Securities and Exchange Commission
                             Washington, D.C. 20549
                             ----------------------


[ X ]     FORM  10-K  Annual  Report  Pursuant  to  Section  13 or  15(d) of the
          Securities  Exchange Act of 1934.  For the fiscal year ended  December
          31, 2001

[   ]     Transition  Report  Pursuant to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934.

                                     0-22562
                             Commission file number

                           CROSSMANN COMMUNITIES, INC.
             (Exact name of registrant as specified in its charter)

              Indiana                                  35-1880120
     (State or other jurisdiction                    (I.R.S. Employer
           of Incorporation)                         Identification No.)

                           9210 North Meridian Street
                           Indianapolis, Indiana 46260
                           ---------------------------
               (Address of principal executive offices) (Zip code)

                                 (317) 843-9514
                                 --------------
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

                     Securities to be registered pursuant to
                           Section 12(g) of the Act:

                        Common Shares, without par value
                                (Title of class)

            Traded on the NASDAQ Stock Market under the symbol "CROS"

     Indicate by check mark whether the  registrant  (1) has filed all documents
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  the  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. [ ]

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  registrant  on  February  5,  2002 was  approximately  $484,592,951.  As of
February 5, 2002, there were 10,671,503  Common Shares of the registrant  issued
and outstanding.

<PAGE>

                                     PART I


ITEM 1.  BUSINESS

Certain statements contained in this section and elsewhere in this Form 10-K are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Such forward-looking  statements may be deemed to include statements
regarding  the  intent,  belief or current  expectations  of the Company and its
management with respect to (i) the Company's strategic plans, (ii) the Company's
future profitability, (iii) the Company's policy regarding capital expenditures,
financing or other matters,  (iv) the Company's sales and marketing  plans,  (v)
industry  trends  affecting  the  Company's  financial  condition  and  (vi) the
Company's  growth  strategy.  Such  statements  involve known and unknown risks,
uncertainties  and  other  factors  that may  cause  actual  results  to  differ
materially from those anticipated in the forward-looking statements. Such risks,
uncertainties  and other  factors  include,  but are not  limited to the factors
described below. In light of the uncertainties  inherent in any  forward-looking
statement,  the inclusion of a  forward-looking  statement  herein should not be
regarded as a representation by the Company or the Company's management that the
Company's plans and objectives will be achieved.

Proposed Merger with Beazer Homes

     On January  29,  2002,  Crossmann  Communities,  Inc.  ("Crossmann"  or the
"Company")  entered into an Agreement  and Plan of Merger with Beazer Homes USA,
Inc.  ("Beazer") and Beazer Homes  Investment  Corp.  (the "Merger  Agreement").
Under the Merger  Agreement,  the  Company  will be merged  with and into Beazer
Homes Investment Corp., a wholly-owned  subsidiary of Beazer,  with Beazer Homes
Investment  Corp.  surviving  the  merger.  Closing  of the merger is subject to
regulatory and shareholder  approvals,  among other conditions and terms, as set
forth  in the  Merger  Agreement.  At the  effective  time of the  merger,  each
outstanding share of the Company's common stock will be converted into the right
to receive  $17.60 per share and a fraction  of a share of Beazer  common  stock
that will vary  according to the 15 day average  trading  price of Beazer common
stock  during the period  ending  three days  before the  Company's  shareholder
meeting with respect to the proposed transaction. Subject to certain limitations
described in the Merger Agreement, shareholders of the Company will be permitted
to elect to receive the merger  consideration  solely in shares of Beazer common
stock or solely in cash.  The  transaction  is expected to be  completed  in the
second or third calendar  quarter of 2002 and is expected to be accounted for as
a  purchase.  On  February  1,  2002,  the  Company  filed a Form  8-K  with the
Securities and Exchange  Commission that included other  information  concerning
the merger and a copy of the Merger Agreement.

     Copies of the  aforementioned  Form 8-K may be inspected  and copied at the
public reference facilities maintained by the Securities and Exchange Commission
at 450 Fifth  Street,  N.W.,  Room  1024,  Washington,  D.C.  20549,  and at the
regional  offices located at Citicorp  Center,  500 West Madison  Street,  Suite
1400, Chicago, Illinois 60661. Copies of these materials can also be obtained by
mail at prescribed  rates from the Public  Reference  Sections of the Securities
and Exchange Commission, 405 Fifth Street NW, Washington, D.C. 20549, by calling
the Securities and Exchange Commission at 1-800-SEC-0330,  or at the web site of
the Securities and Exchange Commission located at www.sec.gov.

     The information  contained in this report,  including information regarding
strategic plans, growth strategy and other forward-looking information, does not
contemplate the effects of the proposed merger with Beazer.



                                     - 2 -
<PAGE>

General

     The Company has provided  homes to families in central  Indiana since 1973.
Crossmann's  homes are  targeted  primarily  to  entry-level  and first  move-up
buyers.  They  range  in  price  from  approximately  $81,900  to  approximately
$800,000;  but the average size of one of Crossmann's  new homes is 1,400 square
feet, and the average selling price in 2001 was  approximately  $134,800.  Homes
sold at the high end of  Crossmann's  price range relate to a division  that was
sold in January 2002.

Today the Company operates in eleven markets in six states:

     Indiana:               Indianapolis, Lafayette, and Ft. Wayne;
     Ohio:                  Columbus, Cincinnati and Dayton;
     Kentucky:              Lexington;
     Tennessee:             Memphis;
     North Carolina:        Charlotte and Raleigh;
     South Carolina:        Myrtle Beach.

     Crossmann  delivered  5,924  new homes in 2001  compared  to 4,804 in 2000.
Crossmann is  characterized  by a record of strong and consistent  sales and net
income  growth over recent  years,  having  achieved a 5-year  average  compound
growth in revenue of  approximately  28.3%.  The Company's  success has been and
will continue to be dependent upon the following key operating strategies:

1.   Focused  Market   Approach.   The  Company  focuses  on   affordably-priced
     entry-level and first move-up single family homes. Management believes that
     entry-level housing generally allows high volume homebuilders,  such as the
     Company,  to  build  a  standardized   product.   Standardization   permits
     efficiencies  in  construction  and  purchasing  that  can  result  in high
     margins. The Company will continue to focus on providing product lines that
     address the needs of this market segment.

2.   Emphasis on Customer Service.  The Company is committed to providing a high
     level of  customer  service as an  integral  component  of its  competitive
     strategy. The Company serves its customers through the attention it devotes
     to their  financial  concerns and by producing a high quality  product at a
     reasonable price.

3.   Market Concentration. The Company currently conducts its business in eleven
     Midwestern  and  Southeastern  markets.  The  Company  believes  that these
     markets  enjoy  relatively  low  unemployment,  diversified  industry,  and
     infrastructure  that makes these markets  attractive  to employers.  Strong
     employment  creates  demand for housing of the type offered by the Company.
     The Company  intends to explore  opportunities  to expand its  homebuilding
     operations  to  other   metropolitan   areas  that  offer  stable  economic
     characteristics  similar  to those of its  existing  markets.  The  Company
     believes that its most effective expansion opportunities will be in similar
     markets  where it can  effectively  utilize the  strengths of its operating
     strategy.

4.   Land Development. Management believes that developing land achieves several
     strategic  objectives:  (i) it helps the  Company  to  improve  its  profit
     margins by reducing the cost of the land on which its homes are built; (ii)
     it ensures the Company an  adequate  supply of lots to meet market  demand;
     (iii) it allows the Company to control the  developments in which it builds
     its homes;  and (iv) it allows the Company to construct  homes  efficiently
     and  cost-effectively  by permitting the  construction  of several  similar
     homes within the same neighborhood at the same time.

5.   Stringent  Cost  Controls.  The large  number of homes built by the Company
     allows it to purchase  both  products  and  services at  favorable  prices.
     Additionally,  the Company has relatively few home designs,  enabling it to
     significantly   reduce  delays  and  expenses   associated  with  educating
     subcontractors  as to new design  requirements.  The Company  controls  its
     construction costs through favorable pricing negotiated with subcontractors
     due to the  efficient  design of its homes.  The Company  believes that its
     success in  dealing  with  subcontractors  can be  attributed  to the large
     amount of work each  subcontractor  performs  for the  Company and from the
     long-term relationships the Company has with most of its subcontractors.


                                     - 3 -
<PAGE>

Markets

<TABLE>
<CAPTION>
     The size and economic characteristics of the Company's markets are shown in
the tables below:

                                            Population        Unemployment
     Market              Population (1)       Growth (2)          Rate (3)
     ------              --------------     ----------        ------------
     <S>                   <C>                  <C>               <C>
     Indianapolis          1,607,486            16.4%             3.8%
     Lafayette               182,821            13.2%             3.5%
     Ft. Wayne               502,141            10.1%             5.2%
     Columbus              1,540,157            14.5%             3.2%
     Cincinnati            1,979,202             8.9%             4.0%
     Dayton                  950,558            -.01%             4.6%
     Lexington               479,198            12.2%             3.7%
     Memphis               1,135,614            12.7%             4.6%
     Charlotte             1,499,293            29.0%             3.5%
     Myrtle Beach            196,629            36.5%             4.9%
     Raleigh               1,187,941            38.9%             4.1%

<FN>
(1)  Estimated MSA population as of April 1, 2000.

(2)  Estimated  growth from 1990 to 2000.
     Population data source: U.S. Census Bureau

(3)  Market rate as of November 2001,  compared to the national  average of 5.8%
     at December 31, 2001. Employment data source: Department of Labor/Bureau of
     Labor Statistics.
</FN>
</TABLE>

     All  Crossmann's  markets  enjoy  relatively  low  cost  land  and  stable,
broad-based employment.  When considering a city for expansion,  Crossmann seeks
markets where the entry-level  consumer is under-served,  but where land, labor,
utilities and zoning are available so that homes can be produced in volume.

Product Lines

     The Company  offers a variety of floor plans and exterior  styles with two,
three,  and four  bedrooms,  two or more  bathrooms  and,  typically,  a two-car
attached  garage.  Standard  features  of each  product  line  include  built-in
appliances and custom wood cabinets in the kitchen,  wall-to-wall  carpeting,  a
high-efficiency furnace,  maintenance-free vinyl siding, landscaped yard, poured
concrete walks,  porches and driveways.  Purchasers are given the opportunity to
select,  at additional  cost,  such amenities as patios or decks,  wood windows,
skylights, upgraded carpeting and flooring, a fireplace or a basement. The homes
are primarily  single-family  detached units, although in some locations in some
markets, the Company offers attached single-family units.

     The Company sells homes under the names "Crossmann  Communities" in most of
its markets,  except where  operations were acquired from another  builder.  For
example,  in  Lexington  it  sells  as  "Cutter  Homes;"  in  Myrtle  Beach,  as
"Pinehurst;"  and in  Raleigh  it  sells as  "Homes  by Huff & Co."  Each  local
operation offers homes to entry-level and first move-up buyers. In Myrtle Beach,
South Carolina,  that target market has been expanded to include second-home and
retirement buyers seeking homes at Crossmann's price point.



                                     - 4 -
<PAGE>

     Effective October 1, 2000, Crossmann acquired the remaining 50% interest in
one of its joint ventures, Trinity Homes, LLC ("Trinity"), an Indianapolis-based
homebuilder  serving the first- and second-time  move-up buyer.  These homes are
sold at a  significantly  higher  selling price than the homes above,  averaging
approximately  $223,000  in 2000,  compared  to $125,000  for  Crossmann's  core
product.

     The Company  intends to focus on  delivering  attractive  housing at prices
entry-level  consumers can afford. The Trinity acquisition was Crossmann's first
departure from this niche.  Management is comfortable with this  diversification
in product because it is limited to Indianapolis, Crossmann's home base.

Construction

     The Company  acts as the general  contractor  for the  construction  of its
residential  communities.  The Company's  construction  supervisors  monitor the
construction of each home; actual  construction is performed by  subcontractors.
The use of  subcontractors  enables the Company to minimize  its  investment  in
direct employee labor,  capital,  equipment and building supply inventory.  This
practice also  increases the Company's  flexibility  in responding to changes in
the demand for housing.  The Company has had long  business  relationships  with
many of its  subcontractors.  These  relationships,  coupled  with the volume of
homes built by the Company, enable the Company to negotiate favorable agreements
with its subcontractors.  The Company has not experienced any significant delays
in construction due to shortages of materials or labor.

     Except as necessary to maintain  customer  satisfaction with the aesthetics
of its product lines,  the Company does not  materially  change its home designs
and floor plans from year to year. The Company  believes that consistency in the
design of its homes helps reduce costs and minimize delays by avoiding  expenses
associated with educating  subcontractors  on the  requirements of a new design.
Where practical,  the Company uses mass production  techniques,  construction on
contiguous  lots,  and  prepackaged  standardized  components to streamline  the
on-site construction phase.

     The construction of detached  single-family  homes by the Company generally
begins after execution of a sales contract with the home buyer,  which minimizes
the costs and risks of completed but unsold inventory.  When a contract has been
signed,  a "house work order" is generated and sent out to the  Company's  field
supervisor and to each  subcontractor  who will work on the home. The house work
order describes the basic house purchased and the optional items selected by the
customer. Subcontractors prepare invoices on the basis of a pre-negotiated price
list  specifying  the  current  rate  the  Company  will  pay for the work to be
completed and the materials used. Price lists are updated  periodically based on
changes in the costs of raw materials and other  factors.  Vouchers are prepared
by the  subcontractor  according  to the  price  list and must be  reviewed  and
approved by the field supervisor before they are paid by the Company.

     Despite the effects of the weather,  the Company  maintains a  construction
schedule  throughout  the  entire  year.  The  Company  can build in all but the
harshest winter weather;  however,  production is slower when cold  temperatures
and snow or ice interfere with work.  Furthermore,  additional construction cost
may be incurred  due to such factors as temporary  heating  costs,  additives to
concrete,  extra utility  charges and the  placement of temporary  driveways and
sidewalks.

