<PAGE>
                                                             Exhibit 10.7

                                 AMENDMENT AGREEMENT


     THIS AMENDMENT AGREEMENT (the "Amendment Agreement") dated as of June 9, 
1998 is entered into by and between UNITED HOMES, INC., an Illinois 
corporation, UNITED HOMES, INC., an Arizona corporation, UNITED HOMES OF 
ILLINOIS, INC., an Illinois  corporation and UNITED HOMES OF MICHIGAN, INC.,  
a Michigan corporation (collectively, the "Borrower") and RESIDENTIAL FUNDING 
CORPORATION, a Delaware corporation (the "Lender"). 

                                       RECITALS

     This Amendment Agreement is entered into upon the basis of the following 
facts and circumstances:

     A.   Lender has made a revolving acquisition, development and 
construction loan to the Borrower in the original principal amount of Twenty 
Five Million Dollars ($25,000,000) (the "Project Loan") pursuant to the terms 
of the Loan Agreement dated as of May 28, 1996 (as amended or modified, the 
"Project Loan Agreement") and in connection therewith Borrower has made, 
executed and delivered to Lender that certain Promissory Note dated May 28, 
1996 (the "Original Project Note") payable to the order of Lender in the 
principal amount of Twenty Five Million Dollars ($25,000,000).

     B.   Lender has made a revolving construction loan to Borrower in the 
original principal amount of Twenty Five Million Dollars ($25,000,000) (the 
"ABF Loan") pursuant to the terms of the Loan Agreement dated as of March 14, 
1997 (as amended or modified, the "ABF Loan Agreement") and in connection 
therewith Borrower has made, executed and delivered to Lender that certain 
Revolving Promissory Note dated March 14, 1997 (the "Original ABF Note") 
payable to the order of Lender in the principal amount of Twenty Five Million 
Dollars ($25,000,000).

     C.   Lender has made a working capital loan to Borrower in the principal 
amount of Seven Million Dollars ($7,000,000) (the "Working Capital Loan") and 
in connection therewith Borrower has made, executed and delivered to Lender 
that certain Promissory Note dated June 9, 1998 (the "Working Capital Note") 
payable to the order of Lender in the principal amount of Seven Million 
Dollars ($7,000,000).

     D.   The Borrower has now requested, and the Lender has now consented, 
to increase the aggregate of the principal amounts of the Project Loan plus 
the ABF Loan to Fifty Five Million Dollars ($55,000,000), and to make certain 
other changes to the terms and conditions of the Project Loan Agreement and 
the related documents and to the terms and conditions of the ABF Loan 
Agreement and the related documents.


<PAGE>

     E.   Lender is willing to make the requested amendments upon and subject 
to the terms and conditions set forth in this Amendment Agreement.

     F.   Capitalized terms used herein which are not otherwise defined shall 
have the meanings given those terms in the Project Loan Agreement or the ABF 
Loan Agreement, as the context requires.

                                     AGREEMENT

     NOW THEREFORE, in consideration of the foregoing Recitals and the 
covenants and conditions, representations and warranties contained herein, 
the parties hereto agree as follows:

     Section 1.     AMENDMENT OF PROJECT LOAN AGREEMENT.  The Project Loan 
Agreement is hereby amended as follows:

     (a)  ADDITION OF CERTAIN DEFINITIONS.  The following terms are hereby 
added to the SECTION 1.1 of the Project Loan Agreement:

          "ABF LOAN"  shall mean the revolving construction loan described in 
     the ABF Loan Agreement.

          "ABF LOAN AGREEMENT"  shall mean that certain Loan Agreement dated 
     as of March 14, 1997 between the Lender and the Borrower, as amended by 
     the Amendment Agreement, as such Loan Agreement may be further amended 
     or otherwise modified from time to time in accordance with the terms 
     thereof.

          "ABF LOAN AMOUNT" shall mean the following:

               (a)  prior to the date of the Amendment Agreement, the amount set
          forth in the ABF Loan Agreement as originally executed and delivered,
          as such amount was amended by letter agreements between the Lender and
          the Borrower dated November 26, 1997 and May 13, 1998;

               (b)  on the date of the Amendment Agreement and continuing until
          the date as to which the Borrower has made an alternative election
          pursuant to the terms of SECTION 2.17 of the ABF Loan Agreement, the
          amount set forth in SECTION 3 of the Amendment Agreement; and 

               (c)  on such date as to which the Borrower has made an election
          pursuant and subject to the terms of SECTION 2.17 of the ABF Loan
          Agreement, the


<PAGE>

          amount set forth in the Borrower's written statement delivered to 
          the Lender pursuant to the terms of SECTION 2.17 of the ABF Loan 
          Agreement, 

     subject in all events to the requirement that the ABF Loan Amount plus the
     Loan Amount shall at all times equal Fifty Five Million Dollars
     ($55,000,000).

