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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from___________ to _____________

Commission file number: 000-55601

REDWOOD MORTGAGE INVESTORS IX, LLC

(Exact name of registrant as specified in its charter)

     Delaware

     26-3541068

     (State or other jurisdiction of
incorporation or organization)

     (I.R.S. Employer
Identification Number)


155 Bovet Road, Suite 302, San Mateo, CA		94402
(Address of principal executive offices)		(Zip Code)

(650) 365-5341

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
none

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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

REDWOOD MORTGAGE INVESTORS IX, LLC

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Balance Sheets	3
	Statements of Income	4
	Statements of Changes in Members’ and Manager's Capital	5
	Statements of Cash Flows	7
	Notes to Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42
PART II.	OTHER INFORMATION	44
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45
Signatures		46

Part I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

REDWOOD MORTGAGE INVESTORS IX, LLC

Balance Sheets

June 30, 2025 (unaudited) and December 31, 2024

($ in thousands)


	June 30,			December 31,
ASSETS	2025			2024
Cash, in banks	$	14,883		$	12,058
Loan payments in trust		21			29
Loans held for sale		—			1,065
Loans
Principal		45,185			53,475
Advances		106			54
Accrued interest		611			611
Prepaid interest		—			(11	)
Loan balances secured by deeds of trust		45,902			54,129
Allowance for credit losses		(320	)		(210	)
Loan balances secured by deeds of trust, net		45,582			53,919
Debt issuance costs, net		25			41
Prepaid expenses		32			—
Other receivable		9			3
Total assets	$	60,552		$	67,115

LIABILITIES AND MEMBERS’ CAPITAL

Liabilities
Accounts payable and accrued liabilities	$	31		$	109
Payable to manager (Note 3)		68			93
Line of credit		—			4,000
Total liabilities		99			4,202

Commitments and contingencies (Note 6)

Members’ and manager’s capital, net		63,043			65,607
Receivable from manager (formation loan) (Note 3)		(2,590	)		(2,694	)
Members’ and manager’s capital, net of formation loan		60,453			62,913
Total liabilities and members’ capital	$	60,552		$	67,115

The accompanying notes are an integral part of these unaudited financial statements.

REDWOOD MORTGAGE INVESTORS IX, LLC

Statements of Income

For the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)

($ in thousands)


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Revenue
Interest income	$	1,058		$	1,605		$	2,137		$	3,105
Interest expense		(8	)		(162	)		(35	)		(216	)
Net interest income		1,050			1,443			2,102			2,889
Late fees		2			2			7			6
Gain on sale, loans		—			24			8			24
Total revenue, net		1,052			1,469			2,117			2,919

Provision for credit losses		110			—			110			—

Operations expense
Mortgage servicing fees to Redwood Mortgage Corp.		29			41			61			81
Asset management fees to Redwood Mortgage Corp.		118			118			236			236
Costs from Redwood Mortgage Corp., net (Note 3)		148			72			288			162
Professional services		370			374			902			926
Other		6			17			32			22
Total operations expense		671			622			1,519			1,427
Net income	$	271		$	847		$	488		$	1,492

Net income
Members (99%)	$	268		$	839		$	483		$	1,478
Manager (1%)		3			8			5			14
	$	271		$	847		$	488		$	1,492

The accompanying notes are an integral part of these unaudited financial statements.

REDWOOD MORTGAGE INVESTORS IX, LLC

Statements of Changes in Members’ and Manager’s Capital

For the Three Months Ended June 30, 2025 (unaudited)

($ in thousands)


	Members’ Capital			Manager’s Capital			Unallocated Organization and Offering Expenses			Members’ and Manager’s Capital, net
Balance at March 31, 2025	$	64,600		$	83		$	(409	)	$	64,274
Net income		268			3			—			271
Earnings distributed		(671	)		(3	)		—			(674	)
Redemptions		(834	)		—			—			(834	)
Organization and offering expenses allocated		(56	)		—			56			—
Organization and offering expenses repaid by RMC		—			—			6			6
Balance at June 30, 2025	$	63,307		$	83		$	(347	)	$	63,043

For the Six Months Ended June 30, 2025 (unaudited)

($ in thousands)


	Members’ Capital			Manager’s Capital			Unallocated Organization and Offering Expenses			Members’ and Manager’s Capital, net
Balance at December 31, 2024	$	65,995		$	83		$	(471	)	$	65,607
Net income		483			5			—			488
Earnings distributed		(1,384	)		(5	)		—			(1,389	)
Redemptions		(1,674	)		—			—			(1,674	)
Organization and offering expenses allocated		(113	)		—			113			—
Organization and offering expenses repaid by RMC		—			—			11			11
Balance at June 30, 2025	$	63,307		$	83		$	(347	)	$	63,043

The accompanying notes are an integral part of these unaudited financial statements.

