Parker and Lancaster Corporation. The former
              shareholders of Parker and Lancaster Corporation have the right to
              cause the Company to repurchase the common stock approximately
              five years after the closing of the acquisition at a price of
              $3.33 per share. The redemption feature of these shares expired
              during the quarter ended December 31, 2005.

              In connection with the Company's acquisition of Masterpiece Homes
              on July 28, 2003, the Company sold 30,000 shares of common stock
              of the Company to the president of Masterpiece Homes at $8 per
              share. The president of Masterpiece Homes has the right to cause
              the Company to repurchase the common stock at $8 per share by
              giving notice to the Company no later than the earlier of December
              31, 2006 or 30 days after termination of his employment, as
              specified in his employment agreement.

(E)           Employee Retirement and Deferred Compensation Plans

              EMPLOYEE RETIREMENT PLAN

              On December 1, 2005, the Company adopted a non-qualified target
              defined benefit retirement plan, effective as of September 1,
              2005, which covers a select group of management employees of the
              Company. This Supplemental Executive Retirement Plan (the "SERP")
              is intended to provide to each participant an annual supplemental
              retirement benefit based upon their years of service with the
              Company and highest average compensation for five consecutive
              years. The annual supplemental benefit for each participant will
              be adjusted based on the actual performance of the SERP compared
              to the target. The benefit is payable for life with a minimum of
              10 years guaranteed. In order to qualify for normal retirement
              benefits, a Participant must attain age 65 with at least five
              years of participation in the SERP. Early retirement will be
              permitted beginning at age 55, after 5 years of participation in
              the Plan. Early retirement benefits will be adjusted actuarially
              to reflect the early retirement date.

                                       10
<PAGE>

              If a participant terminates employment with the Company prior to
              attaining his or her normal retirement date, other than by reason
              of early retirement, death or disability, the participant will
              forfeit all benefits under the SERP.

              The Company can amend or terminate the SERP at any time. However,
              no termination will affect the participants' accrued benefits as
              determined in accordance with the SERP or delay any payments to a
              participant beyond the time that such amount would otherwise be
              payable without regard to the amendment.

              The Company used a 4% annual compensation increase, a 8% expected
              long-term rate of return on plan assets, and a 5% discount rate
              in its calculation of the present value of its projected benefit
              obligation. The discount rate used represented the Moody's AA
              bond rate for long-term bonds as of September 2005. The Company
              recognized the following costs, assets and liabilities related to
              the SERP for the period ended December 31, 2005:
<TABLE>
<CAPTION>

<S>                                                                                       <C>
                       Net Periodic Pension Cost:
                       Service Cost                                                       $  180,000
                       Interest Cost                                                      $  103,000
                       Amortization of prior service cost                                 $  111,000
                                                                                          ----------
                       Total Net Periodic Pension Cost                                    $  394,000

</TABLE>
              DEFERRED COMPENSATION PLAN

              In addition to the retirement benefits provided by the SERP, under
              the Executive Compensation Deferral Plan (the "Deferral Plan"),
              participants will have the ability to defer a portion of their
              compensation which will be credited to an account maintained by
              the Company for the participant. Amounts contributed by
              participants are always vested. Participant deferral accounts will
              be maintained by the Company for recordkeeping purposes only.
              Participants will have no interest in any assets which may be set
              aside by the Company to meet its obligations under the Deferral
              Plan.



                                       11
<PAGE>

(F)           Earnings Per Share:

              The weighted average number of shares used to compute basic
              earnings per common share and diluted earnings per common share
              and a reconciliation of the numerator and denominator used in the
              computation for the three and six months ended December 31, 2005
              and 2004 are shown in the following table:


<TABLE>
<CAPTION>
                                                               Three Months Ended           Six Months Ended
                                                                                 December 31,
                                                            -------------------------------------------------
                                                               2005            2004     2005          2004
                                                            ----------      --------  ---------    ----------

                                                                                 (Unaudited)
                                                                                (in thousands)
<S>                                                             <C>           <C>        <C>          <C>
              Weighted average common shares issued             18,698        18,031     18,698       18,031
              Unconditional shares issuable                          -            28          -           48
              Less:  Average treasury shares
                Outstanding                                       (149)         (515)      (150)        (545)
                                                            ----------      --------  ---------    ---------
              Basic EPS shares                                  18,549        17,544     18,548       17,534
              Effect of assumed shares issued under
                treasury stock method for stock options            339           562        342          566
              Effect of partial conversion of $3 million
                Convertible Subordinated 7% Note                     -           667          -          667
                                                            ----------      --------  ---------    ---------
              Diluted EPS shares                                18,888        18,773     18,890       18,767
                                                            ==========      ========  =========    =========

              Net income available for
                common  Shareholders                        $   15,416       $ 8,230  $  23,194       $16,432
              Effect of partial conversion of $3 million
                Convertible Subordinated 7% Note                     -            11          -            22
                                                            ----------      --------  ---------    ---------
              Adjusted net income for diluted EPS           $   15,416       $ 8,241  $  23,194       $16,454
                                                            ==========      ========  =========    =========
</TABLE>

(G)           Residential Properties Completed or under Construction:

              Residential properties completed or under construction consist of
              the following:

<TABLE>
<CAPTION>


                                                                      December 31,               June 30,
                                                                          2005                     2005
                                                                      ------------             -----------
                                                                                (in thousands)
             <S>                                                             <C>                        <C>
             Under contract for sale (backlog)                        $  184,218                 $ 128,137
             Unsold                                                       73,079                    62,718
                                                                      ----------                 ---------
             Total residential properties completed
                  or under construction                               $  257,297                 $ 190,855
                                                                      ==========                 =========
</TABLE>

(H)           Restricted Stock Award:

              On March 4, 2005, the Compensation Committee of the Company
              resolved to grant Michael T. Vesey, the Company's President, Chief
              Operating Officer and a member of the Company's Board of
              Directors, 125,000 restricted shares of the Company's common stock
              pursuant to the terms of the Company's Stock Award Plan. The award
              was subject to Mr. Vesey's execution of a Restricted Stock Award
              Agreement which he has executed. The Compensation Committee also
              approved the payment of bonus compensation to Mr. Vesey sufficient
              to allow Mr. Vesey to pay the income tax liability triggered on
              each vesting date.

                                       12
<PAGE>

              The shares of restricted stock granted to Mr. Vesey will vest at a
              rate of 10,000 per year on the first through fifth anniversaries
              of the date of grant and 15,000 per year on the sixth through
              tenth anniversaries of the date of the grant, with all shares
              being fully vested by or on the tenth anniversary of the date of
              grant, assuming Mr. Vesey's continued employment with the Company.
              In addition, in the event of a change of control as defined in the
              Stock Award Plan, any shares of restricted stock not vested at
              that time will vest, assuming Mr. Vesey is then employed by the
              Company. Any shares that are not vested are subject to forfeiture
              in the event Mr. Vesey's employment with the Company terminates
              for any reason.

              On a monthly basis, the Company records compensation expense for
              the portion of the award earned along with additional compensation
              expense sufficient to cover the taxes Mr. Vesey will have to pay
              on the award.

(I)           Litigation

              From time to time the Company is named as a defendant in legal
              actions arising from its normal business activities. Although the
              amount of liability that could arise with respect to currently
              pending actions cannot be accurately predicted, in the opinion of
              the Company any such liability will not have a material adverse
              effect on the financial position, operating results or cash flows
              of the Company.

(J)           Commitments and Contingencies:

              As of December 31, 2005, the Company owned or controlled
              approximately 18,000 building lots. As part of the aforementioned
              building lots, the Company had contracted to purchase, or has
              under option, undeveloped land and improved lots for an aggregate
              purchase price of approximately $574,603,000 which is expected to
              yield approximately 9,765 building lots. Generally, the Company
              structures its land acquisitions so that it has the right to
              cancel its agreements to purchase undeveloped land and improved
              lots by forfeiture of its deposit under the agreement.
              Furthermore, purchase of the properties is usually contingent upon
              obtaining all governmental approvals and satisfaction of certain
              requirements by the Company and the sellers.

(K)           Subsequent Events:

              On January 24, 2006, Greenwood Financial, Inc., a wholly-owned
              subsidiary of the Company and other wholly-owned subsidiaries of
              the Company, as borrowers, and Orleans Homebuilders, Inc. as
              guarantor, entered into an Amended and Restated Revolving Credit
              and Loan Agreement (the "Amended and Restated Credit Agreement").
              The Amended and Restated Credit Agreement provided for the
              following amendments to the terms of its December 22, 2004
              revolving credit facility discussed in note (C) above:

              o   The revolving sublimit was increased from $500,000,000 to
                  $650,000,000.

              o   The accordion feature of the Revolving Credit Facility was
                  increased from $650,000,000 to $750,000,000.



