FORM  10-K

                       SECURITIES  AND  EXCHANGE  COMMISSION
                             Washington,  D.C.  20549
(Mark  One)

[X]  ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934
For  the  fiscal  year  ended  June  30,  2002
                                        OR

[  ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d) OF THE SECURITIES
      EXCHANGE  ACT  OF  1934
For  the  transition  period  from        to
                                   ------    ------

Commission  file  number  1-8824
                             CLAYTON  HOMES,  INC.
     (Exact  name  of  registrant  as  specified  in  its  charter)

Delaware                               62-1671360
----------------------------------    ----------------------------------------
(State  or  other  jurisdiction       (I.R.S.  Employer Identification  Number)
of  incorporation or  organization)


5000  Clayton  Road
Maryville,  Tennessee                  37804
----------------------------------    ----------------------------------------
(Address  of  principal  executive    (Zip  Code)
offices)

Registrant's  telephone  number,  including  area  code:  865-380-3000
Securities  registered  pursuant  to  Section  12(b)  of  the  Act:

                                              Name  of  each  exchange  on
Title  of  each  class                        which  registered
-----------------------------------------     --------------------------------
COMMON  STOCK,  $.10  PAR VALUE PER SHARE     NEW YORK STOCK EXCHANGE


      Securities  registered  pursuant  to  section  12(g)  of  the  Act:  None

Indicate  by check mark whether 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 if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in part III of this Form 10-K or any amendment to this
Form  10-K.  [X]

Aggregate  market  value  of  the  voting  stock  held  by non-affiliates of the
registrant  on  August  15,  2002, was approximately $1,282,194,323  (98,177,207
shares  at  closing  price  on  the  NYSE  of  $13.06).

Shares  of  common  stock,  $.10  par value (the "Common Stock"), outstanding on
August  15,  2002,  were  136,129,338.

Exhibit  index  appears  on  pages  14-15.

                DOCUMENTS  INCORPORATED  BY  REFERENCE

<TABLE>
<CAPTION>

Part of Form 10-K Affected                Documents from which portions are incorporated by reference
-------------------------------------------------------------------------------------------------------------------
<S>                                       <C>
Part II (except for Item 5)               The Company's Annual Report to Stockholders for fiscal year ended
                                          June 30,2002 (the "Annual Report"), which is filed as Exhibit 13 herewith

Part III                                  Proxy Statement relating to the Company's Annual Meeting
                                          of Stockholders on October 30, 2002 (the "Proxy Statement")
</TABLE>


                                        1
<PAGE>

                              CLAYTON HOMES, INC.

FORWARD LOOKING STATEMENTS

Certain statements in this annual report are "forward looking" as defined in the
Private Securities Litigation Reform Law. These statements involve certain risks
and  uncertainties  that  may  cause  actual  results  to differ materially from
expectations  as  of  the date of this report. These risks fall generally within
three broad categories consisting of industry factors, management expertise, and
government policy and economic conditions. Industry factors include such matters
as  potential  periodic  inventory  adjustments  by both captive and independent
retailers,  availability  of wholesale and retail financing, general or seasonal
weather  conditions  affecting sales and revenues, catastrophic events impacting
insurance  costs,  cost of labor and/or raw materials and industry consolidation
trends  creating  fewer,  but  stronger,  competitors  capable  of  sustaining
competitive  pricing  pressures.

Management  expertise  and  experience affects its overall ability to anticipate
and  meet consumer preferences, maintain successful marketing programs, continue
quality  manufacturing  output,  keep  a  strong  cost management oversight, and
achieve  stable  results  from  its  securitization  activities.

Lastly,  management  has  little  control  over  government  policy and economic
conditions  such  as  prevailing  interest  rates,  capital  market  liquidity,
government  monetary  policy,  stable  regulation  of  manufacturing  standards,
consumer  confidence,  favorable trade policies, and general prevailing economic
and  employment  conditions.


                                     PART I

ITEM  1.  BUSINESS.

GENERAL

Clayton  Homes, Inc. and its subsidiaries (collectively, the "Company") produce,
sell,  finance and insure primarily low to medium-priced manufactured homes. The
Company's  20 manufacturing plants produce homes which are marketed in 33 states
through  970  retailers, of which 287 are Company-owned sales centers and 82 are
Company-owned  community  sales  offices.  The  balance  (601)  of the Company's
retailers  are  comprised  of  independent  retailers,  located  in  32  states.
Installment  financing and insurance products are offered to its home buyers and
those  buying  from  selected  independent retailers. Such financing is provided
through  its  wholly-owned  finance subsidiary, Vanderbilt Mortgage and Finance,
Inc.  ("VMF").  The Company acts as agent, earns commissions and reinsures risks
on  physical  damage,  family  protection,  and  home buyer protection insurance
policies  issued  by  a  non-related  insurance  company  (ceding  company)  in
connection  with  its  home  sales. The Company also develops, owns, and manages
manufactured  housing  communities.

The Company is a Delaware corporation whose predecessor was incorporated in 1968
in  Tennessee.  Its  principal  executive  offices  are  located near Knoxville,
Tennessee.

The  following  table  indicates the percentage of revenue derived from sales by
Company-owned  retail  centers,  sales  to  independent  retailers and financial
services  operations  and  other income for each of the last three fiscal years.

<TABLE>
<CAPTION>

                                              YEAR ENDED JUNE 30,
<S>                                       <C>       <C>       <C>
                                            2002      2001      2000
                                           ------    ------    ------
Sales by Company-owned retail centers
  and communities                            55%       54%       55%
Sales to independent retailers               18%       19%       22%
Financial services and other                 27%       27%       23%
                                           ------    ------    ------
Total                                       100%      100%      100%
                                           ------    ------    ------
</TABLE>


MANUFACTURED  HOMES

A  manufactured home made by the Company is a factory-built, completely finished
dwelling.  Constructed to be transported by truck, the home is mounted on wheels
attached  to  its  frame.  Manufactured  homes  are  designed  to  be permanent,
owner-occupied  residences  sited  and  attached  to  utilities.


                                        2
<PAGE>

The  Company  manufactures a variety of single and multi-section homes in a wide
price range.  Retail prices range from $10,000 to $90,000 with sizes from 500 to
2,400  square  feet.

The  Company  markets  homes  under  the names of Clayton and Norris.   Included
standard  features  are  central  heating,  range,  refrigerator,  and
color-coordinated  window, wall and floor treatments.  Optional features include
central  air  conditioning,  wood-burning fireplaces, hardwood floors, whirlpool
tubs,  entertainment  systems,  microwaves,  dishwashers,  washers  and  dryers,
skylights  and  furniture.