          "ABF LOAN DOCUMENTS"  shall have the meaning given the term "Loan
     Documents" in the ABF Loan Agreement.

          "ABF NOTE"  shall mean (i) prior to June 9, 1998, the Revolving
     Promissory Note dated as of March 14, 1997 executed by Borrower, as maker,
     and made payable to the order of Lender, as holder, in the amount of Twenty
     Five Million Dollars ($25,000,000) to evidence the ABF Loan  and (ii) on
     and after June 9, 1998, the Amended and Restated Revolving Promissory Note
     dated June 9, 1998 executed by Borrower, as maker, and made payable to the
     order of Lender, as holder, in the amount of Fifty Five Million Dollars
     ($55,000,000) to evidence the ABF Loan,  as such Amended and Restated
     Revolving Promissory Note may be amended or otherwise modified from time to
     time.

          "AMENDMENT AGREEMENT"  shall mean that certain Amendment Agreement
     dated as of June 9, 1998 between the Lender and the Borrower, as such
     Amendment Agreement may be amended or otherwise modified from time to time
     in accordance with the terms thereof.

          "LETTER OF CREDIT" shall mean, with respect to any Project, any letter
     of credit issued by a bank or other financial institution in favor of a
     governmental entity to secure the Borrower's obligation to complete the
     Development Work.

          "WORKING CAPITAL LOAN"  shall mean the working capital loan evidenced
     by the Working Capital Note.

          "WORKING CAPITAL NOTE"  shall mean the Promissory Noted dated June 9,
     1998 executed by Borrower, as maker, and made payable to the order of
     Lender, as holder, in the amount of Seven Million Dollars ($7,000,000) to
     evidence the Working Capital Loan.

     (b)  AMENDMENT OF CERTAIN DEFINITIONS.  The terms "Additional Loan Fee",
"Approval Period", "Loan", "Loan Agreement", "Loan Amount", "Loan Documents",
"Maturity Date", "Note" and "Project Maturity Date" set forth in SECTION 1.1 of
the Project Loan Agreement are hereby amended to read as follows:

          "ADDITIONAL LOAN FEE" shall mean, with respect to a High Advance Rate
     Project, the additional fee the Borrower will be required to pay to Lender
     as a condition precedent


<PAGE>

     to the Lender's release of its lien on any Lot or Unit located in the 
     Project, which amount shall equal, unless otherwise stated in the 
     Project Commitment relating to the Project, five percent (5%) of the 
     principal amount of the Loan required to be paid to the Lender upon the 
     sale, disposition or transfer of the Lot or Unit.

          "APPROVAL PERIOD" shall mean the period of time during which new
     Projects may be approved for funding and Model Homes may be refinanced from
     proceeds of the Loan, which period shall commence on May 28, 1996 and shall
     end on _________________________, which is the date __________________
     months after ___________________, as such period may be extended pursuant
     to the terms of Section 2.11.

          "LOAN" shall mean the revolving loan described in the Loan Agreement.

          "LOAN AGREEMENT"  shall mean the Loan Agreement dated as of May 28,
     1996 between the Lender and the Borrower, as amended by the Amendment
     Agreement, as such Loan Agreement may be further amended or otherwise
     modified from time to time in accordance with the terms thereof.

          "LOAN AMOUNT" shall mean the following:

               (a)  prior to the date of the Amendment Agreement, the amount set
          forth in the Loan Agreement as originally executed and delivered, as
          such amount was amended by letter agreements between the Lender and
          the Borrower dated November 26, 1997 and May 13, 1998;

               (b)  on the date of the Amendment Agreement and continuing until
          the date as to which the Borrower has made an alternative election
          pursuant to the terms of SECTION 2.15, the amount set forth in SECTION
          3 of the Amendment Agreement; and 

               (c)  on such date as to which the Borrower has made an election
          pursuant and subject to the terms of SECTION 2.15, the amount set
          forth in the Borrower's written statement delivered to the Lender
          pursuant to the terms of SECTION 2.15, 

     subject in all events to the requirement that the Loan Amount plus the ABF
     Loan Amount shall at all times equal Fifty Five Million Dollars
     ($55,000,000).