REDWOOD MORTGAGE INVESTORS IX, LLC

Statements of Changes in Members’ and Manager’s Capital

For the Three Months Ended June 30, 2024 (unaudited)

($ in thousands)


	Members’ Capital			Manager’s Capital			Unallocated Organization and Offering Expenses			Members’ and Manager’s Capital, net
Balance at March 31, 2024	$	68,184		$	82		$	(671	)	$	67,595
Net income		839			8			—			847
Earnings distributed		(782	)		(8	)		—			(790	)
Earnings distributed/reinvested (DRIP)		169			—			—			169
Redemptions		(865	)		—			—			(865	)
Organization and offering expenses allocated		(60	)		—			60			—
Organization and offering expenses repaid by RMC		—			—			8			8
Balance at June 30, 2024	$	67,485		$	82		$	(603	)	$	66,964

For the Six Months Ended June 30, 2024 (unaudited)

($ in thousands)


	Members’ Capital			Manager’s Capital			Unallocated Organization and Offering Expenses			Members’ and Manager’s Capital, net
Balance at December 31, 2023		69,018			82			(742	)		68,358
Net income		1,478			14			—			1,492
Earnings distributed		(1,585	)		(14	)		—			(1,599	)
Earnings distributed/reinvested (DRIP)		442			—			—			442
Redemptions		(1,747	)		—			—			(1,747	)
Organization and offering expenses allocated		(121	)		—			121			—
Organization and offering expenses repaid by RMC		—			—			18			18
Balance at June 30, 2024	$	67,485		$	82		$	(603	)	$	66,964

The accompanying notes are an integral part of these unaudited financial statements.

REDWOOD MORTGAGE INVESTORS IX, LLC

Statements of Cash Flows

For the Six Months Ended June 30, 2025 and 2024 (unaudited)

($ in thousands)


	Six Months Ended June 30,
	2025			2024
Operations
Interest income received	$	2,122		$	2,794
Interest expense paid		(75	)		(162	)
Late fees and other loan income		14			(27	)
Operations expense		(1,594	)		(1,398	)
Total cash provided by operations		467			1,207
Investing
Loans funded		(15,002	)		(35,194	)
Principal collected		23,293			19,340
Proceeds from loans sold to non-affiliate, net		1,076			4,068
Advances (made)		(52	)		(5	)
Promissory note repaid by related mortgage fund		—			2,800
Total cash provided by (used in) investing		9,315			(8,991	)
Financing
Members’ and manager's capital
Distributions to members and manager
Earnings distributed, net of DRIP		(1,398	)		(1,089	)
Redemptions, net of early withdrawal penalties (Note 3)		(1,674	)		(1,761	)
Total distributions to members and manager		(3,072	)		(2,850	)
Organization and offering expenses repaid by RMC, net		11			18
Cash (used in) members’ and manager’s capital		(3,061	)		(2,832	)
Promissory note received from related parties		—			940
Promissory note repaid to related parties		—			(940	)
Promissory note received from third party		—			1,500
Promissory note repaid to third party		—			(1,500	)
Line of credit
Advances		2,000			23,250
Repayments		(6,000	)		(15,403	)
Debt issuance costs		—			(66	)
Cash (used in) provided by line of credit		(4,000	)		7,781
Unsecured borrowings received from related mortgage funds		—			2,500
Unsecured borrowings repaid to related mortgage fund		—			(1,200	)
Formation loan collected		104			104
Total cash (used in) provided by financing		(6,957	)		6,353
Net increase (decrease) in cash		2,825			(1,431	)
Cash, beginning of period		12,058			1,712
Cash, end of period	$	14,883		$	281

Non-cash investing activities for the six months ended June 30, 2024 include four loans transferred to held for sale of approximately $4 million. The four loans in 2024 were sold to an unaffiliated bank on May 31, 2024 for the amount owed on the note plus a premium, resulting in a gain of approximately $24 thousand. One loan held for sale of approximately $1.1 million at December 31, 2024 was sold to an unaffiliated bank in January 2025 for the amount owed on the note plus a premium, resulting in a gain of approximately $8 thousand.

Non-cash financing activities for the six months ended June 30, 2025 and 2024 include earnings distributed to the dividend reinvestment plan of $0 and $442 thousand, respectively.

The accompanying notes are an integral part of these unaudited financial statements.

REDWOOD MORTGAGE INVESTORS IX, LLC

Statements of Cash Flows

For the Six Months Ended June 30, 2025 and 2024 (unaudited)

($ in thousands)


	Six Months Ended June 30,
Reconciliation of net income to total cash provided by operations	2025			2024
Net income	$	488		$	1,492
Adjustments to reconcile net income to total cash provided by operations
Gain on sale, loans		(8	)		(24	)
Amortization of debt issuance costs		16			15
Provision for (recovery of) loan losses		110			—
Change in operating assets and liabilities
Loan payments in trust		7			(33	)
Accrued interest		(3	)		(344	)
Prepaid interest		(11	)		34
Prepaid expenses		(32	)		(18	)
Other receivable		3			—
Accounts payable and accrued liabilities		(78	)		121
Payable to related parties		(25	)		(36	)
Total adjustments		(21	)		(285	)
Total cash provided by operations	$	467		$	1,207

The accompanying notes are an integral part of these unaudited financial statements.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

NOTE 1 – ORGANIZATION AND GENERAL

Redwood Mortgage Investors IX, LLC (“RMI IX” or “the company”) is a Delaware limited liability company formed in October 2008 to engage in business as a mortgage lender and investor by making and holding-for-investment mortgage loans secured by California real estate, primarily through first and second deeds of trust.