MANUFACTURING  OPERATIONS

The  Company manufactures homes in 20 facilities, ranging in size from 63,000 to
194,000  square feet.  See "Item 2. Properties" for a listing by location of the
Company's  facilities.  The Company's manufactured homes are built in its plants
using  assembly-line techniques. Completion of a home ordinarily takes two days.
Homes  are  generally  produced  to  fill  orders  received from independent and
Company-owned  retail centers; therefore, the Company does not normally maintain
a significant inventory of homes at its plants.  Completed homes are transported
to  the  retail  centers  by  independent  carriers.

The  Company's  plants  operate  on  a  one-shift-per-day  basis, normally for a
five-day week, with the capacity to produce approximately 35,000 homes per year.
During  the  fiscal year ended June 30, 2002, the Company produced 20,457 homes.

The  principal  materials  utilized in the production of the Company's homes are
steel, aluminum, wood, fiberglass, carpet, vinyl floor covering, hardware items,
appliances  and  electrical  items.  The Company purchases these and other items
from  a  number  of supply sources, and it believes that the materials and parts
necessary  for  the  construction  and assembly of its homes will remain readily
available  from  these  sources.  The Company is not dependent on any particular
manufacturer  or  supplier  as  a  source for these principal materials.  In the
event  that  any  of these items are not readily available or are available at a
higher  cost than could be passed on to consumers, the operations of the Company
could  be  adversely affected.  Construction of the Company's manufactured homes
and  the  plumbing, heating and electrical systems installed in them must comply
with  standards  set  by the Federal Department of Housing and Urban Development
under  the  National  Manufactured Home Construction and Safety Standards Act of
1974.  See  "Regulation."

The  Company  offers  one-year  limited warranty programs covering manufacturing
defects  in  materials or workmanship in a home.  Warranties covering appliances
and  equipment  installed  in  the  homes  generally  are  obligations  of  the
manufacturers  of  such  items  and  are not those of the Company.  Warranty and
service  costs during the years ended June 30, 2002, June 30, 2001, and June 30,
2000,  amounted  to  approximately  $13,522,000,  $14,193,000,  and $14,589,000,
respectively.

The  backlog  of  firm  orders  for homes manufactured by the Company, including
orders  from  Company-owned  retail  centers,  was approximately $22,000,000 and
$35,000,000  on  June  30, 2002, and 2001, respectively.  Based on the Company's
production  rate,  approximately  two  weeks  would  be required to fill backlog
orders  at  June  30,  2002.

SALES  OF  HOMES  MANUFACTURED  BY  THE  COMPANY

The  following  table  sets  forth  manufacturing  sales  and other data for the
periods  indicated.


<TABLE>
<CAPTION>
                                                                 YEAR  ENDED JUNE 30,
                                                               2002      2001      2000
                                                               ----      ----      ----
<S>                                                          <C>       <C>        <C>
Number of homes sold to independent retailers                  8,240     9,119    12,247
Number of homes shipped to Company-owned retail centers       12,168    10,804    14,101
                                                              ------    ------    ------
Total                                                         20,408    19,923    26,348
                                                              ======    ======    ======
Number of plants operating                                        20        20        20
Number of independent retailers                                  601       634       707
Number of Company-owned communities                               82        81        76
Number of Company-owned retail centers                           287       297       318
</TABLE>


                                        3
<PAGE>

COMPANY  RETAIL  OPERATIONS

As  of  June  30,  2002, the Company sold homes through 287 Company-owned retail
centers  in  24  states.  In  addition  to  selling  homes built by the Company,
virtually  all  of  these  retail  centers  sell new homes manufactured by other
companies  and  previously-owned  manufactured  homes.

The  following  table  indicates  the number of Company-owned retail centers and
certain  information  relating to homes sold during the last three fiscal years.


<TABLE>
<CAPTION>
                                                           YEAR ENDED JUNE 30,
                                                          2002     2001     2000
                                                         -------  -------  -------
<S>                                                      <C>      <C>      <C>
Number of Company-owned retail centers                       287      297      318
Number of new homes sold (including homes built by the
    Company and by other manufacturers)                   12,772   12,346   14,022
Average retail price of new homes sold                   $44,759  $43,643  $43,892
Number of previously-owned homes sold                      3,105    3,556    3,910
</TABLE>

All  of  the  Company-owned  retail centers employ salespeople who are primarily
compensated  on  a  commission  basis.  The  retail  centers  do  not  have
administrative  staffs  since most administrative functions are performed at the
Company's  corporate  headquarters.

To  provide  customers  a  wider price range of homes, the Company purchases and
acquires  on trade previously-owned manufactured homes from individuals and from
other  retailers,  as well as foreclosed homes from lenders throughout its trade
territory.

Homes  sold  by  Company-owned  retail  centers are delivered to the homeowners'
sites  by  trucks  either  owned  by  the  Company  or leased for the particular
delivery.  The  purchase price of the home may include delivery and setup of the
home at the retail homeowner's site.  Electrical, water, and gas connections are
performed  by  licensed  technicians.

INDEPENDENT  RETAILERS

In the fiscal year ended June 30, 2002, 40% of homes manufactured by the Company
were  sold to its independent retailers, compared to 46% for the year ended June
30,  2001.  As  of June 30, 2002, the Company supplied its manufactured homes to
601  independent  retailers  in  32  states.  The Company's independent retailer
network enables it to distribute homes to more markets, more quickly, without as
large an investment in management resources and overhead expenses as is required
with  Company-owned  retail  centers.  Sales to independent retailers ensure the
Company  that  its  homes  are  competitive with other manufacturers in terms of
consumer  acceptability,  product  design,  quality  and  price.

The  Company's  finance subsidiary, VMF, provides financing for retail customers
of  select  independent  retailers  with  terms  and conditions similar to those
provided  to  Company-owned locations.  In addition, VMF also provides inventory
financing  for  certain  Company  and  non-Company  independent  retailers.

The  Company  establishes  relationships  with its independent retailers through
sales  representatives  from  its  manufacturing  plants.  These representatives
visit  independent  retailers  in  assigned  areas  to  solicit  orders  for the
Company's  homes.  The  area is generally limited to a 500 mile radius from each
of  the Company's manufacturing plants due to the relatively significant cost of
transporting  a  home.  Depending  on the cost of the home and the manufacturing
competition  within  the  area,  a  home may be competitively shipped shorter or
longer  distances.  During  each  of  the  Company's last three fiscal years, no
single  retailer  accounted  for  more  than  2%  of  the Company's consolidated
revenues.

