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UNITED STATES
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 (FEE REQUIRED)

For the fiscal year ended December 31, 1996

OR
--

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from ___________ to ___________

Commission File No. 33-44914, 33-68564

M/I SCHOTTENSTEIN HOMES, INC.
-----------------------------
(Exact name of registrant as specified in its charter)

Ohio 31-1210837
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

3 Easton Oval, Suite 500
Columbus, Ohio 43219
--------------------

(Address of principal executive offices)(zip code)
Registrant's telephone number, including area code: (614) 418-8000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Name of Each Exchange on

Title of Each Class Which Registered
------------------- -----------------------
Common Stock, par value $.01 New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None
--------------------
(Title of Class)

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

As of March 14, 1997, the aggregate market value of voting common stock
held by non-affiliates of the registrant (3,548,617 shares) was approximately
$37,260,000. The number of shares of common stock of M/I Schottenstein Homes,
Inc., outstanding on March 14, 1997 was 8,800,000.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the year ended December 31,
1996 (Part I, II and IV) Portions of the registrant's Definitive Proxy Statement
for the 1997 Annual Meeting of Shareholders to be filed pursuant to Regulation
14A not later than April 1, 1997 (Part III)

PART I

ITEM 1. BUSINESS

COMPANY

M/I Schottenstein Homes, Inc. was reincorporated in Ohio in November
1993. Prior to that date, the Company was a Delaware corporation. As used in
this report, the term "Company" refers to M/I Schottenstein Homes, Inc.; its
subsidiary, M/I Financial Corp. ("M/I Financial"), and its predecessors, unless
the context indicates otherwise. The Company maintains its executive offices at
3 Easton Oval, Suite 500, Columbus, Ohio 43219 and its telephone number is (614)
418-8000.

During October 1986, the Company completed a public offering of its
Common Stock and from October 1986 to June 1990, the Company was publicly held,
with Irving E. Schottenstein, Melvin L. Schottenstein and their family trusts
owning approximately 79.0% of the outstanding shares of Common Stock. In June
1990, the shareholders of the Company approved a merger agreement providing for
the merger of the Company with M/I Homes Acquisition Corp., a corporation formed
by Irving E. Schottenstein, Melvin L. Schottenstein and their family trusts as a
vehicle for acquiring the Company's publicly held Common Stock (the "Going
Private Transaction"). As a result, Irving E. Schottenstein, Melvin L.
Schottenstein and their family trusts became the holders of 100% of the Common
Stock. Effective January 1, 1991, the Company elected to be treated as an S
Corporation under the Internal Revenue Code of 1986, as amended (the "Code") for
federal income tax purposes and comparable state tax laws. As a result of the S
Corporation election, the Company was no longer subject to federal and state
income taxation and its shareholders were taxed on the Company's income
directly.

In November 1993, the Company completed a public offering of its Common
Stock, selling 3.3 million shares at an initial public offering price of $14 per
share. At that time, the remaining 62.5% of the Company's outstanding Common
Stock was held by Irving E. Schottenstein, the Estate of Melvin L. Schottenstein
and their family trusts, the former S Corporation shareholders. In conjunction
with the public offering, the Company terminated its S Corporation status
effective November 8, 1993. Accordingly, from that date forward, the Company's
income has been fully subject to federal, state and local taxes.

SEGMENT INFORMATION

The Company operates in two business segments - home-building and
financial services. The home-building operations include the development of land
and the sale and construction of single-family attached and detached homes. The
financial services operations involve the origination of mortgage loans
primarily for purchasers of the Company's homes. The financial information
relating to business segments for the three years ended December 31, 1996,
appearing in exhibit 13 of this Annual Report on Form 10-K, is incorporated by
reference.

HOME-BUILDING

M/I Schottenstein Homes, Inc. is one of the nation's leading home
builders. The Company is engaged in the sale and construction of single family
homes marketed and sold under the M/I Homes and Showcase Homes tradenames. In
1995, the latest year for which information is available, the Company was the
19th largest U.S. home builder (based on total revenue) as ranked by Builder
Magazine. During the year ended December 31, 1996, the Company delivered 3,246
homes with a total sales value of over $560 million.

The Company commenced home-building operations in Columbus, Ohio in
1976 and expanded into and opened a home-building division in Tampa, Florida in
1981. In 1984 the Company further expanded in Florida by opening home-building
divisions in Palm Beach County and Orlando. The Company opened home-building
divisions in Charlotte and Raleigh, North Carolina in 1985 and 1986,
respectively. In 1988, the Company established a separate home-building division
for its Showcase product lines in Columbus, Ohio with the intent of building and
marketing semi-custom, upscale homes to more affluent customers. In 1988, the
Company also expanded into and opened home-building

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divisions in Cincinnati, Ohio and Indianapolis, Indiana. In 1991, the Company
opened a home-building division in Washington, D.C., encompassing certain D.C.
suburbs located in Virginia and Maryland. Due to the growth in the Washington,
D.C. market, the Company split this market into separate Maryland and Virginia
divisions in the first quarter of 1994. In May 1993, the Company introduced its
Horizon line of homes in the Columbus market. This is the Company's lowest
priced line of homes and is targeted primarily at first time home buyers. Due to
the strong sales of this line since its introduction and the anticipated growth
in this segment of the market, the Company established a separate division for
the Horizon line in the Columbus market in 1994. The Company also introduced
this line of entry-level homes in several of its other markets in 1994 and 1995.
In the fourth quarter of 1996, the Company opened a home-building division in
Phoenix, Arizona. In addition, the Company continues to explore opportunities
for expanding into new and existing markets either by starting a new division or
through acquisition.

The Company, on a regional basis, offers up to seven distinct lines of
single-family homes ranging in price from the low $80,000's to approximately
$600,000, with an average sales price of homes in Backlog as of December 31,
1996 of $183,000. By offering a wide range of homes, the Company is able to
attract first-time home buyers as well as move-up buyers, many of whom were
previous M/I or Showcase homeowners. The Company seeks to distinguish itself
from its competitors by offering homes that have a higher level of design and
construction quality within a given price range. The Company also believes that
it offers one of the highest levels of customer service in the industry. Based
on the responses to the Company's customer questionnaire, for the sixth year in
a row, more than 95% of the Company's customers would recommend an M/I or
Showcase home to a potential home buyer.

The Company believes that each of its markets has unique
characteristics and must therefore be locally managed with dedicated, on-site
management personnel. Each home-building division is supervised by a division
president who reports to a region president. The Company encourages its region
and division presidents to be entrepreneurial and has accordingly adopted an
incentive compensation structure under which their aggregate compensation is
largely determined on the basis of operating income and customer satisfaction in
their region or division.