                                       13
<PAGE>

              o   The interest rate was lowered from the LIBOR Market Index Rate
                  plus a non-default variable spread ranging from 175 basis
                  points to 237.5 basis points to the LIBOR Market Index Rate
                  plus a non-default variable spread ranging from 165 basis
                  points to 225 basis points.

              o   The maturity  date of the  Revolving  Credit  Facility was
                  extended from December 20, 2007 to December 20, 2008.

              o   The loan to value or loan to cost advance rate ranges were
                  increased from 50% to 90% of the lower of the appraised value
                  or cost of the real estate to 50% to 95% of the lower of the
                  appraised value or cost of the real estate.








                                       14
<PAGE>

                   ORLEANS HOMEBUILDERS, INC. AND SUBSIDIARIES

Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

Orleans Homebuilders, Inc. and its subsidiaries (collectively, the "Company",
"OHB" or "Orleans") market, develop and build high-quality, single-family homes,
townhomes and condominiums to serve various homebuyer segments, including
first-time, first move-up, second move-up, luxury and active adult. The Company
believes this broad range of home designs allows it to capitalize on favorable
economic and demographic trends within its markets. The Company is currently
engaged in residential real estate development in the following fourteen
markets: southeastern Pennsylvania; central New Jersey; southern New Jersey;
Orange County New York; Charlotte, Raleigh and Greensboro, North Carolina;
Richmond and Tidewater, Virginia; Orlando, Palm Coast, and Palm Bay Florida;
Chicago, Illinois; and Phoenix, Arizona. The Company's Charlotte, North Carolina
market also includes operations in adjacent counties in South Carolina. The
Company has operated in its Pennsylvania and New Jersey markets for over 85
years and began operations in its North Carolina and Virginia markets in fiscal
2001 through the acquisition of Parker & Lancaster Corporation, a privately-held
residential homebuilder. The Company entered the Orlando and Palm Coast, Florida
markets on July 28, 2003 through its acquisition of Masterpiece Homes, Inc.
("Masterpiece Homes"), a privately-held residential homebuilder. On July 28,
2004, the Company entered the Chicago, Illinois market through the acquisition
of Realen Homes, L.P. ("Realen Homes"), an established privately-held
homebuilder with operations in southeastern Pennsylvania and Chicago, Illinois.
On December 23, 2004, pursuant to an Asset Purchase Agreement of the same date,
the Company acquired, through a wholly-owned subsidiary, certain real estate
assets from Peachtree Residential Properties, LLC, a North Carolina limited
liability company and Peachtree Townhome Communities, LLC, a North Carolina
limited liability company which, at the time the Company acquired the assets,
were wholly-owned subsidiaries of Peachtree Residential Properties, Inc., a
Georgia corporation (collectively, "Peachtree Residential Properties"). In
December 2005, the Company entered the Phoenix, Arizona market as a start-up
operation via the purchase of an undeveloped parcel of land. The Company
anticipates revenue in this market during fiscal year 2007. The Results of
Operations include the activity of Realen Homes from July 28, 2004 through
December 31, 2005 as well as the revenue and expenses associated with certain
real estate assets acquired from Peachtree Residential Properties from December
22, 2004 through December 30, 2005. Unless otherwise indicated, the term the
"Company" includes the accounts of Realen Homes.

References to a given fiscal year in this Quarterly Report on Form 10-Q are to
the fiscal year ended June 30th of that year. For example, the phrases "fiscal
2006" or "2006 fiscal year" refer to the fiscal year ended June 30, 2006. When
used in this report, "northern region" refers to the Company's markets in
Pennsylvania, New Jersey and New York, which includes the southeastern
Pennsylvania operations of Realen Homes that were acquired on July 28, 2004;
"southern region" refers to the Company's markets in North Carolina and
Virginia; "Florida region" refers to the Company's market in Florida, and
"midwestern region" refers to the Company's market in Illinois.

At December 31, 2005, backlog was $599,127,000 representing 1,392 homes compared
to a backlog of $601,016,000 representing 1,580 homes at December 31, 2004. At
December 31, 2005, the Company was selling in 85 active communities and owned or
controlled approximately 18,000 building lots compared to 85 active communities
and approximately 16,000 owned or controlled building lots at December 31, 2004.
The Company considers a community active and open for sale if it has five or
more lots available for sale in that community.



                                       15
<PAGE>

Over the past 40 years, the Company has developed an expertise in all aspects of
site selection, land planning, entitlement and land development through its
experience in the highly regulated southeastern Pennsylvania and New Jersey
markets. The Company has experienced land acquisition professionals with local
market expertise and maintains oversight of land acquisitions at the corporate
level. The Company's development and local market expertise has allowed it to
assemble an attractive land position. More than 8,900 of the Company's lots are
located in the supply-constrained southeastern Pennsylvania and New Jersey
markets. The Company believes the restrictions on the development of new lots in
these markets contribute to its land position having a market value
significantly higher than its contract purchase price.

Results of Operations

The following table sets forth certain details as to residential sales activity.
The information provided is for the three and six months ended December 31, 2005
and 2004 in the case of residential revenue earned and new orders, and as of
December 31, 2005 and 2004 in the case of backlog.

A sales contract or potential sale is classified as a new order and, therefore,
becomes a part of backlog, at the time a homebuyer executes a contract to
purchase a home from the Company.

The Company experienced a cancellation rate of approximately 21% for the
quarter ended December 31, 2005, compared to a historical cancellation rate of
approximately 15%. The increased cancellation rate is primarily attributable to
investor cancellations in the Company's Florida region.

<TABLE>
<CAPTION>

                                                                   Six Months Ended December 31,
                                                            2005                                 2004
                                               -------------------------------     -------------------------------
                                                                  (Dollars in thousands)
<S>                                             <C>           <C>       <C>         <C>           <C>       <C>
NORTHERN REGION (1)                                                    Average                             Average
Pennsylvania and New Jersey:                    Amount      Homes       Price        Amount      Homes      Price
Residential revenue earned                      $149,198      326       $ 458       $135,701      309       $ 439
New orders                                       139,242      257         542        140,546      274         513
Backlog                                          240,565      466         516        287,664      625         460

SOUTHERN REGION(2)
North Carolina, South Carolina
  and Virginia:
Residential revenue earned                      $138,883      355       $ 391        $98,713      279       $ 354
New orders                                       188,967      430         439        103,065      277         374
Backlog                                          208,375      448         465        161,035      410         393

FLORIDA REGION
Residential revenue earned                       $35,727      151       $ 237        $33,831      206       $ 164
New orders                                        49,063      152         323         37,727      179         211
Backlog                                           99,538      360         276         56,744      292         194

MIDWESTERN REGION (3)
Residential revenue earned                       $55,067      132       $ 417        $48,345      133       $ 363
New orders                                        47,493      111         428         46,240      120         385
Backlog                                           50,649      118         429         95,573      253         378

COMBINED REGIONS
Residential revenue earned                     $ 378,875      964       $ 393      $ 316,590      927       $ 342
New orders                                       424,765      950         447        328,118      850         386
Backlog                                          599,127    1,392         430        601,016    1,580         380
</TABLE>



                                       16
<PAGE>

(1) Information on residential revenue earned and new orders for the six months
ending December 31, 2004 includes the acquired operations of Realen Homes'
Southeastern Pennsylvania region from the date of acquisition, July 28, 2004,
through December 31, 2005.

(2) Information on residential revenue earned and new orders for the six months
ending December 31, 2005 includes amounts acquired from Peachtree Residential
Properties for the period beginning December 23, 2004, the date the Company
acquired the assets, through December 31, 2005.

(3) Information on residential revenue earned and new orders is for the period
beginning July 28, 2004, the date the Company entered this market through its
acquisition of Realen Homes, through December 31, 2005.



<TABLE>
<CAPTION>
                                                                 Three Months Ended December 31,
                                                             2005                                2004
                                               -------------------------------     -------------------------------
                                                                  (Dollars in thousands)
<S>                                               <C>           <C>       <C>        <C>          <C>         <C>
NORTHERN REGION (1)                                                    Average                             Average
Pennsylvania and New Jersey:                     Amount      Homes      Price       Amount       Homes      Price
Residential revenue earned                       $90,145       189      $ 477       $68,418       154       $ 444
New orders                                        47,078        81        581        63,109       110         574
Backlog                                          240,565       466        516       287,664       625         460

SOUTHERN REGION(2)
North Carolina, South Carolina
  and Virginia:
Residential revenue earned                       $79,083       199      $ 397       $58,265       163       $ 357
New orders                                        75,307       172        438        56,177       147         382
Backlog                                          208,375       448        465       161,035       410         393

FLORIDA REGION
Residential revenue earned                       $17,848        72      $ 248       $19,428       117       $ 166
New orders                                        17,024        52        327        15,998        73         219
Backlog                                           99,538       360        276        56,744       292         194

MIDWESTERN REGION (3)
Residential revenue earned                       $33,836        80      $ 423       $32,167        88       $ 366
New orders                                        24,007        56        429        22,037        54         408
Backlog                                           50,649       118        429        95,573       253         378

COMBINED REGIONS
Residential revenue earned                     $ 220,912       540      $ 409     $ 178,278       522       $ 342
New orders                                       163,416       361        453       157,321       384         410
Backlog                                          599,127     1,392        430       601,016     1,580         380
</TABLE>

(1) Information on residential revenue earned and new orders for the three
months ending December 31, 2004 includes the acquired operations of Realen
Homes' Southeastern Pennsylvania region from the date of acquisition, July 28,
2004, through December 31, 2005.