The  Company's  independent  retailers  generally  provide  their  own inventory
financing,  allowing  the  Company to receive payment for homes within two weeks
after the home is constructed.  The Company does not require agreements with its
independent  retailers, and the relationship between the Company and each of its
independent  retailers  may  be  terminated  at  any  time by either party.  The
Company  believes its relationships with its independent retailers are good, and
has  experienced  relatively  little turnover among independent retailers in the
past several years. The Company generally has little control over the operations
of  independent  retailers.

                                        4

<PAGE>

As  is  customary  in  the  industry,  lenders  financing  independent  retailer
purchases  require  that the Company execute repurchase agreements which provide
that,  in the event of retailer default under the retailer's inventory financing
arrangements,  the Company will repurchase homes for the amount remaining unpaid
to  the  lender,  excluding  interest and repossession costs.  Historically, any
homes  repurchased  under  such  agreements  are  immediately  resold  to  other
retailers,  including  Company-owned  retail  centers,  at  approximately  the
repurchase  price.  During  the last five fiscal years, the Company has incurred
no significant losses resulting from these contingent obligations, but there can
be  no  assurance  that  losses  will  not  occur  in  the  future.

FINANCIAL  SERVICES

The  Company  believes  that  the  ability to make financing available to retail
purchasers  is a material factor affecting the market acceptance of its product.
The  Company  facilitates retail sales by offering various finance and insurance
programs.  The  following  table reflects the relative percentages of homes sold
by  Company-owned retail centers which were financed through the Company, either
by  VMF  or  by  conventional  lenders,  and  those  sales made to customers who
arranged  their  own  financing  or  paid  cash.

<TABLE>
<CAPTION>
                                   YEAR ENDED JUNE 30,
                                2002      2001      2000
                               -----     -----     -----
<S>                           <C>       <C>       <C>
VMF                              71%       74%       76%
Conventional lenders              5%        2%        3%
Customer arranged or cash        24%       24%       21%
                               -----     -----     -----
Total                           100%      100%      100%
                               =====     =====     =====
</TABLE>

VMF  also  purchases  and  originates  manufactured housing installment contract
receivables  (also  referred  to  as  manufactured  housing  contracts)  on  an
individual  basis  from  independent  retailers.  Retailers  submit  home  buyer
applications  to  VMF for approval and, provided that credit reports, employment
verification,  and  income  and  debt  analysis  meet VMF's criteria, a contract
purchase  commitment  is  issued  to  the  selling  retailer.

VMF  makes  bulk  purchases  of  manufactured  housing  contracts from banks and
commercial lenders. It also performs, on behalf of other institutions, servicing
of  manufactured housing contracts that were not purchased or originated by VMF.
These purchases and servicing arrangements may relate to the portfolios of other
lenders  or  finance  companies,  governmental  agencies, or other entities that
purchase  and  hold  manufactured  housing  contracts.

UNDERWRITING  POLICIES.  Retail customers of the Company who express a desire to
obtain  financing  by  or through the Company complete a credit application form
which  is  initially  reviewed  by  the  manager  of  the retail center and then
forwarded  to  VMF.

VMF's  underwriting  guidelines require that each applicant's credit, residence,
employment  history  and  income  to  debt  payment  ratios  meet  predetermined
guidelines.  If  in the judgment of the VMF credit manager an applicant does not
meet  minimum underwriting criteria, there must be other determining criteria in
order  for an applicant to be approved.  Credit managers confirm that the credit
investigation  gives  a  complete  and  up-to-date accounting of the applicant's
creditworthiness  and  are  encouraged  to  obtain  second opinions on loans for
relatively  large  dollar  amounts or those which tend to rank lower in terms of
underwriting  criteria.  Generally,  the  sum of the monthly installment housing
obligation,  which  includes the manufactured home loan payment and monthly site
costs,  should  not  exceed  35%  of  the  applicant's  gross  monthly  income.

With  respect  to  those  home  buyers  which  are approved, VMF requires a down
payment  in  the  form  of  cash,  the  trade-in  value  of  a  previously-owned
manufactured home, and/or the estimated value of equity in real property pledged
as  additional  collateral.  For  previously-owned homes, the trade-in allowance
accepted  by  the  retailer  must  be  consistent  with the value of the home as
determined  by  VMF  in  light  of  current market conditions. The value of real
property pledged as additional collateral is estimated by licensed appraisers or
by  retail  personnel,  who are not appraisers but are familiar with the area in
which  the property is located. The average down-payment for 2002 was 20% of the
purchase  price,  while  the  minimum  down-payment  for  qualified  buyers  was
generally  5%.  The  purchase  price  includes the stated cash sale price of the
manufactured  home,  sales  or  other  taxes  and  fees  and  set-up  costs.

                                        5
<PAGE>

The  balance  of  the purchase price is financed using various installment sales
contracts  or  mortgage  instruments  providing  for  a  purchase money security
interest in the manufactured home and a mortgage on any real property pledged as
additional  collateral.  Normally,  the  contracts  provide  for  equal  monthly
payments,  generally over a period of seven to thirty years at fixed or variable
rates  of  interest.  VMF  believes  the  typical manufactured home purchaser is
primarily  sensitive to the amount of the monthly payment and not necessarily to
the  underlying  interest  rate.

The  Company  offers  a bi-weekly payment program which provides for 26 payments
per  year,  allowing  home  buyers  the  convenience  of electronically drafting
payments  from  their  checking  accounts while reducing the overall term of the
loan.  The  Company  believes  that such financing options are attractive to the
customer  and  improve  market  acceptance  of  its  homes  as  well  as improve
delinquency  and  repossession  experience.

During  the  Company's last 13 fiscal years, VMF was the most significant source
of  financing  for purchasers of homes sold by the Company-owned retail centers.
In  fiscal  year 2002, VMF originated 23,204 contracts, as compared to 21,720 in
fiscal  year  2001.  At  June  30, 2002, VMF was servicing approximately 162,000
contracts  with  an  aggregate dollar amount of approximately $5.0 billion.  VMF
originated  or  purchased  approximately  153,000  of  these  contracts  with an
aggregate dollar amount of approximately $4.8 billion.  The Company expects that
VMF  will  continue  to  originate  a  significant  portion of the financing for
purchasers  of  its  homes.