To enhance the selling process, the Company operates design centers in
the Columbus and Cincinnati markets. The design centers are staffed with
interior design specialists who assist Columbus and Cincinnati customers in
selecting interior and exterior colors as well as standard options and upgrades.
In its other markets, the color selection and option/upgrade process is handled
directly by the company's sales consultants.

BUSINESS STRATEGY

The Company's business strategy emphasizes the following key areas: (i)
maintaining profitability with focus on margins as well as expenses; (ii) having
and continuing to pursue premier locations while maintaining a conservative land
acquisition policy; (iii) maintaining a leadership position in Columbus and
pursing profitable growth strategies in other markets; (iv) providing superior
customer service; (v) providing product breadth and innovative design; and (vi)
employing an experienced and entrepreneurial management team. Growth and
performance expectations are always subject to changes in interest rates, the
home-building industry's competitive environment, job growth and consumer
confidence. The Company adapts to these constant changes by focusing on the
following strategies and philosophies that have been key to its success:

(i) Profitability. The overriding business strategy of the Company is
to increase profitability and focus on margins in order to enhance shareholder
value. At the same time, the Company remains committed to its core business
practice of building quality homes and providing superior customer service.
Although there are times when increasing profits may conflict with issues of
quality and customer service, the Company believes that it has been particularly
successful in striking the proper balance between these vital Company goals. In
order to do this, the Company constantly explores new methods and procedures
designed to improve operating efficiency without sacrificing quality. In the
selling process, the marketing sales efforts of the Company promote credibility
and quality rather than price cutting or so-called "give-aways". In each
home-building division, significant attention is paid to improving subdivision
absorption as well as revenue enhancement through premiums and price increases
where warranted. Management believes the Company's long-standing and very
conservative policy which limits the number of "spec" houses has allowed the
Company to avoid the significant discounting which may accompany the sale of a
"spec" house. The

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Company strives to be in locations where the Company is the primary builder or,
if not, the Company seeks to build in communities with other builders who have
similar risk/return philosophies.

The Company is constantly exploring ways in which to make money without
selling additional homes. In support of this, the Company continues to promote
value engineering of its product lines. The Company also strives to grow M/I
Financial in the majority of its markets. In addition, in 1996, the Company
formed a title insurance agency joint venture to capture title insurance profits
in certain of its markets. Finally, the Company continues to pursue ways to
reduce its overall cost of capital as well as maintain financial flexibility.

(ii) Premier Locations and Conservative Land Acquisition Policy. The
Company understands that the profitability of each of its home-building
divisions is largely dependent upon the quality of the division's subdivision
locations. When the market is strong, good locations truly excel and when the
market weakens, good locations are usually the last to be affected. The Company
has always been effective at securing good locations and with the formation of
the Land Committee in early 1996, which is comprised of the CEO and other Senior
Officers of the Company, the Company believes it will become even more effective
in identifying and acquiring premier locations.

The Company's land development activities and land holdings have
increased significantly in the past few years and the Company expects land
holdings to remain at relatively high levels. However, the Company has always
pursued and continues to pursue a land acquisition policy that it believes is
more conservative than the policies of the other national home builders. The
Company develops its own lots where it can gain a competitive advantage by doing
so or where shortages of qualified land developers make it impractical to
purchase the required lots from outside sources. The Company seeks to limit its
investment in undeveloped land and lots to the amount reasonably expected to be
sold in the next three to four years. All land to be acquired by the Company
must be zoned and serviceable by all necessary utilities prior to being
purchased. From time to time, the Company develops land in joint ventures which,
in most cases, are entirely equity financed. As of December 31, 1996, the
Company had an inventory of 2,009 developed lots, 1,400 lots under development
and 2,296 lots zoned for future development, including its share of lots owned
by its joint ventures. The Company believes that this level of land inventory,
in combination with 7,951 lots that the Company may acquire pursuant to
outstanding option and purchase contracts, is sufficient to meet its anticipated
building needs over the next three to four years.

(iii) Maintaining Leading Position in the Columbus Market and
Profitable Growth Strategies in Other Markets. The Company is the leading
builder of single-family detached homes in the Columbus market. In fact, the
Company has built and delivered the greatest number of single-family detached
homes in the Columbus area during each of the last eight years. In 1996, the
Company's market share in Columbus reached a record tying 24% of the total
market. The Company seeks to maintain its leading position in this market by
continuing to provide high quality homes and superior customer service. Its
success in Columbus has enabled the Company to expand into new markets that
offer significant growth opportunities.

Between 1981 and 1996, the Company expanded into and currently
operates home-building divisions in 10 markets outside its original Columbus
market. The Company believes there are significant opportunities to improve
profitability in these markets through expansion of the Company's product
offerings, the acquisition of land in increasingly desirable locations and by
constructing and selling homes with the same commitment to customer service that
has accounted for the Company's success in its Columbus market. In addition, the
Company continues to explore opportunities for expanding into new or existing
markets whether by starting a new division, as evidenced by the expansion into
Phoenix, Arizona late in 1996, or through acquisition. In developing proper
growth strategies and goals for its other markets, however, the Company
understands that the unique characteristics of each market significantly impacts
the long-term strategies which the Company elects to pursue. Regardless of the
strategies employed, the Company will continue to focus on profitability rather
than mere market share.

(iv) Superior Customer Service. The Company is committed to providing
its home buyers with a wide array of functional and innovative designs from
which to choose, quality construction utilizing the best building materials and
a home with lasting value at an affordable price. The overriding Company
philosophy is to provide superior service to its customers. The Company has
always recognized that the purchase of a home in most instances represents the
single largest investment ever made by its customers. The Company understands
the importance of a home purchase decision

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and is sensitive to the fact that many prospective buyers have little knowledge
of home construction and are unsure about how to choose a home builder and a
home. Because of this, virtually every phase of the Company's operations - from
the beginning of the selling process through construction, closing and service
after delivery - is designed to educate and inform the customer, to involve the
customer in the home-building process and to make the home-building experience
more understandable and pleasant. The Company's selling process focuses on the
home's features, benefits, quality and design (as opposed to merely emphasizing
price and square footage). The Company assists many of its customers with
financing and conducts a pre-construction "builder/buyer" conference with each
customer to review the house plans, introduce the customer to his or her
construction supervisor and explain the construction process. The Company
encourages its customers to visit their homesites during construction and
provides free periodic inspections of its homes after delivery. The Company also
offers attractive warranties, including a 20-year transferable major structural
warranty. The Company prides itself on the extraordinary efforts which it
undertakes on a daily basis to "put the customer first" and thereby provide the
highest level of customer service. As a result, based on the responses to the
Company's customer questionnaire, for the sixth year in a row, more than 95% of
the Company's customers would recommend one of the Company's homes to a
potential home buyer.