Land Acquisition and Development

     The Company typically acquires  unimproved land through contingent purchase
agreements.  Closing of the land is contingent  upon,  among other  things,  the
Company's  ability to obtain necessary zoning and other  governmental  approvals
for the proposed development,  confirmation of the availability of utilities and
completion of an environmental review.


                                     - 5 -
<PAGE>

     Once the  land  has been  purchased,  the  Company  undertakes  development
activities  that include site  planning and  engineering,  and  construction  of
roads, sewer, water and drainage facilities and other amenities.  The activities
are carefully  managed,  with phases geared to the  Company's  projected  sales.
Generally,  management  of the Company  attempts to  maintain  an  inventory  of
"finished"  lots sufficient for  approximately  half the homes which the Company
anticipates  it will  construct  during the next 18  months.  In  addition,  the
Company  maintains an inventory of raw land in  anticipation  of its needs for a
period of 18 to 36 months in the future.  The  following  chart  summarizes  the
Company's available lot inventory as of December 31, 2001.

<TABLE>
<CAPTION>

                      Finished     Lots Under       Raw Land         Total        Under
                        Lots       Development     (Est. Lots)     Lots Owned     Option
                        ----       -----------     -----------     ----------     ------
<S>                      <C>         <C>            <C>             <C>           <C>
Indianapolis            1,352        1,068           7,321           9,741        10,468
Lafayette                  86            0             144             230           943
Ft. Wayne                 317            0               0             317           465
Columbus                   67          336             363             766         1,307
Cincinnati/Dayton         239          377             941           1,557         1,082
Lexington                 202          121             402             725           627
Memphis                   185          142             845           1,172           484
Charlotte                 402          403             466           1,271         1,311
Myrtle  Beach             117          204             940           1,261           630
Raleigh                   130           99             835           1,064           356
                         -----       -----          ------          ------        ------
                         3,097       2,750          12,257          18,104        17,673
                         =====       =====          ======          ======        ======
</TABLE>

     In  addition to  purchasing  unimproved  land  outright,  the Company  uses
partnerships and joint ventures to acquire and develop land. Joint ventures sell
finished  lots to  builders,  including,  but not limited to, the  Company.  The
Company will continue to use partnership  and joint venture  arrangements in the
future when management perceives a favorable opportunity.  At December 31, 2001,
the Company was a participant in thirteen such joint ventures.

     The development of land is extremely  capital  intensive,  and as a result,
the Company's ability to develop land is limited.  In 2001 the Company developed
approximately  46.6% of the lots on which  its homes  were  built,  compared  to
approximately  45.3%  in 2000.  The  Company  expects  this  percentage  to stay
approximately the same in 2002.

Marketing and Sales

     The  Company  sells  its  homes  through  a  sales  force  of  commissioned
independent  contractors  ("New Home  Counselors")  who work from sales  offices
located  at the  Company's  headquarters  and in  model  homes  located  in each
residential  community.  New Home  Counselors of the Company advise  prospective
buyers  throughout  the home  buying  process by  providing  information  on the
Company's  product  lines of homes,  pricing,  options and  upgrades,  financing
options, warranties and construction.

     New Home Counselors contract with the Company,  and the Company attempts to
maintain  long-term  relationships  with them. New Home Counselors attend weekly
sales meetings at which they are kept aprised of changes in available  financing
options and other  information  relevant to prospective  buyers and  semi-annual
seminars offered by the Company on a variety of marketing topics.

     The Company does most of its  advertising in the  classified  advertisement
section  of local  newspapers  and on its  company  website.  The  Company  also
attracts buyers as a result of referrals, directional signs and direct mailings.
From  time  to  time  the  Company  may  participate  in  television  and  radio
advertising promotions.

Financing

     The Company  assists its customers in financing  their new homes in several
ways. First, the Company's New Home Counselors  advise buyers,  many of whom are
first-time home buyers, on available financing options.  The Company builds most
of its homes under the  guidelines  and  specifications  of the Federal  Housing
Administration ("FHA") and the Veterans Administration ("VA"), thereby providing
eligible buyers the benefit of FHA/VA mortgages. This is significant because FHA
and VA  financing  generally  enables  buyers to purchase  homes with lower down
payments than the down payments  required by conventional  mortgage  lenders and
allow  applicants to direct a larger  percentage of their incomes toward housing
expenses.  The FHA/VA  insured  mortgages  also provide more liberal  rules with
respect to the amount of points and closing costs that the seller may pay.


                                     - 6 -
<PAGE>

     The Company believes that the availability of FHA/VA financing is important
to its overall  success in that many  entry-level  and first move-up buyers have
limited  financial  resources.  FHA and VA  mortgages  are backed by  government
insured  Fannie  Mae  and  Ginnie  Mae  securities  and  should  therefore  be a
relatively  secure  source of  financing  for  Crossmann's  customers.  In 2001,
approximately  68.2% of the homes  delivered by the Company were  financed  with
FHA/VA mortgages.

     The Company has  established  a mortgage  brokerage  subsidiary,  Crossmann
Mortgage Corp.,  which was certified by FHA, a program of the Federal Department
of Housing and Urban  Development in July 1994. Once  certified,  the subsidiary
began  processing  FHA, VA and  conventional  loans and  selling  the  servicing
rights.  In 1997,  Crossmann  Mortgage Corp. became a qualified FHA underwriter.
The revenue of the  subsidiary  is comprised of  origination  fees and servicing
release  fees,  and its  expenses  primarily  include  administrative  personnel
salaries and other general office  expenses.  Crossmann  Mortgage Corp. does not
warehouse  loans and,  as a result,  does not incur  significant  credit risk or
market risk associated with loans it originates.

     In August 2000,  the Company  formed  Paragon  Title,  Inc., a wholly owned
subsidiary  that provides  title  insurance and closing  services to Crossmann's
customers.

Customer Service and Quality Control

     Before the sale, the Company's New Home  Counselors  work with customers to
select  from  available  options in order to  customize  their new home to their
particular taste.  After the contract is signed,  the buyer visits the Company's
administrative  office to make  color  selections  and  complete  the house work
order.  Here the  Company  provides  the new  homeowner  an  orientation  to the
construction  process and a detailed checklist which describes the items covered
by the  Company's  warranty.  When  construction  on a new home  commences,  the
Company encourages the buyer to visit the site during the construction  process.
Before a buyer takes occupancy of a new house a pre-inspection tour is conducted
with the buyer to ensure that the buyer is satisfied  with the  condition of the
home and to correct any problems before the buyer takes possession.

     Approximately 45 days after closing, representatives of the Company place a
courtesy call to the new  homeowners  to enable them to ask any  questions  that
have arisen since they took  possession.  Customers are encouraged to request an
additional  walk-through  of the  home  approximately  90  days  after  closing.
Finally,  the Company also offers its customers a final inspection on the eleven
month anniversary of the closing to check the home for items to be submitted for
warranty action and to discuss any items which the customer believes warrant the
Company's attention.

     Each home sold by the Company is covered by a comprehensive warranty from a
HUD approved warranty  company.  The warranty extends coverage for ten years for
structural matters,  four years for the roof of the home and two years for other
specified items. By maintaining this warranty  program,  the Company is required
to undergo one inspection,  rather than three, to qualify for FHA/VA  financing,
thereby reducing the cost and time delay associated with such inspections.

     In January 2001, the Company formed  Meridian  Structural  Insurance,  Risk
Retention  Group,  Inc.,  a wholly  owned  subsidiary  to  provide  the  insured
structural   warranty  to  Crossmann's   customers.   Service  to  customers  is
administered by a third-party  administrator.  The insurance  subsidiary  became
operational May 1, 2001.

Competition and Market Factors

     The development and sale of residential  properties is highly  competitive.
The Company  competes in the sale of homes with the resale  market for  existing
homes and with other homebuilders.



                                     - 7 -
<PAGE>

     The resale  market for  existing  homes has  several  attractions  for home
buyers including the following:  (i) buyers of existing homes can generally take
occupancy  of their  homes more  quickly;  (ii)  sellers  in the  resale  market
generally  have  lower  basis in  their  homes  and  therefore  may  have  price
expectations  different  from those of sellers  of new homes;  and (iii)  resale
homes are generally located in established  neighborhoods.  The Company attempts
to meet this competition from the home resale market by offering  benefits which
this market cannot provide,  notably newer design  features,  the flexibility to
select  interior and exterior  finishes,  new home warranties and more desirable
locations from which to choose a homesite.

     The Company  competes with other  homebuilders  on the basis of a number of
interrelated factors, including location, reputation, amenities, design, quality
and price.  Management  believes that entry-level  housing generally allows high
volume homebuilders,  such as the Company, to build a more standardized product,
thus permitting  efficiencies in construction and materials purchasing which can
result in a better value to the consumer. Some of the Company's competitors have
greater financial, marketing and sales resources in certain markets.

     The Company  believes that a competitive  challenge facing it in all of its
present  markets is locating and  acquiring  undeveloped  land  suitable for the
types of communities which it can profitably  develop.  Although the Company has
been  successful in the past in locating and  developing  such tracts within its
present markets,  there can be no assurance that this success will continue.  If
the Company expands the geographic  scope of its business to new markets,  there
can be no assurance  that the Company will be successful  in acquiring  suitable
land for development in such markets.

     The  housing  industry  is  affected  by  consumer  confidence  levels  and
prevailing  economic  conditions in general and by job availability and interest
rate levels in particular.  A variety of other factors affect the demand for new
homes,  including  changes  in costs  associated  with  home  ownership  such as
property taxes and energy costs,  changes in consumer  preferences,  demographic
trends and availability of and changes in mortgage financing programs.

Trademarks

     "Crossmann   Communities"  is  a  federally  registered  service  mark  for
construction  planning,  laying  out  residential  communities  and  residential
construction services that is owned by the Company.

Employees

     At  December  31,  2001,  the Company had 739  full-time  employees  and 62
part-time  employees.  The Company is not a party to any  collective  bargaining
agreements.  The Company  considers  its  relationship  with its employees to be
good.

Executive Officers of the Registrant

     The  executive  officers and directors of the Company and their ages are as
follows:

    Name                     Age    Position with Company
    ----                     ---    ---------------------
    John B. Scheumann        52     Chairman of the Board of Directors
                                      and Chief Executive Officer
    Richard H. Crosser       63     Vice Chairman of the Board of Directors
    Jennifer A. Holihen      43     Chief Financial Officer; Treasurer;
                                      Secretary; Director
    Steven M. Dunn           47     President and Chief Operating Officer


     Mr. Scheumann has been the Company's Chairman of the Board of Directors and
Chief Executive  Officer since 1992 and has served as a senior executive officer
since joining the Company in 1977. Before joining the Company, Mr. Scheumann was
employed by National  Homes  Construction  Corp. for three years in a variety of
capacities, last serving as Division Controller for Multi-Family Construction.



                                     - 8 -
<PAGE>

     Mr. Crosser served as the Company's  President and Chief Operating  Officer
from 1992 until 2001, and now serves on its Board of Directors as Vice Chairman.
He has been a senior executive  officer since joining the Company in 1974. Prior
to 1974, Mr. Crosser was employed by National  Homes  Construction  Corp. for 15
years in a variety of  capacities,  last  serving  as a regional  manager of the
company.

     Ms. Holihen has been the Chief Financial Officer,  Secretary, and Treasurer
since September 1993 and serves on its Board of Directors. Ms. Holihen served as
controller  for the  Company  from 1983 until 1993.  Ms.  Holihen is a Certified
Public Accountant and received her MBA in accounting and management  information
systems from Indiana University in 1987.

     Mr. Dunn was elected  President  in March 2001.  He has served as Executive
Vice President of Operations  since 1998,  and prior to that,  served as General
Manager of the Company's  Columbus,  Ohio Division  since October 1993. Mr. Dunn
was the sole  shareholder  and president of Deluxe Homes of Columbus,  Inc. from
1987 until its acquisition by the Company in 1993.

Government Regulations and Environmental Matters

     The housing  industry and the Company are subject to various  local,  state
and federal  statutes,  ordinances,  rules and  regulations  concerning  zoning,
resource protection,  building design,  construction and similar matters.  These
include  local   regulations   that  impose   restrictive   zoning  and  density
requirements  that may limit the number of  residences  that can  eventually  be
built within the boundaries of a particular location. Furthermore, in developing
its  projects  the  Company  must obtain the  approval of numerous  governmental
authorities  regulating such matters as permitted land uses,  levels of density,
and the  installation of utility  services such as electricity,  water and waste
disposal.

     The length of time necessary to obtain permits and approvals  increases the
carrying cost of unimproved property acquired for the purpose of development and
construction.  In  addition,  the  continued  effectiveness  of permits  already
granted is subject to changes in policies,  rules and regulations and changes in
their  interpretation  and  application.  Such regulation  affects  construction
activities  and may result in  delays,  cause the  Company to incur  substantial
costs, or prohibit or severely restrict development in environmentally sensitive
regions or areas. To date, the governmental  approval processes  discussed above
have not had a material adverse effect on the Company's development  activities.
In  addition,  because the Company  purchases  land  contingent  upon  necessary
zoning, restrictive zoning issues also have not had a material adverse effect on
the Company's development activities.  However, there is no assurance that these
and other restrictions will not adversely affect the Company in the future.

     The Company  generally  will  condition its obligation to purchase land on,
among other things, an environmental  review of the land. However,  there can be
no assurance  that the Company will not incur material  liabilities  relating to
the removal of toxic wastes or other environmental  matters affecting land owned
by the Company or land which the Company no longer  owns.  To date,  the Company
has not incurred any liability  relating to the removal of toxic wastes or other
environmental  matters  and to its  knowledge  has not  acquired  any land  with
environmental problems.

     A significant  number of the Company's  customers obtain mortgage financing
under  programs  sponsored by FHA and VA. Any reductions in the scope of funding
of FHA/VA mortgage  programs could have a material adverse effect on the Company
and its operations.

