<PAGE>



                               FIRST AMENDMENT TO
                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

         THIS AMENDMENT ("Amendment"), dated December 5, 2000, and effective as
of September 30, 2000, is made by and among SCHULER HOMES, INC., a Delaware
corporation (the "Borrower"), the banks from time to time party to this
Agreement (collectively referred to as the "Banks", and individually referred to
as a "Bank"), FIRST HAWAIIAN BANK, a Hawaii corporation, as administrative and
syndication agent for the Banks (the "Administrative Agent"), and BANK OF
AMERICA, N.A., a national banking association, as documentation agent for the
Banks (the "Documentation Agent", the Administrative Agent and the Documentation
Agent are collectively referred to as the "Agents").


                          W I T N E S S E T H   T H A T:

         WHEREAS, the Borrower, the Banks and the Agents entered into that
certain Third Amended and Restated Credit Agreement dated September 30, 1999,
effective October 1, 1999 (the "Credit Agreement") relating to a revolving
credit facility (the "Credit Facility") in the principal amount of
US$170,000,000.00 (the "Commitment") made available to the Borrower by the
Banks; and

         WHEREAS, in connection therewith, the Borrower, the Banks and the
Agents executed certain Loan Documents (as defined in the Credit Agreement); and

         WHEREAS, the Borrower has requested that the Banks and the Agents amend
the terms of the Credit Agreement to increase the level of a certain type of
Permitted Investment (as defined in the Credit Agreement) from $10,000,000 to
$25,000,000 and to include the new subsidiaries of the Borrower as Guarantors;
and

         WHEREAS, the Banks and the Agents are willing to comply with such
request, upon and subject to the terms and conditions hereinafter set forth; and

         NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto hereby agree as follows:

1. DEFINITIONS. All capitalized terms used herein, unless otherwise defined
herein, shall have the same meanings as those ascribed to them in the Credit
Agreement.

2. REPRESENTATIONS AND WARRANTIES. As an essential inducement to the Banks and
the Agents to execute this Amendment, the Borrower hereby repeats, reaffirms and
incorporates herein by reference all of the representations and warranties
contained in Article 5 of the Credit Agreement.

3. AMENDMENT OF LOAN DOCUMENTS. The Loan Documents are hereby amended as
follows:

               (a) Section (f) of the definition of "Permitted Investment" shall
be amended in its entirety as follows:



<PAGE>

                           (f) the investment (including advances and
                  guaranties) in unconsolidated Subsidiaries of the Borrower or
                  joint ventures (in which the Borrower or its Subsidiaries is a
                  joint venture partner) which are involved in home building in
                  the principal markets of the Borrower or its Subsidiaries,
                  provided such investment shall not exceed $25,000,000 in the
                  aggregate subsequent to December 31, 1997, which shall include
                  the acquisition of a 49% interest in Reilly Homes Madison,
                  LLC, a Delaware limited liability company, a 49% interest in
                  Reilly Carlsbad, LLC, a Delaware limited liability company, a
                  24.5% interest in Venturanza Del Verde, LLC, a Delaware
                  limited liability company, a 50% interest in Fairway Farms,
                  LLC, a Delaware limited liability company and a 50% interest
                  in PH-Reilly Orange Groves, LLC, a Delaware limited liability
                  company.

               (b) The definition of "Guarantor" in the Credit Agreement shall
be amended to include Schuler Homes of Arizona, LLC, SHLR of California, Inc.,
Schuler Mortgage, Inc., and SHA Construction LLC.

4. DELIVERY OF RELATED DOCUMENTS. The Borrower shall deliver to the
Administrative Agent on or before 1/31/01 the following documents, all of which
shall be in form and substance satisfactory to the Banks and the Agents:

               (a) An amendment to the Guaranty, in form and substance
satisfactory to the Lender, to include Schuler Homes of Arizona, LLC, SHLR of
California, Inc., Schuler Mortgage, Inc., and SHA Construction LLC as guarantors
of the Credit Facility.