(v) Product Breadth and Innovative Design. The Company offers a wide
range of homes at price points that appeal to both first-time and move-up
buyers, as well as empty nesters. The Company offers more than 200 different
floor plans and elevations in its various product lines. In some instances, the
Company permits customers, at an additional cost, to modify the design of their
homes or add special features. Such modifications are greatly facilitated by the
Company's use of computer-aided design technology. The Company believes that its
homes generally offer a higher level of quality design and construction within a
given price range. It devotes significant resources to the research, design and
development of its homes in order to better meet the needs of the various
housing markets in which the Company operates.

(vi) Management. The Company places high value on and dedicates
substantial resources to assembling the most competent management team at the
corporate and regional levels and within each of its divisions. The Company's
success as a national home builder is in large part due to the skill and
experience of the Company's managers, each of whom possesses intimate knowledge
of the markets they manage. The Company encourages its managers to be
entrepreneurial and to operate their regions and divisions as if they were their
own and, accordingly, has adopted an incentive compensation structure under
which aggregate compensation for regional and division presidents is determined
on the basis of financial performance and customer satisfaction in their region
or division.

SALES AND MARKETING

The Company markets and sells its homes under the M/I and Showcase
tradenames. Home sales are conducted from on-site sales offices in furnished
model homes by the Company's sales personnel. Every sales consultant is trained
and equipped to fully explain the features and benefits of the Company's homes,
to determine which home best suits each customer's needs, to explain the
construction process and to assist the customer in choosing the best financing.
Significant attention is paid to the training and re-training of all sales
personnel to assure the highest levels of professionalism and product knowledge.
The Company currently employs 105 sales consultants and operates approximately
150 model homes across all of its divisions.

The Company advertises in newspapers and in magazines, by direct mail,
on billboards and on radio and television, although the particular marketing
medium used differs from division to division based upon marketing demographics
and other competitive factors. In addition, the Company welcomes independent
broker participation and from time to time, utilizes various promotions and
sales incentives to attract interest from these brokers. The Company's
commitment to quality design and construction and reputation for customer
service has also resulted in a strong referral base and a significant number of
repeat buyers.

The Company generally does not commence construction of its homes until
it obtains a sales contract and preliminary oral advice from the customer's
lender that financing will be approved. However, in certain markets, contracts
are sometimes accepted contingent upon the sale of an existing home and
construction is authorized through a certain stage prior to satisfaction of that
contingency. In addition, in all divisions, a limited number of "spec" homes,
i.e., homes started in the absence of an executed contract, are built in order
to permit construction and delivery of homes

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on an immediate-need basis and to provide presentation of new product. The
Company has always followed a very conservative policy with respect to the
number of spec homes that can be started. Management strictly controls and
limits the number of spec homes.

The Company's sales and marketing efforts are further enhanced by the
Company's inspection and warranty programs. Through these programs, the Company
offers a 2-year limited warranty on materials and workmanship and a 20-year
limited warranty against major structural defects. To increase the value of
these warranties, both are transferable in the event of the sale of the home.
Immediately prior to closing and three months after a home is delivered, the
Company inspects each home with the customer to determine if any repairs are
required. At the customer's written request, the Company will also provide a
free one-year inspection and again make any necessary repairs. The Company also
passes along to its customers all warranties provided by manufacturers or
suppliers of components installed in each home. The Company's warranty expense
has been approximately 1.0% of total costs and expenses for each of the years
ended December 31, 1996, 1995, and 1994.

DESIGN AND CONSTRUCTION

The Company devotes significant resources to the research, design and
development of its homes in order to better meet the needs of the various
housing markets in which the Company operates. Virtually all of the Company's
floor plans and elevations are designed by an experienced in-house staff of
qualified professionals using modern computer-aided design technology. The
Company offers more than 200 different floor plans and elevations. These designs
may differ significantly from market to market. For example, in Florida, where
lifestyles tend to be more leisurely and outdoor oriented, home designs tend to
be more open and airy, with palladian windows, arches, gothic columns and
covered lanais. In the Midwest, home design is more traditional.

The construction of each home is supervised by a construction
supervisor employed by the Company who reports to a Company-employed production
manager. Every customer is introduced to their construction supervisor prior to
commencement of home construction at a pre-construction "builder/buyer"
conference. In addition to introducing the customer to the construction
supervisor, the purpose of the "builder/buyer" conference is to review with the
customer the home plans and all relevant construction details and to explain the
construction process and schedule to the customer. Every customer is given a
hard hat at the "builder/buyer" conference as an open invitation to visit the
site at any time during the course of construction. The Company wants customers
to become involved and better understand the construction of their home and to
see the quality being built into their home. All of this is part of the
Company's philosophy to "put the customer first" and enhance the total
home-building experience.

All homes are constructed according to standardized designs and meet
applicable Federal Housing Authority ("FHA") and Veterans Administration ("VA")
requirements. To allow maximum design flexibility, the Company limits the use of
pre-assembled building components and pre-fabricated structural assemblies. The
efficiency of the building process is enhanced by the Company's use of
standardized materials available from a variety of sources. The Company has,
from time to time, experienced construction delays due to shortages of materials
or subcontractors. Such construction delays may, in turn, delay the delivery of
homes, thereby extending the period of time between the signing of a purchase
contract with respect to a home and the receipt of revenue by the Company;
however, the Company cannot predict the extent to which shortages of necessary
materials or labor may occur in the future. The Company employs independent
subcontractors for the installation of site improvements and the construction of
its homes. Subcontractors are supervised by the Company's on-site construction
supervisors. All subcontractor work is performed pursuant to written agreements
with the Company. Such agreements are generally short-term, with terms from six
to twelve months, provide for a fixed price for labor and materials and are
structured so as to allow for price protection for the Company's Backlog. The
Company seeks to build in large volume with a view toward reducing the per unit
cost of the homes which it sells due to advantages achieved by lower unit prices
paid to subcontractors for labor and materials.

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MARKETS

The Company's operations are organized into geographic regions in order
to maximize management and operating efficiencies. Each geographic region
comprises one or more operating divisions for a particular major metropolitan
area. The Company's present divisional operating structure is as follows:

Year
Operations
Region Division Commenced
------ -------- ---------

Midwest:
Ohio...................... Columbus - Hallmark/Heritage/Regency 1976
Columbus - Showcase 1988
Columbus - Horizon 1994
Cincinnati 1988

Indiana................... Indianapolis 1988

Florida:
Florida................... Tampa 1981
Orlando 1984
Palm Beach County 1984

Carolina/Washington, D.C.:
Carolina.................. Charlotte 1985
Raleigh 1986

Washington D. C........... Virginia 1991
Maryland 1991

Arizona:
Arizona................... Phoenix 1996

Midwest Region. The Company began its operations in the Columbus, Ohio
market in 1976 and expanded into both Cincinnati, Ohio and Indianapolis, Indiana
in 1988. These markets accounted for approximately 60% of the Company's
deliveries in 1996.

