EXHIBIT 4.2

                         EXTENSION OF DEFERRAL AGREEMENT

         THIS AGREEMENT made as of the 14th day of December, 1999, by and
between JEFFREY P. ORLEANS ("JPO") and ORLEANS HOMEBUILDERS, INC., a Delaware
corporation ("Orleans").

                                   BACKGROUND

         A.   JPO is the holder of a convertible subordinated note dated August
              9, 1996 and due January 1, 2002 in the principal amount of Three
              Million Dollars ($3,000,000) issued by Orleans ("CS Note").

         B.   Pursuant to the terms of the CS Note, principal shall be payable
              in equal annual installments of One Million Dollars ($1,000,000)
              each not later than the first day of each calendar year,
              commencing January 1, 2000.

         C.   JPO agreed to defer principal payments due under the CS Note on
              January 1, 2000.

         D.   JPO has agreed to further defer the principal payments due under
              the CS Note until January 1, 2003.

         NOW, THEREFORE, in consideration of the covenants and provisions
contained herein, and intending to be legally bound hereby, the parties agree as
follows:

         JPO agrees to further defer principal payments due under the CS Note
which were due on January 1, 2000 until January 1, 2003.

         All other terms and conditions contained in the CS Note dated August 9,
1996 remain unchanged and in effect.


         Witness:
                                              /s/Jeffrey P. Orleans
                                              ---------------------------
                                              Jeffrey P. Orleans
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                                              ORLEANS HOMEBUILDERS, INC.
         Attest:
                                              By: /s/Joseph Santangelo
                                                  -----------------------
         /s/Susan Nickey                          Joseph Santangelo, CFO
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         Susan Nickey
         Assistant Secretary