Paulson & Company, the Wall Street hedge fund that made billions at the beginning of the recession betting that the sub prime mortgage market would falter, has added another chip to its stack wagering on a housing rebound.

A fund managed by Paulson's affiliates has bought $30 million worth of common and convertible stock in William Lyon Homes. As part of the purchase, Paulson’s fund is likely to get a seat on the Newport Beach, Calif.–based builder.

"We are extremely excited about the recently announced transaction with Paulson," wrote Matthew Zaist, executive vice president at William Lyon in an email to Builder. "The two companies have been sharing information on the home building industry and more specifically the land markets in the western U.S. for the better part of the last year. The more time we spent talking and getting to know each other, the more we realized how similar our outlooks were on the housing recovery in the west and that an investment by Paulson in the company made sense for both parties." The investment funds will be used for "general corporate purposes," Zaist said, adding that those "may include incremental land acquisitions."

A Paulson spokesman, Armel Leslie, declined to comment.

The move is the latest of several Paulson has made in residential land and home building. In August Paulson spent $17 million on 875 acres of entitled but undeveloped land in Lake Las Vegas, a stalled community in Henderson, Nev., several news agencies reported. The master-planned community roughly 17 miles from the Vegas Strip is built around a 320-acre man-made lake and has two hotels, a golf course, a casino, restaurants, and stores.

In 2010 Paulson began plowing money back into housing when it spent $42.4 million for 8,277 raw lots and 22 model homes in Arizona, Colorado, and Nevada that had been owned by the bankrupt TOUSA. The largest asset in the portfolio was Red River, a development 15 miles beyond the outskirts of Phoenix in Pinal County.

Bloomberg reports that Paulson also has invested in land in Florida and Hawaii.

William Lyon came out of bankruptcy in February, only a few short months after filing for a pre-packaged reorganization plan that it worked out ahead of the filing with its lenders. The plan allowed a $206 million infusion from a real estate investment group that was used to restructure the company’s debt and provide capital for operations and land deals.

The company’s sales have improved since exiting bankruptcy. It has been riding the same wave of buoyed orders that other builders are enjoying. It reported new home orders were up 68% in the first six months of 2012 compared with 2011, and sales increased by 27%. Backlog of homes sold but not closed was up 133%.

Teresa Burney is a senior editor for Builder magazine.

Learn more about markets featured in this article: Las Vegas, NV.