          "LOAN DOCUMENTS" shall mean, as to the Loan, all documents,
     instruments, agreements, assignments and certificates relating thereto,
     including, without limitation, any and all loan or credit agreements,
     promissory notes, deeds of trust, mortgages,


<PAGE>


     security agreements, assignments of rents, assignments of leases, 
     assignments of contracts, environmental indemnities, guaranties, 
     contractor's consent agreements, lender's title insurance policies, 
     opinions of counsel, evidences of authorization or incumbency, escrow 
     instructions, architect's consent agreements, and UCC-1 financing 
     statements to be executed (and acknowledged where applicable) by 
     Borrower, Project Owner, Model Home Owner and/or Lender (where 
     applicable) in connection with Lender making the Loan to Borrower, as 
     the same may be amended or otherwise modified from time to time in 
     accordance with the Loan Agreement.  The Loan Documents shall include, 
     but not be limited to, the following: 

               (a)  the Loan Agreement; 

               (b)  the Note; 

               (c)  the Project Documents; 

               (d)  the Model Home Documents;

               (e)  any Letter of Credit;

               (f)  the ABF Loan Documents; and

               (g)  the Working Capital Note and all documents, instruments,
          agreements, assignments and certificates relating thereto.

          "MATURITY DATE" shall mean the first to occur of (i) November 28,
     1999, which is the date forty two (42) months from the date of the Loan
     Agreement (as such date may be extended in writing by Lender and Borrower
     from time to time), or (ii) the date on which the Loan is required to be
     repaid pursuant to SECTION 6.2.

          "NOTE"  shall mean (i) prior to June 9, 1998, the Promissory Note
     dated May 28, 1996 executed by Borrower, as maker, and made payable to the
     order of Lender, as holder, in the amount of Twenty Five Million Dollars
     ($25,000,000) and maturing on the Maturity Date, to evidence the Loan and
     (ii) on and after June 9, 1998, the Amended and Restated Revolving
     Promissory Note dated June 9, 1998 executed by Borrower, as maker, and made
     payable to the order of Lender, as holder, in the amount of Fifty Five
     Million Dollars ($55,000,000) and maturing on the Maturity Date, to
     evidence the Loan,  as such Amended and Restated Revolving Promissory Note
     may be amended or otherwise modified from time to time.

          "PROJECT MATURITY DATE" shall mean, with respect to a Project, the
     date which is set forth in the Project Commitment as the date on which all
     proceeds of the Loan advanced


<PAGE>

     for the Project must be repaid.

     (c)  AMENDMENT OF SECTION 2.6.  SECTION 2.6 of the Project Loan Agreement
shall be amended to read as follows:

          Section 2.6.   REPAYMENT OF PRINCIPAL.  Principal of the Loan shall be
     due and payable as follows:

               (a)  with respect to the Projects as to which proceeds of the
          Loan are to be disbursed to construct the Construction Improvements
          within the Project, upon the sale of a Lot and/or Unit in such
          Project, the Borrower shall repay the principal amount of the Loan (i)
          at the rate of one hundred fifteen percent (115%) of (A) the total
          amount of the Loan disbursed for the acquisition of such Lot plus (B)
          the total amount of the Loan budgeted for the Development Work related
          to such Lot, and (ii) at the rate of one hundred percent (100%) of the
          total amount of the Loan disbursed for the Construction Improvements
          related to the Home on such Lot, until such time as the total amount
          of the Loan disbursed for such Project has been paid in full; during
          the Approval Period, principal repaid in accordance with this
          SUBPARAGRAPH (a) may be reborrowed subject to and upon compliance with
          the terms of this Loan Agreement;

               (b)  with respect to the Projects as to which proceeds of the
          Loan are to be disbursed to construct the Construction Improvements
          within the Project, upon disbursement of proceeds of the Loan for a
          Home within the Project, the principal amount of the Loan (i)
          disbursed to acquire the related Lot, (ii) budgeted for the
          Development Work related to such Lot, and (iii) disbursed for the
          Construction Improvements related to the Home on such Lot, is required
          to be repaid twelve (12) months from the date Loan proceeds are first
          disbursed for the Construction Improvements for such Home,  unless the
          Unit sells prior to such date, in which event the principal shall be
          repaid in accordance with SUBPARAGRAPH (a) above; during the Approval
          Period, principal repaid in accordance with this SUBPARAGRAPH (b) may
          be reborrowed subject to and upon compliance with the terms of this
          Loan Agreement;