The  volume  of manufactured housing contracts originated by VMF for the periods
indicated  below  and certain other information at the end of such periods is as
follows:

<TABLE>
<CAPTION>
                                                 CONTRACT ORIGINATIONS
                                                   YEAR ENDED JUNE 30,
                                              2002       2001        2000
                                            ---------  ---------  -----------
<S>                                         <C>        <C>        <C>
Principal balance of contracts originated
  (in thousands)                            $912,508   $815,058   $982,570
Number of contracts originated                23,204     21,720     26,161
Average contract size                       $ 39,325   $ 37,526   $ 37,559
Average interest rate                          10.10%     11.67%     10.85%
</TABLE>

The following table indicates the number of loans (in thousands) serviced by VMF
on  the  dates  indicated:

<TABLE>
<CAPTION>
                                              LOANS SERVICED (IN THOUSANDS)
                                                    YEAR ENDED JUNE 30,
                                               2002       2001        2000
                                               ----       ----        ----
<S>                                           <C>        <C>         <C>
Originated and purchased loans serviced         153        138         130
Master servicing contracts                        9         10          12
                                               ----       ----        ----
Total                                           162        148         142
</TABLE>

VMF  FUNDING.  VMF draws on its short-term credit facilities with the Company to
fund  manufactured home loans, while long-term financing is obtained through the
capital  markets.  In  fiscal  2002,  VMF  completed  four  public  offerings of
asset-backed  securities totaling approximately $1.9 billion.  In excess of $8.3
billion  of  securities  have  been  issued  and  sold  since  1991.

VMF's  capital  market activity, the primary source of permanent funding for its
lending activities, is in the form of asset-backed securities issued through its
special purpose entity.  These securities, which are sold in public markets, are
collateralized  by  manufactured housing receivables which are either originated
or acquired by VMF.  Certain of these receivables are originated and subserviced
by  other  entities.  With  respect  to  the  securitized  pools  that  contain
receivables  originated  or  acquired by other entities, VMF is servicer for all
loans  in the pools, with a subservicing arrangement on some loans originated or
acquired  from  other  entities.

Loans insured by the Federal Housing Administration ("FHA") or guaranteed by the
Veterans  Administration  ("VA")  are  permanently funded through the Government
National  Mortgage  Association  ("GNMA")  pass-through program.  Under the GNMA
program,  installment  sales  contracts are warehoused by VMF and then pooled in
denominations  of  approximately $3,000,000 to collateralize the issuance by VMF
of  securities

                                        6
<PAGE>

guaranteed  by GNMA under the provisions of the National Housing Act.  Under the
GNMA  program,  VMF retains the servicing of the installment sales contracts and
is responsible for passing through payments under the contracts to GNMA security
holders.  During the fiscal year ended June 30, 2002, VMF originated installment
sales  contracts  eligible for financing under the GNMA program having aggregate
principal  balances  of $15,466,000.  As of June 30, 2002, VMF was servicing 212
GNMA  pools  totaling  $68  million in principal balances.  Use of FHA financing
minimizes  the  Company's  contingent  liability  for  these  installment  sales
contracts  because  of the government-insured nature of the loans.  Accordingly,
the  Company  believes that the use of this form of financing, for customers who
qualify,  increases  the  marketability  of  its  manufactured  homes.

Certain  of  the agreements related to borrowings include covenants with respect
to  the  Company's  financial condition and corporate existence.  The Company is
contingently  liable  as guarantor on installment contract receivables sold with
recourse.   At  June  30,  2002, and 2001, the outstanding principal balances of
these  receivables  totaled  approximately  $68  million  and  $84  million,
respectively.  There  were  no  receivables sold with recourse in 2002, 2001 and
2000.

ACQUIRED  CONTRACTS  AND SERVICING ARRANGEMENTS.  Certain acquired contracts are
originated  by  banks or commercial lenders, and acquired indirectly or directly
by  VMF.  The  acquired  contracts  are  purchased  on the basis of underwriting
criteria  that  may  be  different  from  and  may  not  be  as  strict as VMF's
underwriting  criteria.

In  fiscal  year  1998,  VMF  became the servicer of 10,013 manufactured housing
installment sales contracts with approximate principal balances of $267 million.
VMF  acts  solely  as servicer with respect to these contracts and, thus, has no
ownership interest nor contingent liability related to these portfolios. At June
30,  2002,  VMF  was  servicing  approximately  9,000 of these installment sales
contracts with an approximate principal balance of $158 million. In addition, in
2002,  VMF  acquired  22,996  contracts  with  an aggregate principal balance of
approximately $900 million. VMF has contracted with an affiliate finance company
to  sub-service  approximately  $450  million  of  these  receivables.

DELINQUENCY  AND  REPOSSESSION  EXPERIENCE.  VMF  performs  recordkeeping  and
collection  activities  on  all  loans  that  it originates or purchases through
portfolio  acquisitions.  Although  the terms of the installment sales contracts
vary  according to the financial institutions which purchase the contracts, most
contracts provide that the failure to make a payment as scheduled is an event of
default which gives rise to the right to repossess the home.  However, generally
the  Company  does  not  repossess  the  home  until  payments  are three months
delinquent, unless the borrower does not have apparent ability to bring payments
current,  in  which  case  repossession may occur sooner.  The Company generally
follows  the  same policy with respect to loans insured by the FHA or guaranteed
by  the  VA,  although  the Company must also file a notice of claim within nine
months  after default with the agency to preserve its rights under the programs.

The  following  table  sets  forth  delinquent  installment sales contracts as a
percentage  of  the  total  number  of  installment sales contracts on which the
Company  provided  servicing  and  was  either contingently liable or owner.  An
account  is  considered  delinquent  if any payment is past-due 30 days or more.

<TABLE>
<CAPTION>
                                         DELINQUENCY PERCENTAGE AT JUNE 30,
                                               2002      2001     2000
                                               ----      ----     ----
<S>                                           <C>      <C>      <C>
Total delinquencies as percentage of
  contracts outstanding
  All contracts                                 2.84%    2.59%    2.19%
  Contracts originated by VMF                   2.29     2.12     1.67
  Contracts acquired from other institutions    4.96     4.89     4.88
</TABLE>

The  following  table  sets  forth information related to loan loss/repossession
experience  for  all  installment  contract  receivables on which the Company is
either  owner  or  contingently  liable:

                                        7
<PAGE>


<TABLE>
<CAPTION>
                                                      YEAR ENDED JUNE 30,
                                                  2002      2001       2000
                                                  ----      ----       ----
<S>                                             <C>        <C>        <C>
Net losses as percentage of average
  loans outstanding
     All contracts                                2.2%       1.8%       1.4%
     Contracts originated by VMF                  2.1%       1.7%       1.2%
     Contracts acquired from other institutions   2.5%       2.5%       2.8%
Number of contracts in repossession
     All contracts                               2,790      2,652      2,231
     Contracts originated by VMF                 2,061      2,191      1,774
     Contracts acquired from other institutions    729        461        457
Total number of contracts in repossession as
  percentage of total contracts                  1.83%      1.93%      1.72%
</TABLE>

The  Company currently, at its option, pays the unpaid balance of an installment
sales  contract  for  which  it  is  liable  upon repossession of the home.  The
Company  believes  that as long as it is able to sell repossessed homes promptly
at satisfactory prices, the costs associated with remarketing these homes can be
mitigated.  There  can  be  no  assurance,  however,  that  the Company's future
results  with  respect  to  the  payoff  and resale of repossessed homes will be
consistent  with  its past experience.  See Note 7 to the Consolidated Financial
Statements  in  the  Annual  Report.