               (b) Properly certified resolutions of the respective Boards of
Directors or other governing body, as applicable, of the Borrower, the
Guarantors, Schuler Homes of Arizona, LLC, SHLR of California, Inc., Schuler
Mortgage, Inc., and SHA Construction LLC, duly authorizing the execution and
delivery of this Amendment and the amendment to the Guaranty by such applicable
party.

               (c) An opinion from counsel to the Borrower and the Guarantors
stating that after the execution and delivery of this Amendment and the
amendment to the Guaranty by the parties, the Loan Documents will continue to be
enforceable in accordance with their terms and will continue to constitute the
valid and legally binding obligations of the Borrower and the Guarantors, as
applicable.

5. CONFORMANCE. The Loan Documents are hereby amended to conform with this
Amendment, but in all other respects such provisions are to be and continue in
full force and effect.

6. CONTINUANCE OF SECURITY. The performance of the obligations of the Borrower
under the Loan Documents, as herein amended, shall be fully secured by and
entitled to the benefits of the Guaranty and the other Loan Documents, and any
modifications, extensions, renewals or replacements thereof.



                                       2

<PAGE>


7. NO OFFSETS. As of the date hereof, the Borrower has no claims, defenses or
offsets against the Banks or the Agents, or against the Borrower's obligations
under the "Loan Documents", as herein amended, whether in connection with the
negotiations for or closing of the Credit Facility, of any prior amendments, of
this Amendment, or otherwise, and if any such claims, defenses or offsets exist,
they are hereby irrevocably waived and released.

8. NO WAIVER. This Amendment is made on the express condition that nothing
herein contained shall in any way be construed as affecting, impairing or
waiving any rights of the Banks or the Agents under any of the Loan Documents,
as herein amended.

9. ENTIRE AGREEMENT. This Amendment incorporates all of the agreements between
the parties relating to the amendment of the Loan Documents and supersedes all
other prior or concurrent oral or written letters, agreements or understandings
relating to such amendment.

10. HEADINGS. The headings of paragraphs and subparagraphs herein are inserted
only for convenience and reference, and shall in no way define, limit or
describe the scope or intent of any provisions of this Amendment.

11. GOVERNING LAW; SEVERABILITY. This Amendment is executed and delivered, and
shall be construed and enforced, in accordance with and governed by the laws of
the State of Hawaii. If any provision of this Amendment is held to be invalid or
unenforceable, the validity or enforceability of the other provisions of this
Amendment shall remain unaffected.

12. SUBMISSION TO JURISDICTION. The Borrower and the Guarantors hereby
irrevocably and unconditionally submit, but only for the purposes of any action
or proceeding which the Banks and/or the Agents may bring to enforce any of the
Loan Documents, as amended herein, to the jurisdiction of the courts of the
State of Hawaii and the United States District Court for the District of Hawaii.
Such submission to such jurisdiction shall not prevent the Banks and the Agents
from commencing any such action or proceeding in any other court having
jurisdiction.

13. COUNTERPARTS. This Amendment may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument, and in making proof of this Amendment,
it shall not be necessary to produce or account for more than one such
counterpart.

14. EXPENSES. The Borrower shall pay all reasonable expenses incurred by the
Administrative Agent in negotiations for and documentation of this Amendment and
the satisfaction of the conditions thereof, including, but not limited to, fees
and expenses of legal counsel for the Administrative Agent, and any other costs
incurred by the Administrative Agent in connection with any of the matters
described in this Amendment.

15. BINDING EFFECT. This Amendment shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that the Borrower shall not assign this Amendment or any of the rights, duties
or obligations of the Borrower hereunder without the prior written consent of
the Banks and the Agents.



                                       3

<PAGE>


         IN WITNESS WHEREOF, the parties hereto have executed this Amendment the
day and year first above written.

                            SCHULER HOMES, INC.