               (c)  with respect to the Projects as to which proceeds of the ABF
          Loan are to be disbursed with respect to the Construction Improvements
          within the Project, upon pledge of a Lot within the Project to become
          part of the Borrowing Base Collateral (as such term is defined in the
          ABF Loan Agreement), the Borrower shall repay the principal amount of
          the Loan at the rate of one hundred fifteen percent (115%) of (i) the
          total amount of the Loan disbursed for the acquisition of such Lot
          plus (ii) the total amount of the Loan budgeted for the Development
          Work related to such Lot, until such time as the total amount of the
          Loan disbursed for such Project has been paid in full; during the 
          Approval Period,


<PAGE>

          principal repaid in accordance with this SUBPARAGRAPH (c) may be 
          reborrowed subject to and upon compliance with the terms of this 
          Loan Agreement;

               (d)  if the amount of the Loan disbursed for a Project has not
          been repaid on or before the Project Maturity Date, the Borrower shall
          on such date repay the entire principal amount of the Loan allocable
          to such Project; during the Approval Period, principal repaid in
          accordance with this SUBPARAGRAPH (d) may be reborrowed subject to and
          upon compliance with the terms of this Loan Agreement;

               (e)  upon the sale or refinancing of a Model Home, the Borrower
          shall repay the principal amount of the Loan at the rate of one
          hundred percent (100%) of the total amount of the Loan disbursed for
          the Model Home; during the Approval Period, principal repaid in
          accordance with this SUBPARAGRAPH (e) may be reborrowed subject to and
          upon compliance with the terms of this Loan Agreement; and

               (f)  on the Maturity Date, the Borrower shall repay the entire
          remaining principal amount of the Loan.

     (d)  ADDITION OF SECTION 2.15 -- ADJUSTMENTS TO PROJECT LOAN AMOUNT AND ABF
LOAN AMOUNT.  The Project Loan Agreement is hereby amended to add the following
new SECTION 2.15:

          Section 2.15.  ADJUSTMENTS TO LOAN AMOUNT AND ABF LOAN AMOUNT. 
     SECTION 3 of the Amendment Agreement sets forth the Loan Amount and the ABF
     Loan Amount in effect on the date of the Amendment Agreement, and the
     allocations of the Loan Amount to the various Projects approved for funding
     on the date of the Amendment Agreement.  Thereafter, upon delivery to the
     Lender of thirty (30) days' prior written notice, the Borrower may elect to
     adjust the Loan Amount and the ABF Loan Amount from the then current
     allocations, subject to the following terms and conditions:

               (a)  the Borrower's written notice shall specify (i) the Loan
          Amount, which amount shall not be less than Ten Million Dollars
          ($10,000,000) nor more than Twenty Five Million Dollars ($25,000,000),
          (ii) the ABF Loan Amount, which amount shall not be less than Twenty
          Five Million Dollars ($25,000,000) nor more than Forty Million Dollars
          ($40,000,000) and (iii) the total of the Loan Amount and the ABF Loan
          Amount, which amount shall at all times equal Fifty Five Million
          Dollars ($55,000,000);

               (b)  the Loan Amount shall never be decreased to an amount less
          than the amount necessary to fund projects previously approved for
          financing pursuant to the terms of this Loan Agreement;


<PAGE>

               (c)  the Borrower shall deliver to the Lender (i) such
          endorsements to the Title Policies as the Lender shall require to
          reflect any necessary increases in the amount of insurance provided by
          the Title Policies and (ii) such other documents as Lender may
          reasonably require; and

               (d)  the Borrower shall make such adjustments to the Loan Amount
          and the ABF Loan Amount no more frequently than four (4) times per
          year.

     (e)  AMENDMENT OF SECTION 5.4 -- FINANCIAL COVENANTS.  SECTION 5.4 of the
Project Loan Agreement is hereby amended to read as follows:

          Section 5.4.   FINANCIAL COVENANTS.  Borrower shall comply with, or
     ensure compliance with, each of the following financial covenants:

               (a)  NET WORTH.  United Homes shall, on a consolidated basis, at
          all times maintain a Net Worth equal to or in excess of Ten Million
          Dollars ($10,000,000).

               (b)  LIMITATION ON DISTRIBUTIONS. United Homes shall not
          distribute dividends, bonuses or profit participations to officers or
          stockholders greater than thirty percent (30%) of year-end, audited,
          pre-tax profits generated in any one year.

               (c)  RATIO OF LIABILITIES TO ADJUSTED NET WORTH.  During the
          period commencing on the date of the Amendment Agreement and
          continuing through and including November 15, 1998, the ratio of
          United Homes' total liabilities (reported on a consolidated basis) to
          its Adjusted Net Worth shall not exceed 6.5. to 1.0.  During the
          period commencing November 16, 1998 and at all time thereafter, the
          ratio of United Homes' total liabilities (reported on a consolidated
          basis) to its Adjusted Net Worth shall not exceed 5.0 to 1.0. 