INSURANCE  OPERATIONS.  The  Company  acts  as  agent on physical damage, family
protection,  and  home  buyer  protection  plan  insurance  policies  written by
unaffiliated  insurance  companies  (ceding  companies)  for  purchasers  of its
manufactured  homes.  During  the  fiscal  year ended June 30, 2002, the Company
acted  as  the  agent  on  physical  damage,  family  protection, and home buyer
protection policies on approximately 63%, 49%, and 79%, respectively, of Company
retail  sales.

Physical  damage  and  home  buyer  protection  plan policies issued through the
Company's  agency  are  reinsured  through  Vanderbilt  Property  and  Casualty
Insurance  Co.,  LTD  ("VPAC"),  a  wholly-owned subsidiary of the Company.  The
family  protection  insurance  policies  issued through the Company's agency are
reinsured  through  Vanderbilt  Life  and Casualty Insurance Co., LTD, ("VLAC"),
Midland States Life Insurance Company ("MSLC") and Eastern States Life Insurance
Company  ("ESLC"),  which  are  majority-owned  subsidiaries  of  the  Company.

Effective  June  1,  2002,  the  Company  entered into a Catastrophe Reinsurance
Contract  that generally provides protection of losses arising from one event in
excess  of  $10  million.  The  reinsurers  are  liable for 100% of the next $10
million  of  losses.


MANUFACTURED  HOUSING  COMMUNITIES

The  Company  owns  and  operates 82 manufactured home communities in 12 states.
These  communities  provide  attractive living environments to residents leasing
sites  for  manufactured homes, many of which are built and sold by the Company.
In  addition,  these  communities  also lease sites to residents who already own
their  homes.  Some  communities  also  lease or rent Company-owned manufactured
homes  and  the  sites.

In  fiscal  2002 the Communities group developed 111 home sites in one community
and  added 150 sites at existing locations, bringing total sites owned to 21,382
at  June 30, 2002, a 1% increase from the prior year.  See "Item 2. Properties."
Communities'  overall  revenues were up 3% in 2002.  Rental revenues rose 2% and
sales  increased  2%.  The  following  table lists the number of community sites
owned  and  the  aggregate  occupancy  rate  at the end of the last three fiscal
years:


<TABLE>
<CAPTION>

                                    JUNE 30,
                             2002     2001     2000
                             ----     ----     ----
<S>                         <C>      <C>      <C>
Homes sites owned          21,382   21,121   20,168
Occupancy rate                76%      75%      75%
</TABLE>

                                        8
<PAGE>


REGULATION

The  Company's  manufactured homes are subject to a number of federal, state and
local  laws.  Construction  of  manufactured housing is governed by the National
Mobile  Home  Construction  and  Safety  Standards  Act  of  1974.  In 1976, the
Department  of  Housing  and  Urban Development ("HUD") issued regulations under
this  Act  establishing  comprehensive national construction standards.  The HUD
regulations  cover  all  aspects  of  manufactured  home construction, including
structural  integrity,  fire  safety,  wind  loads  and thermal protection.  The
Company's  manufacturing  facilities  and  the  plans and specifications for its
manufactured  homes have been approved by a HUD-designated inspection agency.  A
HUD-approved  organization  regularly  inspects the Company's manufactured homes
for  compliance during construction.  Failure to comply with the HUD regulations
could  expose  the Company to a wide variety of sanctions, including closing the
Company's  plants.  The  Company  believes the homes it manufactures comply with
all  present  HUD requirements.  In addition, certain components of manufactured
homes  are subject to regulation by the Consumer Product Safety Commission which
is  empowered,  in  certain circumstances, to ban the use of component materials
believed  to  be  hazardous  to health and to require the manufacturer to repair
defects  in  components  in  its  homes.  In  February  1983,  the Federal Trade
Commission  adopted  regulations  requiring  disclosure of a manufactured home's
insulation  specifications.

A  variety  of  laws  affect  the  sale  of  manufactured homes on credit by the
Company.  The  Federal  Consumer  Credit  Protection  Act (Truth-in-Lending) and
Regulation  Z  (issued  by the Board of Governors of the Federal Reserve System)
require  written  disclosure  of  information  relative  to  such  credit sales,
including  the amount of the annual percentage rate and the finance charge.  The
Federal  Fair  Credit  Reporting  Act  also  requires  disclosure  of  certain
information  used  as  a  basis  to  deny  credit.  The  Federal  Equal  Credit
Opportunity  Act  and  Regulation  B  (issued  by  the Board of Governors of the
Federal  Reserve  System)  prohibit  discrimination against any credit applicant
based  on  sex,  marital  status,  race,  color,  religion, national origin, age
(provided  the  applicant  has the capacity to contract), receipt of income from
any public assistance program or the good faith exercise by the applicant of any
right  under  the  Consumer  Credit  Protection  Act.  Regulation  B establishes
administrative requirements for compliance with the Equal Credit Opportunity Act
and, among other things, requires the Company to provide a customer whose credit
request has been denied with a statement of reasons for the denial.  The Federal
Trade  Commission  has issued or proposed various Trade Regulation Rules dealing
with  unfair  credit  practices,  collection efforts, preservation of consumers'
claims  and  defenses  and  the  like.  Installment sales contracts eligible for
inclusion in the GNMA Program are subject to credit underwriting requirements of
the  FHA  or  the  VA.

The  transportation  and  use of the Company's manufactured homes are subject to
highway use laws, ordinances and regulations of various federal, state and local
authorities.  Such  regulations  may prescribe size and road use limitations and
impose  lower  than  normal  speed  limits  and  various other requirements. The
Company's  manufactured  homes  and  its  development  of  manufactured  housing
communities  are  also  subject  to  local  zoning  and  housing  regulations.