(2) Information on residential revenue earned and new orders for the three
months ending December 31, 2005 includes amounts acquired from Peachtree
Residential Properties for the period beginning December 23, 2004, the date the
Company acquired the assets, through December 31, 2005.

(3) Information on residential revenue earned and new orders is for the period
beginning July 28, 2004, the date the Company entered this market through its
acquisition of Realen Homes, through December 31, 2005.

                                       17
<PAGE>


                  Three and Six Months Ended December 31, 2005

Orders and Backlog

New orders for the six months ended December 31, 2005 increased $96,647,000, or
29.5%, to $424,765,000 on 950 homes, compared to $328,118,000 on 850 homes for
the six months ended December 31, 2004. The average price per home of new orders
increased by approximately 15.8% to $447,000 for the six months ended December
31, 2005 compared to $386,000 for the six months ended December 31, 2004.

New orders for the three months ended December 31, 2005 increased $6,095,000, or
3.9%, to $163,416,000 on 361 homes, compared to $157,321,000 on 384 homes for
the three months ended December 31, 2004. The average price per home of new
orders increased by approximately 10.5% to $453,000 for the three months ended
December 31, 2005 compared to $410,000 for the three months ended December 31,
2004.

The backlog at December 31, 2005 decreased $1,889,000, or 0.3%, to $599,127,000
on 1,392 homes compared to the backlog at December 31, 2004 of $601,016,000 on
1,580 homes. The decrease in the backlog was attributable to decreases in new
orders in the northern region which were partially offset by increases in new
orders in the southern and Florida, and midwestern regions. The average price
per home included in the Company's backlog increased 13.2% to $430,000 at
December 31, 2005 compared to $380,000 at December 31, 2004.

NORTHERN REGION:

New orders for the six months ended December 31, 2005 decreased $1,304,000 to
$139,242,000, or 1.0%, on 257 homes, compared to $140,546,000 on 274 homes for
the six months ended December 31, 2004. The decrease in new orders is
attributable to the delay in the start of new communities to replace communities
that were sold out at the conclusion of fiscal 2005 as well as delays in the
opening of new model homes in these replacement communities. The delays are due
to significant government regulations imposed on developers and homebuilders in
the northern region. The decrease was offset by increases in new orders in the
communities acquired as part of the Realen Homes acquisition. New orders for the
acquired Realen Homes communities increased $13,143,000 to $35,451,000, or
58.9%, on 76 homes for the six months ended December 31, 2005 compared to
$22,308,000 on 49 homes for the six months ended December 31, 2004. The increase
in new orders in the acquired Realen Homes communities was attributable to the
Company's introduction of improved product types in these acquired communities.
The average price per home of new orders increased by 5.7% to $542,000 for the
six months ended December 31, 2005 compared to $513,000 for the six months ended
December 31, 2004. The Company believes that it has been able to increase sales
prices due to the demand for new homes resulting from the growing population
coupled with the limited supply of entitled lots for residential housing in
Pennsylvania and New Jersey due to significant governmental regulations imposed
on developers and land builders.



                                       18
<PAGE>

New orders for the three months ended December 31, 2005 decreased $16,031,000 to
$47,078,000, or 25.4%, on 81 homes, compared to $63,109,000 on 110 homes for the
three months ended December 31, 2004. The decrease in new orders is attributable
to the delay in the start of new communities to replace communities that were
sold out at the conclusion of fiscal 2005. The delays are due to significant
government regulations imposed on developers and homebuilders in the northern
region. In addition, the Company has experienced some slowing of potential
homebuyers visiting its sales communities during the last three months. The
Company believes this is due to a reduction in consumer confidence during the
second quarter of its fiscal year coupled with a delay in the opening of new
model homes in the Company's replacement communities. However, the Company has
experienced some improvement in potential homebuyer traffic at the start of the
third quarter as compared to the second quarter of fiscal 2006. The average
price per home of new orders increased by 1.2% to $581,000 for the three months
ended December 31, 2005 compared to $574,000 for the three months ended December
31, 2004. The change in the average price per home of new orders was impacted by
a shift in the mix of new orders for the three months ended December 31, 2005
compared to the three months ended December 31, 2004. Specifically, multi-family
product, which typically has a lower price point than single family product,
comprised a larger percentage of new orders than single family product for the
three months ended December 31, 2005 when compared to the three months ended
December 31, 2004. This shift in product mix reduced the increase in the average
selling price when compared with the prior year. The Company still believes that
the strong demand for new homes resulting from the growing population coupled
with the limited supply of entitled lots for residential housing in Pennsylvania
and New Jersey due to significant governmental regulations imposed on developers
and land builders will continue to have a positive impact on home pricing trends
in the northern region.

The Company had 26 active selling communities in the northern region as of
December 31, 2005 compared to 25 active selling communities as of December 31,
2004.

SOUTHERN REGION:

New orders for the six months ended December 31, 2005 increased $85,902,000 to
$188,967,000, or 83.3%, on 430 homes, compared to $103,605,000 on 277 homes for
the six months ended December 31, 2004. The increase in new orders was
attributable to new orders of $24,730,000 on 51 homes related to the eight
communities acquired from Peachtree Residential Properties as well as the
opening of new communities during the six months ended December 31, 2005. The
new communities replaced existing communities that were sold-out during fiscal
2005. The average price per home of new orders increased by 17.4% to $439,000
for the six months ended December 31, 2005 compared to $374,000 for the six
months ended December 31, 2004. This increase in the average price per home of
new orders is attributable to two factors. First, the Company increased prices
in a majority of those communities in the region open during the six months
ended December 31, 2005 when compared with the same communities and products
offered for sale in the comparable prior year period. Second, the Company opened
new communities in the region during the six months ended December 31, 2005 that
have higher price points than the communities they are replacing that were open
during the six months ended December 31, 2004.



                                       19
<PAGE>

New orders for the three months ended December 31, 2005 increased $19,130,000 to
$75,307,000, or 34.1%, on 172 homes, compared to $56,177,000 on 147 homes for
the three months ended December 31, 2004. The increase in new orders was
attributable to new orders of $11,391,000 on 22 homes related to the eight
communities acquired from Peachtree Residential Properties as well as the
opening of new communities during the three months ended December 31, 2005. The
new communities replaced existing communities that were sold-out during fiscal
2005. The average price per home of new orders increased by 14.7% to $438,000
for the three months ended December 31, 2005 compared to $382,000 for the three
months ended December 31, 2004. This increase in the average price per home of
new orders is attributable to two factors. First, the Company increased prices
in a majority of those communities in the region open during the three months
ended December 31, 2005 when compared with the same communities and products
offered for sale in the comparable prior year period. Second, the Company opened
new communities in the region during the three months ended December 31, 2005
that have higher price points than the communities they are replacing that were
open during the three months ended December 31, 2004.

The Company had 47 active selling communities in the southern region as of
December 31, 2005 and December 31, 2004.

FLORIDA REGION:

New orders for the six months ended December 31, 2005 increased $11,336,000 to
$49,063,000, or 30.1%, on 152 homes, compared to $37,727,000 on 179 homes for
the six months ended December 31, 2004. The increase in new order dollars was
attributable to pricing increases resulting from growing demand for new housing
as well a shift in the region towards move-up product which commands greater
pricing power than entry level product. The decrease in the number of new orders
was attributable to development delays which have postponed the opening of
several new communities in the region. The increase in the demand for new
housing and the movement towards move-up product has had a positive impact on
the average price per home of new orders. The average price per home of new
orders increased by 53.1% to $323,000 for the six months ended December 31, 2005
compared to $211,000 for the six months ended December 31, 2004.

New orders for the three months ended December 31, 2005 increased $1,026,000 to
$17,024,000, or 6.4%, on 52 homes, compared to $15,998,000 on 73 homes for the
three months ended December 31, 2004. The increase in new order dollars was
attributable to pricing increases resulting from growing demand for new housing
as well a shift in the region towards move-up product which commands greater
pricing power than entry level product. The decrease in the number of new orders
was attributable to development delays which have postponed the opening of
several new communities in the region. The increase in the demand for new
housing and the movement towards move-up product has had a positive impact on
the Company's average price per home of new orders. The average price per home
of new orders increased by 49.3% to $327,000 for the three months ended December
31, 2005 compared to $219,000 for the three months ended December 31, 2004.



                                       20
<PAGE>

The Company had four active selling communities in the Florida region as of
December 31, 2005, compared to eight active selling communities as of December
31, 2004. Despite the reduction in the number of communities, the Company
expects a continued increase in residential revenue and units sold in the
Florida region as the Company owns or controls 2,174 lots at December 31, 2005
compared to 1,641 lots at December 31, 2004. The Company anticipates having
seven active selling communities in the region by the end of the fiscal year
2006.