               (d)  POSITIVE NET INCOME.  The Borrower shall ensure that the
          pre-tax net income for the Borrower, on a consolidated basis, shall
          not be negative for any two consecutive calendar quarters, nor
          negative for any four consecutive calendar quarters on a cumulative
          basis.

     (f)  ADDITION OF SECTION 2.16 -- LETTERS OF CREDIT.  The Project Loan
Agreement is hereby amended to add the following new SECTION 2.16:

          Section 2.16.  LETTERS OF CREDIT. 

          (a)  Borrower hereby agrees to pay to the Lender, for each Letter of
     Credit


<PAGE>

      which the Borrower requests the Lender arrange to be issued, the annual 
      fee relating to such Letter of Crecit, in the amount specified by the 
      Lender.

          (b)  On each date that the Lender or any Affiliate of the Lender pays
     any amount to reimburse the issuer of a Letter of Credit for amounts paid
     by the issuer due to a draw upon the Letter of Credit, the Borrower shall
     pay to the Lender an amount equal to the amount so drawn.  

          (c)  Borrower acknowledges that any payment made by Lender or any
     Affiliate of Lender as set forth in SUBSECTION (b) above shall constitute a
     disbursement of the Loan, requiring immediate repayment from  the Borrower.
     Borrower further acknowledges that its failure to make such required
     repayment shall constitute an Event of Default, entitling Lender to
     exercise any and all of its remedies against Borrower in accordance with
     the terms of the Loan Documents.

          (d)  The obligation of Borrower to Lender with respect to the
     obligations incurred pursuant to this SECTION 2.16 shall be absolute,
     unconditional and irrevocable to the extent permitted by law, and shall be
     performed strictly in accordance with the terms of this Loan Agreement,
     irrespective of any of the following circumstances:

               (1)  any lack of validity or enforceability of any Letter of
          Credit, any other Loan Document, any of the documents relating to the
          Letters of Credit, or any other agreement or instrument underlying the
          Letters of Credit or the other Loan Documents, or any failure to
          comply strictly with the terms of any Letter of Credit, any other Loan
          Document or any other agreement or instrument; 

               (2)  any amendment or waiver of, or consent to departure from,
          the Letters of Credit, any document relating thereto or any other Loan
          Document;

               (3)  the existence of any claim, setoff, defense or other rights
          which the Lender, any Affiliate of Lender or Borrower may have at any
          time against any other party or any beneficiary or any transferee of
          any Letter of Credit (or any persons or entities for whom any such
          party or beneficiary or any such transferee may be acting), the issuer
          of any Letter of Credit or any other person or entity whether in
          connection with a Letter of Credit, any document relating thereto, any
          other Loan Document, any agreement or transaction underlying a Letter
          of Credit or any unrelated transactions;

               (4)  any statement, certificate, draft or other document
          presented under a Letter of Credit proving to be forged, fraudulent,
          invalid or insufficient in any respect or any statement therein being
          untrue or inaccurate in any respect whatsoever;


<PAGE>


               (5)  payment by the issuer of a Letter of Credit under the Letter
          of Credit against presentation of a draft or certificate which does
          not comply with the terms of the Letter of Credit; or

               (6)  any other circumstance or happening whatsoever, whether or
          not similar to any of the foregoing.

     Section 2.     AMENDMENT OF ABF LOAN AGREEMENT.  The ABF Loan Agreement is
hereby amended as follows:

     (a)  ADDITION OF CERTAIN DEFNINITIONS.  The following terms are hereby
added to the SECTION 1.1 of the ABF Loan Agreement:

          "AMENDMENT AGREEMENT"  shall mean that certain Amendment Agreement
     dated as of June 9, 1998 between the Lender and the Borrower, as such
     Amendment Agreement may be amended or otherwise modified from time to time
     in accordance with the terms thereof.

          "WORKING CAPITAL LOAN"  shall mean the working capital loan evidenced
     by the Working Capital Note.

          "WORKING CAPITAL NOTE"  shall mean the Promissory Noted dated June 9,
     1998 executed by Borrower, as maker, and made payable to the order of
     Lender, as holder, in the amount of Seven Million Dollars ($7,000,000) to
     evidence the Working Capital Loan.