The Company believes that Columbus is a steady market with a stable
and diverse employment base. The Company is the leading home builder in
Columbus, having built and delivered more single-family detached homes in this
market than any other home builder during each of the last eight years. In 1996,
the Company had a 24% market share in the Columbus market.

The Company believes that the Cincinnati market, similar to Columbus,
is characterized by a stable economic environment and a diverse employment base.
In 1994, the Company introduced its more affordable Horizon product line in this
market in order to compete more effectively for first-time home buyers. This
division recorded a record number of New Contracts and Homes Delivered in 1996,
primarily due to the strong performance of the Horizon product line.

The Indianapolis market is a growing market noted for an excellent
transportation system and a relatively young population. In 1995, the Company
introduced its Horizon product line in this market to offer more choices for
first time home buyers. This division recorded a record number of Homes
Delivered in 1996, primarily due to the strong performance of the Horizon
product line.

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Florida Region. The Company entered the Florida market in 1981, when
it opened its Tampa division. In 1984, the Company opened additional divisions
in Palm Beach County and Orlando. In 1996, deliveries from this region
represented approximately 20% of the Company's total deliveries.

Tampa's economy is one of the fastest growing economies in the United
States. Growth in this market is supported by business relocations and
expansions, attracted by the metropolitan area's low costs and an ample labor
supply. Due to the increased number of jobs in the services, government and
finance industries, the Tampa market continues to present significant
opportunities for the Company.

Palm Beach County is one of the more affluent markets in the United
States. The tourist industry is the largest employer and is one of the key
drivers for the metropolitan area's growth. The Company introduced its highest
priced product line in order to cater to the more affluent residents in this
market.

Orlando's economy is anchored by the service industry, representing
approximately 33% of total employment. The Orlando market has traditionally
experienced lower unemployment rates than both the state of Florida and the
United States. Home builder competition remains strong in this area. In 1995,
the Company introduced a more upscale product line in order to compete more
effectively in this market.

The Carolina/Washington, D.C. Region. In 1985, the Company entered
Charlotte and a year later opened in Raleigh-Durham. In 1991, the Company
expanded into both Virginia and Maryland. In 1996, these markets represented
approximately 20% of the Company's total deliveries.

Charlotte, which is home to two of the fastest growing firms in the
banking industry, continues to grow as a financial center. The Company expects
this market to continue to gain administrative and back-office jobs as these
firms pursue growth outside the region. In addition, Charlotte is establishing
itself as a transportation hub with its manufacturing base. Given this strong
industry presence, Charlotte is ranked above average for long-term employment
growth.

Raleigh is well situated to take advantage of the explosive growth in
high-tech firms with a well-educated workforce. The Company expects the housing
market in this area to continue to exhibit strong growth. This division recorded
a record number of Homes Delivered in 1996.

The Company believes that the Washington, D.C. market will remain very
competitive. The Washington, D.C. region historically has been dominated by
federal government employment. However, there has been an increasing trend
toward private sector jobs, especially in the high-technology area. The
Company's current operations in the Washington, D.C. region are located
primarily in Fairfax, Prince William and Loudoun counties in Virginia and Prince
Georges, Montgomery and Anne Arundel counties in Maryland. The Company has
experienced tremendous success in its Willows subdivision near the Potomac River
in Maryland. The Company will continue to focus on geographic, product and
pricing niches in the Washington, D.C. market.

The Arizona Region. The Company entered the Phoenix market late in
1996. As commonly occurs in the home-building industry, it has been the
Company's experience that it incurs substantial losses in a new market for the
first two years of operations. With respect to 10 of the Company's 11 developing
markets, these losses have already been absorbed in the Company's historical
results of operations. The Company expects to incur losses in its Phoenix
division as a result of its conservative expense policy relating to start-ups.

PRODUCT LINES

The Company, on a regional basis, offers up to seven distinct product
lines, ranging in price from the low $80,000's to approximately $600,000 and
ranging in square footage from approximately 1,100 to 4,000 square feet. There
are more than 200 different floor plans and elevations across all product lines.
By offering a wide range of homes, the Company is able to attract first-time
home buyers, move-up buyers and "empty-nesters".

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In the Columbus market, which is the Company's largest market, the
Company offers all of its seven distinct product lines. In addition, the Company
offers a select number of its product lines in its divisions outside of
Columbus. The price range, excluding optional add-ons, and average square
footage for these product lines in Columbus are shown below:

AVERAGE
PRODUCT LINE PRICE RANGE SQUARE FOOTAGE
------------------------ ------------------------- --------------

Horizon $80,000 - $140,000 1,400
Heritage $115,000 - $165,000 1,500
Hallmark $140,000 - $205,000 2,000
Regency $165,000 - $230,000 2,450
Showcase Signature $190,000 - $230,000 2,500
Hampsted $180,000 - $300,000 2,600
Showcase Classic $205,000 - $310,000 2,800

In addition, the Company offers a line of attached townhomes in the
Maryland and Virginia markets. These homes are marketed primarily to first-time
buyers and range from 1,400 to 2,300 square feet of living space. These homes
utilize wood frame construction and feature exteriors of aluminum with brick
fronts.

In all of the Company's lines of homes, certain options are available
to the purchaser for an additional charge. Major options include fireplaces,
additional bathrooms, and higher quality carpeting, cabinets and appliances. The
options typically are more numerous and significant on the more expensive homes.
In offering its various products, the Company attempts to maintain substantially
the same ratio of revenue to costs and expenses for each of its product lines.

LAND DEVELOPMENT ACTIVITIES

The Company's land development activities and land holdings have
increased significantly in the past few years and the Company expects land
holdings to remain at relatively high levels. However, the Company pursues a
land acquisition policy that it believes is more conservative than other
national home builders. The Company continues to purchase lots from outside
developers under option contracts, when possible, to limit the Company's risk;
however, the Company continues to evaluate all of its alternatives to satisfy
its need for lots in the most cost effective manner. The Company develops its
own lots where it can gain a competitive advantage by doing so or where
shortages of qualified land developers make it impractical to purchase the
required lots from outside sources. The Company seeks to limit its investment in
undeveloped land and lots to the amount reasonably expected to be sold in the
next three to four years. Although the Company purchases land and engages in
land development activities primarily for the purpose of furthering its own
home-building activities, in certain markets, the Company has developed land
with the intention of selling a portion of the lots to outside home builders.