ITEM 2. PROPERTIES

     The Company leases office space in Indianapolis,  Lafayette,  Ft. Wayne and
Franklin, Indiana; Columbus and Cincinnati, Ohio; Lexington,  Kentucky; Memphis,
Tennessee;  Charlotte and Raleigh,  North  Carolina and in Myrtle  Beach,  South
Carolina. The leases for office space are at prevailing market rates.



                                     - 9 -
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     The Company from time to time is involved in routine litigation  incidental
to its  business.  The Company does not believe that any  liabilities  resulting
from  litigation  to which it is a party will  materially  affect the  Company's
financial  position,  results of operations or cash flows.

     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

     None.


                                     - 10 -
<PAGE>


                                     PART II

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

     The  Company's  common  shares  trade on The Nasdaq  Stock Market under the
symbol:  "CROS." Shares  outstanding at December 31, 2001 were  10,671,503.  The
closing  price at December 31, 2001 was $33.00.  During the year ended  December
31, 2001, the high closing sales price per share as reported by The Nasdaq Stock
Market was $45.44. The low closing sales price per share was $20.50.

     High and low share prices for the last two fiscal years were:

                                   2000                     2001
                           -------------------       -------------------
     Quarter ended          High          Low         High          Low
     -------------         -------------------       -------------------
     March 31              $21.50       $14.75       $31.00       $20.50
     June 30                18.75        14.68        41.07        23.50
     September 30           21.00        14.14        45.44        21.26
     December 31            25.13        17.25        34.55        21.28

     The closing sale price of the  Company's  Common  Shares as reported on The
Nasdaq  Stock  Market on February 5, 2002 was  $45.41.  As of January 17,  2002,
there were 38 holders of record of the Company's  Common  Shares.  The Company's
transfer  agent  estimates that there were  10,671,503  shares  outstanding,  on
January 17, 2002, and that on that date there are approximately 1,546 beneficial
owners of the Company's Common Shares.

     On  October  7,  1999,   Crossmann's  Board  of  Directors  authorized  the
repurchase  of up to 15% of its  outstanding  shares  (1,740,357  shares  out of
11,602,382 shares then outstanding).  As of December 31, 2001,  1,283,000 shares
had been  repurchased  pursuant to this plan,  at an average price of $15.78 per
share. That authorization expired on April 7, 2001.

     The  transfer  agent for the  Company's  Common  Shares is  American  Stock
Transfer & Trust. Its address is 40 Wall Street, New York, NY 10005.

     The Company paid its first  dividend of $.05 per common share at the end of
the second  quarter of 2001, and repeated this payment at the close of the third
and fourth quarters respectively.  In general, the Board of Directors prefers to
retain earnings to finance the continuing  development of its business,  but has
elected to pay cash  dividends in 2001 in light of the Company's  low debt.  The
payment of future  dividends will be at the discretion of the Company's Board of
Directors,  and will be  determined  on a  quarter-to-quarter  basis but will be
subject to limitations  contained in the merger  agreement  unless and until the
merger  agreement is terminated in accordance with its terms.  Payment of future
dividends will depend upon, among other things, future earnings,  the success of
the Company's expansion activities,  capital requirements, the general financial
condition of the Company and general business  conditions.  The Company is party
to credit  agreements with  noteholders  and commercial  banks that restrict its
ability to pay cash dividends  with respect to the Common Shares.  (See "Item 7.
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.")

ITEM 6. SELECTED FINANCIAL DATA

     The following is selected  consolidated  financial  data of the Company for
the five years ended  December 31, 2001.  The data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated  financial statements of Crossmann Communities,
Inc. and notes thereto contained elsewhere in this Form 10-K.



                                     - 11 -
<PAGE>
<TABLE>
<CAPTION>
                                     Consolidated Financial and Operating Data
                                (in thousands, except per share and operating data)
                                              Year Ended December 31,

                                             1997              1998            1999          2000           2001
                                             ----              ----            ----          ----           ----

<S>                                       <C>               <C>             <C>           <C>            <C>
Statement of Operations Data:
 Sales                                    $ 316,435         $ 421,926       $ 609,319     $ 621,038      $ 798,356
 Gross profit                                65,550            89,906         124,233       121,366        173,708
 Income from operations                      32,170            44,056          62,223        55,759         87,396
 Income before income taxes                  33,399            49,606          65,694        58,380         88,746
 Income taxes                                13,393            19,734          25,957        22,601         35,064
 Net income                                  20,006            29,872          39,737        35,779         53,682
 Net income per common share:
    Basic                                      2.05              2.63            3.44          3.33           5.09
    Diluted                                    2.02              2.57            3.40          3.28           5.01

 Weighted average common shares outstanding:
    Basic                                     9,759            11,342          11,553        10,732         10,543
    Diluted                                   9,927            11,608          11,698        10,907         10,710

Balance Sheet Data:
 Cash and cash equivalents                $   5,526         $  18,011       $  13,636     $  17,443      $  14,179
 Inventories and properties
  held for development or sale              153,524           214,198         259,996       279,313        339,333
 Total assets                               185,276           283,794         339,875       373,903        429,618
 Notes payable                               51,122           101,223         119,959       141,287        118,333
 Total shareholders' equity                 110,803           150,281         188,479       207,710        264,407

Operating Data:
 Number of closings (1)                       2,774             3,714           5,100         4,804          5,924
 Average home sales price                 $ 114,072         $ 113,604       $ 119,474     $ 129,275      $ 134,800
 Homes in backlog (1)                         1,080             1,744           1,496         2,010          1,983


<FN>
(1)  A home is included in "closings"  when title is transferred to the buyer.  Sales and cost of sales for a house
     are recognized at the date of closing.  A home is included in "backlog" after a sales contract is executed and
     prior to the transfer of title to the purchaser.  Because the closings of pending sales  contracts are subject
     to contingencies, no assurances can be given that homes in backlog will result in closings.
</FN>
</TABLE>



                                                       - 12 -
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

Proposed Merger with Beazer Homes

     On January 29, 2002,  the Company  entered into the Merger  Agreement  with
Beazer and Beazer Homes Investment Corp. The following  Management's  Discussion
and  Analysis  addresses  the  historical  results  of,  and  known  trends  and
uncertainties  with  respect  to,  the  business  of the  Company  as a separate
company, and does not contemplate the effect of the proposed merger with Beazer.

Overview

     The Company's business and the homebuilding industry in general are subject
to changes in  economic  conditions,  including  but not  limited to  employment
levels,  interest rates,  the availability of credit,  and consumer  confidence.
Orders for new homes were extraordinarily  strong during the second half of 2000
and the  first  half of  2001,  due to the  environment  of  strong  employment,
favorable interest rates and consumer optimism. As the economy has slowed in the
second  half of 2001,  and as  uncertainty  about the future  lingers  after the
events of September  11th,  2001,  orders have not met prior year levels in some
markets.  Crossmann ended the year with backlog down slightly.  There were 1,983
homes in backlog  at the end of 2001,  compared  to 2,010 at the end of 2000,  a
decline of 1%.

     Crossmann  adapts to changing  patterns of demand by adjusting its overhead
spending and land  investment  to match  anticipated  volume.  For example,  the
Company cut overhead and closed underperforming markets of Louisville,  Kentucky
and  Nashville,  Tennessee  during 2000 to improve  margins.  The  Company  also
acquired  full  ownership  of Trinity in October 2000 to help offset the closing
shortfall. In 2001, the Company enjoyed higher volume and improved gross margins
as a result of these changes.

     In 2002,  the Company will  continue to allocate  its  resources to markets
where there is the best opportunity for good returns.

Significant Accounting Estimates

     Significant  estimates made by Crossman's  management  include reserves for
warranty  expenses to be incurred on homes under  warranty  and accruals for the
costs to be incurred for completion of homes closed.  Estimates for warranty and
costs to  complete  are made based on detailed  budgets  for each home,  options
selected by the customer and historical cost behavior patterns. Costs associated
with these  estimates  are expensed in the period in which the  associated  home
sale revenue is recognized.

Results of Operations

     During the five-year  period ended December 31, 2001,  the Company's  sales
increased  at an average  compound  annual  rate of 28.3% per year,  from $316.4
million in 1997 to $798.4  million in 2001.  Net income  increased at an average
compound  annual rate of 28.9%,  from $20.0  million in 1997 to $53.7 million in
2001. Shareholders' equity increased from $110.8 million as of December 31, 1997
to $264.4 million as of December 31, 2001.



                                     - 13 -
<PAGE>

     The following table recaps unit growth in the Company's markets. Management
views volume  relative to the total size of each market a significant  factor in
producing good margins.

<TABLE>
<CAPTION>
                                              Unit Closings by Market
                                              -----------------------
                        1992     1993     1994     1995      1996      1997     1998      1999      2000      2001
                        ----     ----     ----     ----      ----      ----     ----      ----      ----      ----

<S>                      <C>      <C>    <C>      <C>       <C>       <C>      <C>       <C>       <C>       <C>
Indianapolis(1)........  491      686      732    1,043     1,293     1,597    1,722     2,412     2,245     3,076
Lafayette..............  125      143      183      160       188       166      171       190       171       216
Columbus.........................  23      133      197       247       315      315       311       281       421
Cincinnati/Dayton.........................  13      159       245       419      489       541       463       481
Ft. Wayne.................................  12      116        94        84      186       213       196       302
Louisville....................................................  1       102      240       190       119         1
Lexington..............................................................  64      109       154       159       220
Memphis................................................................  27      189       277       268       216
Nashville......................................................................    2        95       125         3
Charlotte......................................................................    1       235       431       602
Myrtle Beach...................................................................  290       386       213       201
Raleigh..................................................................................   96       133       185
                         -----------------------------------------------------------------------------------------
Total                    616      852    1,073    1,675     2,068     2,774    3,714     5,100     4,804     5,924
                         =========================================================================================
<FN>
(1)  Closings in Indianapolis in 2000 include fourth quarter 2000 closings for Trinity,  but not closings  achieved
     when Trinity was a 50% joint venture  partner of  Crossmann's  from  September  1997 through  September  2000.
     Closings for Indianapolis also include  operations in suburban markets south of the Indianapolis  metropolitan
     area.
</FN>
</TABLE>

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

     The following  table sets forth,  for the years ended December 31, 2001 and
2000, certain income statement items related to the Company's operations:

<TABLE>
<CAPTION>
                                                   For the years ended December 31,

                                                                                                      Percentage
                                                  2000                           2001                   Change,
                                      --------------------------     -------------------------       2000 to 2001
                                                      (percent                        (percent
                                      (in millions)   of sales)      (in millions)    of sales)
<S>                                    <C>             <C>            <C>              <C>               <C>
Sales                                  $   621.0       100.0%         $   798.4        100.0%            28.6%
Cost of sales                              499.6        80.5%             624.7         78.2%            25.0%
Gross profit                               121.4        19.5%             173.7         21.8%            43.1%
Selling, general and administrative
expenses                                    65.6        10.6%              86.3         10.8%            31.6%
Income from operations                      55.8         9.0%              87.4         10.9%            56.6%

Other income, net                            5.0         0.8%               3.9          0.5%           -22.0%
Interest expense                            -2.4        -0.4%              -2.6         -0.3%             8.3%
                                             2.6         0.4%               1.3          0.2%           -50.0%
Income before income taxes                  58.4         9.4%              88.7         11.1%            51.9%
Income taxes                                22.6         3.6%              35.0          4.4%            54.9%
Net income                             $    35.8         5.8%         $    53.7          6.7%            50.0%

Other operating data
   Units closed                            4,804                          5,924                          23.3%
   Average sales $ per unit closed     $ 129,275                      $ 134,800                           4.3%
   Units in backlog at December 31         2,010                          1,983                          -1.3%
</TABLE>


                                     - 14 -
<PAGE>

     Sales increased by $177.4  million,  or  approximately  28.6%, in 2001 over
2000.  Sales were higher  primarily as a result of increased  unit sales;  5,924
units were closed in 2001 compared to 4,804 in 2000. Crossmann's average selling
price was also higher, approximately $134,800 in 2001, compared to approximately
$129,275 in 2000.  The increase in average  selling price  resulted  principally
from the  contribution of 583 homes from Trinity,  which averaged  approximately
$213,300 in 2001.

     Gross profit increased by $52.3 million,  or  approximately  43.1%, for the
year.  This  represents a gross margin  percentage  of 21.8% of sales in 2001 as
compared to 19.5% in 2000. The improved  gross margin  percentage  resulted,  in
part,  from  Crossmann's  decision  in 2000  to exit  lower  margin  markets  in
Louisville,  Kentucky  and  Nashville,  Tennessee.  Also,  margins  generated by
Trinity,   acquired  by  Crossmann  in  October  2000,  have  steadily  improved
throughout  the year.  At  acquisition,  Trinity's  average  gross  margins were
approximately  13.2%,  lower than  Crossmann's  average in part  because of less
efficient purchasing and in part because of the effect of purchase accounting on
the acquired  operation.  With better  purchasing power and less costly land and
capital available because of its relationship to Crossmann, Trinity's margins in
the fourth quarter of 2001 had improved to approximately 18.7%.

     Selling,  general and administrative  expenses increased as a percentage of
sales from 10.6% in 2000 to 10.8% in 2001.  This increase was due principally to
incurring higher overhead for Trinity's operations for the entire year. In 2000,
Trinity's spending was included for only the fourth quarter.

     Due to the increase in sales, income before income taxes for 2001 increased
approximately  $30.3  million over 2000, or 51.9%.  This  represents an increase
from 9.4% of sales in 2000 to 11.1% of sales in 2001. Net income increased $17.9
million or 50.0%.  Net income as a percentage of sales was 6.7% in 2001 compared
to 5.8% in 2000. The Company's effective tax rate was 39.5% in 2001, compared to
38.7% in 2000.  The rise in tax rate  occurred  because of a change in state tax
laws affecting some of Crossmann's markets.

<TABLE>
<CAPTION>
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

     The following  table sets forth,  for the years ended December 31, 2000 and
1999, certain income statement items related to the Company's operations:

                                                        For the Years Ended December 31,                    Percentage
                                                                                                           Change, 1999
                                                 1999           1999             2000          2000           to 2000
                                                 ----           ----             ----          ----        ------------
                                                              (percent                       (percent
                                             (in millions)    of sales)     (in millions)    of sales)

<S>                                          <C>               <C>            <C>             <C>              <C>
Sales                                        $   609.3         100.0%         $   621.0       100.0%             1.9%
Cost of sales                                    485.1          79.6%             499.6        80.5%             3.0%
                                             ---------         -----          ---------       -----
Gross profit                                     124.2          20.4%             121.4        19.5%            -2.3%
Selling, general and administrative
expenses                                          62.0          10.2%              65.6        10.6%             5.8%
                                             ---------         -----          ---------       -----
Income from operations                            62.2          10.2%              55.8         9.0%           -10.3%
Other income, net                                  5.7           0.9%               5.0         0.8%           -12.3%
Interest expense                                  -2.2          -0.4%              -2.4        -0.4%             9.1%
                                             ---------         -----          ---------       -----
                                                   3.5           0.6%               2.6         0.4%           -25.7%
Income before income taxes                        65.7          10.8%              58.4         9.4%           -11.1%
Income taxes                                      26.0           4.3%              22.6         3.6%            13.1%
                                             ---------         -----          ---------       -----
Net income                                   $    39.7           6.5%         $    35.8         5.8%            -9.8%
                                             =========                        =========

Other operating data
   Units closed                                  5,100                            4,804                         -5.8%

   Average sales $ per unit closed           $ 119,474                        $ 129,275                          8.2%
   Units in backlog at December 31               1,496                            2,010                         34.4%
</TABLE>



                                     - 15 -
<PAGE>


     Sales increased by $11.7 million, or approximately 1.9%, in 2000 over 1999.
Sales were higher due to the acquisition of Trinity in the fourth quarter.  Unit
sales were lower; 4,804 units were closed in 2000 compared to 5,100 in 1999; but
the average selling price was higher,  approximately  $129,300 in 2000, compared
to approximately  $119,500 in 1999. Trinity  contributed  closings at an average
selling price of approximately  $240,400 in the fourth quarter,  which is higher
than Crossmann's other markets.

     Gross profit  decreased by $2.8 million,  or  approximately  2.3%,  for the
year.  This  represents a gross margin  percentage  of 19.5% of sales in 2000 as
compared to 20.4% in 1999. The decrease in margin resulted  principally from low
margins  and exit  costs in  Louisville  and  Nashville.  Gross  margin was also
impacted in 2000 by lower  margins  from  Trinity  closings.  Trinity  sales had
margins  of  13.2%  in  the  fourth  quarter  of  2000.

     Selling,  general and  administrative  expenses  stayed  fairly steady as a
percentage of sales, 10.2% in 1999 compared to 10.6% in 2000.

     Due to the decline in gross  margin,  income  before  income taxes for 2000
decreased approximately $7.3 million compared to 1999, or 11.1%. This represents
a  decrease  from  10.8% of sales in 1999 to 9.4% of sales in 2000.  Net  income
decreased  $3.9 million or 9.8%. Net income as a percentage of sales was 5.8% in
2000 compared to 6.5% in 1999. Most of these declines were attributable to lower
gross margin.  The Company's  effective tax rate was 38.7% in 2000,  compared to
39.6% in 1999.

Backlog

     The following  table sets forth certain data relating to the  operations of
the Company for the years ended December 31, 1999, 2000 and 2001.

<TABLE>
<CAPTION>
                                              ----------------------------------------------------------
                                                      1999                    2000                  2001
                                              ----------------------------------------------------------
<S>                                           <C>                     <C>                   <C>
Closings (for the year ended)                        5,100                   4,804                 5,924
Homes in backlog                                     1,496                   2,010                 1,983
Aggregate sales value in backlog              $177,300,000            $273,400,000          $279,700,000
Average sales price of backlog                $    118,520            $    136,020          $    141,050
</TABLE>

     Historically,  Crossmann has been able to close  approximately  three times
its ending  backlog of new homes in the  subsequent  year.  Because of softening
orders in the second half of 2001, Crossmann will be challenged to deliver three
times its ending backlog in 2002.

Liquidity and Capital Resources

     At December 31, 2001,  Crossmann had cash and cash  equivalent  balances of
$14.2 million.

     On  October  7,  1999,   Crossmann's  Board  of  Directors  authorized  the
repurchase  of up to 15% of its  outstanding  shares  (1,740,357  shares  out of
11,602,382 shares then outstanding).  As of December 31, 2001,  1,283,000 shares
had been  repurchased and retired  pursuant to this plan, at an average price of
$15.78 per share. This authorization expired April 7, 2001.

     During 2001,  expenditures were financed with cash from operations and with
borrowings  on a $135 million  unsecured  line of credit with Bank One,  Indiana
N.A. and its participants. The line of credit bears interest at the bank's prime
lending rate, but permits  portions of the  outstanding  balance to be committed
for fixed  periods of time at a rate equal to LIBOR plus 1.3% through  1.6%.  At
December  31,  2001 the  Company  had drawn  funds on its bank line of credit of
$60,000,000.  This line of credit has a three-year maturity,  renewable annually
and expires April 1, 2004.



                                     - 16 -
<PAGE>

     The Company  also has $8.3 million in senior  notes,  maturing in 2004 with
interest payable  quarterly at 7.625%,  and annual principal  reductions of $2.8
million,  and $50.0 million in senior notes issued in June of 1998, payable over
10 years at  7.75%,  payable  quarterly.  Annual  principal  reductions  of $8.3
million for the $50.0 million note begin June 11, 2003.

     Both the note  agreements  and the bank line of credit  require  compliance
with certain financial and operating  covenants and place certain limitations on
the Company's  investments in land and unconsolidated joint ventures.  They also
restrict  payments of cash  dividends  and  repurchases  of common  stock by the
Company. The Company is in compliance with all financial and operating covenants
at December 31, 2001.

     The Company's primary uses of capital are home  construction  costs and the
purchase and development of land.  Real estate  inventories  were  approximately
$339.3  million  or 79.0% of total  assets at  December  31,  2001  compared  to
approximately  $279.3  million or 74.7% of total assets at December 31, 2000. To
assure the future  availability  of developed  lots for next year's  operations,
from time to time in the normal  course of  business,  the Company  contracts to
purchase  a  portion  of its  developed  lots  from  outside  developers.  Total
commitments  for these purchases were  approximately  $169.8 million at December
31, 2001. The purchases of these lots are subject to various  conditions imposed
on both the  sellers  and the  Company.  Capital is also used to add and improve
equipment used in administering the business and for model home furnishings.

     From time to time, Crossmann enters into joint ventures with other builders
and developers, to share land development risk and to obtain external expertise.
Crossmann's   investment  in  and  advances  to  joint  ventures   decreased  to
approximately $15.3 million in 2001 from approximately $16.3 million in 2000.

     The cash  generated  from  operations  and the banks' credit  agreement are
expected to provide  adequate  liquidity for planned internal growth and capital
expenditures.  In the event that the Company seeks to accelerate  growth through
the  acquisition of large parcels of land or of other  homebuilders,  additional
capital  may be  necessary.  The Company  believes  that such  capital  could be
obtained  from  banks or other  financing  alternatives,  from the  issuance  of
additional shares, or from seller financing; however, there can be no assurances
that the Company would be able to secure the necessary capital.

Inflation and Effects of Changing Prices

     The Company  historically has been able to raise sales prices by amounts at
least equal to its cost  increases and,  accordingly,  has not  experienced  any
detrimental  effect from  inflation.  However,  because  the Company  sells to a
price-conscious  consumer,  its ability to raise prices is somewhat limited.  In
2001,  the Company was able to pass along certain price  increases  effectively.
The  average   selling  price  of  Crossmann's   core  product   increased  from
approximately $129,275 in 2000 to approximately $134,800 in 2001.

     Housing demand, in general,  is affected adversely by increases in interest
rates. If mortgage interest rates increase significantly, the Company's sales of
residential real estate could be adversely affected.  In addition,  gross profit
and net income can be affected because  Crossmann can assist buyers,  subject to
certain  limitations  by FHA and VA, by paying a portion of a customer's  points
and closing costs needed to help in securing a mortgage loan.

New Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  141,  "Business  Combinations,"  and  SFAS No.  142,  "Goodwill  and  Other
Intangible Assets." SFAS No. 141 requires business combinations  initiated after
June 30, 2001, to be accounted for using the purchase  method of accounting  and
broadens the criteria for recording  intangible  assets  separate from goodwill.
SFAS No.  141  also  prohibits  the use of  pooling-of-interest  method  for all
business combinations initiated after June 30, 2001.


                                     - 17 -
<PAGE>

     SFAS No. 142 requires the use of a nonamortization  approach to account for
purchased goodwill and certain  intangibles.  Under a nonamortization  approach,
goodwill  and  certain  intangibles  would  not be  amortized  into  results  of
operations,  but instead would be reviewed for  impairment at least annually and
written  down and charged to results of  operations  in the periods in which the
recorded value of goodwill and certain  intangibles are determined to be greater
than their fair value.

     SFAS No. 142 is effective  for fiscal years  beginning  after  December 15,
2001.  The  adoption  of SFAS No.  142 will  result  in the  discontinuation  of
amortization  of  goodwill  recorded  at  December  31,  2001  of  approximately
$1,025,000  annually.  We do not believe any impairment charges will result from
the adoption of this statement.

     SFAS No. 144,  "Accounting  for Long-Lived  Assets,"  issued in August 2001
addresses  accounting  for  and  reporting  of the  impairment  or  disposal  of
long-lived  assets.  SFAS No. 144 is effective for fiscal years  beginning after
December  31,  2001.  We do not expect the  adoption of SFAS No. 144 will have a
significant impact on our financial position or results of operations.

Future Trends

     Management views land acquisition and zoning as the greatest  challenges to
its business in years to come. The Company will continue to seek to maximize the
value of each  parcel it  purchases  so that it can  continue  to serve its core
customer.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company does not invest in marketable securities, nor does it engage in
hedging activities or foreign currency  conversions.  The Company's bank line of
credit is carried at variable interest rates.


                                     - 18 -
<PAGE>

               ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                           Crossmann Communities, Inc.
                                and Subsidiaries

                   Index to Consolidated Financial Statements

Independent Auditors' Report............................................      20
Consolidated Balance Sheets as of December 31, 2000 and 2001............      21
Consolidated Statements of Income for the Years Ended
  December 31, 1999, 2000, and 2001.....................................      22
Consolidated Statements of Shareholders' Equity for the Years Ended
  December 31, 1999, 2000, and  2001....................................      23
Consolidated Statements of Cash Flows for the Years Ended
  December 31, 1999, 2000, and 2001.....................................      24
Notes to Consolidated Financial Statements..............................   25-33


                                     - 19 -
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Crossmann Communities, Inc.
Indianapolis, Indiana

We have  audited  the  accompanying  consolidated  balance  sheets of  Crossmann
Communities,  Inc. and  subsidiaries  as of December 31, 2001 and 2000,  and the
related consolidated  statements of income,  shareholders' equity and cash flows
for each of the  three  years in the  period  ended  December  31,  2001.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
the significant estimates made by management,  as well as evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the financial  position of the companies as of December 31,
2001 and 2000, and the results of their operations and their cash flows for each
of the three years in the period  ended  December  31, 2001 in  conformity  with
accounting principles generally accepted in the United States of America.



DELOITTE & TOUCHE LLP
Indianapolis, Indiana

January 22, 2002


                                     - 20 -
<PAGE>
<TABLE>
<CAPTION>

                                  Crossmann Communities, Inc.
                                        and Subsidiaries

                                  Consolidated Balance Sheets
                                as of December 31, 2000 and 2001



                                                             2000                     2001
                                                        --------------          --------------
<S>                                                     <C>                     <C>
Assets
   Cash and cash equivalents                            $   17,442,680          $   14,179,268
   Retainages                                                1,257,188               1,140,152
   Real estate inventories                                 279,312,701             339,333,446
   Furniture and equipment, net                              4,607,689              10,615,590
   Investments in unconsolidated joint ventures             16,336,641              15,311,563
   Goodwill, net                                            19,839,154              18,814,063
   Other assets                                             35,107,053              30,223,658
                                                        --------------          --------------
Total assets                                            $  373,903,106          $  429,617,740
                                                        ==============          ==============


Liabilities and shareholders' equity
   Accounts payable                                     $    9,459,979          $   28,610,454
   Accrued expenses and other liabilities                   15,446,987              18,266,842
   Notes payable                                           141,286,510             118,333,332
                                                        --------------          --------------
Total liabilities                                          166,193,476             165,210,628

Commitments and contingencies (Note 15)

Shareholders' equity:
   Preferred shares, without par value:
      Authorized shares - 10,000,000
      No shares issued and outstanding
   Common shares, without par value:
      Authorized shares - 30,000,000
      Issued and outstanding shares - 10,457,922
         at December 31, 2000
      Issued and outstanding shares - 10,671,503
         at December 31, 2001                               47,067,554              51,670,460
   Retained earnings                                       160,642,076             212,736,652
                                                        --------------          --------------
Total shareholders' equity                                 207,709,630             264,407,112
                                                        --------------          --------------
Total liabilities and shareholders' equity              $  373,903,106          $  429,617,740
                                                        ==============          ==============
<FN>
See accompanying notes.
</FN>
</TABLE>

                                             - 21 -

<PAGE>
<TABLE>
<CAPTION>
                                              Crossmann Communities, Inc.
                                                    and Subsidiaries

                                           Consolidated Statements of Income

                                  for the Years Ended December 31, 1999, 2000 and 2001


                                                           1999                      2000                    2001
                                                        --------------          --------------          --------------

<S>                                                     <C>                     <C>                     <C>
  Sales of residential real estate                      $  609,319,345          $  621,037,646          $  798,355,565
  Cost of residential real estate sold                     485,086,158             499,671,386             624,647,706
                                                        --------------          --------------          --------------
  Gross profit                                             124,233,187             121,366,260             173,707,859

  Selling, general and administrative expenses              62,010,118              65,607,310              86,312,161
                                                        --------------          --------------          --------------
  Income from operations                                    62,223,069              55,758,950              87,395,698

  Other income, net                                          5,725,972               4,983,186               3,914,544
  Interest expense                                          (2,255,019)             (2,362,337)             (2,563,922)
                                                        --------------          --------------          --------------
                                                             3,470,953               2,620,849               1,350,622
                                                        --------------          --------------          --------------
  Income before income taxes                                65,694,022              58,379,799              88,746,320
  Income taxes                                              25,956,910              22,600,813              35,063,803
                                                        --------------          --------------          --------------
  Net income                                            $   39,737,112          $   35,778,986          $   53,682,517
                                                        ==============          ==============          ==============

  Net income per common share:
   Basic                                                $         3.44          $         3.33          $         5.09
                                                        ==============          ==============          ==============
   Diluted                                              $         3.40          $         3.28          $         5.01
                                                        ==============          ==============          ==============

  Weighted average number of common shares outstanding:
    Basic                                                   11,553,288              10,731,966              10,543,273
                                                        ==============          ==============          ==============
    Diluted                                                 11,698,479              10,907,457              10,710,135
                                                        ==============          ==============          ==============

<FN>
See accompanying notes.
</FN>
</TABLE>

                                                         - 22 -
<PAGE>

<TABLE>
<CAPTION>
                                               Crossmann Communities, Inc.
                                                     and Subsidiaries

                                                Consolidated Statements of
                                                   Shareholders' Equity

                                   for the Years Ended December 31, 1999, 2000 and 2001


                                                           Common Shares
                                                    ---------------------------            Retained
                                                     Shares           Amount               Earnings              Total
                                                    --------------------------------------------------------------------

<S>                 <C>                             <C>            <C>                  <C>                 <C>
Balances at January 1, 1999                         11,543,772     $ 65,154,710         $ 85,125,978        $150,280,688
   Net income                                                                             39,737,112          39,737,112
   Repurchase of common shares                        (182,500)      (2,921,982)                              (2,921,982)
   Issuance of common shares                           107,814        1,383,554                                1,383,554
                                                    --------------------------------------------------------------------
Balances at December 31, 1999                       11,469,086       63,616,282          124,863,090         188,479,372
   Net income                                                                             35,778,986          35,778,986
   Repurchase of common shares                      (1,100,500)     (17,327,666)                             (17,327,666)
   Issuance of common shares                            89,336          778,938                                  778,938
                                                    --------------------------------------------------------------------
Balances at December 31, 2000                       10,457,922       47,067,554          160,642,076         207,709,630
   Net income                                                                             53,682,517          53,682,517
   Dividends paid                                                                         (1,587,941)         (1,587,941)
   Issuance of common shares                           213,581        3,664,960                                3,664,960
   Tax benefit from stock option exercises                              937,946                                  937,946
                                                    --------------------------------------------------------------------
Balances at December 31, 2001                       10,671,503     $ 51,670,460         $212,736,652        $264,407,112
                                                    ====================================================================

<FN>
See accompanying notes.
</FN>
</TABLE>


                                                         - 23 -
<PAGE>
<TABLE>
<CAPTION>
                                             Crossmann Communities, Inc.
                                                   and Subsidiaries
                                        Consolidated Statements of Cash Flows

                     for the Years Ended December 31, 1999, 2000 and 2001 (See Notes 7, 8 and 9)


                                                                ----------------------------------------------------
                                                                     1999                2000                2001
                                                                ----------------------------------------------------
<S>                                                             <C>                <C>                 <C>
Operating activities:
Net income                                                      $ 39,737,112       $  35,778,986       $  53,682,517
Adjustments to reconcile net income to net
   cash provided by (used in) operating activities:
      Depreciation                                                   662,871           2,082,103           1,546,819
      Amortization                                                   543,987           1,995,607           1,025,091
      Equity in earnings of affiliates                            (3,645,100)         (1,438,500)         (2,184,120)
      Deferred income taxes                                              -0-            (852,373)            805,973
      Cash provided (used) by changes in:
         Retainages                                                  (82,725)            (58,846)            117,036
         Real estate inventories                                 (37,026,268)         35,972,471         (60,020,745)
         Other assets                                             (1,321,810)        (16,846,102)          3,951,666
         Accounts payable                                          1,079,738         (25,476,868)         19,150,475
         Accrued expenses and other liabilities                   (3,069,587)          3,829,193           3,883,557
                                                                ----------------------------------------------------
Net cash provided by (used in) operating activities               (3,121,782)         34,985,671          21,958,269

Investing activities:
Purchases of furniture and equipment                              (1,307,871)           (365,408)         (7,554,720)
Investments in joint ventures                                     (6,303,906)         (2,051,706)          3,209,198
Business acquisitions, net of cash acquired                       (4,363,760)         (5,454,482)                -0-
                                                                ----------------------------------------------------
Net cash used in investing activities                            (11,975,537)         (7,871,596)         (4,345,522)

Financing activities:
Proceeds from bank borrowings                                    256,011,879         227,435,875         251,640,000
Principal payments on bank borrowings                           (239,733,000)       (231,351,875)       (271,810,000)
Payments on notes and long-term debt                              (4,018,677)         (2,842,578)         (2,783,178)
Dividends paid                                                           -0-                 -0-          (1,587,941)
Repurchase of common shares                                       (2,921,982)        (17,327,666)                -0-
Net proceeds from sale of common shares                            1,383,554             778,938           3,664,960
                                                                ----------------------------------------------------
Net cash provided by (used in) financing activities               10,721,774         (23,307,306)        (20,876,159)

Net increase (decrease) in cash and cash equivalents              (4,375,545)          3,806,769          (3,263,412)
Cash and cash equivalents at beginning of year                    18,011,456          13,635,911          17,442,680
                                                                ----------------------------------------------------
Cash and cash equivalents at end of year                        $ 13,635,911       $  17,442,680       $  14,179,268
                                                                ====================================================

<FN>
See accompanying notes.
</FN>
</TABLE>


                                                       - 24 -
<PAGE>

                           Crossmann Communities, Inc.
                                and Subsidiaries

                   Notes to Consolidated Financial Statements

              for the Years Ended December 31, 1999, 2000 and 2001

1. Basis of Presentation

Crossmann Communities,  Inc. ("Crossmann" or the "Company") is engaged primarily
in the development,  construction, marketing and sale of new single-family homes
for first time and first move-up buyers.  The Company also acquires and develops
land for  construction of such homes and provides  mortgage  origination,  title
company  services  and  insured  warranty  coverage  for the buyers  through its
wholly-owned  subsidiaries  Crossmann Mortgage Corporation,  Paragon Title, Inc.
and  Meridian  Structural  Insurance,  Risk  Retention  Group,  Inc. The Company
operates in Indianapolis, Ft. Wayne and Lafayette, Indiana; Cincinnati, Columbus
and  Dayton,  Ohio;  Lexington,  Kentucky;  Memphis,  Tennessee;  Charlotte  and
Raleigh,  North  Carolina;  and  Myrtle  Beach,  South  Carolina.  During  2000,
Crossmann   closed  its  operations  in  Louisville,   Kentucky  and  Nashville,
Tennessee.

2. Significant Accounting Policies

Principles of Consolidation.
The consolidated  financial  statements  include the accounts of the Company and
its  wholly-owned  subsidiaries.   All  significant  intercompany  accounts  and
transactions  have been  eliminated.  The  Company  also owns 50%  interests  in
certain unconsolidated joint ventures,  which are accounted for using the equity
method. Effective October 1, 2000, Crossmann acquired the remaining 50% interest
in one of its joint  ventures,  Trinity Homes,  LLC  ("Trinity").  Prior to this
date, the Company recorded its 50% share of Trinity earnings in other income.

Accounting Estimates
The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.

Significant  estimates  made  by  Crossman's  management  include  reserves  for
warranty  expenses to be incurred on homes under  warranty  and accruals for the
costs to be incurred for completion of homes closed.  Estimates for warranty and
costs to  complete  are made based on detailed  budgets  for each home,  options
selected by the customer and historical cost behavior patterns. Costs associated
with these  estimates  are expensed in the period in which the  associated  home
sale revenue is recognized.

Business Segments
Crossmann does not report its geographic regions separately because its product,
pricing and margins are all very similar from market to market.  Crossmann  does
not report its mortgage or title  operations  separately  because they  directly
support its core homebuilding operations.  Services to outside parties are rare.
Generally,  internal  payments between the building  operations and mortgage and
title  subsidiaries are eliminated in consolidation  and flow through the income
statement as savings in the builder's gross margin.

Cash and Cash Equivalents
All highly  liquid  investments  with  maturities  of three  months or less when
purchased are considered to be cash  equivalents.



                                     - 25 -
<PAGE>

Real Estate Inventories
Real estate inventories are stated at the lower of cost (specific identification
method) or net realizable  value. In addition to direct land  acquisition,  land
development and housing  construction  costs,  inventory costs include interest,
real estate taxes and related development and construction  overhead costs which
are capitalized in inventory  during the development and  construction  periods.
Net realizable value represents  estimates,  based on management's present plans
and intentions,  of sale price less development and disposition  cost,  assuming
that disposition occurs in the normal course of business.

Goodwill
Goodwill  is  amortized  over  twenty  years  using  the  straight-line  method.
Accumulated amortization was approximately $3,061,500 and $4,178,400 at December
31,  2000 and 2001,  respectively.  In the event  that  facts and  circumstances
indicate that the carrying  value of goodwill may be impaired,  an evaluation of
recoverability  is  performed.  The  evaluation  compares the  estimated  future
undiscounted  cash flows associated with the asset to the asset's carrying value
to determine whether an impairment charge is required.

Furniture and Equipment
Furniture  and  equipment  are stated at cost.  Depreciation  is computed  using
straight-line  and  accelerated  methods over the estimated  useful lives of the
respective  assets  ranging  from 5 to 15  years.  Accumulated  depreciation  is
approximately   $6,078,300  and  $5,603,805  at  December  31,  2000  and  2001,
respectively. Repairs and maintenance costs are expensed as incurred.

Revenue Recognition
Revenue  is  recognized  upon a formal  closing  and as  title  to the  property
transfers  to the  buyer.  At that  time,  the  risks  and  responsibilities  of
ownership  are  transferred  to the  buyer.  Revenue  from  mortgage  and  title
operations are recognized at closing and are included as sales from  residential
real estate.

New Accounting Pronouncements
In July 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
141,  "Business  Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 141 requires  business  combinations  initiated after June 30,
2001, to be accounted for using the purchase  method of accounting  and broadens
the criteria for recording  intangible  assets separate from goodwill.  SFAS No.
141  also  prohibits  the use of  pooling-of-interest  method  for all  business
combinations initiated after June 30, 2001.

SFAS No. 142  requires  the use of a  nonamortization  approach  to account  for
purchased goodwill and certain  intangibles.  Under a nonamortization  approach,
goodwill  and  certain  intangibles  would  not be  amortized  into  results  of
operations,  but instead would be reviewed for  impairment at least annually and
written  down and charged to results of  operations  in the periods in which the
recorded value of goodwill and certain  intangibles are determined to be greater
than their fair value.

SFAS No. 142 is effective for fiscal years  beginning  after  December 15, 2001.
The adoption of SFAS No. 142 will result in the  discontinuation of amortization
of goodwill recorded at December 31, 2001 of approximately  $1,025,000 annually.
We do not believe any  impairment  charges will result from the adoption of this
statement.

SFAS No.  144,  "Accounting  for  Long-Lived  Assets,"  issued  in  August  2001
addresses  accounting  for  and  reporting  of the  impairment  or  disposal  of
long-lived  assets.  SFAS No. 144 is effective for fiscal years  beginning after
December  31,  2001.  We do not expect the  adoption of SFAS No. 144 will have a
significant impact on our financial position or results from operations.

3. Financial Instruments

SFAS No. 107, Disclosure About Fair Value of Financial Instruments,  defines the
fair value of a financial instrument as the amount at which the instrument could
be exchanged in a current transaction  between willing parties,  other than in a
forced or liquidation  sale. The following  summarizes the estimated fair values
of  financial  instruments  and  the  major  methods  and  assumptions  used  in
estimating  such  amounts:



                                     - 26 -
<PAGE>

The recorded  amounts of short-term  financial  instruments  (primarily cash and
cash equivalents,  retainages, and accounts payable) approximate the fair values
due to the relatively short period to maturity.

Debt  with  variable  interest  rates is  recorded  at  carrying  amounts  which
approximate the fair value based on discounted future cash flows. The fair value
of senior notes payable due December 2004 and due June 2008 totals approximately
8,675,000 and $54,401,000, respectively, at December 31, 2001.

4. Real Estate Inventories

Real estate inventories at December 31 consist of:

                                               2000                 2001
                                           ------------         ------------

Residential homes under construction       $117,399,498         $145,043,489
Land held for future development             64,604,096           68,934,611
Land under development                       50,578,935           74,856,935
Purchased developed lots                     32,826,664           32,668,442
Homes held for resale                         3,910,940            5,836,784
Model homes                                   9,992,568           11,993,185
                                           ------------         ------------
                                           $279,312,701         $339,333,446
                                           ============         ============

The Company  occasionally  purchases homes from customers to facilitate the sale
of new homes.  Such homes held for resale are  recorded  at the lower of cost or
net realizable value.

5. Investments in Unconsolidated Joint Ventures

The Company has entered into joint ventures with various real estate  developers
and owns 50% or less in each venture. The joint ventures are accounted for using
the equity method. Aggregated condensed financial information for unconsolidated
joint ventures is as follows:

                         1999            2000            2001
                     ------------     -----------     -----------

Revenue              $126,940,421     $20,362,027     $35,566,337
Expenses              117,539,265      18,233,979      30,166,052
                     ------------     -----------     -----------
Net income           $  9,401,156     $ 2,128,048      $5,400,285
                     ============     ===========     ===========

Assets               $ 92,882,531     $63,657,068     $69,200,802
Liabilities            73,817,315      49,178,071      50,926,915
                     ------------     -----------     -----------
Equity               $ 19,065,216     $14,478,997     $18,273,887
                     ============     ===========     ===========

Assets of joint  ventures  consist  primarily  of  developed  lots,  land  under
development and land held for future development.  Revenue consists primarily of
residential lot sales. Land joint ventures provided $6,022,340,  $14,557,550 and
$23,338,700  in lots  to the  Company  in  1999,  2000  and  2001  respectively.
Investments in  unconsolidated  joint ventures include accounts  receivable from
the joint ventures of $9,106,601 and $5,891,963 in 2000 and 2001,  respectively.
Interest and fee income from unconsolidated joint ventures totaled approximately
$902,500, $552,800 and $826,800 for 1999, 2000 and 2001, respectively.

For the year ended  December  31,  1999,  and for the  nine-month  period  ended
October 1, 2000, the Company's  investment in the Trinity joint venture provided
approximately  $3,645,100  and  $1,438,500  in  other  income  to  the  Company,
respectively.


                                     - 27 -
<PAGE>
6. Other Assets

<TABLE>
<CAPTION>
Other assets at December 31 consist of:

                                                          2000              2001
                                                      -----------       -----------

<S>                                                   <C>               <C>
Lot deposits                                          $ 8,830,458       $ 9,185,106
Mortgage notes receivable                               9,482,463         2,540,500
Model homes, financed                                   6,632,481         4,971,862
Other (including related party notes receivable
   of $665,270 and $951,558, respectively)             10,161,651        13,526,190
                                                      -----------       -----------
                                                      $35,107,053       $30,223,658
                                                      ===========       ===========
</TABLE>

At December 31, 2001,  other assets  includes  $933,766 of  restricted  cash. In
2000, the Company  financed  model homes through  certain  unconsolidated  joint
ventures  which require  monthly  payments of  approximately  1% of the carrying
cost. The corresponding  finance  obligation is included in accrued expenses and
other  liabilities.  Interest  expense  associated with the financed model homes
totaled approximately $45,400 and $626,100 for 2000 and 2001, respectively.

7. Credit Arrangements

<TABLE>
<CAPTION>
Notes payable consist of the following at December 31:

                                                               --------------------------------
                                                                   2000                2001
                                                               --------------------------------
<S>                                                           <C>                  <C>
 Line of credit with banks, maximum $135,000,000, with
 interest payable on funds committed for fixed periods
 at LIBOR (ranging from 3.54% to 5.70% at December 31,
 2001) plus 1.3% through 1.6% and on floating funds at
 the banks' prime rate (4.75% at December 31, 2001)
 maturing in April 2004.                                      $ 80,170,000         $ 60,000,000


 Senior notes payable, due December 2004 with annual
 principal payments of $2,777,778, and  quarterly
 interest payments at 7.625%.                                   11,111,110            8,333,332

 Senior notes payable, due June 11, 2008 with annual
 principal payments of $8,333,334 beginning June 2003,
 and quarterly interest payments at 7.75%.                      50,000,000           50,000,000

 Other                                                               5,400                  -0-
                                                              ------------         ------------
                                                              $141,286,510         $118,333,332
                                                              ============         ============
</TABLE>

The senior notes and line of credit agreements  require a minimum current ratio,
a minimum  fixed  charge  coverage  ratio,  a maximum  ratio of debt to tangible
capital base, a maximum ratio of land to equity,  and a maximum ratio of debt to
a borrowing base derived from inventory  levels.  The senior note due April 2004
requires  a  premium  in the event of  pre-payment.  Additionally,  both  credit
agreements limit investment in unconsolidated joint ventures,  restrict payments
of cash  dividends,  and  require  express  written  consent of the  lenders for
certain  transactions.  The  Company is in  compliance  with all  financial  and
operating covenants at December 31, 2001.

Interest  capitalized  during  real  estate  development  and  construction  was
$7,591,000, $8,307,400, and $8,323,000 for 1999, 2000, and 2001, respectively.

Interest paid,  including amounts  capitalized,  was  approximately  $9,846,000,
$10,669,800 and $10,887,000 in 1999, 2000, and 2001, respectively.  The weighted
average interest rate on outstanding borrowings was 5.94% at December 31, 2001.


                                     - 28 -
<PAGE>
Scheduled  maturities of notes payable for each of the five years and thereafter
as of December 31, 2001 are as follows:

          2002               $  2,777,778
          2003                 11,111,112
          2004                 71,111,110
          2005                  8,333,334
          2006                  8,333,334
          Thereafter           16,666,664
                             ------------
                             $118,333,332
                             ============

8. Shareholders' Equity

The Company has authorized  10,000,000 preferred shares which remain unissued at
December 31, 2001.  The Board of Directors of the Company has not yet determined
the  preferences,  qualifications,  relative  voting  or  other  rights  of  the
authorized preferred shares.

On October 7, 1999,  Crossmann's Board of Directors authorized the repurchase of
up to 15% of its outstanding  shares  (1,740,357 shares out of 11,602,382 shares
then  outstanding).   As  of  December  31,  2001,  1,283,000  shares  had  been
repurchased and retired pursuant to this plan, at an average price of $15.78 per
share. That authorization  expired April 7, 2001. During 2001, cash dividends of
$1,587,941 ($0.15 per share) were paid.

The Company  has  incentive  share  option  plans for  employees  and  directors
pursuant to which 1,237,500 common shares are reserved.  The options were issued
at market  prices on the grant date,  became  exercisable  on the grant date and
expire ten years after the grant date

<TABLE>
<CAPTION>
                              1999       1999              2000       2000             2001         2001
                              ----       ----              ----       ----             ----         ----
                                       Weighted                     Weighted                      Weighted
                                        Average                      Average                       Average
                                       Exercise                     Exercise                      Exercise

<S>                         <C>          <C>             <C>         <C>              <C>          <C>
Beginning Balance           501,630      $16.33          466,749     $17.04           408,394      $17.57
Options granted              98,970       24.92           72,000      15.50            40,000       24.03
Options exercised           (58,601)      11.97          (72,605)      7.39          (195,191)      15.87
Options forfeited           (75,250)      26.65          (57,750)     23.45            (1,000)      30.38
                            -------------------          ------------------           -------------------
Ending Balance              466,749      $17.04          408,394     $17.57           252,203      $19.85
                            ===================          ==================           ===================
Exercisable                 466,749      $17.04          408,394     $17.57           252,203      $19.85
                            ===================          ==================           ===================
</TABLE>

                                     - 29 -
<PAGE>
The following table summarizes  information about stock options  outstanding and
exercisable at December 31, 2001:

<TABLE>
<CAPTION>

                                            Weighted Average      Weighted
                     Number Outstanding       Contractual         Average
   Range of                  and             Remaining Life       Exercise
Exercise Prices          Exercisable            (Years)            Price
---------------          -----------            -------            -----
<S>                        <C>                      <C>            <C>
    $11-16                  98,703                  6              $13.99
     17-25                 118,000                  7               23.69
     26-32                  35,500                  6               30.40
</TABLE>

The  Company  applies  APB  Opinion  No.  25,  Accounting  for  Stock  Issued to
Employees,  and related  Interpretations  in accounting for the option plans. No
compensation  cost has been  recognized  for the plans  because the stock option
price is equal to fair value at the grant date.  Had  compensation  cost for the
plans  been  determined  based on the fair  value at the grant  dates for awards
under the plan  consistent  with the  method  of SFAS No.  123,  Accounting  for
Stock-Based  Compensation,  the  Company's  pro forma net  income  and basic and
diluted net income per share for the years ended  December  31,  1999,  2000 and
2001 would be as follows:

<TABLE>
<CAPTION>
                                        1999            2000             2001
                                        ----            ----             ----
<S>                                 <C>             <C>             <C>
  Net income:
        As reported                 $39,737,112     $35,778,986     $53,682,517
        Pro forma                    39,176,859      35,489,811      53,445,417
  Basic net income per share:
        As reported                        3.44            3.33            5.09
        Pro forma                          3.39            3.31            5.07
  Diluted net income per share:
        As reported                        3.40            3.28            5.01
        Pro forma                          3.35            3.25            4.99
</TABLE>

The fair value of the option grants are estimated on the date of grant using the
Black-Sholes  option  pricing model based on the following  assumptions  for the
years ended December 31,

                                           2000             2001
                                           ----             ----

           Expected  volatility            45.0%            45.0%
           Expected  dividend yield         none          nominal
           Risk-free interest rate          6.0%             4.8%
           Expected life (in years)           5                5



                                     - 30 -
<PAGE>

The following is a reconciliation  of the weighted average common shares for the
basic and diluted net income per share computations for the years ended December
31:

<TABLE>
<CAPTION>
                                          1999            2000              2001
                                      ----------       ----------        ---------

<S>                                   <C>              <C>              <C>
Weighted average common shares        11,553,288       10,731,966       10,543,273
Dilutive effect of stock options         145,191          175,491          166,862
                                      ----------       ----------       ----------
Weighted average common shares
   and incremental shares             11,698,479       10,907,457       10,710,135
                                      ==========       ==========       ==========
</TABLE>

9. Income Taxes

<TABLE>
<CAPTION>
The  reconciliation  of income taxes computed at the U.S. federal  statutory tax
rate to income tax expense for the years ended December 31:

                                          1999            2000              2001
                                      ----------       ----------        ---------

<S>                                  <C>               <C>              <C>
Tax at U.S. statutory rate           $22,992,908      $20,432,930      $31,061,212
State income taxes, net of
   federal tax benefit                 2,964,002        2,167,883        4,002,591
                                     -----------       ----------      -----------
                                     $25,956,910      $22,600,813      $35,063,803
                                     ===========      ===========      ===========
</TABLE>

<TABLE>
<CAPTION>
The  following is a summary of the  components of the provision for income taxes
for the years ended December 31:

                                          1999            2000              2001
                                      ----------       ----------        ---------

<S>                                  <C>               <C>              <C>
Current tax expense:
   Federal                           $21,827,556      $19,242,403      $29,454,207
   State                               4,129,354        4,210,783        4,803,623
                                     -----------      -----------      -----------
                                      25,956,910       23,453,186       34,257,830
Deferred tax expense (benefit)               -0-        (852,373)          805,973
                                     -----------      -----------      -----------
                                     $25,956,910      $22,600,813      $35,063,803
                                     ===========      ===========      ===========
</TABLE>

Income taxes paid were  $26,297,000,  $22,455,000 and  $32,679,000  during 1999,
2000 and 2001, respectively.

Total  deferred  tax assets  (primarily  related to warranty  reserves and other
non-deductible accruals) are approximately $2,009,000 and $1,154,000 at December
31, 2000 and 2001,  respectively.  Total  deferred  tax  liabilities  (primarily
related to  acquisition  basis  differences)  are  approximately  $1,601,000 and
$1,552,000 at December 31, 2000 and 2001, respectively.

10. Related Party Transactions

Office  space at the  Company's  headquarters  is leased  from a related  party.
During  1999,  2000 and 2001  approximately  $382,800,  $382,800  and  $475,700,
respectively,  in rental  payments were made to a related  entity  controlled by
certain key members of  management.  The Company  paid  approximately  $217,700,
$237,200  and  $218,000  for 1999,  2000 and 2001,  respectively,  for  aircraft
charter services to a related entity. 11. Leases


                                     - 31 -
<PAGE>

The Company  leases office and warehouse  space,  vehicles and office  equipment
pursuant to operating lease agreements expiring on various dates through October
2012. Rent expense was approximately  $1,018,500,  $1,285,900 and $1,687,900 for
1999,  2000 and 2001,  respectively.  Annual  minimum  payments  to be made to a
related  party  incorporated  in the  amounts  below  range  from  approximately
$511,300 in 2002 to $217,300 in 2004.

Annual  minimum  operating  lease  payments  due as of December  31, 2001 are as
follows:

                   2002           $2,253,568
                   2003            1,955,642
                   2004            1,345,353
                   2005              490,302
                   2006              369,472
                                  ----------
                                  $6,414,337
                                  ==========

12. Employee Benefits

The  Company's  defined  contribution  savings  plan  covers  substantially  all
employees  of the  Company.  Participants  are  allowed  to make  nonforfeitable
contributions  up to limits  established by the Internal  Revenue Code. The plan
also permits  investments by employees in the Company's common shares.  In 1999,
2000 and 2001 the  Company  matched in cash 50% of the first 6% of  compensation
contributed  by each  participant,  totaling  $331,600 and $365,000 and $460,800
respectively.  On  December  31,  1999,  2000 and  2001,  the  Company  declared
discretionary profit sharing contributions of approximately  $871,300,  $771,400
and $800,000 respectively, payable in the Company's common shares.

<TABLE>
<CAPTION>
13. Quarterly Financial Information (Unaudited)

                                         1st Quarter          2nd Quarter          3rd Quarter          4th Quarter
                                         -----------          -----------          -----------          -----------
<S>                                     <C>                  <C>                  <C>                  <C>
2001:
Net Sales                               $109,769,566         $197,128,734         $227,323,967         $264,133,298
Gross Profit                              22,985,686           41,684,455           49,153,697           59,884,021
Income from operations                     6,397,925           19,960,398           26,462,362           34,575,013
Net income                                 4,303,129           13,034,849           17,147,939           19,196,600
Net income per share, basic                        0.41                 1.24                 1.62                 1.81
Net income per share, diluted                      0.40                 1.22                 1.59                 1.79

2000:
Net Sales                               $106,525,968         $153,687,292         $148,769,374         $212,055,012
Gross Profit                              21,354,222           30,732,998           30,242,076           39,036,964
Income from operations                     7,016,469           15,555,893           15,100,409           18,086,179
Net income                                 4,544,960            9,338,075           10,612,237           11,283,714
Net income per share, basic                        0.40                 0.87                 1.01                 1.09
Net income per share, diluted                      0.39                 0.85                 1.00                 1.07

<FN>
Note:Earnings per share are computed  independently  for each quarter  presented.  Therefore,  the sum of quarterly per
     share amounts may not equal the total for the year.
</FN>
</TABLE>


                                                         - 32 -
<PAGE>

14. Business Acquisitions

Crossmann  acquired the remaining 50% interest in Trinity,  effective October 1,
2000  for  approximately   $7,600,000  in  cash,  and  assumed  debt  and  other
liabilities of approximately $42,800,000. The transaction was accounted for as a
purchase.  Cost in  excess  of the fair  value  of the net  assets  acquired  of
approximately  $4,200,000  was recorded as  goodwill.  The  unaudited  pro forma
results of  operations  as if the  acquisition  occurred  on January 1, 1999 are
presented below.  These pro forma results are not necessarily  indicative of the
actual results of operations that would have occurred.

<TABLE>
<CAPTION>
                                     1999                       2000
                             Unaudited Pro Forma        Unaudited Pro Forma
<S>                              <C>                       <C>
Sales                            $724,676,286              $707,428,060
Other income                        2,220,817                 3,674,529
Net income                         42,258,137                36,137,913

Net income per share:
Basic                            $       3.66              $       3.37
Diluted                                  3.61                      3.31
</TABLE>

15. Commitments and Contingencies

To assure the future  availability  of developed  lots,  in the normal course of
business,   the  Company  has  contracted  to  purchase  developed  lots.  Total
commitments  for these purchases were  approximately  $169.8 million at December
31,  2001.   These  contracts  are  generally   without   specific   performance
requirements   and  limit  the   Company's   exposure  to  the   forfeiture   of
non-refundable  deposits which were  approximately $8.8 million and $9.1 million
at  December  31,  2000 and 2001,  respectively.  The  purchase of these lots is
subject to various conditions imposed on both the sellers and the Company.

The Company has outstanding  letters of credit of approximately  $4.2 million at
December  31,  2001 of which $1.2  million was  established  to  capitalize  the
Company's  warranty  insurance  company,  Meridian  Structural  Insurance,  Risk
Retention Group,  Inc., and approximately $3.0 million was pledged to ensure the
completion of land development work in various municipalities.

The Company from time to time is involved in routine  litigation  incidental  to
its business.  The Company does not believe that any liabilities  resulting from
litigation to which it is a party will materially affect the Company's financial
position and results of operations.

16. Subsequent Event (Unaudited)

On January 29, 2002,  the Company  entered into an Agreement  and Plan of Merger
with Beazer Homes USA, Inc.  ("Beazer") and Beazer Homes  Investment  Corp. (the
"Merger  Agreement").  Closing  of the  merger  is  subject  to  regulatory  and
shareholder  approvals,  among other  conditions and terms,  as set forth in the
Merger Agreement.  Upon closing of the merger,  shareholders of the Company will
receive  proceeds of $17.60 per share and a fraction of a share of Beazer common
stock.  The  transaction  is  expected  to be  completed  in the second or third
quarter of 2002.


                                     - 33 -
<PAGE>

ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The Directors,  executive officers of the Company are set forth in the following
table:

Name                     Age    Position with Company
----                     ---    ---------------------
John B. Scheumann        52     Chairman of the Board of Directors and
                                  Chief Executive Officer
Richard H. Crosser       63     Vice Chairman of the Board of Directors
Jennifer A. Holihen      43     Chief Financial Officer; Treasurer;
                                  Secretary; Director
Steven M. Dunn           47     President and Chief Operating Officer
James C. Shook           70     Director
Larry S. Wechter         46     Director
John E. Worthen          68     Director

     Mr. Scheumann has been the Company's Chairman of the Board of Directors and
Chief Executive  Officer since 1992 and has served as a senior executive officer
since joining the Company in 1977. Before joining the Company, Mr. Scheumann was
employed by National  Homes  Construction  Corp. for three years in a variety of
capacities, last serving as Division Controller for Multi-Family Construction.

     Mr. Crosser served as the Company's  President and Chief Operating  Officer
from 1992 until 2001, and now serves on its Board of Directors as Vice Chairman.
He has been a senior executive  officer since joining the Company in 1974. Prior
to 1974, Mr. Crosser was employed by National  Homes  Construction  Corp. for 15
years in a variety of  capacities,  last  serving  as a regional  manager of the
company.

     Ms. Holihen has been the Chief Financial Officer,  Secretary, and Treasurer
since September 1993 and serves on its Board of Directors. Ms. Holihen served as
controller  for the  Company  from 1983 until 1993.  Ms.  Holihen is a Certified
Public Accountant and received her MBA in accounting and management  information
systems from Indiana University in 1987.

     Mr. Dunn was elected  President  in March 2001.  He has served as Executive
Vice President of Operations  since 1998,  and prior to that,  served as General
Manager of the Company's  Columbus,  Ohio Division  since October 1993. Mr. Dunn
was the sole  shareholder  and president of Deluxe Homes of Columbus,  Inc. from
1987 until its acquisition by the Company in 1993.



                                     - 34 -
<PAGE>

     James C. Shook was elected to Crossmann's Board of Directors in March 1994.
Mr. Shook was President of Coldwell Banker/The Shook Agency, Inc., a real estate
brokerage  firm in Lafayette,  Indiana from 1984 until his retirement in January
2000. Mr. Shook's other corporate  affiliations  have included  directorships of
Vectren,  Inc.,  NBD Indiana  N.A.,  Bank One Indiana N.A.,  and Lafayette  Life
Insurance Co. He is a life director of the Indiana Chamber of Commerce.

     John E.  Worthen  served as President  of Ball State  University  from 1984
until  his  retirement  in 2000,  and as  President  of  Indiana  University  of
Pennsylvania  from 1979 until 1984. Dr. Worthen has a Bachelor of Science degree
in  Psychology  from  Northwestern  University,  a Master  of Arts  degree  from
Columbia  University,  and  a  Doctor  of  Education  degree  from  Harvard,  in
Counseling,  Psychology and Administration in Higher Education. He has served as
a consultant to public schools,  universities,  the U.S Women's Bureau,  and the
U.S. Department of Labor. He served on the board of directors of Indiana Energy,
Inc. and Indiana Gas Company,  Inc. from 1997 until 2000 and currently serves on
the boards of the Ball State University Foundation,  First Merchants Corporation
and Ball Memorial Hospital.

     Larry S.  Wechter is the Managing  Director  and CEO of Monument  Advisors,
Inc. Monument Advisors manages a private equity fund and a mezzanine fund. These
funds focus on small to medium size  manufacturing,  service,  and  distribution
firms throughout the United States, but primarily in the Midwest.

     Prior to  founding  Monument,  Mr.  Wechter  served  in the  Office  of the
Chairman as President  and Director of ADESA  Corporation  (NASDAQ:  SOLD),  the
second  largest auto  auction  chain in the world and the largest used car floor
plan finance  company in the U.S.  ADESA was formerly a publicly  traded company
and is now a wholly-owned  subsidiary of Allete, Inc. (formally Minnesota Power,
Inc.) a diversified company based in Duluth,  Minnesota. Mr. Wechter also served
on Allete's (NYSE: ALL) management committee.  Prior to his role as President of
ADESA,  Mr. Wechter served as its Chief Financial  Officer.  Mr. Wechter was the
lead  financial  executive  in ADESA's  initial  public  offering and its second
primary  offering,  and all debt  underwriting and was directly  involved in all
aspects of the negotiations and structuring that led to ADESA's  acquisitions of
its business units.

     Mr. Wechter serves on the board of Symons  International Group (OTC: SIGC),
the  Ball   State   University   School   of   Entrepreneurship,   the   Midwest
Entrepreneurship  Education  Association and the Indiana Humanities Council. Mr.
Wechter  serves  on the  board  of  many  privately  held  companies,  including
portfolio companies of Monument.  Mr. Wechter currently holds NASD Series 7, 24,
27, and 63 securities licenses and is a CPA.

ITEM 11.  EXECUTIVE COMPENSATION

     The  following  table sets forth the  compensation  earned by the Company's
Chief  Executive  Officer and the Company's  four other  highest-paid  executive
officers  for  services  rendered  in all  capacities  to the  Company  and  its
subsidiaries  for the fiscal  years ended  December 31,  1999,  2000,  and 2001,
respectively.


                                     - 35 -
<PAGE>
<TABLE>
<CAPTION>
                                             Summary Compensation Table
                                             --------------------------

                                         Annual Compensation                       Long Term Compensation
                                     ---------------------------         --------------------------------------

                                                                            Other                    All Other
                                               Salary       Bonus        Compensation              Compensation (1)
  Name and Principal Position         Year       ($)         ($)             ($)         Options        ($)
  ---------------------------         ----       ---         ---             ---         -------   ------------
<S>                                   <C>      <C>         <C>              <C>           <C>         <C>
John B. Scheumann, Chairman           2001     300,000     300,000          1,820         None        10,773
 and Chief Executive Officer          2000     210,000     250,000          1,950                     11,882
                                      1999     200,000     300,000          3,529                     13,988
Richard H. Crosser, Vice              2001     300,000     350,000          1,040         None        10,773
 Chairman                             2000     210,000     200,000          1,350                     11,882
                                      1999     200,000     300,000          1,303                     13,988
Steve M. Dunn, President,             2001     200,000     300,000          1,266        4,000        10,773
Chief Operating Officer               2000     140,000     235,000          1,490        6,000        11,882
                                      1999     125,000     150,000          1,478          -0-        13,988
Jennifer A. Holihen, Chief            2001     150,000     200,000          3,910        4,000        10,773
 Financial Officer, Treasurer,        2000     110,000     175,000          3,880        6,000        11,882
 Secretary                            1999      90,000     125,000          4,385        4,000        13,988

<FN>
(1)  Represents contributions by the Company to the named individual's profit sharing plan.
</FN>
</TABLE>

Option Plan Benefits

The following table sets forth the benefits allocated under the Outside Director
Plan and the  Employee  Option Plan  (collectively,  the "Plans") for the fiscal
year  ended  December  31,  2001 to each of the named  executive  officers;  all
current  executive  officers  as a  group;  all  current  directors  who are not
executive  officers as group; and all employees,  including all current officers
who are not executive officers,  as a group. The amount of such benefits are not
necessarily  indicative  of the amounts that will be granted in the future.  The
closing  sale price of a Common  Share at the close of  business  on February 5,
2002 was $45.41. Option Plan Benefits

                              Employee Option Plan    Outside Director Option
Name                              Number of Units       Plan Number of Units
----                              ---------------       --------------------

John B. Scheumann                     -0-                        -0-
Richard H. Crosser                    -0-                        -0-
Steve M. Dunn                       4,000                        -0-
Jennifer A. Holihen                 4,000                        -0-


All Other Executive
  Officers as a Group                 -0-                        -0-

All Directors who are not
  Executive Officers                                           5,000

All non-Executive Officers
  and Employees as a Group         27,000

The following table contains  information  concerning the grant of stock options
under the Company's  Employee  Option Plan to the named  executive  officers and
groups  indicated.  The table also  lists  potential  realizable  values of such
options on the basis of assumed annual compounded  appreciation  rates of 5% and
10% over the life of the options, which are set at a maximum of 10 years.



                                     - 36 -
<PAGE>
<TABLE>
<CAPTION>
                                            Option Grants FY 2001
                                            ---------------------

                                                                                  Potential Realizable Value
                                        % Of Total                                 at Assumed Annual Rates
                                          Options                                 of Price Appreciation over
                                        Granted to     Exercise                           10 years
Name                      Options        Employees      Price       Expiration     5%($)           10%($)
----                      -------       ----------     --------     ----------     -----           ------

<S>                        <C>              <C>         <C>          <C>  <C>      <C>             <C>
John B. Scheumann            -0-             -0-          -0-            -0-           -0-             -0-
Richard H. Crosser           -0-             -0-          -0-            -0-           -0-             -0-
Steve M. Dunn              4,000            11.4        22.19        1/02/11       144,564         230,195
Jennifer A. Holihen        4,000            11.4        22.19        1/02/11       144,564         230,195
</TABLE>

The following  table provides  information  with respect to the named  executive
officers and groups indicated  concerning the unexercised options held as of the
end of the last fiscal year.

<TABLE>
<CAPTION>
                                   Aggregated Option Values at December 31, 2001
                                   ---------------------------------------------

                                                                                            Value of Unexercised
                                                    Value                                    Options at Yearend:
                                                   Realized:        Number of Options      Market price of $33.00 -
                            Shares Acquired     Market Price of       Unexercised at       exercise price ranging
Name                          on Exercise           $33.00          December 31, 2001      from $15.50 to $25.00
----                          -----------           ------          -----------------      ----------------------

<S>                             <C>               <C>                    <C>                      <C>
Jennifer A. Holihen             27,997            $923,901               14,703                   $162,313
Steven M. Dunn                     -0-                 -0-               10,000                   $148,250
</TABLE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of
the Company's  Common Shares as of February 5, 2002 by (i) each person or entity
who is known to the Company to own beneficially  more than 5% of the outstanding
shares of Common Shares of the Company,  (ii) each director,  (iii) each officer
listed in the Summary  Compensation  Table on page 6 of this Proxy Statement and
(iv) all directors and officers as a group.  All shares are subject to the named
person's sole voting and investment power except where otherwise indicated.


                                     - 37 -
<PAGE>
<TABLE>
<CAPTION>
                                                                 Number of Shares        Percent of
  Name (1)                                                      Beneficially Owned     Common Shares (2)
  --------                                                      ------------------     -------------

<S>                                                                  <C>                    <C>
  John B. Scheumann, Chairman, CEO, Director                         1,928,186              18.07
  Richard H. Crosser, Vice Chairman, Director (3)                    1,228,500              11.51
  Steve M. Dunn, President                                             121,500               1.14
  Jennifer A. Holihen, Executive Vice President and CFO,
    Secretary, Treasurer                                                70,497                  *
  James C. Shook, Director                                              15,011                  *
  Larry S. Wechter, Director (4)                                         3,761                  *
  John E. Worthen, Director                                                375                  *
  FMR Corporation                                                    1,159,100              10.86
  Lord, Abbett & Co.                                                   859,458               8.05
  David L. Babson & Co., Inc.                                          642,400               6.02
  Wellington Management Company, LLC                                   616,100               5.77

  All directors and executive officers
  as a group (7 persons)                                             3,367,830              31.56

<FN>
* Denotes less than 1%

(1)  The address of each beneficial  owner is 9210 North Meridian Street,  Indianapolis,  Indiana,
     46260, except: FMR Corp., 82 Devonshire Street, Boston,  Massachusetts,  02109; Lord Abbett &
     Co., 90 Hudson St., Jersey City, NJ, 07302;  David L. Babson & Co., Inc., One Memorial Drive,
     Cambridge,  Massachusetts,  02142;  and  Wellington  Management & Co.,  LLP, 75 State Street,
     Boston, MA, 02109.

(2)  There were 10,671,503 shares issued and outstanding at February 5, 2002.

(3)  All of the 1,228,500  shares owned  beneficially  by Mr.  Crosser are owned by the Richard H.
     Crosser Living Trust, a revocable trust  established by Mr. Crosser on February 25, 1992. The
     beneficiaries  of the trust are Mr.  Crosser's  children.  Mr.  Crosser is the trustee of the
     trust.

(4)  One thousand,  eight hundred of the shares owned beneficially by Mr. Wechter are owned by the
     Penn  Meridian  Foundation,  a trust  established  by Mr.  Wechter on December 11, 1995.  Mr.
     Wechter and his wife, Janis Wechter, are co-trustees of the trust.
</FN>
</TABLE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company  had  business  dealings  with  certain  affiliates,  including  its
Chairman of the Board and CEO, John B. Scheumann and its Vice Chairman,  Richard
H. Crosser and entities with which they are affiliated. Since its initial public
offering , the policy of the Company has been to require that such  transactions
be on terms not less  favorable to the Company than  reasonably  available  from
unrelated  third  parties  and  that  they  be  approved  by a  majority  of the
disinterested members of the Board of Directors of the Company.

The Company  leases  approximately  25,000  square feet of office  space for its
headquarters,  and an  additional  4,000 square feet for its mortgage  brokerage
subsidiary, at 9202 and 9210 North Meridian Street in Indianapolis, Indiana from
Crossmann  Properties LLC, an entity 81.0% owned by principal  shareholders John
B. Scheumann and Richard H. Crosser and 19.0% owned by the Company.  The monthly
lease payments are $42,942.

The Company chartered an aircraft for corporate use from DJAC LLC, an entity 30%
owned by principal shareholders John B. Scheumann and Richard H. Crosser and 50%
owned by the  Company.  In 2001,  the Company  paid  approximately  $218,000 for
aircraft charter services. DJAC LLC ceased operations in July, 2001.


                                     - 38 -
<PAGE>
                                     PART IV

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

(a)  Documents  filed  with this  Report.  See Index to  Consolidated  Financial
Statements  included  in  this  report.  See  Item  14(d)  for an  index  of the
supplementary financial statement schedule included in this report.


(b)  Reports on Form 8-K. A report on Form 8-K was filed on  February 1, 2002 to
announce the proposed merger with Beazer Homes USA, Inc.

(c) Exhibits. There are included in this report or incorporated by reference the
following exhibits.

Exhibit
Number                          Description of Exhibit
------                          ----------------------

  3.1          Amended and  restated  Articles  of  Incorporation  of  Crossmann
               Communities,  Inc.  (Incorporated  by reference to Exhibit 3.1 to
               Form S-1 Registration Statement No. 33-68396.)

  3.2          Bylaws of Crossmann Communities,  Inc. (Incorporated by reference
               to Exhibit 3.2 to Form S-1 Registration Statement No. 33-68396.)

  4.1          Specimen Share  Certificate for Common Shares.  (Incorporated  by
               reference to Exhibit 2.9 to Form S-1  Registration  Statement No.
               33-68396.)

 10.1          1993  Outside  Director  Stock  Option  Plan.   (Incorporated  by
               reference to Exhibit 10.2 to Form S-1 Registration  Statement No.
               33-68396.)



                                     - 39 -
<PAGE>

 10.2          1993 Employee  Stock Option Plan.  (Incorporated  by reference to
               Exhibit 10.3 to Form S-1 Registration Statement No. 33-68396.)

 10.3          Partnership  Agreement of Mark Anthony  Partnership,  dated April
               17, 1991.  (Incorporated by reference to Exhibit 10.6 to Form S-1
               Registration Statement No. 33-68396.)

 10.4          Non-standardized  Joinder  Agreement for McCready and Keene, Inc.
               401(k) Basic Regional  Prototype Plan (with Revised  Options) for
               Crossmann Communities, Inc. (Incorporated by reference to Exhibit
               10.26 to Form 10-Q dated May 10, 1995.)

 10.5          McCready and Keene,  Inc.  401(k) Basic  Regional  Prototype Plan
               Basic Plan  Document #03.  (Incorporated  by reference to Exhibit
               10.27 to Form 10-Q dated May 10, 1995.)

 10.6          Trust  Agreement for Crossmann  Communities,  Inc.  401(k) Profit
               Sharing  Plan,  by and between  Crossmann  Communities,  Inc. and
               Richard  H.  Crosser,  John  Scheumann,   and  Jennifer  Holihen,
               Trustees.  (Incorporated  by reference  to Exhibit  10.28 to Form
               10-Q dated May 10, 1995.)

 10.7          Note Agreement dated as of December 19, 1995,  $25,000,000 7.625%
               Senior Notes due December  19,  2004,  by Crossmann  Communities,
               Inc., et al.  (Incorporated by reference to Exhibit 10.37 to Form
               10-K dated March 20, 1996.)

 10.8          7.625%  Senior Note due  December  19,  2004,  issued to Combined
               Insurance  Company of America by Crossmann  Communities,  Inc. et
               al.  (Incorporated  by  reference  to Exhibit  10.38 to Form 10-K
               dated March 20, 1996.)

 10.9          7.625% Senior Note due December 19, 2004, issued to The Minnesota
               Mutual Life Insurance Company by Crossmann  Communities,  Inc. et
               al.  (Incorporated  by  reference  to Exhibit  10.39 to Form 10-K
               dated March 20, 1996.)

 10.10         Employee  Stock  Option  Agreement,  dated  March 13, 1996 by and
               between  Crossmann  Communities,  Inc. and  Jennifer A.  Holihen.
               (Incorporated  by reference  to Exhibit  10.47 to Form 10-K dated
               March 24, 1998.)

 10.11         Employee Stock Option  Agreement,  dated February 18, 1997 by and
               between  Crossmann  Communities,  Inc. and  Jennifer A.  Holihen.
               (Incorporated  by reference  to Exhibit  10.48 to Form 10-K dated
               March 24, 1998.)

 10.12         Amended and Restated  Operating  Agreement for Trinity Homes, LLC
               dated October 17, 1997, by and among Crossmann Communities, Inc.,
               Trinity Homes, Inc., and Pyramid Mortgage Co., Inc. (Incorporated
               by reference to Exhibit 10.50 to Form 10-K dated March 24, 1998.)

 10.13         Agreement  and Plan of  Merger,  dated May 29,  1998 by and among
               Crossmann  Communities,  Inc.,  Crossmann  Communities  of  North
               Carolina, Inc., Pinehurst Builders, Inc., Buck Creek Development,
               Inc., CTS Communications,  Inc., Beach Vacations,  Inc., James T.
               Callihan,  Ralph R. Teal, Jr., Jeffrey H. Skelley, and H. Gilford
               Edwards.  (Incorporated  reference to Exhibit  10.49 to Form 10-Q
               dated August 14, 1998.)



                                     - 40 -
<PAGE>

 10.14         Purchase  agreement dated May 29,1998,  by and between  Crossmann
               Communities of North Carolina, Inc., True Blue Development,  LLC,
               and James T. Callihan,  Ralph R. Teal,  Jr.,  Jeffrey H. Skelley,
               Charles D. Floyd and Ralph Jones.  (Incorporated  by reference to
               Exhibit 10.50 to Form 10-Q dated August 14, 1998.)

 10.15         Agreement  and Plan of Merger,  dated May 29, 1998,  by and among
               Crossmann  Communities,  Inc.,  Crossmann  Communities  of  North
               Carolina, Inc., River Oaks Golf Development Corporation and James
               T. Callihan,  Ralph R. Teal, Jr., Jeffrey H. Skelley,  Charles D.
               Floyd and Ralph C. Jones.  (Incorporated  by reference to Exhibit
               10.51 to Form 10-Q dated August 14, 1998.)

 10.16         Employee  Stock  Option  Agreement,  dated  March 5,  1998 by and
               between  Crossmann  Communities,  Inc. and  Jennifer A.  Holihen.
               (Incorporated  by reference  to Exhibit  10.24 to Form 10-K dated
               March 23, 1999.)

 10.17         Director  Stock  Option  Agreement,  dated  March 5,  1998 by and
               between   Crossmann   Communities,   Inc.  and  James  C.  Shook.
               (Incorporated  by reference  to Exhibit  10.25 to Form 10-K dated
               March 23, 1999.)

 10.18         Director  Stock  Option  Agreement,  dated  March 5,  1998 by and
               between  Crossmann  Communities,   Inc.  and  Larry  S.  Wechter.
               (Incorporated  by  reference  to Exhibit  1026 to Form 10-K dated
               March 23, 1999.)

 10.19         Director  Stock Option  Agreement,  dated  January 4, 1999 by and
               between   Crossmann   Communities,   Inc.  and  James  C.  Shook.
               (Incorporated  by reference  to Exhibit  10.19 to Form 10-K dated
               March 29, 2000.)

 10.20         Director  Stock Option  Agreement,  dated  January 4, 1999 by and
               between  Crossmann  Communities,   Inc.  and  Larry  S.  Wechter.
               (Incorporated  by reference  to Exhibit  10.20 to Form 10-K dated
               March 29, 2000.)

 10.21         Membership Interest Purchase  Agreement,  dated October 20, 2000,
               by and among Crossmann  Communities  Partnership,  Trinity Hones,
               Inc., and Pyramid  Mortgage Co., Inc.  (Incorporated by reference
               to Exhibit 10.52 to Form 10-Q dated November 14, 2000.)

 10.22         Membership Interest Purchase  Agreement,  dated October 20, 2000,
               by and among Crossmann Communities Partnership, John E. McKenzie,
               James D. McKenzie, and Mark W. Thune.  (Incorporated by reference
               to Exhibit 10.53 to Form 10-Q dated November 14, 2000.)

 10.23         Employment Agreement dated October 20, 2000, by and among Trinity
               Homes,  LLC,  Crossmann  Communities,  Inc. and John E. McKenzie.
               (Incorporated  by reference  to Exhibit  10.54 to Form 10-Q dated
               November 14, 2000.)

 10.24         Employment Agreement dated October 20, 2000, by and among Trinity
               Homes, LLC,  Crossmann  Communities,  Inc. and James D. McKenzie.
               (Incorporated  by reference  to Exhibit  10.55 to Form 10-Q dated
               November 14, 2000.)



                                     - 41 -
<PAGE>

 10.25         Fourth Amendment to Amended and Restated Credit Agreement,  dated
               October 20, 2000 among Crossmann Communities,  Inc. and Bank One,
               Indiana,   NA  (As  "Agent")  and  the  Lenders  Party   Thereto.
               (Incorporated  by reference  to Exhibit  10.51 to Form 10-Q dated
               November 14, 2000.)

 10.26         Employment  Agreement  dated  January  29,  2002,  by and between
               Crossmann Communities, Inc. and Steve Dunn.

 10.27         Employment  Agreement  dated  January  29,  2002  by and  between
               Crossmann Communities, Inc. and Jennifer Holihen.

 19.1          Lease by and between  Pinnacle  Properties LLC  ("Landlord")  and
               Crossmann  Communities,  Inc.  ("Tenant"),  9202  North  Meridian
               Street, Suite 300,  Indianapolis,  Indiana 46260,  executed April
               18, 1994.  (Incorporated  by  references  as Exhibit 19.1 to Form
               10-Q filed with the Securities and Exchange Commission August 12,
               1994.)

 21.1          Amended subsidiaries of the registrant.

 23.1          Consent of Deloitte & Touche LLP.



                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  12 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.

                                 CROSSMANN COMMUNITIES, INC.


                                 By
                                    --------------------------------------------
                                    John B. Scheumann
                                    Chairman and Chief Executive Officer


                                 By
                                    --------------------------------------------
                                    Lisa D. Hupfer
                                    Controller and Principal Accounting Officer

Dated: February 5, 2002




                                     - 42 -
<PAGE>

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

Signature                                 Title                       Date
---------                                 -----                       ----


--------------------------     Chairman of the Board of         February 8, 2002
John B. Scheumann              Directors; Chief Executive
                               Officer


                               Vice Chairman of the Board       February 8, 2002
--------------------------     of Directors
Richard H. Crosser


--------------------------     Director; Chief Financial        February 8, 2002
Jennifer A. Holihen            Officer; Treasurer; Secretary



--------------------------     Director                         February 8, 2002
James C. Shook


--------------------------     Director                         February 8, 2002
Larry S. Wechter


--------------------------     Director                         February 8, 2002
John E. Worthen


                                     - 43 -