     (b)  AMENDMENT OF CERTAIN DEFINITIONS.  The terms "Loan", "Loan Agreement",
"Loan Amount", "Loan Documents", "Maturity Date", "Note", "Related Loan",
"Related Loan Agreement" and "Related Loan Amount" set forth in SECTION 1.1 of
the ABF Loan Agreement are hereby amended to read as follows:

          "LOAN" shall mean the revolving loan described in this Loan Agreement.

          "LOAN AGREEMENT" shall mean the Loan Agreement dated as of March 14,
     1997 between the Lender and the Borrower, as amended by the Amendment
     Agreement, as such Loan Agreement may be further amended or otherwise
     modified from time to time in accordance with the terms thereof.

          "LOAN AMOUNT" shall mean the following:

               (a)  prior to the date of the Amendment Agreement, the amount set
          forth in the Loan Agreement as originally executed and delivered, as
          such amount was amended by letter agreements between the Lender and
          the Borrower dated


<PAGE>

          November 26, 1997 and May 13, 1998;

               (b)  on the date of the Amendment Agreement and continuing until
          the date as to which the Borrower has made an alternative election
          pursuant to the terms of SECTION 2.17, the amount set forth in SECTION
          3 of the Amendment Agreement; and 

               (c)  on such date as to which the Borrower has made an election
          pursuant and subject to the terms of SECTION 2.17, the amount set
          forth in the Borrower's written statement delivered to the Lender
          pursuant to the terms of SECTION 2.17, 

     subject in all events to the requirement that the Loan Amount plus the
     Related Loan Amount shall at all times equal Fifty Five Million Dollars
     ($55,000,000).

          "LOAN DOCUMENTS" shall mean, as to the Loan, all documents,
     instruments, agreements, assignments and certificates executed by Borrower,
     or from Borrower, relating thereto, including, without limitation, any and
     all loan or credit agreements, promissory notes, deeds of trust, mortgages,
     security agreements, assignments of rents, assignments of leases,
     assignments of contracts, environmental indemnities, guaranties,
     contractor's consent agreements, evidences of authorization or incumbency
     and escrow instructions to be executed (and acknowledged where applicable),
     by Borrower and/or Lender (where applicable), and UCC-1 financing
     statements from Borrower, in connection with Lender making the Loan to
     Borrower, as the same may be amended or otherwise modified from time to
     time in accordance with this Loan Agreement.  The Loan Documents shall
     include, but not be limited to, the following: 

               (a)  this Loan Agreement; 

               (b)  the Note; 

               (c)  the Mortgage;

               (d)  the Security Agreement;

               (e)  the UCC-1 Financing Statement;

               (f)  the Environmental Indemnity;

               (g)  the Assignment;

               (h)  the Project Commitments; 


<PAGE>


               (i)  the Title Procedures Agreement; 

               (j)  the Bank Letter of Instructions, or any substitute letter of
          instructions delivered pursuant to the terms of SECTION 3.9; 

               (k)  the Related Loan Documents; and

               (l)  the Working Capital Note and all documents, instruments,
          agreements, assignments and certificates relating thereto.

          "MATURITY DATE" shall mean the first to occur of (i) March 14, 2001,
     which is the date forty eight (48) months from the date of the Loan
     Agreement (as such date may be extended by Lender and Borrower from time to
     time, either in accordance with SECTION 2.14 or otherwise), or (ii) the
     date on which the Loan is required to be repaid pursuant to SECTION 7.2.

          "NOTE"  shall mean (i) prior to June 9, 1998, the Revolving Promissory
     Note dated March 14, 1997 executed by Borrower, as maker, and made payable
     to the order of Lender, as holder, in the amount of Twenty Five Million
     Dollars ($25,000,000) and maturing on the Maturity Date, to evidence the
     Loan and (ii) on and after June 9, 1998, the Amended and Restated Revolving
     Promissory Note dated June 9, 1998 executed by Borrower, as maker, and made
     payable to the order of Lender, as holder, in the amount of Fifty Five
     Million Dollars ($55,000,000) and maturing on the Maturity Date, to
     evidence the Loan,  as such Amended and Restated Revolving Promissory Note
     may be amended or otherwise modified from time to time.

          "RELATED LOAN" shall mean the revolving loan made by Lender to
     Borrower pursuant to the terms of the Related Loan Agreement.

          "RELATED LOAN AGREEMENT" shall mean that certain Loan Agreement dated
     as of May 28, 1996 between the Lender and the Borrower, as amended by the
     Amendment Agreement, as such Loan Agreement may be further amended or
     otherwise modified from time to time.