To limit its risk in connection with raw land development, the Company
has primarily acquired land through the use of contingent purchase contracts.
All such contracts require the internal approval of the Company's land
committee. These contracts condition the Company's obligation to purchase land
upon the Company's review and approval of zoning, utilities, soil and subsurface
conditions, environmental and wetland conditions, levels of taxation, traffic
patterns, development costs, title matters and other property-related criteria.
In addition, careful attention is paid to the quality of the public school
system. Only after this thorough evaluation has been completed does the Company
make a commitment to purchase undeveloped land. To further reduce its risk when
evaluating the acquisition of raw land, the Company generally does not commence
engineering until all necessary land use and zoning approvals are obtained.

To diversify its investment in land, the Company from time to time
enters into joint ventures and limited liability corporations (LLC's), generally
with other homebuilders. At December 31, 1996, the Company had interests varying
from 33% to 50% in each of 18 joint ventures and 5 LLC's. These joint ventures
and LLC's develop land into lots and, generally, the Company receives its
percentage interest in the joint venture and LLC in the form of a distribution
of developed lots. These joint ventures and LLC's pay to the managing partner
certain fees for accounting,

9
10

administrative and construction supervision services performed by the managing
partner in addition to its percentage interest as a partner in the profits of
the joint venture and LLC. The Company currently is responsible for the
management of 7 of the 18 joint ventures and 3 of the 5 LLC's. These joint
ventures and LLC's are equity financed, except where seller financing is
available on attractive terms.

In developing lots and land, the Company is required by some
municipalities and other governmental authorities to provide completion bonds
for sewer, streets and other improvements. The Company generally provides
letters of credit in lieu of these completion bonds. At December 31, 1996, $9.5
million of letters of credit were outstanding for these purposes, as well as
$3.8 million of completion bonds.

AVAILABLE LOTS AND LAND

The Company seeks to balance the economic risk of owning lots and land
with the necessity of having lots available for its homes. At December 31, 1996,
the Company had in inventory 2,003 developed lots and 979 lots under
development. The Company also owned raw land expected to be developed into
approximately 1,269 lots.

In addition, at December 31, 1996, the Company's interest in lots held
by its joint ventures and LLC's consisted of 6 developed lots and 421 lots under
development. The Company also owns interests in raw land held by its joint
ventures and LLC's zoned for 1,027 lots. It is anticipated that some of the lots
owned by the Company and the joint ventures and LLC's will be sold to others,
including land held through its joint ventures and LLC's.

At December 31, 1996, the Company had options and purchase contracts,
which expire over the next three years, to acquire 3,184 developed lots, and
land which will be developed into approximately 4,767 lots, for a total of 7,951
lots, with an aggregate current purchase price of approximately $167.0 million.
Purchase of the land which will be developed is contingent upon satisfaction of
certain requirements by the Company and the sellers, such as zoning approval.
The majority of purchase agreements for developed lots provide for periodic
escalation of the purchase price which, the Company believes, reflects the
developers' carrying cost of the lots. The following table sets forth the
Company's land position in lots (including the Company's interest in joint
ventures and LLC's) by region at December 31, 1996:

OWNED LOTS
-----------------------------------
Under To Be Lots to be
Region Developed Development Developed Purchased Total
----------------------------------------------------------------------------------

Midwest 857 992 1,575 5,195 8,619

Florida 717 123 106 1,432 2,378

Carolina 195 129 152 779 1,255

Washington, D.C. 240 156 463 545 1,404
---------------------------------------------------------------------------------

Total 2,009 1,400 2,296 7,951 13,656
=================================================================================

FINANCIAL SERVICES

Through its wholly-owned subsidiary M/I Financial, the Company offers
fixed and adjustable rate mortgage loans, primarily to buyers of the Company's
homes. M/I Financial has branches in all of the Company's housing markets, with
the exception of Virginia, Maryland and Phoenix. Of the 2,985 Homes Delivered in
1996, in the markets in which M/I Financial operates, M/I Financial provided
financing for 2,309 of these homes, representing approximately $304.7 million of
mortgage loans originated and sold. M/I Financial issues commitments to
customers and closes both conventional and government-insured loans in its own
name. However, in an effort to minimize the risk of financing activities, M/I
Financial generally sells the loans it originates to the secondary market which
provides the funding shortly thereafter. The Company retains a small servicing
portfolio which it currently sub-services with a financial institution.

10
11

At December 31, 1996, the Company was committed to fund $79.8 million
in mortgage loans to home buyers. Of this total, approximately $11.0 million
were adjustable rate loans and $68.8 million were fixed rate loan commitments.
The loans are granted at current market interest rates and the rate is
guaranteed through the transfer of the title of the home to the buyer. The
Company uses hedging methods to reduce its exposure to interest rate
fluctuations between the commitment date of the loan and the time the home
closes. The method to be used is determined at the time of the loan commitment
based on the market conditions and alternatives available. The Company's policy
requires that there be no interest rate risk on loans closed waiting to be sold.
Also according to the policy, the pipeline of committed loans is to be hedged at
70 to 95% of the committed balance which represents the percentage of loans
expected to be closed.

One of the methods the Company uses to hedge the interest rate risk
relative to unclosed loans is to purchase commitments from outside investors to
acquire the loans at the interest rate at which the loan will be closed. The
cost of these purchase commitments is recorded as an asset and is expensed as
loans are closed under the related commitments. Any remaining unused balance is
expensed when the commitment expires, or earlier if the Company determines that
it will be unable to use the entire commitment prior to its expiration date. At
December 31, 1996, the Company had approximately $50.7 million of commitments to
deliver mortgage loans to outside investors.

Another method utilized by the Company to hedge its interest rate risk
is the use of forward sales of mortgage-backed securities whereby the Company
agrees to sell and later repurchase similar but not identical mortgage-backed
securities. Generally, the agreements are fixed-coupon agreements whereby the
interest rate and maturity date of both transactions are approximately the same
and are established to correspond with the closing of the fixed interest rate
mortgage loan commitments of the Company. The difference between the two values
of the mortgage-backed securities in the agreements at settlement provide a
hedge on the interest rate risk exposure in the mortgage loan commitments and is
included in the gain or loss on the sale of the loans to third party investors.
At December 31, 1996, these agreements matured within 90 to 120 days. Securities
under forward sales agreements averaged approximately $15.3 million during 1996
and the maximum amounts outstanding at any month end during 1996 was $27.0
million, the balance at December 31, 1996. Hedging gains of $868,000 were
deferred at year end as the mortgage loans and commitment contracts qualified
for hedge accounting.

