NVR Development, the land-development subsidiary of McLean home builder NVR L.P., has defaulted on a $13.9 million loan from Columbia First Bank FSB of Arlington, according to the thrift's president, Thomas J. Schaefer.

The thrift has scheduled an Oct. 15 auction of the property that had been bought with the loan.

An NVR L.P. executive who asked not to be identified played down the default, saying it is part of NVR's restructuring that was announced in August. "We view this as part of the orderly process of what we previously announced, which is that NVR Development is renegotiating all of its loans."

Many of NVR's financial problems have been linked to its land-development subsidiary.

NVR, the largest home builder in the Washington area, is laboring under debt that it incurred in the 1980s in buying Ryan Homes and purchasing large amounts of land.

According to one source familiar with NVR, the loan from Columbia First was used to purchase a 135-acre site in Great Falls. NVR Development bought the land through a limited partnership from Copper Land Co. in 1988 and expected to resell it in 67 two-acre lots to NVR's upscale new-home subsidiary, NVHomes. However, when the real estate market slowed, NVHomes was unable to purchase the lots.

In August, Copper Land Co. sued the limited partnership, Great Falls West Associates, contending that it is owed $3.5 million from the sale.

This would be the second land auction involving NVR Development-owned land. On Aug. 31, Provident Bank of Maryland bought 253 lots in a subdivision in Timonium, Md., for $12.3 million after NVR Development defaulted on a loan.

In July, NVR announced that NVR Development had missed interest payments on some loans and was in default on a $10 million line of credit. According to company documents filed with the Securities and Exchange Commission, NVR Development had $128 million in outstanding loans on 15 land-development projects in the Washington area at the end of the second quarter.

It has received default notices on nine of those loans, and the company said it expects to receive additional default notices from other lenders as it seeks to restructure those loans. NVR has emphasized, however, that only $3.4 million of its subsidiary's loans are guaranteed by the parent company, meaning the parent isn't responsible for any losses beyond that amount.

In late August, NVR, the parent organization, reported a $53.5 million second-quarter loss, mostly because it declared that some of the land it holds is now worth less than the company paid for it. It also announced that its bank lenders had agreed to extend the company's working line of credit through February, although reducing it from $248 million to $215 million.

In American Stock Exchange trading yesterday, NVR's partnership units closed at 56 cents, down 7 cents.