MIDWESTERN REGION:

The Company entered the midwestern region through the acquisition of Realen
Homes on July 28, 2004. New orders for six months ended December 31, 2005
increased $1,253,000 to $47,493,000, or 2.7%, on 111 homes compared to
$46,240,000 on 120 homes for the six months ended December 31, 2004. The average
price per home of new orders increased by 11.2% to $428,000 for the six months
ended December 31, 2005 compared to $385,000 for the six months ended December
31, 2004. The increase in average price per home of new orders was attributable
to price increases in a majority of those communities open during the six months
ended December 31, 2005 when compared with the same communities and products
offered for sale in the comparable prior year period.

New orders for three months ended December 31, 2005 increased $1,970,000 to
$24,007,000, or 8.9%, on 56 homes compared to $22,037,000 on 54 homes for the
three months ended December 31, 2004. The average price per home of new orders
increased by 5.2% to $429,000 for the three months ended December 31, 2005
compared to $408,000 for the three months ended December 31, 2004. The increase
in average price per home of new orders was attributable to price increases in a
majority of those communities open during the three months ended December 31,
2005 when compared with the same communities and products offered for sale in
the comparable prior year period.

The Company had 8 active selling communities in the midwestern region as of
December 31, 2005, compared to 5 active selling communities as of December 31,
2004.

Total Earned Revenues

Total earned revenues for the six months ended December 31, 2005 increased
$64,122,000, to $384,292,000, or 20.0%, compared to $320,170,000 for the six
months ended December 31, 2004. Residential revenue earned from the sale of
residential homes included 964 homes totaling $378,875,000 during the six months
ended December 31, 2005, as compared to 927 homes totaling $316,590,000 during
the six months ended December 31, 2004. The average selling price per home
delivered in the six months ended December 31, 2005 increased by approximately
14.9% to $393,000 for the six months ended December 31, 2005 compared to
$342,000 for the six months ended December 31, 2004.

Total earned revenues for the three months ended December 31, 2005 increased
$44,643,000, to $224,651,000, or 24.8%, compared to $180,008,000 for the three
months ended December 31, 2004. Residential revenue earned from the sale of
residential homes included 540 homes totaling $220,912,000 during the three
months ended December 31, 2005, as compared to 522 homes totaling $178,278,000
during the three months ended December 31, 2004. The average selling price per
home delivered in the three months ended December 31, 2005 increased by
approximately 19.6% to $409,000 for the three months ended December 31, 2005
compared to $342,000 for the three months ended December 31, 2004.



                                       21
<PAGE>

NORTHERN REGION:
Residential revenue earned for the six months ended December 31, 2005 increased
$13,497,000 to $149,198,000, or 10.0%, on 326 homes delivered as compared to
$135,701,000 on 309 homes delivered during the six months ended December 31,
2004. The increase in residential revenue earned and new home deliveries is a
result of increased homebuilding production in the region coupled with a shift
in the mix of homes delivered. Specifically, multi-family product, which
typically has a shorter building cycle than single family product, comprised a
larger percentage of the total homes delivered in the region during the six
months ended December 31, 2005 than single family product when compared to the
six months ended December 31, 2004. The average selling price per home delivered
in the six months ended December 31, 2005 increased 4.3% to $458,000 for the six
months ended December 31, 2005 compared to $439,000 for the six months ended
December 31, 2004.

Residential revenue earned for the three months ended December 31, 2005
increased $21,727,000 to $90,145,000, or 31.8%, on 189 homes delivered as
compared to $68,418,000 on 154 homes delivered during the three months ended
December 31, 2004. The increase in residential revenue earned and new home
deliveries is a result of increased homebuilding production in the region
coupled with a shift in the mix of homes delivered. Specifically, multi-family
product, which typically has a shorter building cycle than single family
product, comprised a larger percentage of the total homes delivered in the
region during the three months ended December 31, 2005 than single family
product when compared to the three months ended December 31, 2004. The average
selling price per home delivered in the three months ended December 31, 2005
increased 7.4% to $477,000 for the three months ended December 31, 2005 compared
to $444,000 for the three months ended December 31, 2004.

SOUTHERN REGION:

Residential revenue earned for the six months ended December 31, 2005 increased
$40,170,000 to $138,883,000, or 40.7%, on 355 homes delivered as compared to
$98,713,000 on 279 homes delivered during the six months ended December 31,
2004. The increase in residential revenue earned and homes delivered was
attributable to continued new order growth as the Company continues to expand in
the region. The 8 communities acquired from Peachtree Residential Properties
contributed $21,640,000 on 49 homes during the six months ended December 31,
2005. The average price per home delivered increased 10.5% to $391,000 for the
six months ended December 31, 2005 compared to $354,000 for the six months ended
December 31, 2004. The increase in the average price per home delivered was
attributable to increases in the average price per home of new orders in fiscal
2006 coupled with an increase in revenue attributable to customer-selected
options. In addition, a change in the product mix of homes delivered during the
six months ended December 31, 2005 compared to the six months ended December 31,
2004 contributed to the increase in the average price per home delivered.
Specifically, the Company delivered a larger percentage of luxury and move-up
homes during the six months ended December 31, 2005 than during the six months
ended December 31, 2004.

Residential revenue earned for the three months ended December 31, 2005
increased $20,818,000 to $79,083,000, or 35.7%, on 199 homes delivered as
compared to $58,265,000 on 163 homes delivered during the three months ended
December 31, 2004. The increase in residential revenue earned and homes
delivered was attributable to continued new order growth as the Company
continues to expand in the region. The 8 communities acquired from Peachtree
Residential Properties contributed $10,354,000 on 23 homes during the three
months ended December 31, 2005. The average price per home delivered increased
11.2% to $397,000 for the three months ended December 31, 2005 compared to
$357,000 for the three months ended December 31, 2004. The increase in the
average price per home delivered was attributable to increases in the average
price per home of new orders in fiscal 2006 coupled with an increase in revenue
attributable to customer-selected options. In addition, a change in the product
mix of homes delivered during the three months ended December 31, 2005 compared
to the three months ended December 31, 2004 contributed to the increase in the
average price per home delivered. Specifically, the Company delivered a larger
percentage of luxury and move-up homes during the three months ended December
31, 2005 than during the three months ended December 31, 2004.


                                       22
<PAGE>

FLORIDA REGION:

Residential revenue earned for the six months ended December 31, 2005 increased
$1,896,000 to $35,727,000, or 5.6%, on 151 homes, compared to $33,831,000 on 206
homes for the six months ended December 31, 2004. The increase is primarily
attributable to a 44.5% increase in the average selling price per home delivered
to $237,000 for the six months ended December 31, 2005 compared to $164,000 for
the six months ended December 31, 2004. The increase in the average selling
price per home delivered is attributable to the demand for new housing as well a
shift in the region toward move-up product which commands greater pricing power
than entry level product.

Residential revenue earned for the three months ended December 31, 2005
decreased $1,580,000 to $17,848,000, or 8.1%, on 72 homes, compared to
$19,428,000 on 117 homes for the three months ended December 31, 2004. The
decrease is primarily attributable to government related delays in recording the
record plats and obtaining building permits in some of the region's communities.
The average price per home delivered increased 49.4% to $248,000 for the three
months ended December 31, 2005 compared to $166,000 for the three months ended
December 31, 2004. The increase in the average selling price per home delivered
is attributable to the demand for new housing as well a shift in the region
towards move-up product which commands greater pricing power than entry level
product.

MIDWESTERN REGION:

The Company entered the midwestern region on July 28, 2004 through the
acquisition of Realen Homes. Residential revenue for the six months ended
December 31, 2005, increased $6,722,000 to $55,067,000, or 13.9%, on 132 homes,
compared to $48,345,000 on 133 homes for the six months ended December 31, 2004.
The increase is primarily attributable to a 14.9% increase in the average
selling price per home to $417,000 for the six months ended December 31, 2005
compared to $363,000 for the six months ended December 31, 2004.

Residential revenue for the three months ended December 31, 2005, increased
$1,669,000 to $33,836,000, or 5.2%, on 80 homes, compared to $32,167,000 on 88
homes for the three months ended December 31, 2004. The increase is primarily
attributable to a 15.6% increase in the average selling price per home to
$423,000 for the three months ended December 31, 2005 compared to $366,000 for
the three months ended December 31, 2004.

Other Income

Other income consists primarily of property management fees and mortgage
processing income. Other income for the six months ended December 31, 2005
increased $576,000 to $4,064,000, or 16.5%, compared to $3,488,000 for the six
months ended December 31, 2004. The increase is primarily attributable to
increases in mortgage processing revenue as a result of the increase in
residential property revenue of the Company and interest income earned during
the six months ended December 31, 2005 compared to the six months ended December
31, 2004.

Other income for the three months ended December 31, 2005 increased $699,000 to
$2,386,000, or 41.4%, compared to $1,687,000 for the three months ended
December 31, 2004. The increase is primarily attributable to increases in
mortgage processing revenue as a result of the increase in residential property
revenue of the Company and interest income earned during the three months ended
December 31, 2005 compared to the three months ended December 31, 2004.