          "RELATED LOAN AMOUNT" shall mean the following:

               (a)  prior to the date of the Amendment Agreement, the amount set
          forth in the Related Loan Agreement as originally executed and
          delivered, as such amount was amended by letter agreements between the
          Lender and the Borrower dated November 26, 1997 and May 13, 1998;


<PAGE>

               (b)  on the date of the Amendment Agreement and continuing until
          the date as to which the Borrower has made an alternative election
          pursuant to the terms of SECTION 2.15 of the Related Loan Agreement,
          the amount set forth in SECTION 3 of the Amendment Agreement; and 

               (c)  on such date as to which the Borrower has made an election
          pursuant and subject to the terms of SECTION 2.15 of the Related Loan
          Agreement, the amount set forth in the Borrower's written statement
          delivered to the Lender pursuant to the terms of SECTION 2.15 of the
          Related Loan Agreement, 

     subject in all events to the requirement that the Loan Amount plus the
     Related Loan Amount shall at all times equal Fifty Five Million Dollars
     ($55,000,000).

     (d)  AMENDMENT OF SECTION 2.17 -- ADJUSTMENTS TO PROJECT LOAN AMOUNT AND
ABF LOAN AMOUNT.  SECTION 2.17 of the ABF Loan Agreement is hereby amended to
read as follows:

          Section 2.17.  ADJUSTMENTS TO LOAN AMOUNT AND RELATED LOAN AMOUNT. 
     SECTION 3 of the Amendment Agreement sets forth the Loan Amount and the
     Related Loan Amount in effect on the date of the Amendment Agreement, and
     the allocations of the Related Loan Amount to the various Projects approved
     for funding on the date of the Amendment Agreement.  Thereafter, upon
     delivery to the Lender of thirty (30) days' prior written notice, the
     Borrower may elect to adjust the Loan Amount and the Related Loan Amount
     from the then current allocations, subject to the following terms and
     conditions:

               (a)  the Borrower's written notice shall specify (i) the Loan
          Amount, which amount shall not be less than Twenty Five Million
          Dollars ($25,000,000) nor more than Forty Million Dollars
          ($40,000,000), (ii) the Related Loan Amount, which amount shall not be
          less than Ten Million Dollars ($10,000,000) nor more than Twenty Five
          Million Dollars ($25,000,000)  and (iii) the total of the Loan Amount
          and the Related Loan Amount, which amount shall at all times equal
          Fifty Five Million Dollars ($55,000,000);

               (b)  the Related Loan Amount shall never be decreased to an
          amount less than the amount necessary to fund projects previously
          approved for financing pursuant to the terms of the Related Loan
          Agreement;

               (c)  the Borrower shall deliver to the Lender (i) such
          endorsements to the Title Policies as the Lender shall require to
          reflect any necessary increases in the amount of insurance provided by
          the Title Policies and (ii) such other documents as Lender may
          reasonably require; and


<PAGE>

               (d)  the Borrower shall make such adjustments to the Loan Amount
          and the Related Loan Amount no more frequently than four (4) times per
          year.

     (e)  AMENDMENT OF SECTION 5.4 -- FINANCIAL COVENANTS.  From and after the
date of this Amendment Agreement, SECTION 5.4 of the ABF Loan Agreement shall be
amended to read as follows:

          Section 5.4.   FINANCIAL COVENANTS.  Borrower shall comply with, or
     ensure compliance with, each of the following financial covenants:

               (a)  NET WORTH.  United Homes shall, on a consolidated basis, at
          all times maintain a Net Worth equal to or in excess of Ten Million
          Dollars ($10,000,000).

               (b)  LIMITATION ON DISTRIBUTIONS. United Homes shall not
          distribute dividends, bonuses or profit participations to officers or
          stockholders greater than thirty percent (30%) of year-end, audited,
          pre-tax profits generated in any one year.

               (c)  RATIO OF LIABILITIES TO ADJUSTED NET WORTH.  During the
          period commencing on the date of the Amendment Agreement and
          continuing through and including November 15, 1998, the ratio of
          United Homes' total liabilities (reported on a consolidated basis) to
          its Adjusted Net Worth shall not exceed 6.5. to 1.0.  During the
          period commencing November 16, 1998 and at all time thereafter, the
          ratio of United Homes' total liabilities (reported on a consolidated
          basis) to its Adjusted Net Worth shall not exceed 5.0 to 1.0. 

               (d)  POSITIVE NET INCOME.  The Borrower shall ensure that the
          pre-tax net income for the Borrower, on a consolidated basis, shall
          not be negative for any two consecutive calendar quarters, nor
          negative for any four consecutive calendar quarters on a cumulative
          basis.