To reduce the credit risk associated with accounting losses, which
would be recognized if the counterparties failed completely to perform as
contracted, the Company limits the entities that management can enter into a
commitment with to the primary dealers in the market. The risk of accounting
loss is the difference between the market rate at the time a counterparty fails
and the rate the Company committed to for the mortgage loans and any purchase
commitments recorded with the counterparty.

M/I Financial has been approved by the Department of Housing and Urban
Development and the VA to originate loans insured by the FHA and the VA,
respectively, and has been approved by the Federal Home Loan Mortgage
Corporation ("FHLMC") and by the Federal National Mortgage Association ("FNMA")
as a seller and servicer of mortgages sold to the FHLMC and FNMA.

REGULATION AND ENVIRONMENTAL MATTERS

The home-building industry, including the Company, is subject to
various local, state and federal (including FHA and VA) statutes, ordinances,
rules and regulations concerning zoning, building, design, construction, sales
and similar matters. Such regulation affects construction activities, including
types of construction materials which may be used, certain aspects of building
design, as well as sales activities and other dealings with consumers. The
Company also must obtain certain licenses, permits and approvals from various
governmental authorities for its development activities. In many areas, the
Company is subject to local regulations which impose restrictive zoning and
density requirements in order to limit the number of houses within the
boundaries of a particular locality. The Company seeks to reduce the risk from
restrictive zoning and density requirements by the use of contingent land
purchase contracts which require that the land to be purchased by the Company
meet various requirements, including zoning.

The Company may be subject to periodic delays or may be precluded
entirely from developing projects due to building moratoriums, particularly in
Florida. Generally, such moratoriums relate to insufficient water or sewage

11
12

facilities or inadequate road capacity within specific market areas or
subdivisions. Moratoriums experienced by the Company have not been of long
duration and have not had a material effect on the Company's business.

Each of the states in which the Company operates has adopted a wide
variety of environmental protection laws. These laws generally regulate
developments of substantial size and which are in or near certain specified
geographic areas. Furthermore, these laws impose requirements for development
approvals which are more stringent than those which land developers would have
to meet outside of these geographic areas.

Increasingly stringent requirements may be imposed on home builders and
developers in the future which may have a significant impact on the Company and
the industry. Although the Company cannot predict the effect of these
requirements, such requirements could result in time-consuming and expensive
compliance programs. In addition, the continued effectiveness of licenses or
permits already granted or development approvals already obtained is dependent
upon many factors, some of which are beyond the Company's control.

EMPLOYEES

At March 14, 1997, the Company employed 732 people (including part-time
employees), of which 179 were employed in sales; 303 in construction; and 250 in
management, administrative and clerical positions. The Company considers its
employee relations to be excellent. No employees are represented by a collective
bargaining agreement.

ITEM 2. PROPERTIES

The Company leases all of its offices, including the corporate and
division locations. The Company leased a portion of its office space from M/I
Office Development Company, an Ohio general partnership of which the Irving and
Frankie Schottenstein Trust and the Melvin L. Schottenstein Marital Trust are
partners. See "Item 13. Certain Relationships and Related Transactions." The
Company currently leases a portion of its office space from a limited liability
company, in which the Company has a minority equity interest. See Note 8 to the
Consolidated Financial Statements.

Due to the nature of the Company's business, a substantial amount of
property is held as inventory in the ordinary course of business. See "Item 1.
Business - Available Lots and Land."

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in routine litigation incidental to its
business. Management does not believe that any of this litigation is material to
the financial condition or the results of operations of the Company.

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

During the fourth quarter of 1996, no matters were submitted to a vote
of security holders.

12
13

PART II

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

The information required by this item is incorporated herein by
reference from the Company's Annual Report to Shareholders for the year ended
December 31, 1996.

ITEM 6. SELECTED FINANCIAL DATA

The information required by this item is incorporated herein by
reference from the Company's Annual Report to Shareholders for the year ended
December 31, 1996.

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

The information required by this item is incorporated herein by
reference from the Company's Annual Report to Shareholders for the year ended
December 31, 1996.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is incorporated herein by
reference from the Company's Annual Report to Shareholders for the year ended
December 31, 1996.

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

There have been no changes in or disagreements with accountants during
each of the two years ended December 31, 1996 and 1995.

13
14

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is incorporated herein by
reference to the Company's definitive proxy statement relating to the 1997
Annual Meeting of Shareholders.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated herein by
reference to the Company's definitive proxy statement relating to the 1997
Annual Meeting of Shareholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is incorporated herein by
reference to the Company's definitive proxy statement relating to the 1997
Annual Meeting of Shareholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated herein by
reference to the Company's definitive proxy statement relating to the 1997
Annual Meeting of Shareholders.

14
15

PART IV

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

(a) 1. Financial Statements. The following financial statements of M/I
Schottenstein Homes, Inc. and subsidiary have been incorporated herein
by reference as set forth in Item 8 of Part II of this Annual Report on
Form 10-K:

Independent Auditors' Report

Consolidated Balance Sheets - December 31, 1996 and 1995

Consolidated Statements of Income - Year Ended December 31, 1996, 1995
and 1994

Consolidated Statements of Stockholders' Equity - Year Ended December
31, 1996, 1995 and 1994

Consolidated Statements of Cash Flows - Year Ended December 31, 1996,
1995 and 1994

Notes to Consolidated Financial Statements

2. Financial Statement Schedules.

Page
----

Independent Auditors' Report on financial statement schedules...................... 21

For the Year ended December 31, 1996, 1995 and 1994:
Schedule II - Valuation and Qualifying Accounts ................................ 21

All other schedules have been omitted because the required information
is included in the financial statements or notes thereto, the amounts
involved are not significant, or the required matter is not present.

3. Exhibits.

The following exhibits required by Item 601 of Regulation S-K are filed
as part of this report. For convenience of reference, the exhibits are
listed according to the numbers appearing in the Exhibit Table to Item
601 of Regulation S-K.

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

3.1 Amended and Restated Articles of Incorporation of the
Company, hereby incorporated by reference to Exhibit
3.1 of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993.

3.2 Regulations of the Company, hereby incorporated by
reference to Exhibit 3(l) of the Company's
Registration Statement on Form S-1, Commission File
No. 33-68564.

3.3 Amendment to the Code of Regulations of the Company,
hereby incorporated by reference to Exhibit 4.3 of the
Company's Registration Statement on Form S-8,
Commission File No. 33-76518.

4 Specimen of Stock Certificate, hereby incorporated by
reference to Exhibit 4 of the Company's Registration
Statement on Form S-1, Commission File No. 33-68564.

15
16

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

10.1 Executive Deferred Compensation Plan, hereby
incorporated by reference to Exhibit 10(e) of the
Predecessor's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989.