                                       23
<PAGE>

Costs and Expenses

Costs and expenses for the six months ended December 31, 2005 increased
$52,298,000 to $345,536,000, or 17.8%, compared with the six months ended
December 31, 2004. The cost of residential properties for the six months ended
December 31, 2005 increased $41,042,000 to $292,587,000, or 16.3%, when compared
with the six months ended December 31, 2004. The increase in cost of residential
properties was primarily attributable to the overall increase in residential
revenue as noted above. The consolidated gross profit margin for the six months
ended December 31, 2005 increased 2.2% to 22.8% compared to 20.5% for the six
months ended December 31, 2004.

Interest included in the costs and expenses of residential properties and land
sold for the six months ended December 31, 2005 and December 31, 2004 was
$5,430,000 and $4,821,000, respectively. The interest incurred during the
construction periods is capitalized to inventory and then expensed to the cost
of residential properties in the period in which the home settles.

The increase in gross profit margin is primarily attributable to the change in
product mix toward more homes for move-up buyers and the introduction of Orleans
models at the communities the Company acquired from Realen Homes. In addition,
the gross profit margin is favorably affected by the consolidated reduced
inventory step-up amortization related to acquisition accounting for inventory
delivered during the six months ended December 31, 2005 as compared to the six
months ended December 31, 2004.

Costs and expenses for the three months ended December 31, 2005 increased
$32,742,000 to $199,295,000, or 19.7%, compared with the three months ended
December 31, 2004. The cost of residential properties for the three months ended
December 31, 2005 increased $27,348,000 to $169,302,000, or 19.3%, when compared
with the three months ended December 31, 2004. The increase in cost of
residential properties was primarily attributable to the overall increase in
residential revenue as noted above. The consolidated gross profit margin for the
three months ended December 31, 2005 increased 3.0% to 23.4% compared to 20.4%
for the three months ended December 31, 2004.

Interest included in the costs and expenses of residential properties and land
sold for the three months ended December 31, 2005 and December 31, 2004 was
$3,211,000 and $2,618,000, respectively. The interest incurred during the
construction periods is capitalized to inventory and then expensed to the cost
of residential properties in the period in which the home sale to the Company's
customer settles.

The increase in gross profit margin is primarily attributable to the change in
product mix toward more homes for move-up buyers and the introduction of Orleans
models at the communities the Company acquired from Realen Homes. In addition,
the gross profit margin is favorably affected by the consolidated reduced
inventory step-up amortization related to acquisition accounting for inventory
delivered during the three months ended December 31, 2005 as compared to the
three months ended December 31, 2004.



                                       24
<PAGE>

The Company sells a variety of home types in various communities and regions,
each yielding a different gross profit margin. As a result, depending on the mix
of both communities and of home types delivered, the consolidated gross profit
margin may fluctuate up or down on a periodic basis and periodic profit margins
may not be representative of the consolidated gross profit margin for the year.


Selling, General & Administrative Expenses

For the six months ended December 31, 2005, selling, general and administrative
expenses increased $9,320,000 to $48,575,000, or 23.7%, when compared with the
six months ended December 31, 2004. Variable selling expense as a percentage of
revenue for the six months ended December 31, 2005 is consistent with that for
the six months ended December 31, 2004. Fixed selling, general and
administrative expenses for the six months ended December 31, 2005 are higher
than that for the six months ended December 31, 2004 due to pension expense
recognized in connection with the Company's adoption of a supplemental executive
retirement plan, forfeited deposits and land pre-acquisition costs related to
abandoned land development projects, as well as incentive compensation, sales
start-up, and advertising expenditures.

The selling, general and administrative expenses as a percentage of residential
revenue earned for the six months ended December 31, 2005 increased 0.4% to
12.8% as compared to the 12.4% for the six months ended December 31, 2004. The
increased percentage is primarily due to the increased fixed selling, general
and administrative expenses discussed above.

For the three months ended December 31, 2005, selling, general and
administrative expenses increased $4,068,000 to $27,228,000, or 17.6%, when
compared with the three months ended December 31, 2004. Variable selling expense
as a percentage of revenue for the three months ended December 31, 2005 is
consistent with that for the three months ended December 31, 2004. Fixed
selling, general and administrative expenses for the three months ended December
31, 2005 are higher than that for the three months ended December 31, 2004 due
to pension expense recognized in connection with the Company's adoption of an
supplemental executive retirement plan, forfeited deposits and land
pre-acquisition costs related to abandoned land development projects, as well as
incentive compensation, and advertising expenditures.

The selling, general and administrative expenses as a percentage of residential
revenue earned for the three months ended December 31, 2005 decreased 0.7% to
12.3% as compared to the 13.0% for the three months ended December 31, 2004. The
decreased percentage is primarily attributable to the ability to obtain
economies of scale through a reduction of the fixed selling, general and
administrative costs acquired in the Realen acquisition.

Income Tax Expense

Income tax expense for the six months ended December 31, 2005 increased
$5,062,000 to $15,562,000, or 48.2% from $10,500,000 for the six months ended
December 31, 2004. Income tax expense as a percentage of income from operations
before income taxes was 40.2% and 39.0% for the six months ended December 31,
2005 and 2004, respectively. The increase in income tax expense for the six
months ended December 31, 2005 is attributable to an increase in pre-tax net
income during the six months ended December 31, 2005 compared to the six months
ended December 31, 2004 coupled with a higher effective tax rate. The increase
in the effective tax rate is due to a decrease in favorable permanent
differences from pervious acquisitions, partially offset by the inclusion of tax
credits for the tax deduction of qualified production activities provided by the
American Jobs Creation Act of 2004.



                                       25
<PAGE>

Income tax expense for the three months ended December 31, 2005 increased
$4,715,000 to $9,940,000, or 90.2% from $5,225,000 for the three months ended
December 31, 2004. Income tax expense as a percentage of income from operations
before income taxes was 39.2% and 38.8% for the three months ended December 31,
2005 and 2004, respectively. The increase in income tax expense for the three
months ended December 31, 2005 is attributable to an increase in pre-tax net
income during the three months ended December 31, 2005 compared to the three
months ended December 31, 2004 coupled with a higher effective tax rate. The
increase in the effective tax rate is due to a decrease in favorable permanent
differences from pervious acquisitions, partially offset by the inclusion of tax
credits for the tax deduction of qualified production activities provided by the
American Jobs Creation Act of 2004.

Net Income

Net income for the six months ended December 31, 2005 increased $6,762,000, or
41.2%, to $23,194,000, compared with $16,432,000 for the six months ended
December 31, 2004. The increase in net income was attributable to increased
residential revenue earned during the six months ended December 31, 2005 coupled
with improved gross profit margins.

Net income for the three months ended December 31, 2005 increased $4,715,000, or
87.3%, to $15,416,000, compared with $8,230,000 for the three months ended
December 31, 2004. The increase in net income was attributable to increased
residential revenue earned during the three months ended December 31, 2005
coupled with improved gross profit margins.

Liquidity and Capital Resources

On an ongoing basis, the Company requires capital to purchase and develop land,
to construct units, to fund related carrying costs and overhead and to fund
various advertising and marketing programs to facilitate sales. These
expenditures include site preparation, roads, water and sewer lines, impact fees
and earthwork, as well as the construction costs of the homes and amenities. The
Company's sources of capital include funds derived from operations, sales of
assets and various borrowings, most of which are secured. The Company believes
that funds generated from operations and financial commitments from available
lenders will provide sufficient capital for the Company to meet its existing
operating needs.

Trust Preferred Securities

On November 23, 2005, the Company issued $75,000,000 of trust preferred
securities which mature on January 30, 2036 and are callable, in whole or in
part, at par plus accrued interest on or after January 30, 2011. For the first
ten years, the securities have a fixed interest rate of 8.61% per annum.
Thereafter, the securities have a floating interest rate equal to three-month
LIBOR plus 360 basis points per annum, resetting quarterly. In the event the
Company fails to meet certain financial covenants, the applicable rate of
interest will be increased by 300 basis points until such time as the Company is
in compliance with the financial covenants, then the interest rate will return
to its original amount. The transaction is treated as debt for financial
statement purposes. The Company used proceeds from the sale of these securities
to repay outstanding obligations under the Revolving Credit Facility discussed
above.



                                       26
<PAGE>

On September 20, 2005, the Company issued $30,000,000 of trust preferred
securities which mature on September 30, 2035 and are callable, in whole or in
part, at par plus accrued interest on or after September 30, 2010. For the first
ten years, the securities have a fixed interest rate of 8.52% per annum.
Thereafter, the securities have a floating interest rate equal to three-month
LIBOR plus 380 basis points per annum, resetting quarterly. The transaction is
treated as debt for financial statement purposes. The Company used proceeds from
the sale of these securities for land purchases and general corporate purposes.
The obligations relating to the trust preferred securities are subordinated to
the Revolving Credit Facility.

