MONTEREY HOMES CORPORATION

                              ARTICLES OF AMENDMENT

         Monterey Homes Corporation, a Maryland corporation having its principal
office in Baltimore City, Maryland  (hereinafter called  "Corporation"),  hereby
certifies to the State Department of Assessments and Taxation of Maryland that:

         FIRST:  The  charter of the  Corporation,  is amended by  striking  out
Article FIRST of the Articles of Incorporation and inserting in lieu thereof the
following:

         The   name   of  the   Corporation   is   Meritage   Corporation   (the
"Corporation").


         SECOND:  The amendment of the charter of the Corporation as hereinabove
set forth has been duly  advised by the Board of  Directors  and approved by the
stockholders of the Corporation in the manner and by the vote required by law.

         The  undersigned  acknowledges  these  Articles of  Amendment to be the
corporate  act of the  Corporation  and states  that,  to the best of his or her
knowledge,  information and belief, the matters and facts set forth therein with
respect to the  authorization  and  approval  thereof  are true in all  material
respects and that this statement is made under the penalties of perjury.

         IN WITNESS  WHEREOF,  the  Corporation has caused this instrument to be
signed  in its name and on its  behalf by its  President,  and  attested  by its
Secretary, on the 16th day of September, 1998.


                                              MONTEREY HOMES CORPORATION


ATTEST:
                                               By:
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Secretary                                         Managing Director