10.2 Amendments to the Predecessor's Executive Deferred
Compensation Plan dated March 29, 1991 and June 24,
1992, hereby incorporated by reference to Exhibit
19(a) of the Predecessor's Quarterly Report on Form
10-Q for the quarter ended June 30, 1992.

10.3 The Predecessor's Amended and Restated 401(K) Profit
Sharing Plan, consisting of a savings plan adoption
agreement, savings plan and savings plan trust, hereby
incorporated by reference to Exhibit 10(cc) of the
Predecessor's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991.

10.4 P.L. 1992 Limited Partnership Certificate and
Agreement of Limited Partnership dated March 25, 1992,
hereby incorporated by reference to Exhibit 10(vv) of
the Predecessor's Registration Statement on Form S-4,
Commission File No. 33-44914.

10.5 Master Lease Agreement between the Predecessor and M/I
Office Development Company dated August 7, 1992,
hereby incorporated by reference to Exhibit 19(c) of
the Predecessor's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1992.

10.6 First Amendment to Master Lease Agreement between the
Predecessor and M/I Office Development Company dated
September 9, 1992, hereby incorporated by reference to
Exhibit 19(b) of the Predecessor's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1992.

10.7 Second Amendment to Master Lease Agreement between the
Predecessor and M/I Office Development Company dated
October 30, 1992, hereby incorporated by reference to
Exhibit 19(c) of the Predecessor's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1992.

10.8 Third Amendment to Master Lease Agreement between the
Predecessor and M/I Office Development Company dated
March 4, 1996, hereby incorporated by reference to
Exhibit 10.14 of the Company's Annual Report on Form
10-K for the year ended December 31, 1995.

10.9 Cascades 1992 Limited Partnership Certificate and
Agreement of Limited Partnership dated July 20, 1992,
hereby incorporated by reference to Exhibit 10(cc) of
the Predecessor's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992.

16
17

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

10.10 Revolving credit loan, seasonal loan and standby
letter of credit agreement by and among the Company,
Bank One, Columbus, N.A.; The Huntington National
Bank; NBD Bank; National City Bank, Columbus; The
First National Bank of Boston and Bank One, Columbus,
N.A., as agent for the banks, dated September 29,
1995, hereby incorporated by reference to Exhibit 10.1
of the Company's quarterly report on Form 10-Q for the
quarter ended September 30, 1995.

10.11 Amendment No. 1 to revolving credit loan, seasonal
loan and standby letter of credit agreement by and
among the Company, Bank One, Columbus, N.A.; The
Huntington National Bank; The First National Bank of
Chicago; National City Bank of Columbus; The First
National Bank of Boston and Bank One, Columbus, N.A.,
as agent for the banks, dated May 7, 1996, hereby
incorporated by reference to Exhibit 10.1 of the
Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996.

10.12 Second restated revolving credit loan and standby
letter of credit agreement by and among the Company,
Bank One, Columbus, N.A.; The Huntington National
Bank; The First National Bank of Chicago; National
City Bank of Columbus; The First National Bank of
Boston; The Fifth Third Bank of Columbus and Bank One,
Columbus, N.A., as agent for the banks, dated December
30, 1996. (Filed herewith.)

10.13 Amendment No. 1 to second restated revolving credit
loan and standby letter of credit agreement by and
among the Company, Bank One, Columbus, N.A.; The
Huntington National Bank; The First National Bank of
Chicago; National City Bank of Columbus; The First
National Bank of Boston; The Fifth Third Bank of
Columbus and Bank One, Columbus, N.A., as agent for
the banks, dated March 14, 1997. (Filed herewith.)

10.14 Promissory Note by and among the Company, M/I
Financial Corp. and Bank One, Columbus, N.A., dated
November 5, 1993, hereby incorporated by reference to
Exhibit 19(d) of the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1993.

10.15 Revolving Credit Agreement by and among the Company;
M/I Financial Corp. and Bank One, Columbus, N.A.,
dated August 7, 1995, hereby incorporated by reference
to Exhibit 10.1 of the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1995.

10.16 First Amendment to revolving credit agreement by and
among the Company, M/I Financial Corp. and Bank One,
Columbus, N.A., dated May 7, 1996, hereby incorporated
by reference to Exhibit 10.2 of the Company's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996.

10.17 Revolving Credit Agreement by and among the Company;
M/I Financial Corp. and Bank One, Columbus, N.A. dated
July 19, 1996, hereby incorporated by reference to
Exhibit 10.1 of the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996.

17
18

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

10.18 1993 Stock Incentive Plan of the Company, hereby
incorporated by reference to Exhibit 4.4 of the
Company's Registration Statement on Form S-8,
Commission File No. 33-76518.

10.19 Melvin and Irving Schottenstein Family Agreement by
and among the Company and its then shareholders of
record dated October 7, 1993, hereby incorporated by
reference to Exhibit 10(ww) of the Company's
Registration Statement on Form S-1, Commission File
No. 33-68564.

10.20 First Amendment to Melvin and Irving Schottenstein
Family Agreement by and among the Company dated March
17, 1997. (Filed herewith.)

10.21 Consulting and Separation Agreement between the
Company and Eric J. Schottenstein, dated January 5,
1994, hereby incorporated by reference to Exhibit
10.27 of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993.

10.22 Executive Employment Agreement by and between the
Company and Irving E. Schottenstein dated August 9,
1994, hereby incorporated by reference to Exhibit
10(c) of the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1994.

10.23 Company's 1995 President and Chief Executive Officer
Bonus Program, hereby incorporated by reference to
Exhibit 10.29 of the Company's Annual Report on Form
10-K for the year ended December 31, 1994.

10.24 Company's 1995 Corporate Executive Vice President
Bonus Program, hereby incorporated by reference to
Exhibit 10.1 of the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1995.

10.25 Company's 1995 Senior Vice President and Chief
Financial Officer Bonus Program, hereby incorporated
by reference to Exhibit 10.2 of the Company's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995.

10.26 Company's 1996 President and Chief Executive Officer
Bonus Program, hereby incorporated by reference to
Exhibit 10.45 of the Company's Annual Report on Form
10-K for the year ended December 31, 1995.

10.27 Company's 1996 Corporate Executive Vice President
Bonus Program, hereby incorporated by reference to
Exhibit 10.46 of the Company's Annual Report on Form
10-K for the year ended December 31, 1995.

10.28 Company's 1996 Senior Vice President and Chief
Financial Officer Bonus Program, hereby incorporated
by reference to Exhibit 10.47 of the Company's Annual
Report on Form 10-K for the year ended December 31,
1995.

18
19

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

10.29 Investment Home Compensation Plan dated September 1,
1995, hereby incorporated by reference to Exhibit 10.2
of the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995.