Revolving Credit Facility

At December 31, 2005, the Company had $29,126,000 of borrowing capacity under
its secured revolving credit facility discussed below. A majority of the
Company's debt is variable rate, based on 30-day LIBOR or the prime rate, and
therefore, the Company is exposed to market risk in connection with interest
rate changes. At December 31, 2005, the 30-day LIBOR and prime rates of interest
were 4.39% and 7.25%, respectively.

On January 24, 2006, Greenwood Financial, Inc., a wholly-owned subsidiary of the
Company and other wholly-owned subsidiaries of the Company, as borrowers, and
Orleans Homebuilders, Inc. as guarantor, entered into an Amended and Restated
Revolving Credit and Loan Agreement (the "Amended and Restated Credit
Agreement"). The Amended and Restated Credit Agreement provided for the
following amendments to the terms of its December 22, 2004 revolving credit
facility:

                  The revolving sublimit was increased from $500,000,000 to
                  $650,000,000.

                  The accordion feature of the Revolving Credit Facility was
                  increased from $650,000,000 to $750,000,000.

                  The interest rate was lowered from the LIBOR Market Index Rate
                  plus a non-default variable spread ranging from 175 basis
                  points to 237.5 basis points to the LIBOR Market Index Rate
                  plus a non-default variable spread ranging from 165 basis
                  points to 225 basis points.

                  The maturity date of the Revolving Credit Facility was
                  extended from December 20, 2007 to December 20, 2008.

                  The loan to value or loan to cost advance rate ranges were
                  increased from 50% to 90% of the lower of the appraised value
                  or cost of the real estate to 50% to 95% of the lower of the
                  appraised value or cost of the real estate.

In connection with the Amended and Restated Credit Agreement, Orleans
Homebuilders entered into and amended Guaranty Agreement.

Employee Retirement Plan

On December 1, 2005, the Company adopted a non-qualified target defined benefit
retirement plan, effective as of September 1, 2005, which covers a select group
of management employees of the Company. This Supplemental Executive Retirement
Plan (the "SERP") is intended to provide to each participant an annual
supplemental retirement benefit based upon their years of service with the
Company and highest average compensation for five consecutive years. The annual
supplemental benefit for each participant will be adjusted based on the actual
performance of the SERP compared to the target. The benefit is payable for life
with a minimum of 10 years guaranteed. In order to qualify for normal retirement
benefits, a Participant must attain age 65 with at least five years of
participation in the SERP. Early retirement will be permitted beginning at age
55, after 5 years of participation in the Plan. Early retirement benefits will
be adjusted actuarially to reflect the early retirement date.



                                       27
<PAGE>

If a participant terminates employment with the Company prior to attaining his
or her normal retirement date, other than by reason of early retirement, death
or disability, the participant will forfeit all benefits under the SERP.

The Company can amend or terminate the SERP at any time. However, no termination
will affect the participants' accrued benefits as determined in accordance with
the SERP or delay any payments to a participant beyond the time that such amount
would otherwise be payable without regard to the amendment.

The Company used a 4% annual compensation increase, a 8% expected long-term
rate of return on plan assets, and a 5% discount rate in its calculation of the
present value of its projected benefit obligation. The discount rate used
represented the Moody's AA bond rate for long-term bonds as of September 2005.
The Company recognized the following costs, assets and liabilities related to
the SERP for the period ended December 31, 2005:


            Net Periodic Pension Cost:
            Service Cost                                              $  180,000
            Interest Cost                                             $  103,000
            Amortization of prior service cost                        $  111,000
                                                                      ----------
            Total Net Periodic Pension Cost                           $  394,000

Deferred Compensation Plan

In addition to the retirement benefits provided by the SERP, under the Executive
Compensation Deferral Plan (the "Deferral Plan"), participants will have the
ability to defer a portion of their compensation which will be credited to an
account maintained by the Company for the participant. Amounts contributed by
participants are always vested. Participant deferral accounts will be maintained
by the Company for recordkeeping purposes only. Participants will have no
interest in any assets which may be set aside by the Company to meet its
obligations under the Deferral Plan.

Share Repurchase Program

In September 2005, the Board of Directors authorized the repurchase of up to one
million shares of the Company's common stock. The repurchases, which represent
up to 5% of the Company's 18.7 million shares of common stock currently
outstanding, will be made from time to time through open market purchases or
privately negotiated transactions at the Company's discretion and in accordance
with the rules of the Securities and Exchange Commission. The amount and timing
of the repurchases will depend on market conditions and other factors.



                                       28
<PAGE>

During the six months ended December 31, 2005, the Company repurchased 90,900
shares of its common stock for a total purchase price of $1,744,143.

Cash Flow Statement

Net cash used in operating activities for the six months ended December 31, 2005
was $151,509,000, compared to net cash used in operating activities for the
prior year six month period of $158,496,000. The decrease in net cash used in
operating activities during the six months ended December 31, 2005 was primarily
attributable to an increase in net income partially offset by a net increase in
cash used for real estate held for development and sale and accounts payable and
other liabilities. Net cash used in investing activities for the six months
ended December 31, 2005 was $678,000, compared to $57,286,000 for the prior
fiscal period. This decrease was primarily related to the acquisition of Realen
Homes on July 28, 2004. Net cash provided by financing activities for the six
months ended December 31, 2005 was $132,310,000, compared to $201,583,000 for
the prior fiscal period. The decrease in net cash provided by financing
activities is primarily attributable to borrowings used to acquire Realen Homes
during the six months ended December 31, 2004.

Lot Positions

As of December 31, 2005, the Company owned or controlled approximately 18,000
building lots. Included in the aforementioned lots, the Company had contracted
to purchase, or has under option, undeveloped land and improved building lots
for an aggregate purchase price of approximately $574,603,000 that are expected
to yield approximately 9,765 building lots.

Undeveloped Land Acquisitions

In recent years, the process of acquiring desirable undeveloped land has become
extremely competitive, particularly in the northern region, mostly due to the
lack of available parcels suitable for development. In addition, expansion of
regulation in the housing industry has increased the time it takes to acquire
undeveloped land with all of the necessary governmental approvals required to
begin construction. Generally, the Company structures its land acquisitions so
that it has the right to cancel its agreements to purchase undeveloped land by
forfeiture of its deposit under the agreement. For the six months ended December
31, 2005, the Company forfeited $240,000 of land deposits and expensed an
additional $687,000 of pre-acquisition costs related to the cancellation of
purchase agreements. Included in the balance sheet captions "Inventory not owned
- Variable Interest Entities" and "Land deposits and costs of future
development," at December 31, 2005 the Company had $35,990,000 invested in 71
parcels of undeveloped land, of which $21,587,000 is deposits, a portion of
which is non-refundable. At December 31, 2005 overall undeveloped parcels of
land under contract had an aggregate purchase price of approximately
$481,649,000 and were expected to yield approximately 8,682 building lots.

The Company attempts to further mitigate the risks involved in acquiring
undeveloped land by structuring its undeveloped land acquisitions so that the
deposits required under the agreements coincide with certain benchmarks in the
governmental approval process, thereby limiting the amount at risk. This process
allows the Company to periodically review the approval process and make a
decision on the viability of developing the acquired parcel based upon expected
profitability. In some circumstances the Company may be required to make
deposits solely due to the passage of time. This structure still provides the
Company an opportunity to periodically review the viability of developing the
parcel of land. In addition, the Company primarily structures its agreements to
purchase undeveloped land to be contingent upon obtaining all governmental
approvals necessary for construction. Under most agreements, the Company secures
the responsibility for obtaining the required governmental approvals as the
Company believes that it has significant expertise in this area. The Company
intends to complete the acquisition of undeveloped land after all governmental
approvals are in place. In certain circumstances, however, when all extensions
have been exhausted, the Company must make a decision on whether to proceed with
the purchase even though all governmental approvals have not yet been received.
In these circumstances, the Company performs reasonable due diligence to
ascertain the likelihood that the necessary governmental approvals will be
granted.


                                       29
<PAGE>

Improved Lot Acquisitions

The process of acquiring improved building lots from developers is extremely
competitive. The Company competes with many national homebuilders to acquire
improved building lots, some of which have greater financial resources than the
Company. The acquisition of improved lots is usually less risky than the
acquisition of undeveloped land as the contingencies and risks involved in the
land development process are borne by the developer. In addition, governmental
approvals are generally in place when the improved building lots are acquired.

At December 31, 2005, the Company had contracted to purchase or had under option
approximately 1,083 improved building lots for an aggregate purchase price of
approximately $92,954,000. At December 31, 2005, the Company had $5,580,000
invested in these improved building lots, of which $5,274,000 is deposits. There
were no deposits forfeited during the six months ended December 31, 2005 with
respect to improved building lots.

The Company expects to utilize primarily the Revolving Credit Facility as
described above as well as other existing capital resources, to finance the
acquisitions of undeveloped land and improved lots described above. The Company
anticipates completing a majority of these acquisitions during the next several
years.

