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                                 SIXTH MODIFICATION
                                         OF
                                  CREDIT AGREEMENT
     
     
          This Sixth Modification of Credit Agreement ("Agreement") is made
     this 10th day of July, 1998, among THE ROTTLUND COMPANY, INC., a
     Minnesota corporation ("Borrower"), BANKBOSTON, N.A., formerly known
     as THE FIRST NATIONAL BANK OF BOSTON, a national bank association
     having its principal place of business at 100 Federal Street, Boston,
     Massachusetts 02110 ("BKB"), and BANKBOSTON N.A., as Agent (the
     "Agent") for itself and the other lending institutions which are or
     may become parties to the Credit Agreement (as hereinafter defined).
     
                                W I T N E S S E T H:
     
          IN CONSIDERATION OF TEN AND NO/100 DOLLARS ($10.00) and other
     good and valuable consideration, the receipt and sufficiency of which
     are hereby acknowledged, the undersigned Borrower and BKB hereby
     covenant and agree as follows:
     
          1.   RECITALS.  The following Recitals are true and correct as of
     the date of this Agreement.
     
               (a)  The Borrower, BKB and the Agent entered into that
     certain Credit Agreement dated as of October 23, 1996, and that
     certain First Modification of Credit Agreement dated November 19,
     1996, that certain Second Modification of Credit Agreement dated
     December 24, 1996, that certain Third Modification of Credit Agreement
     dated January 28, 1997, that certain Fourth Modification of Credit
     Agreement dated June 25, 1997, and that certain Fifth Modification of
     Credit Agreement dated January 15, 1998 (the foregoing Credit
     Agreement, as modified, is referred to herein as "Credit Agreement").
     
               (b)  The parties to the Credit Agreement wish to further
     amend and modify the Credit Agreement.
     
               (c)  All terms not otherwise defined herein shall have the
     same meaning as in the Credit Agreement.
     
          2.   The Credit Agreement is hereby modified as follows:
     
               (a)  By substituting "$25,000,000"for "$23,850,000" in
     Section 10.1;
     
               (b)  By substituting "March 31, 1998" for "June 30, 1996" in
     Section 10.1; and
     

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               (c)  By deleting the provisions of Section 10.3 in their
     entirety and by substituting in lieu thereof "EBITDA TO INTEREST
     EXPENSE.  The Borrower will not permit the ratio of (a) EBITDA for any
     fiscal quarter to (b) Interest Incurred for such period to be less
     than the ratio set forth below:
     
                        PERIOD                             PERMITTED RATIO
     
          Quarter ending March 31, 1998                     Waived
     
          Quarter ending June 30, 1998                1.30:1
     
          Quarter ending September 30, 1998                 2.10:1
     
          Quarter ending December 31, 1998                  2.30:1
     
          For the quarter ending March 31, 1999 and continuing to Maturity
     Date such ratio shall be tested for each period of four consecutive
     fixed quarters and shall be no less than 2.00:1."
     
          3.   The Effective Date of this Sixth Modification shall be as of
     March 31, 1998 so that, without limitation, compliance with all
     covenants contained in the Credit Agreement shall be determined from
     modifications contained herein.
     
          4.   BKB waives the covenants contained in Section 10.2 of the
     Credit Agreement for the period June 30, 1998, through September 30,
     1998.  The parties hereto acknowledge and agree that the waiver
     provided in the preceding sentence will terminate and, beginning on
     October 1, 1998, the covenants contained in Section 10.2 of the Credit
     Agreement shall be maintained and enforced.
     
          5.   Except as modified hereby, the terms and conditions of the
     Credit Agreement shall remain in full force and effect and the
     Borrower hereby ratifies the terms and conditions thereof.
     
          6.   By its execution hereof, Borrower warrants and represents
     that there does not, as of the date hereof, exist a default, event of
     default or event or circumstance with which the passage of time or
     giving of notice, or both, would constitute a default or event of
     default under any of the Loan Documents.  By its execution hereof,
     Borrower reaffirms, as of the date hereof, all of the representations,
     warranties and indemnities contained in the Loan Documents except to
     the extent any of the representations or warranties speak to a
     specific earlier date, or the facts on which any of them were based
     have been changed by transactions contemplated or permitted by the
     Loan Documents.  As of the date hereof, Borrower has no defense,
     offset or counterclaim against the indebtedness evidenced or secured
     by any of the Loan Documents, as amended, or against the Agent or the
     Banks.
     

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          7.   This Agreement may be executed in any number of counterparts
     each of which shall be deemed an original.
     
          IN WITNESS WHEREOF, the undersigned Borrower and Agent have
     hereunto caused this instrument to be executed by their duly
     authorized corporate officers and their seal to be affixed hereto as
     of the day and year first above written.
     
                                  THE ROTTLUND COMPANY, INC., a
                                  Minnesota corporation
     
     
                                  By: ______________________________
                                  Title: _____________________________
     
     
                                  BANKBOSTON, N.A.
     
     
                                  By: ______________________________
     
     
          The undersigned guarantors hereby agree to all modifications of
     the Credit Agreement and hereby ratify and reaffirm their respective
     Subsidiary Guaranty dated as of the day and year first above written.
     
     
                                  NORTHCOAST MORTGAGE, INC.
     
     
                                  By: ______________________________
                                  Its: ______________________________
     
                                  ROTTLUND HOMES OF FLORIDA, INC.
     
     
                                  By: ________________________________
                                  Its: ________________________________
     
          

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                                  ROTTLUND HOMES OF INDIANA, INC.
     
                                  By: Rottlund Homes of Indiana, Inc., 
                                      Its General Partner
     
                                      By: ____________________________
                                      Its: ____________________________
     
     
                                  ROTTLUND HOMES OF INDIANA 
                                  LIMITED PARTNERSHIP
     
     
                                  By: ________________________________
                                  Its: ________________________________
     
     
                                  ROTTLUND HOMES OF IOWA, INC.
     
     
                                  By: ________________________________
                                  Its. ________________________________
     
     
                                  ROTTLUND HOMES OF NEW JERSEY
     
     
                                  By: ________________________________
                                  Its: ________________________________