10.30 Limited Liability Company Agreement of Northeast
Office Venture, Limited Liability Company dated
November 17, 1995, hereby incorporated by reference to
Exhibit 10.51 of the Company's Annual Report on Form
10-K for the year ended December 31, 1995.

10.31 Lease Agreement by and between the Company and
Northeast Office Venture, Limited Liability Company
dated November 17, 1995, hereby incorporated by
reference to Exhibit 10.52 of the Company's Annual
Report on Form 10-K for the year ended December 31,
1995.

10.32 Note Purchase Agreement between the Company and The
First National Bank of Boston, dated September 30,
1996, hereby incorporated by reference to Exhibit 10.1
of the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996.

13 Annual Report to Shareholders for the year ended
December 31, 1996. (Filed herewith.)

21 Subsidiaries of Company. (Filed herewith.)

23 Consent of Deloitte & Touche LLP. (Filed herewith.)

24 Powers of Attorney. (Filed herewith.)

(b) Reports on Form 8-K
--------------------
No reports on Form 8-K have been filed during the last quarter of the
period covered by this report.

(d) Financial Statement Schedule - See Item 14(a)(2).

19
20

SIGNATURES

Pursuant to the requirements of Section 13 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, in Columbus, Ohio on
this 28th day of March, 1997.

M/I SCHOTTENSTEIN HOMES, INC.
(Registrant)

By: /S/ ROBERT H. SCHOTTENSTEIN
---------------------------------
Robert H. Schottenstein
President

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 indicated on this 28th of March, 1997.

NAME AND TITLE NAME AND TITLE
-------------- --------------

IRVING E. SCHOTTENSTEIN* /S/ KERRII B. ANDERSON
- ------------------------------- -------------------------------------------
Irving E. Schottenstein Kerrii B. Anderson
Chairman of the Board and Senior Vice President, Chief Financial
Chief Executive Officer Officer and Assistant Secretary
(Principal Executive Officer) (Principal Financial and Accounting Officer)

FRIEDRICH K. M. BOHM* NORMAN L. TRAEGER*
- ------------------------------- -------------------------------------------
Friedrich K. M. Bohm Norman L. Traeger
Director Director

HOLLY S. KASTAN* ERIC J. SCHOTTENSTEIN*
- ------------------------------- -------------------------------------------
Holly S. Kastan Eric J. Schottenstein
Director Director

AMY D. SCHOTTENSTEIN* /S/ ROBERT H. SCHOTTENSTEIN
- ------------------------------- -------------------------------------------
Amy D. Schottenstein Robert H. Schottenstein
Director President

STEVEN SCHOTTENSTEIN* LEWIS R. SMOOT, SR.*
- ------------------------------- -------------------------------------------
Steven Schottenstein Lewis R. Smoot, Sr.
Director Director

<FN>
* The above-named Directors and Officers of the Registrant execute this report
by Robert H. Schottenstein and Kerrii B. Anderson, their Attorneys-in-Fact,
pursuant to powers of attorney executed by the above-named Directors and filed
with the Securities and Exchange Commission as Exhibit 24 to the report.

By: /S/ ROBERT H. SCHOTTENSTEIN
--------------------------------------------
Robert H. Schottenstein, Attorney-in-Fact

By: /S/ KERRII B. ANDERSON
--------------------------------------------
Kerrii B. Anderson, Attorney-in-Fact

20
21

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
M/I Schottenstein Homes, Inc.
Columbus, Ohio

We have audited the consolidated financial statements of M/I Schottenstein
Homes, Inc. and its subsidiary as of December 31, 1996 and 1995, and for each of
the three years in the period ended December 31, 1996, and have issued our
report thereon dated February 27, 1997, except with respect to the last
paragraph of Note 2, for which the date is March 15, 1997; such financial
statements and report are included in your 1996 Annual Report to Shareholders
and are incorporated herein by reference. Our audits also included the
consolidated financial statement schedule of M/I Schottenstein Homes, Inc. and
its subsidiary, listed in Item 14. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such consolidated financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

/s/ Deloitte & Touche LLP
- -----------------------------------
Deloite & Touche LLP

Columbus, Ohio
February 27, 1997

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
- -----------------------------------------------

Additions
Balance at Charged to Balance at
Beginning Costs and End of
Description of Year Expenses Deductions Year
- ----------- ------- -------- ---------- ----

Valuation allowance deducted from asset account -
single-family lots, land and land development costs:

Year ended
December 31, 1996 $975,000 $ 1,375,000 $ 0 $ 2,350,000
========== =========== =========== ===========

Year ended
December 31, 1995 $ 0 $ 975,000 $ 0 $ 975,000
========== =========== =========== ===========

Year ended
December 31, 1994 $ 0 $ 0 $ 0 $ 0
========== =========== =========== ===========

21
22

EXHIBIT INDEX

Exhibit Number Description Page No.
- -------------- ------------------------------------------------------- --------

3.2 Regulations of the Company, hereby incorporated by
reference to Exhibit 3(l) of the Company's
Registration Statement on Form S-1, Commission File
No. 33-68564.

3.3 Amendment to the Code of Regulations of the Company,
hereby incorporated by reference to Exhibit 4.3 of the
Company's Registration Statement on Form S-8,
Commission File No. 33-76518.

4 Specimen of Stock Certificate, hereby incorporated by
reference to Exhibit 4 of the Company's Registration
Statement on Form S-1, Commission File No. 33-68564.

10.1 Executive Deferred Compensation Plan, hereby
incorporated by reference to Exhibit 10(e) of the
Predecessor's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989.

22
23

Exhibit Number Description Page No.
- -------------- ------------------------------------------------------- --------

23
24

Exhibit Number Description Page No.
- -------------- ------------------------------------------------------- --------

10.18 1993 Stock Incentive Plan of the Company, hereby
incorporated by reference to Exhibit 4.4 of the
Company's Registration Statement on Form S-8,
Commission File No. 33-76518.

24
25

Exhibit Number Description Page No.
- -------------- ------------------------------------------------------- --------

10.20 First Amendment to Melvin and Irving Schottenstein
Family Agreement by and among the Company dated March
17, 1997. (Filed herewith.)

25
26

Exhibit Number Description Page No.
- -------------- ------------------------------------------------------- --------

10.30 Limited Liability Company Agreement of Northeast
Office Venture, Limited Liability Company dated
November 17, 1995, hereby incorporated by reference to
Exhibit 10.40 of the Company's Annual Report on Form
10-K for the year ended December 31, 1995.

13 Annual Report to Shareholders for the year ended
December 31, 1996. (Filed herewith.)

21 Subsidiaries of Company. (Filed herewith.)

23 Consent of Deloitte & Touche LLP. (Filed herewith.)

24 Powers of Attorney. (Filed herewith.)