Critical Accounting Policies

For a discussion the Company's critical accounting policies, see "Critical
Accounting Policies" under Item 7 of the Company's Annual Report on Form 10-K
for fiscal year ended June 30, 2005 filed with the Securities and Exchange
Commission.

Recent Accounting Pronouncements

In December 2004, the FASB revised FAS No. 123 through the issuance of FAS No.
123-R "Share Based Payment", revised ("FAS 123-R"). FAS 123-R was effective for
the Company commencing July 1, 2005. FAS 123-R, among other things, eliminates
the alternative to use the intrinsic value method of accounting for stock based
compensation and requires entities to recognize the cost of employee services
received in exchange for awards of equity instruments based on the grant-date
fair value of those awards (with limited exceptions). The fair value based
method in FAS 123-R is similar to the fair-value-based method in FAS No. 123 in
most respects, subject to certain key differences. As the Company previously
adopted the fair value recognition provisions of FAS No. 123 prospectively for
all stock awards granted, commencing on July 1, 2002, the impact of the modified
prospective adoption of FAS 123-R did not have a significant impact on the
financial position or results of operations of the Company. The Company
amortizes compensation expense on a straight line basis over the vesting period
of each option grant. For the six months ended December 31, 2005, the Company
recorded pretax compensation expense associated with stock awards of $267,000.
Total compensation cost related to nonvested awards not yet recognized of
$3,920,000 will be recognized according to vesting schedules through March 2015.
The Company utilizes the Black-Scholes option pricing model to calculate the
compensation expense associated with stock options.

                                       30
<PAGE>

In December 2004, the FASB issued FASB Staff Position No. FAS 109-1,
"Application of FASB Statement No. 109, Accounting for Income Taxes, for the Tax
Deduction on Qualified Production Activities Provided by the American Jobs
Creation Act of 2004" (FSP FAS 109-1). FSP FAS 109-1 clarifies that the
deduction will be treated as a "special deduction" as described in Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." As such,
the special deduction has no effect on deferred tax assets and liabilities
existing at the date of enactment. The impact of the deduction will be reported
in the period in which the deduction is claimed. The Company files a
consolidated return on a calendar year. Accordingly, the Company began
reflecting the special deduction with respect to its operations effective
January 1, 2005. Its expected impact was and will be to lower the effective tax
provision in the periods in which the deduction may be claimed and that this
benefit will increase as the deduction is phased in under the statute.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

In addition to historical information, this report contains statements relating
to future events or our future results. These statements are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and are subject to the Safe Harbor provisions created by statute.
Generally words such as "may", "will", "should", "could", "anticipate",
"expect", "intend", "estimate", "plan", "continue", and "believe" or the
negative of or other variation on these and other similar expressions identify
forward-looking statements. These forward-looking statements are made only as of
the date of this report. The Company does not undertake to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise.

Forward-looking statements are based on current expectations and involve risks
and uncertainties and the Company's future results could differ significantly
from those expressed or implied by the Company's forward-looking statements.

Many factors, including those listed below, could cause the Company's actual
consolidated results to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company:

     o    Future increases in interest rates or a decrease in the availability
          of mortgage financing could lead to fewer home sales, which could
          adversely affect the Company's total earned revenues and earnings.

     o    The Company is subject to substantial risks with respect to the land
          and home inventories it maintains and fluctuations in market
          conditions may affect the Company's ability to sell its land and home
          inventories at expected prices, if at all, which could reduce the
          Company's total earned revenues and earnings.

                                       31
<PAGE>

     o    The Company's business is subject to governmental regulations that may
          delay, increase the cost of, prohibit or severely restrict the
          Company's development and homebuilding projects and reduce its total
          earned revenues and growth.

     o    States, cities and counties in which the Company operates have
          adopted, or may adopt, slow or no growth initiatives which would
          reduce the Company's ability to build and sell homes in these areas
          and could adversely affect the Company's total earned revenues and
          earnings.

     o    The Company may not be successful in its effort to identify, complete
          or integrate acquisitions, or to enter new markets through start-up
          operations, which could disrupt the activities of the Company's
          current business, adversely affect the Company's results of operations
          and future growth, or cause losses.

     o    The Company is dependent on the services of certain key employees and
          the loss of their services could harm the Company's business.

     o    The Company may not be able to acquire suitable land at reasonable
          prices, which could result in cost increases the Company is unable to
          recover and reduce the Company's total earned revenues and earnings.

     o    The competitive conditions in the homebuilding industry could increase
          the Company's costs, reduce its total earned revenues and earnings and
          otherwise adversely affect its results of operations or limit its
          growth.

     o    The Company may need additional financing to fund its operations or to
          expand its business, and if the Company is unable to obtain sufficient
          financing or such financing is obtained on adverse terms, the Company
          may not be able to operate or expand its business as planned, which
          could adversely affect the Company's results of operations and future
          growth.

     o    Shortages of labor or materials and increases in the price of
          materials can harm the Company's business by delaying construction,
          increasing costs, or both.

     o    The Company depends on the continued availability and satisfactory
          performance of its subcontractors which, if unavailable, could have a
          material adverse effect on the Company's business by limiting its
          ability to build and deliver homes.

     o    The Company is subject to construction defect, product liability and
          warranty claims arising in the ordinary course of business that could
          adversely affect its results of operations.

     o    The Company is subject to mold litigation and mold claims arising in
          the ordinary course of business for which the Company has no insurance
          that could adversely affect the Company's results of operations.

     o    The Company's business, total earned revenues and earnings may be
          adversely affected by adverse weather conditions or natural disasters.

     o    The Company may be subject to environmental liabilities that could
          adversely affect its results of operations or the value of its
          properties.

                                       32
<PAGE>

     o    Increases in taxes or government fees could increase the Company's
          costs and adverse changes in tax laws could reduce customer demand for
          the Company's homes, either of which could reduce the Company's total
          earned revenues or profitability.

     o    Jeffrey P. Orleans, Chairman and Chief Executive Officer and the
          Company's majority shareholder, can cause the Company to take certain
          actions or preclude the Company from taking actions without the
          approval of the other shareholders and may have interests that could
          conflict with the interests of other shareholders.

     o    The Company has entered into several transactions with related
          parties, including entities controlled by Mr. Jeffrey P. Orleans,
          which may create conflicts of interest.

     o    Acts of war or terrorism may seriously harm the Company's business.

     o    The Company's substantial indebtedness could adversely affect it
          financial condition and prevent it form fulfilling its debt service
          obligations.

     o    To service the Company's indebtedness, the Company requires a
          significant amount of cash. The Company's ability to generate cash
          depends on many factors beyond its control.



                                       33
<PAGE>


Item 3.       Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may impact the financial position,
results of operations or cash flows of the Company, due to adverse changes in
financial and commodity market prices and interest rates. The Company's
principal market risk exposure continues to be interest rate risk. A majority of
the Company's debt is variable based on LIBOR or the prime rate, and, therefore,
affected by changes in market interest rates. Based on current operations, an
increase or decrease in interest rates of 100 basis points will result in a
corresponding increase or decrease in cost of sales and interest charges
incurred by the Company of approximately $4,290,000 in a fiscal year, a portion
of which will be capitalized and included in cost of sales as homes are
delivered. The Company believes that reasonably possible near-term interest rate
changes will not result in a material negative effect on future earnings, fair
values or cash flows of the Company. Generally, the Company has been able to
recover any increased costs of borrowing through increased selling prices;
however, there is no assurance the Company will be able to continue to increase
selling prices to cover the effects of any increase in near-term interest rates.

Changes in the prices of commodities that are a significant component of home
construction costs, particularly lumber, may result in unexpected short term
increases in construction costs. Since the sales price of the Company's homes is
fixed at the time the buyer enters into a contract to acquire a home and because
the Company generally contracts to sell its homes before construction begins,
any increase in costs in excess of those anticipated may result in gross margins
lower than anticipated for the homes in the Company's backlog. The Company
attempts to mitigate the market risks of price fluctuation of commodities by
entering into fixed-price contracts with its subcontractors and material
suppliers for a specified period of time, generally commensurate with the
building cycle.

There have been no material adverse changes to the Company's (1) exposure to
risk and (2) management of these risks, since June 30, 2005.

Item 4.       Controls and Procedures

The Company's management, with the participation of the Company's Chief
Executive Officer, President and Chief Operating Officer, and Chief Financial
Officer, evaluated the effectiveness of the Company's disclosure controls and
procedures as of the end of the period covered by this report. Based upon that
evaluation, the Chief Executive Officer, President and Chief Operating Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures are functioning effectively to provide reasonable assurance that
information required to be disclosed by the Company in reports filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the Security and Exchange Commission's
rules and forms. There has been no change in the Company's internal control over
financial reporting during the Company's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.