The  Company  is also subject to the Federal Fair Debt Collection Practices Act,
which  regulates  the  manner  in  which  the  Company  collects payments on its
installment  sales  contracts,  and  the Magnuson-Moss Warranty Improvement Act,
which regulates the descriptions of warranties on products.  The description and
substance  of  the  Company's  warranties are also subject to a variety of state
laws and regulations. Insurance agency activities are subject to state insurance
laws  and regulations as determined by the particular insurance commissioner for
each  state  in  accordance with the McCarran-Ferguson Act.  Sales practices are
governed at both the federal and state level through various consumer protection
trade  practices  and  public  accommodation  laws  and  regulations.

VPAC  and  VLAC  are  subject  to insurance and other regulations of the British
Virgin Islands.  MSLC and ESLC are subject to insurance and other regulations of
the Turks and Caicos Islands.  The Company's operations are subject to a variety
of  other  statutes  and  regulations.

COMPETITION

The  manufactured  housing  industry is highly competitive at the manufacturing,
retail  and finance levels in terms of price, service, delivery capabilities and
product  performance.  There  are  many  firms  in  direct  competition with the
Company.  The  Company  believes it has a competitive advantage over firms which
do  not  have  manufacturing,  retailing  and financing capabilities.  Since the
Company's homes are a form of low-cost housing, they compete with other forms of
such  housing  including  apartments  and  conventionally-

                                        9
<PAGE>

built and prefabricated homes.  Some of the Company's competitors are larger and
have  significant financial resources while other competitors are quite small in
relation  to  the  size of the Company.  The capital requirements for entry into
both  the manufacturing and retail segments are relatively small, with financing
available  to  them.  The  Company  is  not able to estimate the total number of
competitors  in  its  marketing  area.

FINANCIAL  INFORMATION  ABOUT  INDUSTRY  SEGMENTS

Financial  information  with  respect  to  the  Company's  operating segments is
incorporated  herewith  by  reference  to  page  22  of  the  Annual  Report.

EMPLOYEES

As  of  June 30, 2002, the Company employed 6,784 persons.  Of these, 1,892 were
employed  in  retail,  3,673 in manufacturing, 685 in financial services, 441 in
communities  and 93 in executive and administrative positions.  The Company does
not  have  any  collective  bargaining  agreements  and  considers  its employee
relations  to  be  good.

ITEM  2.  PROPERTIES.

The  Company's  Financial  Services operations and executive offices are located
near  Knoxville,  Tennessee  in  a wholly-owned, two-story building with 135,000
square  feet  of  space. The following table sets forth the properties which the
Company  uses for its manufacturing operations and locations of its manufactured
housing communities.  All of the buildings used for manufacturing operations are
constructed  of  fabricated  metal  on  a  concrete  slab.

LOCATION  OF  PROPERTY

<TABLE>
<CAPTION>


                               APPROXIMATE                                 APPROXIMATE
MANUFACTURING OPERATIONS       SQUARE FEET       MANUFACTURING OPERATIONS  SQUARE FEET
<S>                       <C>                    <C>                       <C>
Owned by Company:                                Owned by Company:
  Arizona                                          Tennessee (continued)
    El Mirage                    123,000             Ardmore                  100,000
  Georgia                                            Rutledge                  87,000
    Waycross                     100,000             Bean Station #1          114,000
  Kentucky                                           Bean Station #2          137,000
    Hodgenville                  130,000             Andersonville            128,000
  North Carolina                                     White Pine               137,000
    Henderson                    112,000           Texas
    Oxford                        92,000             Waco #1                  148,000
    Richfield                    194,000             Waco #2                   99,000
  Tennessee                                          Bonham                   117,000
    Maynardville                 110,000             Sulphur Springs          113,000
    Savannah #1                  104,000
    Savannah #2                  109,000          Leased:
                                                    Halls, Tennessee           63,000
</TABLE>

                                       10
<PAGE>

<TABLE>
<CAPTION>
                               APPROXIMATE                                 APPROXIMATE
COMMUNITIES                      ACRES          COMMUNITIES                   ACRES
<S>                          <C>                <C>                     <C>
Owned by Company:                                Owned by Company:
  Arizona                                          Tennessee
    El Mirage                         35             Chattanooga                   34
    Glendale                          14             Knoxville (4)                202
    Phoenix                           47             LaVergne                      76
  Florida                                            Louisville                    41
    Gainesville (2)                  132             Millington                    29
    Jacksonville (5)                 330             Morristown                    12
    Kissimmee                         41             Maryville (2)                 34
    Mulberry (2)                     162             Powell (2)                    69
    Plant City                        38             Sevierville                  115
    Princeton                         37             Smyrna                        26
    Tallahassee                       39             Tullahoma                     18
  Georgia                                          Texas
    Douglasville (2)                  97             Arlington                     39
    Rossville                         78             Dallas (3)                   140
  Iowa                                               Denton (3)                   201
    Carter Lake                       41             Fort Worth (4)               154
  Michigan                                           Flower Mound                  18
    Kalamazoo                        126             Greenville                    40
  Missouri                                           Houston (3)                  158
    Independence                      90             Humble                        55
  North Carolina                                     Little Elm                    86
    Greensboro                        83             Pearland                      50
  Oklahoma                                           Princeton                     69
    Edmond                            37             San Angelo                    90
    Enid                              20             San Antonio (6)              294
    Lawton                            38             Schertz                       71
    Midwest City                      25             Wilmer                        69
    Norman                            44             Wylie (2)                    209
    Oklahoma City (2)                116           Virginia
  South Carolina                                     Evington                      70
    Columbia                          97             Blacksburg                    38
    Florence (2)                      97
</TABLE>

The  Company-owned  retail  centers  are three to four acre sites with a special
manufactured  office  unit  serving  as  the sales office.  The remainder of the
retail  center  site  is  devoted  to  the  display of homes.  Of the 287 retail
centers,  159  are  owned  by  the Company and 128 occupy leased property.   The
Company  does  not  believe  that any individual retail sales center property is
material  to  its  overall  business.

<PAGE>

All  of  the properties described above are well maintained and suitable for the
purposes  for  which  they  are  being  used.  The  Company  believes  that  its
properties  are  adequate  for  its  near-term  needs.

ITEM  3.  LEGAL  PROCEEDINGS.

No  material  legal  proceedings  are  pending  other  than  routine  litigation
incidental  to the business of the Company.   The Company believes that such the
ultimate  resolution  of  such  proceedings  will  not have any material adverse
effect  on  it  or  its  operations.

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SHAREHOLDERS.

No  matters  were submitted to a vote to shareholders during the last quarter of
the  Company's  fiscal  year  ended  June  30,  2002.


                                       11
<PAGE>

                                    PART II

ITEM  5.  MARKET  FOR  THE  REGISTRANT'S  COMMON  EQUITY AND RELATED STOCKHOLDER
MATTERS.