                            By   /s/  Douglas M. Tonokawa
                                 Name:  Douglas M. Tonokawa
                                 Title: Vice President of Finance
                                                                      "Borrower"



                            FIRST HAWAIIAN BANK, as Administrative
                            Agent and Syndication Agent

                            By   /s/  Koren K. Dreher
                                 Name:  Koren K. Dreher
                                 Title: Sr. Vice President



                            BANK OF AMERICA, N.A, as Documentation Agent

                            By   /s/  CK Goodfellow
                                 Name:  Cynthia K. Goodfellow
                                 Title: Vice President



                            FIRST HAWAIIAN BANK, as a Bank

                            By   /s/  Koren K. Dreher
                                 Name:  Koren K. Dreher
                                 Title: Sr. Vice President



                            BANK OF AMERICA N.A, as a Bank

                            By   /s/  CK Goodfellow
                                 Name:  Cynthia K. Goodfellow
                                 Title: Vice President



                            BANK ONE, ARIZONA, NA

                            By   /s/  R Williams
                                 Name:  Rhonda R. Williams
                                 Title: Vice President



                                       4

<PAGE>


                            FLEET NATIONAL BANK

                            By   /s/  Daniel L. Silbert
                                 Name:  Daniel L. Silbert
                                 Title: Vice President



                            BANK OF HAWAII

                            By   /s/  Gene H. Tsuji
                                 Name:  Gene H. Tsuji
                                 Title: Assistant Vice President



                            U.S. BANK NATIONAL ASSOCIATION


                            By   /s/  Ann B. Caldwell
                                 Name:  Ann B. Caldwell
                                 Title: Vice President



                                       5

<PAGE>


         AND SCHULER HOMES OF CALIFORNIA, INC., a California corporation,
SCHULER HOMES OF OREGON, INC., an Oregon corporation, SCHULER HOMES OF
WASHINGTON, INC., a Washington corporation, MELODY HOMES, INC., a Delaware
corporation, SCHULER REALTY/MAUI, INC., a Hawaii corporation, SCHULER
REALTY/OAHU, INC., a Hawaii corporation, LOKELANI CONSTRUCTION CORPORATION, a
Delaware corporation, MELODY MORTGAGE CO., a Colorado corporation, SHLR OF
WASHINGTON, INC., a Washington corporation, SHLR OF COLORADO, INC., a
Colorado corporation, SHLR OF UTAH, INC., a Utah corporation, SSHI LLC, a
Delaware limited liability company, SHLR OF NEVADA, INC., a Nevada
corporation and SRHI LLC, a Delaware limited liability company (collectively
referred to as the "Guarantors", and individually referred to as a
"Guarantor"), the "Guarantors" under that certain Guaranty dated as of
September 30, 1999, executed by the Guarantors in connection with the Credit
Agreement (the "Guaranty"), do hereby (a) consent to the amendments to the
Loan Documents, as described above; (b) agree that the amendments to the Loan
Documents described above shall not in any way affect, impair, or diminish
any of their obligations under the Guaranty, all of which are hereby
reaffirmed; (c) agree that their obligations under the Guaranty shall be
joint and several with the obligations of Schuler Homes of Arizona, LLC, SHLR
of California, Inc., Schuler Mortgage, Inc., and SHA Construction LLC under
the amendment to the Guaranty executed by said entities concurrently
herewith; and (d) acknowledge that they have no claims, demands, defenses or
offsets against the Banks or the Agents or against their obligations under
the Guaranty, and if any such claims, demands, defenses or offsets do exist,
they are hereby irrevocably waived and released.

                            SCHULER HOMES OF CALIFORNIA, INC.

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            SCHULER HOMES OF OREGON, INC.

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            SCHULER HOMES OF WASHINGTON, INC.

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            MELODY HOMES, INC.

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                                       6

<PAGE>



                            SCHULER REALTY/MAUI, INC.

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            SCHULER REALTY/OAHU, INC.

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            LOKELANI CONSTRUCTION CORPORATION

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            MELODY MORTGAGE CO.


                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            SHLR OF WASHINGTON, INC.

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            SHLR OF UTAH, INC.

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            SHLR OF COLORADO, INC.


                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                                       7

<PAGE>


                            SSHI LLC
                            By SHLR of Washington, Inc.
                               Its Member


                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            SHLR OF NEVADA, INC.

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance



                            SRHI LLC By SHLR of Nevada, Inc.
                               Its Managing Member

                            By /s/  Douglas M. Tonokawa
                               Name:  Douglas M. Tonokawa
                               Title: Vice President of Finance
                                                                    "Guarantors"


























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