                                       34
<PAGE>



                           PART II. OTHER INFORMATION


Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds
              (dollars in thousands, except per share data)

                       In September 2005, the Board of Directors authorized
              the repurchase of up to one million shares of the Company's
              common stock. The repurchases, which represent up to 5% of the
              Company's 18.7 million shares of common stock currently
              outstanding, will be made from time to time through open
              market purchases or privately negotiated transactions at the
              Company's discretion and in accordance with the rules of the
              Securities and Exchange Commission. The amount and timing of the
              repurchases will depend on market conditions and other
              factors. The Company repurchased the following shares of
              common stock during the second quarter of 2005:

<TABLE>
<CAPTION>
                                                                                               Total Number of
                                 Total          Average         Shares Purchased               Maximum Number
                                 Number          Price             as Part of                of Shares That May
                               of Shares         Paid              Publically                 Yet Be Purchased
Period                         Purchased       per Share         Announced Plans               Under the Plan
-----------------------------------------------------------------------------------------------------------------
<S>                              <C>             <C>                  <C>                           <C>
November 1 - 30, 2005           30,200          $ 19.58              30,200                        969,800

December 1 - 31, 2005           60,700          $ 18.99              60,700                        909,100
</TABLE>


Item 4.       Submission of Matters to a Vote of Security Holders.

              On December 1, 2005, the Company held its Annual Meeting of
              Stockholders pursuant to a notice dated October 18, 2005.
              Definitive proxy materials were filed with the Securities and
              Exchange Commission prior to the meeting. A total of
              17,906,915 shares were voted at the meeting constituting 96.5%
              of the 18,561,220 shares entitled to vote.

              At the Annual Meeting, the ten nominees (Benjamin D. Goldman,
              Jerome S. Goodman, Robert N. Goodman, Andrew N. Heine, David
              Kaplan, Lewis Katz, Jeffrey P. Orleans, Robert M. Segal, John
              W. Temple and Michael T.Vesey) for election to the Company's
              Board of Directors were all elected. The results of the vote
              were as follows:

                                                              Shares for Which
                                      Share Voted For        Vote was Withheld
                                      ---------------        ------------------
              Benjamin D. Goldman       17,118,603                788,312
              Jerome S. Goodman         17,526,201                380,714
              Robert N. Goodman         16,657,314              1,249,601
              Andrew N. Heine           17,485,705                441,210
              David Kaplan              17,484,741                422,174
              Lewis Katz                17,425,121                481,794
              Jeffrey P. Orleans        17,423,165                483,750
              Robert M. Segal           17,434,353                472,562
              John W. Temple            17,497,015                409,900
              Michael T. Vesey          17,435,373                471,542

                                       35
<PAGE>

Item 6.          Exhibits.


                  4.1      In accordance with Regulation S-K, Item
                           601(b)(4)(iii)(A) certain instruments respecting
                           long-term debt of the Company have been omitted; the
                           Company agrees to furnish a copy of any such
                           instrument to the SEC upon request.

                  10.1**   Supplemental Executive Retirement Plan, effective
                           September 1, 2005.

                  10.2**   Executive Compensation Deferral Plan, effective
                           June 1, 2005.

                  10.3*    Amended and Restated Revolving Credit Loan Agreement
                           among Greenwood Financial, Inc. and certain other
                           subsidiaries of Orleans Homebuilders, Inc., Orleans
                           Homebuilders, Inc. and Wachovia Bank, National
                           Association and certain other lenders, dated January
                           24, 2006.

                  10.4*    Guaranty by Orleans Homebuilders, Inc. dated
                           January 24, 2006.

                  10.5     Junior Subordinated Indenture by and between OHI
                           Financing, Inc. and JMorgan Chase Bank, National
                           Association, dated November 23, 2005 (incorporated by
                           reference to Exhibit 10.1 to the Company's Current
                           Report on Form 8-K filed November 30, 2005).

                  10.6     Amended and Restated Trust Agreement by and Among OHI
                           Financing, Inc., JPMorgan Chase Bank, National
                           Association and the Administrative Trustees named
                           herein, dated November 23, 2005 (incorporated by
                           reference to Exhibit 10.2 to the Company's Current
                           Report on Form 8-K filed on November 30, 2005).

                  10.7     Parent Guarantee Agreement by and between Orleans
                           Homebuilders, Inc. and JPMorgan Chase Bank, National
                           Assoication dated November 23, 2005 (incorporated by
                           reference to Exhibit 10.3 to the Company's Current
                           Report on Form 8-K filed on November 30, 2005).

                  10.8**   First Amendment to Employment Agreement by and
                           between Orleans Homebuilders, Inc. and Robert
                           Fitzsimmons dated December 31, 2005.

                  10.9**   First Amendment to Employment Agreement by and
                           between Orleans Homebuilders, Inc. and Jeffrey P.
                           Orleans dated December 31, 2005.



                                       36
<PAGE>
                  31.1*    Certification of Jeffrey P. Orleans pursuant to
                           Section 302 of the Sarbanes-Oxley Act of 2002.

                  31.2*    Certification of Michael T. Vesey pursuant to Section
                           302 of the Sarbanes-Oxley Act of 2002.

                  31.3*    Certification of Joseph A. Santangelo pursuant to
                           Section 302 Sarbanes-Oxley Act of 2002.

                  32.1*    Certification of Jeffrey P. Orleans pursuant to
                           Section 906 Sarbanes-Oxley Act of 2002.

                  32.2*    Certification of Michael T. Vesey pursuant to Section
                           906 Sarbanes-Oxley Act of 2002.

                  32.3*    Certification of Joseph A. Santangelo pursuant to
                           Section 906 Sarbanes-Oxley Act of 2002.

*  Exhibits filed herewith electronically.

** Management contract or compensatory plan or arrangement filed herewith
   electronically.


                                       37
<PAGE>

                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          ORLEANS HOMEBUILDERS, INC.
                                          (Registrant)

         February 9, 2006                 Michael T. Vesey
                                          ----------------
                                          Michael T. Vesey
                                          President and Chief Operating Officer


         February 9, 2006                 Joseph A. Santangelo
                                          --------------------
                                          Joseph A. Santangelo
                                          Treasurer, Secretary and Chief
                                          Financial Officer




                                       38
<PAGE>
                                       EXHIBIT INDEX

                  4.1      In accordance with Regulation S-K, Item
                           601(b)(4)(iii)(A) certain instruments respecting
                           long-term debt of the Company have been omitted; the
                           Company agrees to furnish a copy of any such
                           instrument to the SEC upon request.

                  10.1**   Supplemental Executive Retirement Plan, effective
                           September 1, 2005.

                  10.2**   Executive Compensation Deferral Plan, effective
                           June 1, 2005.

                  10.3*    Amended and Restated Revolving Credit Loan Agreement
                           among Greenwood Financial, Inc. and certain other
                           subsidiaries of Orleans Homebuilders, Inc., Orleans
                           Homebuilders, Inc. and Wachovia Bank, National
                           Association and certain other lenders, dated January
                           24, 2006.

                  10.4*    Guaranty by Orleans Homebuilders, Inc. dated
                           January 24, 2006.

                  10.5     Junior Subordinated Indenture by and between OHI
                           Financing, Inc. and JMorgan Chase Bank, National
                           Association, dated November 23, 2005 (incorporated by
                           reference to Exhibit 10.1 to the Company's Current
                           Report on Form 8-K filed November 30, 2005).

                  10.6     Amended and Restated Trust Agreement by and Among OHI
                           Financing, Inc., JPMorgan Chase Bank, National
                           Association and the Administrative Trustees named
                           herein, dated November 23, 2005 (incorporated by
                           reference to Exhibit 10.2 to the Company's Current
                           Report on Form 8-K filed on November 30, 2005).

                  10.7     Parent Guarantee Agreement by and between Orleans
                           Homebuilders, Inc. and JPMorgan Chase Bank, National
                           Assoication dated November 23, 2005 (incorporated by
                           reference to Exhibit 10.3 to the Company's Current
                           Report on Form 8-K filed on November 30, 2005).

                  10.8**   First Amendment to Employment Agreement by and
                           between Orleans Homebuilders, Inc. and Robert
                           Fitzsimmons dated December 31, 2005.

                  10.9**   First Amendment to Employment Agreement by and
                           between Orleans Homebuilders, Inc. and Jeffrey P.
                           Orleans dated December 31, 2005.

                  31.1*    Certification of Jeffrey P. Orleans pursuant to
                           Section 302 of the Sarbanes-Oxley Act of 2002.

                  31.2*    Certification of Michael T. Vesey pursuant to Section
                           302 of the Sarbanes-Oxley Act of 2002.

                  31.3*    Certification of Joseph A. Santangelo pursuant to
                           Section 302 Sarbanes-Oxley Act of 2002.

                  32.1*    Certification of Jeffrey P. Orleans pursuant to
                           Section 906 Sarbanes-Oxley Act of 2002.

                  32.2*    Certification of Michael T. Vesey pursuant to Section
                           906 Sarbanes-Oxley Act of 2002.

                  32.3*    Certification of Joseph A. Santangelo pursuant to
                           Section 906 Sarbanes-Oxley Act of 2002.

*  Exhibits filed herewith electronically.

** Management contract or compensatory plan or arrangement filed herewith
   electronically.