     Section 3.     ALLOCATIONS OF PROJECT LOAN AMOUNT AND ABF LOAN AMOUNT. 
Commencing on the date of this Amendment Agreement and continuing until such
time as the Borrower makes an election to adjust the allocations of the Project
Loan Amount and the ABF Loan Amount as set forth in SECTION 2.15 of the Project
Loan Agreement and SECTION 2.17 of the ABF Loan Agreement, the allocations of
the Project Loan Amount and the ABF Loan Amount shall be as set forth in the
following table: 

<TABLE>
<CAPTION>

                                                    CURRENT
                             PROJECT               ALLOCATION
                <S>                                <C>
                Project Loan:
</TABLE>


<PAGE>

<TABLE>
                     <S>                           <C>
                     Casa del Cielo                $2,053,823
                     Gregg's Landing                1,975,318
                     Sienna Point, IL                 741,768
                     Tiffany Farms/Antioch          2,236,367
                     Waukegan/Bayberry              2,234,444
                     Woodside Green                   657,246
                     Bayberry, MI                     747,234
                     Sienna Point, MI               1,045,706
                     Harvest Run                    2,291,605
                     Cave Creek                     1,500,000
                     Desert Springs                 2,700,000

                                         SUBTOTAL  $18,183,511

                ABF Loan                           36,816,489

                                            TOTAL  $55,000,000

                Letters of Credit(1)               $1,811,842.25
</TABLE>

     (1)     The amount allocated to letters of credit shall be in addition to
the total of the Project Loan Amount and the ABF Loan Amount, provided that the
total of the letters of credit shall not exceed $2,000,000.


The allocations set forth in the preceding table replace in their entirety the
allocations set forth in that certain letter from the Lender to the Borrower
dated May 13, 1998, which letter shall be of no further force or effect.

     Section 4.     REPRESENTATIONS AND WARRANTIES OF BORROWER.  The Borrower
represents, warrants and agrees that (i) there exists no Potential Default or
Event of Default under the Project Loan Documents, the ABF Loan Documents or the
documents relating to the Working Capital Loan, (ii) the Project Loan Documents,
the ABF Loan Documents and the documents relating to the Working Capital Loan 
continue to be the legal, valid and binding agreements and obligations of the
Borrower enforceable in accordance with their terms, as modified herein,  (iii)
the Lender is not in default under any of the Project Loan Documents, the ABF
Loan Documents or the documents relating to the Working Capital Loan, (iv) the
Borrower has no offset or defense to its performance or obligations under any of
the Project Loan Documents, the ABF Loan Documents or the documents relating to
the Working Capital Loan, (v) the representations contained in the Project Loan
Documents, the ABF Loan Documents and the documents relating to the Working
Capital Loan remain true and accurate in all respects, and (vi) there has been
no Material Adverse Change from the date of any of the Project Loan Documents,
the ABF Loan Documents or the documents relating to the Working Capital Loan to
the date of this Modification Agreement.

     Section 5.     EFFECT ON PROJECT LOAN DOCUMENTS, ABF LOAN DOCUMENTS AND
DOCUMENTS RELATING TO THE WORKING CAPITAL LOAN.  Except as hereby expressly
modified, the Project Loan Documents, the ABF Loan Documents and the documents
relating to the Working Capital Loan shall otherwise be unchanged and shall
remain in full force and effect, and the Borrower ratifies


<PAGE>

and reaffirms all of its obligations thereunder.

     Section 6.     EXECUTION IN COUNTERPART.  This Amendment Agreement may 
be executed in any number of counterparts and by the different parties hereto 
on separate counterparts, each of which when so executed and delivered shall 
be an original, but all of which shall together constitute one and the same 
instrument.


<PAGE>


     IN WITNESS WHEREOF, Borrower has executed this Amendment Agreement and
Lender has consented to this Amendment Agreement as of the date first written
above by and through their duly authorized representatives.

                         BORROWER:

                         UNITED HOMES, INC.,
                         an Illinois corporation

                         By: 

                         Printed Name: 

                         Title: 

                         UNITED HOMES, INC.,
                         an Arizona corporation

                         By: 

                         Printed Name: 

                         Title: 

                         UNITED HOMES OF ILLINOIS, INC.,
                         an Illinois corporation

                         By: 

                         Printed Name: 

                         Title: 

                         UNITED HOMES OF MICHIGAN, INC.,
                         a Michigan corporation

                         By: 

                         Printed Name: 

                         Title: 


<PAGE>

The Lender consents to foregoing 
terms of this Amendment Agreement.

LENDER:

RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation


By: 

Printed Name: 

Title: