CROSSMANN COMMUNITIES INC, 10-K, 2000-03-30

CROSSMANN COMMUNITIES INC
10-K, 2000-03-30
OPERATIVE BUILDERS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________

FORM 10-K
____________________

[ x ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the fiscal year ended December 31, 1999

[ ] 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 of (I.R.S. Employer Identification No.)
incorporation)
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 March 29, 2000 was approximately $170,518,850. As of March
29, 2000, there were 10,958,795 Common Shares of the registrant issued and
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the documents listed below have been incorporated by
reference into the indicated part of this Form 10-K.

DOCUMENT INCORPORATED PART OF FORM 10-K
Proxy Statement for 2000 Annual Meeting of Shareholders Part III
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.

GENERAL

Crossmann Communities, Inc. ("Crossmann" or 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 $229,900; the average size
of one of Crossmann's new homes is 1,400 square feet, and the average selling
price in 1999 was approximately $119,500. Today the Company operates in
fourteen markets in six states:
<TABLE>

<S> <C>

In Indiana: Indianapolis, Lafayette, Ft. Wayne and Columbus;
In Ohio: Columbus, Cincinnati, and Dayton;
In Kentucky: Louisville and Lexington;
In Tennessee: Memphis and Nashville;
In North Carolina: Charlotte and Raleigh;
In South Carolina: Myrtle Beach.
</TABLE>

Crossmann achieved record sales in 1999, delivering 5,100 new homes
compared to 3,714 in 1998. During 1999, Crossmann made one acquisition: Homes
by Huff & Co., Inc. ("Huff") in Raleigh, North Carolina.

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 36.1%. 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
fourteen Midwestern and Southeastern markets. The Company believes that these
cities enjoy relatively low unemployment, diversified industry, and
infrastructure that makes these cities 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.

MARKETS
<TABLE>

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

POPULATION UNEMPLOYMENT
-----------
MARKET POPULATION (1) GROWTH (2) RATE(4)
- ---------------- -------------- ----------- -------------
Indianapolis 1,519,194 10.0% 2.3%
Lafayette 172,220 6.6% 1.9%
Ft. Wayne 481,191 5.5% 2.6%
Southern Indiana (3) (3) (3)
Columbus 1,469,604 9.2% 2.2%
Cincinnati 1,948,264 7.2% 3.0%
Dayton 948,522 -.03% 3.3%
Louisville 999,267 5.3% 2.8%
Lexington 449,645 10.8% 1.7%
Memphis 1,093,427 8.5% 3.0%
Nashville 1,156,225 17.4% 2.1%
Charlotte 1,383,080 19.0% 2.3%
Myrtle Beach 174,762 21.3% 4.9%
Raleigh 1,079,873 25.8% 1.3%
<FN>

(1) Estimated MSA population, as of July 1, 1998.
(2) Estimated growth since 1990.
(3) Not available.
(4) Compared to the national average of 4.1%
</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 "New American Homes," "Deluxe
Homes" and "Trimark Homes" in most of its markets, except where operations
were acquired from another builder. For example, in Lexington it sells as
"Cutter Homes;" in Memphis it sells as "Heartland Homes" or "Paragon;" 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.

The Company intends to remain focused on delivering attractive housing at
prices entry-level consumers can afford. It will explore modification of its
existing product lines or creation of new product lines when local marketing
efforts indicate changes will improve profitability.

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.

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, 1999.
<TABLE>

FINISHED LOTS UNDER RAW LAND UNDER
LOTS DEVELOPMENT (EST. LOTS) TOTAL OPTION

Indianapolis . . . . . . . . 1,303 681 3,737 5,721 2,955
Lafayette. . . . . . . . . . . 27 34 0 61 602
Ft. Wayne. . . . . . . . . . 290 0 0 290 374
Columbus. . . . . . . . . . 351 75 605 1,031 270
Cincinnati/Dayton . . . 253 225 796 1,274 231
Southern Indiana . . . . 279 0 1,435 1,714 227
Louisville . . . . . . . . . 210 96 539 845 200
Lexington . . . . . . . . . 66 165 529 760 120
Memphis . . . . . . . . . . 288 0 181 469 648
Nashville . . . . . . . . . . 71 20 0 91 337
Charlotte . . . . . . . . . . 84 0 440 524 1,235
Myrtle Beach . . . . . . . 438 100 509 1,047 767
Raleigh. . . . . . . . . . . . . 22 0 80 102 211
-------- ----------- ----------- ------ ------
3,682 1,396 8,851 13,929 8,177
======== =========== =========== ====== ======
</TABLE>

In addition to purchasing unimproved land outright, the Company from
time to time has used 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 consider such
partnership and joint venture arrangements in the future when management
perceives a favorable opportunity. At December 31, 1999, the Company was a
participant in ten 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 1998 the Company
developed approximately 57% of the lots on which its homes were built,
compared to approximately 52% in 1999. The Company expects this percentage
to stay approximately the same in 2000.

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 longterm relationships with them. New Home Counselors attend
weekly sales meetings at which they are kept apprised 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.

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
1999, approximately 66% of the homes delivered by the Company were financed
with FHA/VA mortgages.

The Company has established a mortgage brokerage subsidiary, Crossmann
Mortgage Corp. Crossmann Mortgage Corp. 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.
In general, Crossmann Mortgage Corp. does not warehouse or fund loans and, as
a result, does not incur credit risk or market risk associated with loans it
originates.

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 attempt to correct any problems before the buyer
takes possession.

Approximately 30 days after closing, representatives of the Company
place a courtesy call to the new homeowner to enable him or her 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 first 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
an independent 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.

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.

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

"Trimark" is a federally registered service mark for real estate
development services that is owned by the Company. The Company has not yet
registered its "Deluxe" trademark. "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, 1999, the Company had 595 full-time employees and 51
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
<TABLE>

The executive officers and directors of the Company and their ages as of December
31, 1999 are as follows:

NAME AGE POSITION WITH COMPANY
- ------------------- --- --------------------------------------------------------------
John B. Scheumann 51 Chairman of the Board of Directors and Chief Executive Officer
Richard H. Crosser 61 President and Chief Operating Officer; Director
Jennifer A. Holihen 41 Chief Financial Officer; Treasurer; Secretary; Director
Steven M. Dunn 45 Executive Vice President of Operations
</TABLE>

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 has been the Company's President and Chief Operating Officer
since 1992 and serves on its Board of Directors. He has served as 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 assumed the role of Executive Vice President of Operations in
August of 1998. Mr. Dunn had been the 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 in 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
Columbus, Indiana; Columbus and Cincinnati, Ohio; Louisville and Lexington,
Kentucky; Memphis and Nashville, Tennessee; Charlotte and Raleigh, North
Carolina and in Myrtle Beach, South Carolina. The leases for office space are
at prevailing market rate and can be changed at any time without an effect to
the Company.

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 and results of operations.

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

None.

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, 1999 were 11,469,086.
The closing price at December 31, 1999 was $15.50. During the year ended
December 31, 1999, the high closing sales price per share as reported by The
Nasdaq Stock Market was $33.33. The low closing sales price per share $14.38.
<TABLE>

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

1998 19998
Quarter ended High Low High Low
- ------------- ------ ------ ------ ------
March 31 $31.25 $20.75 $29.00 $18.75
June 30 31.75 25.75 29.75 19.38
September 30 37.25 19.13 33.63 16.00
December 31 30.88 12.13 18.06 14.19
</TABLE>

The closing sale price of the Company's Common Shares as reported on The
Nasdaq Stock Market on March 29, 2000 was $15.56. As of March 29, 2000, there
were 51 holders of record of the Company's Common Shares. The Company's
transfer agent estimates that there were 10,958,795 shares outstanding, on
March 29, 2000, and that on that date there are approximately 1,840 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 March 30, 2000, 692,800 shares had
been repurchased pursuant to this plan, at an average price of $15.82 per
share. There were 10,958,795 shares outstanding at March 30, 2000.
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 has not paid dividends since its initial public offering in
October 1993. It anticipates that future earnings will be retained to
finance the continuing development of its business and does not anticipate
paying cash dividends on its Common Shares in the foreseeable future. The
payment of future dividends will be at the discretion of the Company's Board
of Directors and subject to consent of its primary lenders. 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, 1999. 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.

<TABLE>

CONSOLIDATED FINANCIAL AND OPERATING DATA
(in thousands, except per share and operating data)
Year Ended December 31,

1995 1996 1997 1998 1999
STATEMENT OF OPERATIONS DATA:
Sales $177,590 $229,485 $316,435 $421,926 $609,319
Gross Profit 35,704 48,051 65,550 89,906 124,233
Income from operations 18,621 24,854 32,170 44,056 62,223
Income before income taxes 18,630 24,668 33,399 49,606 65,694
Income taxes 7,519 9,603 13,393 19,734 25,957
Net income 11,111 15,065 20,005 29,872 39,737
Net income per common share (1):
Basic 1.22 1.65 2.05 2.63 3.44
Diluted 1.21 1.63 2.02 2.57 3.40

Weighted average common shares
outstanding:
Basic 9,112 9,150 9,759 11,342 11,553
Diluted 9,183 9,261 9,927 11,608 11,698

OPERATING DATA:
Number of closings (2) 1,675 2,068 2,774 3,714 5,100
Average home sales price $106,024 $110,970 $114,072 $113,604 $119,474
Homes in backlog (2) 757 1,006 1,080 1,744 1,496

BALANCE SHEET DATA:
Cash and cash equivalents $ 5,233 $ 100 $ 5,526 $ 18,011 $ 13,636
Inventories and properties
held for development or sale 69,683 113,202 153,524 214,198 259,996
Total assets 83,954 128,336 185,276 283,794 339,875
Notes payable 25,472 48,326 51,122 101,223 119,959
Total shareholders' equity 44,212 59,649 110,803 150,281 188,479
<FN>

(1) Per share amounts for 1995 and 1996 have been adjusted to reflect the
three-for-two stock split effective August 18, 1997.

(2) 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.
</TABLE>

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

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. The Company's success in 1999 and during the past several years
has been influenced by favorable economic conditions in its principal markets.
Employment has been strong; interest rates have been relatively low; low
inflation has kept the Company's costs predictable. Financing has been
readily available to Crossmann's consumers in the form of FHA and VA
mortgages. Capital has been readily available for expansion, enabling
Crossmann to take advantage of a strong economic climate.

There can be no assurance that these trends will continue. In fact,
rising interest rates during the latter part of 1999 affected orders compared
to 1998. Backlog at December 31, 1999 is 14% lower than at December 31, 1998.
Although management believes that home ownership is still attractive for many
buyers at prevailing interest rates, there can be no assurance the Company
will match its recent growth rate. There can be no assurance that the
Company will continue to find attractive opportunities in new cities, nor can
there be any assurance that the Company will be able to transfer its business
strategy to new market areas successfully, or that new markets will offer the
opportunities and stability of the Company's existing markets.

RESULTS OF OPERATIONS

During the five-year period ended December 31, 1999, the Company's sales
increased at an average compound annual rate of 36.1% per year, from $177.6
million in 1995 to $609.3 million in 1999. Net income increased at an average
compound annual rate of 37.5%, from $11.1 million in 1995 to $39.7 million in
1999. Shareholders' equity increased from $44.2 million as of December 31,
1995 to $188.5 million as of December 31, 1999.

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
---- ---- ----- ----- ----- ----- ----- -----
Indianapolis(1). . . . . . . . . . . . 491 686 732 1,043 1,124 1,314 1,384 1,946
Lafayette. . . . . . . . . . . . . . . 125 143 183 160 188 166 171 190
Columbus. . . . . . . . . . . . . . 23 133 197 247 315 315 311
Cincinnati. . . . . . . . . . . . . . 13 159 162 189 230 339
Ft. Wayne. . . . . . . . . . . . . . 12 116 94 84 186 213
Dayton. . . . . . . . . . . . . . . . . 83 230 259 202
Southern Indiana. . . . . . . . . 169 283 338 466
Louisville. . . . . . . . . . . . . . . 1 102 240 190
Lexington. . . . . . . . . . . . . . 64 109 154
Memphis. . . . . . . . . . . . . . . 27 189 277
Nashville . . . . . . . . . . . . . . . 2 95
Charlotte . . . . . . . . . . . . . . . 1 235
Myrtle Beach . . . . . . . . . . . . . 290 386
Raleigh 96
-----
Total. . . . . . . . . . . . . . . . . . 616 852 1,073 1,675 2,068 2,774 3,714 5,100
==== ==== ===== ===== ===== ===== ===== =====
<FN>

(1) Closings in Indianapolis do not include units built by Crossmann's 50% joint venture,
Trinity Homes LLC ("Trinity"). Trinity closed 446 homes in 1998 and 536 homes in 1999.
Crossmann's share of Trinity earnings are included in "Other Income" in Crossmann's
consolidated financial statements.
</TABLE>

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

The following table sets forth, for the years ended December 31, 1999 and
1998, certain income statement
items related to the Company's operations:
<TABLE>

FOR THE YEAR ENDED DECEMBER 31,

PERCENTAGE
CHANGE, 1998
1998 1998 1999 1999 TO 1999
-------------- --------- -------------- ---------
(percent (percent
(in millions) of sales) (in millions) of sales)
Sales $ 421.9 100.0% $ 609.3 100.0% 44.4%
Cost of sales 332.1 78.7% 485.1 79.6% 46.1%
-------------- --------- -------------- ---------
Gross profit 89.8 21.3% 124.2 20.4% 38.4%
Selling, general and administrative
expenses 45.8 10.8% 62.0 10.2% 35.4%
-------------- --------- -------------- ---------
Income from operations 44.0 10.5% 62.2 10.2% 41.4%

Other income, net 6.9 1.6% 5.7 0.9% -17.4%
Interest -1.3 -0.3% -2.2 -0.4% 69.2%
-------------- --------- -------------- ---------
5.6 1.3% 3.5 0.6% -37.5%

Income before income taxes 49.6 11.8% 65.7 10.8% 32.4%
Income taxes 19.7 4.7% 26.0 4.3% 32.0%
-------------- --------- -------------- ---------
Net income $ 29.9 7.1% $ 39.7 6.5% 33.0%
============== ==============

Other operating data
Units closed 3,714 5,100 37.3%
Average sales $per unit closed $ 113,604 $ 119,474 5.2%
Units in backlog at December 31 1,744 1,496 -14.2%
</TABLE>

Sales increased by $187.4 million, or approximately 44.4%, in 1999 over
1998. Sales were higher primarily as a result of increased unit sales; 5,100
units were closed in 1999 compared to 3,714 in 1998. Crossmann's average
selling price was higher, approximately $119,500 in 1999, compared to
approximately $113,600 in 1998. The Company attributes the higher selling
price to strong employment and relatively low interest rates during much of
the year. These factors caused consumers to add optional items to their
homes. The rise in selling price was also attributable to Crossmann's
acquisition of Homes by Huff & Co. in June of 1999. The new acquisition
contributed closings at an average selling price of approximately $173,600,
which is higher than Crossmann's other markets.

Gross profit increased by $34.4 million, or approximately 38.4%, for the
year. This represents a gross margin percentage of 20.4% of sales in 1999 as
compared to 21.3% in 1998. The decrease in margin percentage resulted in part
from market mix: Crossmann achieves generally higher margins in cities where
it has operated longer and has greater buying power in the local building
market. Stronger closings in newer markets generally yielded lower margins
than in more established markets. The decrease in gross margin percentage
can also be attributed to financing assistance paid by Crossmann. As rates
trended higher in 1999, the Company contributed points and closing costs
toward its consumers' financing cost, to help keep consumers qualified for
mortgage financing. This practice helps the Company retain backlog in periods
of rising rates; however, it adds to cost of those sales. Management believes
that the lower gross margin in 1999 compared to 1998 helped Crossmann to
achieve significantly higher overall volume.

Selling, general and administrative expenses decreased as a percentage of
sales from 10.8% in 1998 to 10.2% in 1999. Higher volume in the newer
divisions helped to offset overhead.

Due to the increase in sales, income before income taxes for 1999
increased approximately $16.1 million over 1998, or 32.4%. This represents a
decrease from 11.8% of sales in 1998 to 10.8% of sales in 1999. Net income
increased $9.9 million or 33.0%. Net income as a percentage of sales was 6.5%
in 1999 compared to 7.1% in 1998. Most of the rate declines were attributable
to lower gross margins. The Company's effective tax rate was 39.5% in 1999,
compared to 39.8% in 1998.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

The following table sets forth, for the years ended December 31, 1998 and
1997, certain income statement items related to the Company's operations:

<TABLE>

For the year ended December 31,

PERCENTAGE
CHANGE,
1997 1997 1998 1998 1997 TO 1998
(percent of sales) (percent of sales)
(in millions) (in millions)
Sales $ 316.4 100.0% $ 421.9 100.0% 33.3%
Cost of sales 250.9 79.3% 332.1 78.7% 32.4%
-------------- ------------------ -------------- ------------------
Gross profit 65.5 20.7% 89.8 21.3% 37.0%
Selling, general and administrative
expenses 33.4 10.6% 45.8 10.8% 37.1%
-------------- ------------------ -------------- ------------------
Income from operations 32.1 10.1% 44.0 10.5% 37.1%

Other income, net 2.1 0.7% 6.9 1.6% 228.6%
Interest -0.9 -0.3% -1.3 -0.3% 44.4%
-------------- ------------------ -------------- ------------------
1.2 0.4% 5.6 1.3% 366.7%

Income before income taxes 33.3 10.6% 49.6 11.8% 48.5%
Income taxes -13.3 -4.3% 19.7 4.7% -248.1%
-------------- ------------------ -------------- ------------------
Net income $ 20.0 6.3% $ 29.9 7.1% 49.3%
============== ==============

Other operating data
Units closed 2,774 3,714 33.9%
Average sales $per unit closed $ 114,072 $ 113,604 -0.4%
Units in backlog at December 31 1,080 1,744 61.5%
</TABLE>

Sales increased by $105.5 million, or approximately 33.3%, in 1998 over
1997. Sales were higher primarily as a result of increased unit sales; 3,714
units were closed in 1998 compared to 2,774 in 1997. The Company's new
Memphis division, enhanced by the acquisition of Paragon in May of 1998,
contributed 189 closings compared to only 27 in 1997, and its new Myrtle Beach
division, formed with the acquisition of Pinehurst in May 1998, contributed
290. Crossmann's average selling price was lower, approximately $113,600 in
1998 compared to approximately $114,000 in 1997.

Gross profit increased by $24.3 million, or approximately 37.0%, for the
year, representing 21.3% of sales in 1998 as compared to 20.7% in 1997. The
increase resulted from market mix: Crossmann achieves higher margins in
cities where it has operated longer and has greater buying power in the local
building market. Margins improved in 1998 in Indianapolis, Lafayette and
Columbus, where it had operated for a number of years. Margins were also
stronger in Ft. Wayne, Southern Indiana, Cincinnati and Dayton in 1998 than in
1997. Improving margins in maturing markets tend to offset weaker margins
that new divisions may generate in early stages. In addition, interest rates
in 1998 were low. Seller contributions toward closing costs and points were
minimal.

Selling, general and administrative expenses increased as a percentage
of sales from 10.6% in 1997 to 10.8% in 1998. The increase reflected higher
general and administrative expenses incurred by the newer homebuilding
divisions. Higher volume in these divisions anticipated in 1999 was expected
to offset this overhead in later periods.
Other income, net of expenses increased $4.3 million for the year, to
approximately $5.5 million in 1998 from $1.2 million in 1997. The increase
was due principally to earnings from Trinity, which generated approximately
$2.9 million in income to Crossmann in 1998 compared to approximately $825,400
in 1997.

Due to the increase in unit sales and to increased other income, income
before income taxes for 1998 increased approximately $16.2 million over 1997,
or 48.5%. This represents an increase from 10.6% of sales in 1997 to 11.8% of
sales in 1998. Net income increased $9.9 million or 49.3%. Net income as a
percentage of sales was 7.1% in 1998 compared to 6.3% in 1997. The Company's
effective tax rate was 39.8% in 1998, compared to 40.1% in 1997.

BACKLOG
<TABLE>

The following table sets forth certain data relating to the operations of
the Company for the years ended December 31, 1997, 1998 and 1999.

December 31

1997 1998 1999
------------ ------------ ------------
Closings (for the period ended) 2,774 3,714 5,100
Homes in backlog 1,080 1,744 1,496
Aggregate sales value in backlog $120,450,000 $197,100,000 $177,300,000
Average sales price of backlog $ 111,610 $ 113,020 $ 118,520
</TABLE>

Management believes that a substantial portion of the homes in backlog
at December 31, 1999 will be closed prior to June 30, 2000, but because of
weather conditions, there can be no assurance as to the quarter in which such
closings will occur.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1999, Crossmann had cash and cash equivalents balances of
$13.6 million, of which $13.0 million was held in escrow for periods of up to
30 days.

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, 1999, 182,500 shares
had been repurchased pursuant to this plan, at an average price of $16.01 per
share. The Company repurchased 510,300 additional shares subsequent to
December 31, 1999 at an average price of $15.79 per share.

During 1999, expenditures were financed with cash from operations and
with borrowings on a $100 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, 1999 the Company had drawn funds on its senior
bank line of credit of $56,000,000. This line of credit has a three year
maturity, renewable annually.

The Company also has $13.9 million in senior notes, maturing in 2004 with
interest payable quarterly at 7.625%, and annual principal reductions of
$2,777,777, and $50.0 million in senior notes issued in June of 1998, payable
over 10 years at 7.75%, payable quarterly. Annual principal reductions for
this note issue of $8,333,334 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 by the Company.

The Company's primary uses of capital are home construction costs and the
purchase and development of land. Real estate inventories were approximately
$260.0 million or 76.5% of total assets at December 31, 1999 compared to
approximately $214.2 million or 75.5% of total assets at December 31, 1998.
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 was approximately $70.3 million at
December 31, 1999. 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.

In 1999, the Company acquired Homes by Huff & Co., Inc., a Raleigh, North
Carolina homebuilder. This transaction gave rise to approximately $2.9
million in goodwill in 1999.

From time to time, Crossmann enters into joint ventures with other
builders and developers, to share risk and to obtain external expertise.
Crossmann's investment in and advances to joint ventures increased to
approximately $27.7 million in 1999 from approximately $17.7 million in 1998.
The most significant joint venture investment is Trinity Homes LLC, with
investments in and advances to totaling approximately $14.3 million.

The notes 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. Because the Company sells to a
price-conscious consumer, its ability to raise prices is limited. However, in
1999, the Company was able to pass along certain price increases effectively.
The average selling price increased from approximately $113,600 in 1998 to
approximately $119,500 in 1999. Generally, management seeks to optimize
volume by keeping homes affordable and to optimize margins thorough careful
planning.

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.

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. A portion of its
revolving debt is carried at floating interest rates, but the exposure to
changes in prime rate related to that debt is not material.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Crossmann Communities, Inc.
and Subsidiaries

Index to Consolidated Financial Statements

<TABLE>

<S> <C>

Independent Auditors' Report 17
Consolidated Balance Sheets as of December 31, 1998 and 1999 19
Consolidated Statements of Income for the Years Ended December 31, 1997, 1998, and 1999 20
Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 1997,1998, and
1999 21
Consolidated Statements of Cash Flows for the Years Ended December 31, 1997, 1998, and 1999 22
Notes to Consolidated Financial Statements 23-29
</TABLE>

NDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying consolidated balance sheets of Crossmann
Communities, Inc. and subsidiaries as of December 31, 1998 and 1999, and the
related consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1999. 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 Crossmann Communities, Inc. and
subsidiaries as of December 31, 1998 and 1999, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1999 in conformity with accounting principles generally
accepted in the United States of America.

DELOITTE & TOUCHE LLP

Indianapolis, Indiana
February 25, 2000

<TABLE>

Crossmann Communities, Inc
and Subsidiaries

Consolidated Balance Sheets

as of December 31, 1998 and 1999

1998 1999
------------ ------------
ASSETS
Cash and cash equivalents $ 18,011,456 $ 13,635,911
Retainages 1,115,617 1,198,342
Real estate inventories 214,197,844 259,995,959
Furniture and equipment, net 3,964,369 4,753,141
Investments in joint ventures 17,720,878 27,669,884
Goodwill, net 15,395,896 17,597,512
Other assets 13,387,755 15,024,356
------------ ------------
Total assets $283,793,815 $339,875,105
============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 20,734,383 $ 22,335,253
Accrued expenses and other liabilities 11,555,789 9,101,392
Notes payable 101,222,955 119,959,088
------------ ------------
Total liabilities 133,513,127 151,395,733

Commitments and contingencies

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 - 11,543,772
at December 31, 1998
and 11,651,595

Issued - 11,651,585 and outstanding - 11,469,085
at December 31, 1999 65,154,710 63,616,282
Retained earnings 85,125,978 124,863,090
------------ ------------
Total shareholders' equity 150,280,688 188,479,372
------------ ------------
Total liabilities and shareholders' equity $283,793,815 $339,875,105
============ ============
<FN>

See accompanying notes.
</TABLE>

<TABLE>

Crossmann Communities, Inc.
and Subsidiaries

Consolidated Statements of Income

for the Years Ended December 31, 1997, 1998 and 1999

1997 1998 1999
------------- ------------- -------------

Sales of residential real estate $316,435,463 $421,925,742 $609,319,345
Cost of residential real estate sold 250,885,725 332,119,887 485,086,158
------------- ------------- -------------
Gross profit 65,549,738 89,805,855 124,233,187

Selling, general and administrative expenses 33,380,216 45,749,445 62,010,118
------------- ------------- -------------
Income from operations 32,169,522 44,056,410 62,223,069

Other income, net 2,102,473 6,869,524 5,725,972
Interest expense (872,862) (1,319,920) (2,255,019)
------------- ------------- -------------
1,229,611 5,549,604 3,470,953
------------- ------------- -------------
Income before income taxes 33,399,133 49,606,014 65,694,022
Income taxes 13,393,347 19,734,278 25,956,910
------------- ------------- -------------
Net income $ 20,005,786 $ 29,871,736 $ 39,737,112
============= ============= =============

Net income per common share:
Basic $ 2.05 $ 2.63 $ 3.44
============= ============= =============
Diluted $ 2.02 $ 2.57 $ 3.40
============= ============= =============

Weighted average number of common shares outstanding:
Basic 9,758,678 11,341,645 11,553,288
============= ============= =============
Diluted 9,927,482 11,607,944 11,698,479
============= ============= =============

<FN>

See accompanying notes.
</TABLE>

<TABLE>

Crossmann Communities, Inc.
and Subsidiaries

Consolidated Statements of
Shareholders' Equity

for the Years Ended December 31, 1997, 1998 and 1999

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

Balances at January 1, 1997 9,188,652 $24,400,903 $ 35,248,456 $ 59,649,359
Net income 20,005,786 20,005,786
Issuance of common shares, net
of offering costs 1,919,201 31,147,834 31,147,834
----------- ------------ -------------
Balances at December 31, 1997 11,107,853 55,548,737 55,254,242 110,802,979
Net income 29,871,736 29,871,736
Issuance of common shares, net 435,919 9,605,973 9,605,973
----------- ------------ -------------
Balances at December 31, 1998 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
=========== ============ ============ =============

<FN>

See accompanying notes.
</TABLE>

<TABLE>

Crossmann Communities, Inc.
and Subsidiaries
Consolidated Statements of Cash Flows

for the Years Ended December 31, 1997, 1998 and 1999 (See Notes 6, 7 and 8)

1997 1998 1999

OPERATING ACTIVITIES:
Net income $ 20,005,786 $ 29,871,736 $ 39,737,112
Adjustments to reconcile net income to net

cash used by operating activities:
Depreciation 689,111 999,519 662,871
Amortization 363,576 494,990 543,987
Equity in earnings of affiliates (825,400) (2,866,700) (3,645,100)
Deferred income taxes (70,430) (302,188) -0-
Cash provided (used) by changes in:

Retainages 269,434 (228,851) (82,725)
Real estate inventories (31,894,099) (38,736,025) (37,026,268)
Other assets (877,623) (3,106,812) (1,321,810)
Accounts payable 553,229 3,278,609 1,079,738
Accrued expenses and other liabilities 1,739,068 4,129,563 (3,069,587)
-------------- -------------- --------------
Net cash used by operating activities (10,047,348) (6,466,159) (3,121,782)

INVESTING ACTIVITIES:
Purchases of furniture and equipment (1,026,085) (1,307,119) (1,307,871)
Investments in joint ventures (8,124,332) (5,604,524) (6,303,906)
Business acquisitions, net of cash acquired (421,925) (9,669,888) (4,363,760)
-------------- -------------- --------------
Net cash used by investing activities (9,572,342) (16,581,531) (11,975,537)

FINANCING ACTIVITIES:
Proceeds from bank borrowings 161,113,458 198,603,946 256,011,879
Principal payments on bank borrowings (163,090,000) (211,489,000) (239,733,000)
Payments on notes and long-term debt (3,258,798) (2,893,467) (4,018,677)
Proceeds from issue of senior notes -0- 50,000,000 -0-
Repurchase of common shares -0- -0- (2,921,982)
Net proceeds from sale of common shares 30,281,168 1,311,529 1,383,554
-------------- -------------- --------------
Net cash provided by financing activities 25,045,828 35,533,008 10,721,774

Net increase (decrease) in cash and cash equivalents 5,426,138 12,485,318 (4,375,545)
Cash and cash equivalents at beginning of year 100,000 5,526,138 18,011,456
-------------- -------------- --------------
Cash and cash equivalents at end of year $ 5,526,138 $ 18,011,456 $ 13,635,911
============== ============== ==============

<FN>

See accompanying notes.
</TABLE>

Crossmann Communities, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

for the Years Ended December 31, 1997, 1998 and 1999

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 originates
mortgage loans for the buyers. The Company operates in Indianapolis, Ft.
Wayne, Lafayette, and Southern Indiana; Cincinnati, Columbus and Dayton, Ohio;
Louisville, and Lexington, Kentucky; Memphis and Nashville, Tennessee;
Charlotte and Raleigh, North Carolina; and Myrtle Beach, South Carolina.

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. In 1998, the Company acquired two homebuilders for
approximately $13,850,000 in cash and notes and 311,938 shares of the
Company's common stock. The transactions were accounted for as purchases and
includes their operations subsequent to each acquisition date. Cost in excess
of the fair value of net assets acquired of approximately $10,900,000 was
recorded as goodwill. In June 1999, the Company acquired one homebuilder for
approximately $11,800,000 in cash, assumed notes and other assumed
liabilities. The transaction was accounted for as a purchase and includes the
operations subsequent to the acquisition date. Cost in excess of the fair
value of net assets acquired of approximately $2,871,000 was recorded as
goodwill. The pro forma effect of the acquisitions on results of operations
are not presented as they are not considered material.

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.

Cash and Cash Equivalents
All highly liquid investments with maturities of three months or less when
purchased are considered to be cash equivalents. Due to the short maturity
period of the cash equivalents, the carrying value of these instruments
approximates their fair value. Cash and cash equivalents at December 31, 1998
and 1999 include approximately $17,400,000 and $13,000,000 of cash held in
escrow for periods of up to 30 days, respectively.

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 $1,211,800 and $2,074,400 at
December 31, 1998 and 1999, respectively.

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 39 years. Accumulated depreciation is
approximately $3,333,300 and $3,996,200 at December 31, 1998 and 1999,
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.

New Accounting Pronouncements
Statements of Financial Accounting Standard ("SFAS") No. 133, Accounting for
Derivative Instruments and Hedging Activities, and is effective for all fiscal
years beginning after June 15, 2000. This statement, as amended, established
accounting and reporting standards for derivative instruments and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial condition and measure
those instruments at fair value. If certain conditions are met, a derivative
may be specifically designated as a fair value hedge, a cash flow hedge, or a
hedge of a foreign currency exposure. The accounting for changes in the fair
value of a derivative (that is, gains and losses) depends on the intended use
of the derivative and the resulting designation. Management has not yet
determined the effect, if any, SFAS No. 133 will have on the Company's
consolidated financial statements.

3. FINANCIAL INSTRUMENTS

SFAS No. 107, Disclosure About Fair Value of Financial Instrument, defines the
fair value of a financial instruments 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:

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
carrying amount of senior notes payable at December 31, 1999, approximates the
fair value based upon debt instruments with similar terms and conditions.

4. REAL ESTATE INVENTORIES
<TABLE>

Real estate inventories at December 31 consist of:

1998 1999
------------ ------------

Residential homes under construction $ 97,679,676 $117,280,516
Land held for future development 36,649,746 49,085,157
Land under development 45,784,467 45,712,631
Purchased developed lots 21,813,143 31,995,716
Homes held for resale 5,193,641 4,187,270
Model homes 7,077,171 11,734,669
------------ ------------
$214,197,844 $259,995,959
============ ============
</TABLE>

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
market.

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:
<TABLE>

1997 1998 1999
----------- ------------ ------------

Revenue $24,978,053 $101,829,142 $126,940,421
Expenses 23,146,934 94,867,827 117,539,265
----------- ------------ ------------
Net income $ 1,831,119 $ 6,961,315 $ 9,401,156
=========== ============ ============

Assets $43,891,845 $ 63,358,541 $ 92,882,531
Liabilities 31,043,708 48,716,614 73,817,315
----------- ------------ ------------
Equity $12,848,137 $ 14,641,927 $ 19,065,216
=========== ============ ============
</TABLE>

At December 31, 1998 and 1999, assets of the joint ventures consisted
primarily of developed lots, land under development and land held for future
development. Revenue consisted primarily of single-family home and
residential lot sales. Land joint ventures provided $2,843,994, $6,525,180
and $6,022,340 in lots to the Company in 1997, 1998 and 1999 respectively.
Investments in land joint ventures include accounts receivable from the joint
ventures of $2,424,886 and $6,957,448 in 1998 and 1999, respectively.

In October 1997, the Company entered into a joint venture with another
homebuilding company in Indianapolis. This joint venture provided
approximately $825,400, $2,866,700 and $3,645,100 in other income to the
Company in 1997, 1998 and 1999 respectively. Investments in joint ventures at
December 31, 1998 and December 31,1999, includes $7,336,000 and $11,009,196
respectively, in notes receivable from this joint venture. The notes
receivable bear interest at the prime rate of Bank One, Indiana, N.A. (8.50%
at December 31, 1999), payable quarterly, and they mature in 2003.
6. CREDIT ARRANGEMENTS
<TABLE>

Notes payable consists of the following at December 31:

1998 1999
Line of credit with banks, maximum $100,000,000, with interest payable
on funds committed for fixed periods at LIBOR (6.46% at December 31,
1999) plus 1.3% through 1.6% and on floating funds at the banks' prime
rate (8.50% at December 31, 1999) maturing in March 2002. $ 33,891,000 $ 56,000,000
Senior notes payable, due December 2004 with annual principal
payments of $2,777,777, and quarterly interest payments at 7.625%. 16,666,666 13,888,888
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
Various notes payable collateralized by land, with periodic principal
payments, maturing through November 2000, and bearing fixed and
variable interest at rates ranging from 8.25% to prime plus 1%. 665,289 70,200
$101,222,955 $119,959,088
============ ============
</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 2004 requires a pre-payment premium in the event of early extinguishment
of the debt. Additionally, both credit agreements limit investment in
unconsolidated joint ventures, payments of cash dividends, and require
express written consent of the lenders for certain transactions.

Interest capitalized during real estate development and construction was
$3,925,100, $4,704,200, and $7,591,000 for 1997, 1998, and 1999, respectively.

Interest paid, including amounts capitalized, was approximately $4,798,000,
$6,053,000 and $9,846,000 in 1997, 1998, and 1999, respectively. The
weighted average interest rate on borrowings outstanding was 7.8% at December
31, 1999.
<TABLE>

Scheduled maturities of notes payable for each of the five years and
thereafter as of December 31, 1999 are as follows:

<S> <C>

2000 $ 2,847,978
2001 2,777,778
2002 58,777,778
2003 2,777,777
2004 11,111,111
Thereafter 41,666,666
------------

$119,959,088
============
</TABLE>

7. SHAREHOLDERS' EQUITY

The Company has authorized 10,000,000 preferred shares which remain unissued
at December 31, 1999. The Board of Directors of the Company has not yet
determined the preferences, qualifications, relative voting or other rights of
the authorized preferred shares.

The Company issued 62,276 and 311,938 common shares to acquire homebuilders in
June 1997 and May 1998, respectively.

The Company has incentive share option plans for employees and directors
pursuant to which 937,500 common shares are reserved. The options were
issued at market prices on the grant date, became exercisable on the grant
date or in some cases three years from the grant date, and expire ten years
after the grant date. Details of stock options are as follows. The 1997
amounts have been adjusted to reflect a three-for-two stock split effective
August 18, 1997. As of December 31, 1999, options outstanding had exercise
prices between $5.17 and $30.38 and a weighted average remaining contractual
life of 6.8 years.
<TABLE>

1997 1998 1999

Weighted Average Exercise Price Weighted Average Exercise Price

Shares Shares Shares
Beginning Balance 270,450 $ 7.70 377,700 $ 9.96 501,630
Options granted 139,500 13.59 206,250 25.22 98,970
Options exercised (24,750) 5.19 (80,720) 9.14 (58,601)
Options forfeited (7,500) 11.83 (1,600) 22.63 (75,250)
-------- -------------------------------- -------- -------------------------------- --------
Ending Balance 377,700 $ 9.96 501,630 $ 16.33 466,749
======== ================================ ======== ================================ ========
Exercisable 377,700 $ 9.96 501,630 $ 16.33 466,749
======== ================================ ======== ================================ ========

<S> <C>

Weighted Average Exercise Price

Beginning Balance $ 16.33
Options granted 24.92
Options exercised 11.9749
Options forfeited 26.65
--------------------------------
Ending Balance $ 13.34
================================
Exercisable $ 13.34
================================
</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 net income and basic and diluted net
income per share for the years ended December 31, 1997, 1998 and 1999 would
have decreased to the pro forma amounts indicated below:
<TABLE>

1997 1998 1999
----------- ----------- -----------
Net income:
As reported $20,005,786 $29,871,736 $39,737,112
Pro forma 19,512,261 28,519,836 39,176,859
Basic net income per share:
As reported 2.05 2.63 3.44
Pro forma 2.00 2.51 3.39
Diluted net income per share:
As reported 2.02 2.57 3.40
Pro forma 1.97 2.46 3.35
</TABLE>

The fair value of the option grants are estimated on the date of grant using
an option pricing model with the following assumptions: no dividend yield,
risk-free interest rates of 4.51% to 7.13%, volatility of 38 to 42 and
expected lives ranging from five to ten years. The pro forma amounts are not
representative of the effects on reported net income for future years.

In 1997, the Company adopted SFAS No. 128 and, accordingly, the consolidated
statement of income reflect diluted as well as basic net income per share
amounts. The following is a reconciliation of the weighted average common
shares for the basic and diluted net income per share computations:

<TABLE>

FOR THE YEARS ENDED DECEMBER 31,

1997 1998 1999
--------- ---------- ----------
Weighted average common shares 9,758,678 11,341,645 11,553,288
Dilutive effect of stock options 168,804 266,299 145,191
--------- ---------- ----------
Weighted average common shares
and incremental shares 9,927,482 11,607,944 11,698,479
========= ========== ==========
</TABLE>

8. INCOME TAXES
<TABLE>

The reconciliation of income taxes computed at the U.S. federal statutory tax rate
to income tax expense for the years ended December 31, 1997, 1998 and 1999 is:

1997 1998 1999
----------- ----------- -----------

Tax at U.S. statutory rate $10,785,504 $17,362,105 $22,992,908
State income taxes, net of federal tax benefit 2,607,843 2,372,173 3,054,002
$13,393,347 $19,734,278 $25,956,910
=========== =========== ===========
</TABLE>

<TABLE>

The following is a summary of the components of the provision for income
taxes:

1997 1998 1999
------------ ------------ -----------
Current tax expense:
Federal $10,842,305 $16,218,343 $21,827,556
State 2,621,472 3,818,123 4,129,354
------------ ------------ -----------
13,463,777 20,036,466 25,956,910
Deferred tax benefit (70,430) (302,188) -0-
------------ ------------ -----------
$13,393,347 $19,734,278 $25,956,910
============ ============ ===========
</TABLE>

Income taxes paid were $12,514,000, $14,860,000 and $26,297,000 during 1997,
1998 and 1999, respectively.

The net deferred tax liability of approximately $444,000 at December 31, 1999
and 1998 consists primarily of temporary basis differences for tax and
financial reporting resulting from acquisitions and warranty expense.

9. RELATED PARTY TRANSACTIONS

Office space at the Company's headquarters is leased from a related party.
During 1997, 1998 and 1999 approximately $292,800, $294,600 and $382,800,
respectively, in rental payments were made to related parties.

10. LEASES

The Company leases office and warehouse space, vehicles and office equipment
pursuant to operating lease agreements expiring on various dates through
October 2004. Rent expense was approximately $510,200, $603,600 and
$1,018,500 for 1997, 1998 and 1999, respectively. Annual minimum payments to
be made to a related party incorporated in the amounts below range from
approximately $440,700 in 2000 to $195,400 in 2004.
<TABLE>

Annual minimum operating lease payments due as of December 31, 1999 are as
follows:

<S> <C>

2000 $1,194,610
2001 844,314
2002 632,384
2003 575,691
2004 237,437
----------
$3,484,436
==========
</TABLE>

11. 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
1997, 1998 and 1999 the Company matched in cash 50% of the first 6% of
compensation contributed by each participant, totaling $142,500 and $215,900
and $331,600 respectively. On December 31, 1997, 1998 and 1999, the Company
declared a discretionary profit sharing contribution of approximately
$509,000, $773,700 and $871,300 respectively, payable in the Company's common
shares. These contributions were the maximum amount deductible by the Company
under the rules set forth in section 404(a)(3) of the Internal Revenue Code.

<TABLE>

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
------------ ------------ ------------ ------------
1999:
Net Sales $ 90,416,073 $136,241,679 $170,990,809 $211,670,784
Gross Profit 18,099,783 27,920,466 35,377,892 42,835,046
Income from operations 6,633,478 13,500,642 19,283,114 22,805,835
Net income 4,034,322 8,838,252 12,641,543 14,222,995
Net income per share, basic .35 .76 1.09 1.24
Net income per share, diluted .34 .75 1.09 1.23

1998:
Net Sales $ 56,323,242 $ 91,226,487 $116,816,658 $157,559,355
Gross Profit 11,795,691 19,054,977 25,199,301 33,755,892
Income from operations 3,937,239 8,178,498 13,520,614 18,420,077
Net income 2,549,201 5,302,589 9,854,314 12,165,650
Net income per share, basic .23 .47 .86 1.06
Net income per share, diluted .22 .46 .85 1.04
<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.
</TABLE>

13. COMMITMENTS AND CONTINGENCIES

To assure the future availability of various developed lots, in the normal
course of business, the Company has contracted to purchase developed lots.
Total commitments for these purchases were approximately $70.3 million at
December 31, 1999. The purchase of these lots is subject to various
conditions imposed on both the sellers and the Company.

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.

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 information required by this Item is contained in the sections captioned
"Election of Directors" and "Section 16(A) Beneficial Ownership Reporting
Compliance" of the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held on May 23, 2000 (the "Proxy Statement"), and is
incorporated herein by reference. Information with respect to Executive
Officers of the Company is set forth under the caption "Executive Officers of
the Registrant" in Part I, Item 1 of this report.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is contained in the section captioned
"Executive Compensation" of the Company's Proxy Statement and is incorporated
herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item is contained in the section captioned
"Security Ownership of Certain Beneficial Owners and Management" of the
Company's Proxy Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is contained in the section captioned
"Certain Transactions" of the Company's Proxy Statement and is incorporated
herein by reference.

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. On October 7, 1999, Crossmann's Board of Directors
authorized the repurchase of up to 15% of its outstanding shares. Notice of
this repurchase plan was reported on a Form 8-K filed on October 8, 1999.

<TABLE>

<S> <C>

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.)
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 10.50to 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.)
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.
10.20 Director Stock Option Agreement, dated January 4, 1999 by and between Crossmann
Communities, Inc. and Larry S. Wechter.
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.
27.1 Financial Data Schedule for the year ended December 31, 1999.
</TABLE>

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 /s/ John B. Scheumann
John B. Scheumann
Chairman and Chief Executive Officer

Dated: March 30, 2000

<TABLE>

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
- ----------------------- ----------------------------------------------- --------------
/S/ JOHN B. SCHEUMANN CHAIRMAN OF THE BOARD OF DIRECTORS; MARCH 30, 2000
- -----------------------
JOHN B. SCHEUMANN CHIEF EXECUTIVE OFFICER
/S/ RICHARD H. CROSSER DIRECTOR; PRESIDENT AND CHIEF OPERATING OFFICER MARCH 30, 2000
- -----------------------
RICHARD H. CROSSER
/S/ JENNIFER A. HOLIHEN DIRECTOR; CHIEF FINANCIAL OFFICER; MARCH 30, 2000
- -----------------------
JENNIFER A. HOLIHEN TREASURER; SECRETARY
/S/ JAMES C. SHOOK DIRECTOR MARCH 30, 2000
- -----------------------
JAMES C. SHOOK
/S/ LARRY S. WECHTER DIRECTOR MARCH 30, 2000
- -----------------------
LARRY S. WECHTER
</TABLE>

EXHIBIT 10.23

CROSSMANN COMMUNITIES, INC.

OUTSIDE DIRECTOR STOCK OPTION AGREEMENT

THIS AGREEMENT made this 4th day of January, 1999, by and between
Crossmann Communities, Inc., an Indiana corporation (the "Company") and James
C. Shook (the "Optionee"), pursuant to the terms, conditions and limitations
contained in the Outside Director Stock Option Plan, as it may be amended
from time to time hereafter (the "Plan") the terms of which are incorporated
into and made a part of this Agreement;

WHEREAS, the Board has determined that it is in the best interest of the
Company and appropriate to the stated purposes of the Plan, that the Company
grant to the Optionee an option to purchase shares of Common Stock of the
Company pursuant to the terms and conditions of the Plan and this Agreement
and on January 4, 1999, the Board granted such an option to the Optionee (the
"Grant Date"),

NOW, THEREFORE, the Company and the Optionee do hereby agree as follows:

1. Grant of Option. The Company hereby grants to the Optionee the
right and option to purchase, pursuant to the terms and conditions contained
herein and in the Plan, all or any part of an aggregate of one thousand
(1,000) shares of the Common Stock of the Company (the "Option").

2. Option Price. The Option price hereunder is $25.00/per share
(the "Option Price") which Option Price is equal to one hundred percent (100%)
of the fair market value of the Common Stock on the Grant Date under this
Agreement, as determined under the terms of the Plan.

3. Exercise of Option. The Option shall be exercisable as of the
Grant Date and shall continue to be exercisable subject to the provisions of
Section 4, 6 and 7, until the tenth anniversary of the Grant Date (the
"Expiration Date").

(a) Method of Exercise. The Option shall be exercised by
written notice, which shall:
(i) state the election to exercise the Option, the
number of shares in respect of which it is being exercised, the person(s) in
whose name(s) the stock certificate(s) for such shares is (are) to be
registered, including pertinent address(es) and Social Security Number(s);
(ii) contain such representations and agreements, if
any, as may be required by the Company's counsel relative to the holder's
investment intent regarding such shares;

(iii) be signed by the Optionee; and

(iv) be in writing and delivered in person or by
certified mail to the Chairman of the Board of the Company.

The Option may not be exercised if the issuance of the shares upon
such exercise could constitute a violation of any applicable Federal or state
securities or other law or valid regulation. As a condition to his exercise
of the Option, the Company may require the person exercising the Option to
make any representation or warranty to the Company as may be required by any
applicable law or regulation.

(b) Payment Upon Exercise of Option. Payment of the full
Option Price for shares upon which the Option is exercised shall accompany the
written notice of exercise described above. The Company shall cause to be
issued and delivered to the Optionee the certificate(s) representing such
shares as soon as practicable following the receipt of the notice and payment
described above.

(c) Limitation on Exercise of Option. Notwithstanding any
other provision of this Agreement to the contrary, the aggregate fair market
value (determined as of the Grant Date) of the Common Stock of the Company
with respect to which the Option is exercisable for the first time during any
calendar year, under all such incentive stock option plans (as defined in Code
Section 422A) of the Company and any parent or subsidiary corporations shall
not exceed One Hundred Thousand Dollars ($100,000.00).

(d) No Obligation to Exercise Option. This grant of options
shall impose no obligation upon the Optionee to exercise any such Options.

4. Nontransferability of Option. The Option shall not be
transferable or assignable by the Optionee. The Option shall be exercisable,
during the Optionee's lifetime, only by him or her. The Option shall not be
pledged or hypothecated in any way, and shall not be subject to execution,
attachment or similar process. Any attempted transfer, assignment, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof, and the levy of any process upon the Option, shall be null, void and
without effect.

5. Termination of Directorship. In the event Optionee shall cease
to serve as an Outside Director of the Company, all options granted to the
Optionee under this Agreement shall terminate immediately as to the
unexercised portion thereof. In the event of the death of an Optionee while
serving as an Outside Director of the Company, the Optionee's personal
representative shall have the right subject to Section 3 of this Agreement and
the Plan, to exercise any and all Options which could have been exercised on
the date of death, at any time within twelve months from the date of death.

6. Effect of Amendment, Suspension or Termination of Existing
Options. No amendment, suspension or termination of the Plan shall, without
the Optionee's consent, alter or impair any of the rights or obligations of
the Company or the Optionee with respect to the Option granted under the terms
of this Agreement.

7. Restrictions on Issuing Shares. The Company's shares shall not
be issued pursuant to the exercise of the Option unless the transferability of
the shares so issued and/or the actual issuance of the shares comply with all
relevant provisions of law, including but not limited to, the (i) limitations,
if any, imposed by the Sate of Indiana, (ii) restrictions, if any, imposed by
the Securities Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the United States
Securities and Exchange Commission thereunder, and (iii) requirements of any
stock exchange upon which the shares may then be listed. The Inside
Directors, shall, in its sole discretion, determine if such restrictions or
such issuance of shares so complies with all relevant provisions of law.

(b) Other Restrictions. The Inside Directors may at the time shares are
actually issued pursuant to the exercise of the Option, place such further
restrictions on the transferability of any shares of Common Stock to be issued
to the Optionee upon the exercise of the Option as the Board, in its sole
discretion, determines to be reasonable, appropriate or necessary.

(c) No Rights Vested as a Shareholder. The Optionee and/or his
successor in interest shall not have any of the rights of a shareholder of the
Company by reason of the grant of the Option until such Option is exercised
and optioned shares are issued pursuant to such Option.

8. Adjustments. In the event of any Company recapitalization,
dissolution, liquidation or reorganization, the adjustments described under
the terms of the Plan shall be applied.

9. Acknowledgment. The Optionee acknowledges receipt of a copy of
the Plan, a copy of which is attached hereto, and represents that Optionee is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all the terms and provisions thereof. Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of
the Board upon any questions arising under the Plan.

IN WITNESS WHEREOF, the Company, by its authorized representative, and
the Optionee have entered into this Agreement on the date first written above.

CROSSMANN COMMUNITIES, INC.: OPTIONEE:

By: /s/Richard H. Crosser, President /s/James C. Shook

Witness:/s/ Judy Swihart

EXHIBIT 10.24

CROSSMANN COMMUNITIES, INC.

OUTSIDE DIRECTOR STOCK OPTION AGREEMENT

THIS AGREEMENT made this 4th day of January, 1999, by and between
Crossmann Communities, Inc., an Indiana corporation (the "Company") and Larry
S. Wechter (the "Optionee"), pursuant to the terms, conditions and
limitations contained in the Outside Director Stock Option Plan, as it may be
amended from time to time hereafter (the "Plan") the terms of which are
incorporated into and made a part of this Agreement;

NOW, THEREFORE, the Company and the Optionee do hereby agree as follows:

(iii) be signed by the Optionee; and

(iv) be in writing and delivered in person or by
certified mail to the Chairman of the Board of the Company.

(d) No Obligation to Exercise Option. This grant of options
shall impose no obligation upon the Optionee to exercise any such Options.

(a) Withholding of Taxes. Shares shall not be issued upon exercise of
the Option unless and until withholding tax, if any, or other withholding
liabilities, if any, imposed by any governmental entity have, in the opinion
of the Inside Directors, been satisfied or provision for their satisfaction
has been made.
(b) Other Restrictions. The Inside Directors may at the time shares are
actually issued pursuant to the exercise of the Option, place such further
restrictions on the transferability of any shares of Common Stock to be issued
to the Optionee upon the exercise of the Option as the Board, in its sole
discretion, determines to be reasonable, appropriate or necessary.

8. Adjustments. In the event of any Company recapitalization,
dissolution, liquidation or reorganization, the adjustments described under
the terms of the Plan shall be applied.

IN WITNESS WHEREOF, the Company, by its authorized representative, and
the Optionee have entered into this Agreement on the date first written above.

CROSSMANN COMMUNITIES, INC.: OPTIONEE:

By: /s/Richard H. Crosser, President /s/James C. Shook

Witness: /s/ Judy Swihart

EXHIBIT 21.1 AMENDED SUBSIDIARIES OF THE REGISTRANT

1. abMerit Realty, Inc.
2. abCrossmann Communities of Ohio, Inc
3. abDeluxe Homes of Lafayette, Inc.
4. abCrossmann Management, Inc.
5. abDeluxe Aviation, Inc.
6. abCrossmann Investments, Inc.
7. abCrossmann Mortgage Corp.
8. abCutter Homes, Ltd.
9. abCrossmann Communities of Tennessee, LLC
10. abCrossmann Communities of North Carolina, Inc.
11. abPinehurst Builders, LLC

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement Nos.
33-94568, 333-2626 and 333-4980on Forms S-8 and Registration Statement Nos.
333-35509 and 333-63059 on Forms S-3 each of Crossmann Communities, Inc. of
our report dated February 25, 2000, appearing in the Annual Report on Form
10-K of Crossmann Communities, Inc. for the year ended December 31, 1999.

DELOITTE & TOUCHE LLP
Indianapolis, Indiana
March 29, 2000

<ARTICLE> 5
<LEGEND>
Crossmann Communities, Inc.
Exhibit 27.1
Article 5 Financial Data Schedule for 1999 10-K
</LEGEND>

<S> <C>
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<PERIOD-END> DEC-31-1999
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</TABLE>