(a)  The  Common  Stock  is  traded on the New York Stock Exchange (the "NYSE").
The  following  table  sets forth, for fiscal years 2002 and 2001, respectively,
the  range  of  high  and  low  closing  sale  prices  as  reported by the NYSE.

<TABLE>
<CAPTION>
                             FISCAL                FISCAL
                              2002                  2001
                              ----                  ----
QUARTER ENDED              High      Low        High      Low
<S>                       <C>       <C>       <C>       <C>
   September             $16.50    $10.75      $10.00    $ 8.13
   December               17.41     12.60       12.88      8.75
   March                  17.21     14.49       14.50     12.05
   June                   19.28     15.10       15.82     11.55
</TABLE>

(b)  As  of  August  15, 2002, there were 9,185 holders of record (approximately
44,000  beneficial  holders)  of  the  Company's  Common  Stock.

(c)  It  is  the  policy  of  the  Board of Directors of the Company to reinvest
substantially  all  earnings  in  the  business.  At its April 2001 meeting, the
Board  of  Directors changed the Company dividend policy from quarterly payments
to  an annual payment. The first annual dividend of 6.4 cents per share was paid
in  January 2002.  Future dividend policy will depend on the Company's earnings,
capital  requirements, financial condition and other factors considered relevant
by  the Board of Directors in its sole discretion.  Additionally, certain of the
Company's  financing  agreements  have  various covenants that restrict payments
which  may  be  made  for  dividends  and  other  stock  transactions.

The  following  portions  of the 2002 Annual Report are incorporated herewith by
reference  (page  number  references  are  to  the  Annual  Report):

ITEM  6.  SELECTED  FINANCIAL  DATA.
Eleven  Year  Review  on  page  6.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS.
Management's  Discussion  and  Analysis  of  Financial  Condition and Results of
Operations  on  pages  7-11.

As required by the Securities and Exchange Commission final release no. 33-8048,
the  table  provided below represents the equity compensation plan disclosure in
aggregate. For further information, please refer to Note 8 on pages 20-21 in the
2002  Annual  Report.  All  information  presented below is reported at June 30,
2002.

<TABLE>
<CAPTION>

                                                                                           NUMBER OF SECURITIES
                                             (A)                                          REMAINING AVAILABLE FOR
PLAN CATEGORY                    NUMBER OF SECURITIES TO BE      WEIGHTED-AVERAGE      FUTURE ISSUANCE UNDER EQUITY
                                   ISSUED UPON EXERCISE OF       EXERCISE PRICE OF          COMPENSATION PLANS
                                     OUTSTANDING OPTIONS,       OUTSTANDING OPTIONS,      (EXCLUDING SECURITIES
                                     WARRANTS AND RIGHTS        WARRANTS AND RIGHTS      REFLECTED IN COLUMN (A))
<S>                                        <C>                   <C>                  <C>
Equity compensation plans approved
  by security holders                       5,729,954                 $11.23                    3,317,696
Equity compensation plans
  not approved by security holders                  -                     -                             -
Total                                       5,729,954                 $11.23                    3,317,696
</TABLE>

ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK.
Market  Risk  on  page  10.

                                       12
<PAGE>

ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA.

 -  Quarterly  Results  (unaudited)  on  page  11.
 -  Report  of  Independent  Accountants  on  page  12.
 -  Consolidated  Balance  Sheets  on  page  12.
 -  Consolidated  Statements  of  Income  on  page  13.
 -  Consolidated  Statements  of  Shareholders'  Equity  on  page  14.
 -  Consolidated  Statements  of  Cash  Flows  on  page  15.
 -  Notes  to  the  Consolidated  Financial  Statements  on  pages  16-24.

ITEM  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE.
Not applicable during the Company's fiscal year ended June 30, 2002, and through
the  date  of  this  report.

                                       13
<PAGE>

                                    PART III

ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT.

EXECUTIVE  OFFICERS  OF  THE  COMPANY

<TABLE>
<CAPTION>

NAME                 AGE      POSITION
<S>                  <C>      <C>
Kevin T. Clayton      39      Chief Executive Officer, President, and President, Financial Services (a)

David M. Booth        50      Executive Vice President and President, Retail (b)

Richard D. Strachan   61      Executive Vice President and President, Manufacturing (c)

John J. Kalec         52      Executive Vice President and Chief Financial Officer (d)

Allen Morgan          55      Vice President and General Manager, Communities (e)

</TABLE>

(a)  Mr.  Clayton  has been President of Financial Services since 1995. Prior to
that  time,  he  served  in  various  management positions with the Company.  In
August  1997, he was named President and Chief Operating Officer of the Company.
In  July  1999,  he  was  named  Chief  Executive  Officer.
(b)  Mr.  Booth  has been Executive Vice President of the Company since 1997 and
President of Retail since 1995.  Prior to that time, he served as Executive Vice
President  of  Retail  and  in  other  management  positions  with  the Company.
(c)  Mr. Strachan has been Executive Vice President of the Company and President
of Manufacturing since 1998 and President of Manufacturing since 1997.  Prior to
that  time,  he served as Vice President and General Manager of Manufacturing as
well  as  other significant management positions with the Company and within the
industry.
(d)  Mr.  Kalec  rejoined the Company in 2001 as Senior Vice President and Chief
Financial  Officer.  From  January  2000  to August 2001, he was Chief Financial
Officer and Executive Vice President of iPIX.  From August 1998 to January 2000,
he served as Vice President and Chief Financial Officer of Interactive Pictures.
Prior to that time, he served as Senior Vice President, Chief Financial Officer,
and  Secretary  of Clayton Homes, Inc. from 1996 to 1998.  In 2002, he was named
Executive  Vice  President  and  Chief  Financial  Officer.
(e)  Mr.  Morgan  joined  the  Company  in  1998,  as  General  Manager  of  the
Communities  Group.  In  September  1999,  he  was  named  Vice President of the
Company.  From  1992  to  1998  he  was Superintendent of Knox County, Tennessee
Schools.

The  Company's  executive  officers  serve  at  the  pleasure  of  the  Board of
Directors.

All  other  required  information  is  incorporated  by  reference  to the Proxy
Statement  under  the  heading  ELECTION  OF DIRECTORS AND DIRECTOR BIOGRAPHIES.

ITEM  11.  EXECUTIVE  COMPENSATION.
Incorporated  by reference to the Proxy Statement under the heading COMPENSATION
OF  MANAGEMENT.

ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND MANAGEMENT.
Incorporated  by reference to the Proxy Statement under the headings ELECTION OF
DIRECTORS AND DIRECTOR BIOGRAPHIES, SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
and  PRINCIPAL  STOCKHOLDERS.

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.
Incorporated by reference to the Proxy Statement under the headings COMPENSATION
COMMITTEE  INSIDER  PARTICIPATION  and  INSIDER  TRANSACTIONS.


                                       14
<PAGE>

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)  The following documents are filed as part of this report:

     1.  Financial Statements: (Included in Annual Report filed as Exhibit 13
         herewith).

           The following Consolidated Financial Statements of Clayton Homes,
           Inc. and its subsidiaries included in Part II, Item 8 are
           incorporated by reference to the 2002 Annual Report to Shareholders
           for the year ended June 30, 2002.

           Report  of  Independent  Accountants.

           Consolidated Balance Sheets - June 30, 2002, and 2001.

           Consolidated Statements of Income - years ended June 30, 2002, 2001
           and 2000.

           Consolidated Statements of Shareholders' Equity - years ended
           June 30, 2002, 2001  and  2000.

           Consolidated Statements of Cash Flows - years ended June 30, 2002,
           2001 and 2000.

           Notes to the Consolidated Financial Statements.

     3.  Exhibits:

         3.  (a)  Restated  charter  as  amended.  (D)

             (b)  Bylaws.  (F)

         4.  (a)  Specimen  stock  certificates.  (F)

             (b)  The Company agrees to furnish to the Commission, upon
                  request, instruments relating to the long term debt of the
                  Company or its subsidiaries.

        10.  (a)  Lease Agreement, dated June 29, 1972, as amended, between
                  Clayton Homes, Inc. and Dean Planters Warehouse, Inc. (A)
                  (subsequently assigned to CLF, a limited partnership which
                  includes a related  party).

            *(b)  Clayton Homes, Inc. 1997 Employees Stock Incentive Plan.  (E)

            *(c)  1996 Outside Directors Equity Plan.  (C)

        13.  Annual Report to Shareholders for year ended June 30, 2002. (B)

        21.  List  of  Subsidiaries  of  the  Registrant  (filed  herewith).

        23.  Consent  of  independent  accountants  (filed  herewith).

________________________________________________________________

                                       15
<PAGE>


(A)     Filed  as  Exhibits  to Registration Statement on Form S-1 (SEC File No.
2-83705)  and  incorporated  by  reference  thereto.

(B)     For  the  information  of  the  Commission only, except to the extent of
portions  specifically  incorporated  by  reference.

(C)     Filed  with  Registration Statement on Form S-8 (SEC File No. 333-83543)
and  incorporated  by  reference  thereto.

(D)     Filed  with the Company's Proxy Statement for the Annual Meeting of
Shareholders held  November  14,  1996, and incorporated by reference thereto.

(E)     Filed  with  the  Company's  Proxy  Statement  for the Annual Meeting of
Shareholders  held  November  12,  1997,  and incorporated by reference thereto.

(F)     Filed  with  the  Company's  Form 10K for the fiscal year ended June 30,
1998,  and  incorporated  by  reference  thereto.

*   Management  and  Director's  Compensation  plans.

________________________________________________________________


(b)     Reports  on  Form  8-K:
        (i)  Clayton Homes, Inc./Vanderbilt Mortgage & Finance, Inc. Senior
             Subordinate Pass-Through Certificates Series 2002-1.  Filed with
             the Commission on  May  31,  2002.

       (ii)  Clayton Homes, Inc./Vanderbilt Mortgage & Finance, Inc.
             incorporation of financial statements of Clayton Homes, Inc. into
             Registration Statement on Form  S-3 (Commission File No.
             333-57532), pertaining to Senior Subordinate Pass-Through
             Certificates Series 2002-1.  Filed with the Commission on
             June 26, 2002.


                                       16
<PAGE>

                                   SIGNATURES

Pursuant  to  the requirements of Section 13 or 15(d) 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, in the City of Alcoa,
State  of  Tennessee,  on  September  25,  2002.

                                    CLAYTON  HOMES,  INC.

                                    By:     /s/  Kevin  T.  Clayton
                                            -----------------------
                                            Kevin T. Clayton
                                            Chief Executive Officer, President
                                            and President, Financial Services

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has  been  signed  by  the  following persons in the capacities and on the dates
indicated.

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

/s/ James L. Clayton                          September 25, 2002          Chairman of the Board
-------------------------------------
James L. Clayton


/s/ Kevin T. Clayton                          September 25, 2002          Chief Executive Officer, President
-------------------------------------                                     and President, Financial Services
Kevin T. Clayton                                                          (Principal Executive Officer)


/s/ John J. Kalec                             September 25, 2002          Executive Vice President and
-------------------------------------                                     Chief Financial Officer
John J. Kalec                                                             (Principal Financial Officer &
                                                                          Principal Accounting Officer)


/s/ B. Joe Clayton                            September 25, 2002          Director
-------------------------------------
B. Joe Clayton


/s/ Dan W. Evins                              September 25, 2002          Director
-------------------------------------
Dan W. Evins


/s/ Wilma H. Jordan                           September 25, 2002          Director
-------------------------------------
Wilma H. Jordan


/s/ Thomas N. McAdams                         September 25, 2002          Director
-------------------------------------
Thomas N. McAdams


/s/ C. Warren Neel                            September 25, 2002          Director
-------------------------------------
C. Warren Neel
</TABLE>

                                       17
<PAGE>

                                 CERTIFICATIONS

(a)     CEO  CERTIFICATION

I,  Kevin  T.  Clayton,  certify  that:

1.     I  have  reviewed this annual report on Form 10-K of Clayton Homes, Inc.;

2.     Based  on  my  knowledge,  this annual report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by this annual
report;  and

3.     Based  on  my  knowledge,  the  financial statements, and other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  in  this  annual  report.

Date:     September  25,  2002


                                      /s/  Kevin  T.  Clayton
                                      -----------------------
                                      Kevin  T.  Clayton
                                      Chief  Executive  Officer,  President
                                      and  President,  Financial  Services

(b)     CFO  CERTIFICATION

I,  John  J.  Kalec,  certify  that:

1.     I  have  reviewed this annual report on Form 10-K of Clayton Homes, Inc.;

2.     Based  on  my  knowledge,  this annual report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by this annual
report;  and

3.     Based  on  my  knowledge,  the  financial statements, and other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  in  this  annual  report.

Date:     September  25,  2002


                                      /s/  John  J.  Kalec
                                      --------------------
                                      John  J.  Kalec
                                      Executive  Vice  President  and  Chief
                                      Financial  Officer

                                       18
<PAGE>