The company is externally managed by Redwood Mortgage Corp. (“RMC” or “the manager”).

•

RMC is solely responsible for managing the business and affairs of RMI IX, subject to the voting rights of the members on specified matters. The manager acting alone has the power and authority to act for and bind the company.

•

RMC provides personnel and services necessary for RMI IX to conduct its business as the company has no employees of its own.

•

The mortgage loans the company funds and invests in are arranged and generally are serviced by RMC.

In the opinion of management of RMC, the accompanying unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly and accurately the financial information included therein. These unaudited financial statements should be read in conjunction with the audited financial statements included in the company’s Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (SEC). The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the operating results to be expected for the full year.

The rights, duties and powers of the members and manager of the company are governed by the Ninth Amended and Restated Limited Liability Company Operating Agreement of RMI IX (the “Operating Agreement”), as amended by the Second Amendment to the Operating Agreement, the Delaware Limited Liability Company Act and the California Revised Uniform Limited Liability Company Act.

Members representing a majority of the outstanding units may, without the concurrence of the manager, vote to: (i) dissolve the company, (ii) amend the Operating Agreement, subject to certain limitations, (iii) approve or disapprove the sale of all or substantially all of the assets of the company or (iv) remove or replace one or all of the managers. Where there is only one manager, a majority in interest of the members is required to elect a new manager to continue the company business after a manager ceases to be a manager due to its withdrawal.

The following is a summary of certain provisions of the Operating Agreement and is qualified in its entirety by the terms of the Operating Agreement. Members should refer to the Operating Agreement for complete disclosure of its provisions.

The company’s primary investment objectives are to:

•

yield a favorable rate of return from the company’s business of making and/or investing in loans;

•

preserve and protect the company’s capital by making and/or investing in loans secured by California real estate, preferably income-producing properties geographically situated in the San Francisco Bay Area and the coastal metropolitan regions of Southern California; and

•

generate and distribute cash flow from these mortgage lending and investing activities.

Net income (or loss) is allocated among the members according to their respective capital accounts after one percent (1%) of the net income (or loss) is allocated to the manager. The monthly results are subject to subsequent adjustment as a result of quarterly and year-end accounting and reporting.

To determine the amount of cash to be distributed in any specific month, the company relies in part on its forecast of full year profits. At June 30, 2025, cumulative to-date earnings (estimated) allocated to members’ account statements was approximately $1.2 million greater than net income available to members (actual per the general ledger). The difference between earnings allocated to members’ account statements and net income available to members is expected to be offset by future earnings in excess of net distributions in 2026.

The company’s net income, cash available for distribution, and net-distribution rate fluctuate depending on:

•

loan origination volume and the balance of capital available to lend;

•

the current and future interest rates negotiated with borrowers;

•

line of credit advances, repayments and the interest rate thereon;

•

loan sales to unaffiliated third parties, and any gains received thereon;

•

the amount of fees and cost reimbursements to RMC;

•

the timing and amount of other operating expenses, including expenses for professional services;

•

the timing and amount of payments from RMC on the formation loan; and

•

fee and/or cost reimbursements waived, if any, from RMC.

Federal and state income taxes are the obligation of the members, other than the annual California franchise tax and the California LLC gross receipts tax. The tax basis in the net assets differs from book basis by the amount of the allowance for credit losses.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

The ongoing sources of funds for loans are the proceeds (net of redemption of members’ capital and operating expenses) from:

•

loan payoffs;

•

borrowers’ monthly principal and interest payments;

•

line of credit advances;

•

loan sales to unaffiliated third parties; and

•

payments from RMC on the outstanding balance of the formation loan.

Lending and investment guidelines and criteria

The company intends to hold until maturity the loans in which it invests and does not presently intend to invest in mortgage loans primarily for the purpose of reselling such loans in the ordinary course of business; however, the company may sell mortgage loans (or fractional interests therein) when the manager determines that it appears to be advantageous for the company to do so, based upon prevailing and expected interest rates, the length of time that the loan has been held by the company and the expected time to maturity and/or payoff of the loan, the company’s credit risk and concentration risk and the overall investment objectives of the company. Loans sold to third parties may be sold for par, at a premium or, in the case of non-performing or under performing loans, at a discount. Company loans may be sold to third parties or to the manager or its related mortgage funds; however, any loan sold to the manager or a related mortgage fund will be sold for a purchase price equal to the greater of (i) the par value of the loan or (ii) the fair market value of the loan. The manager will not receive commissions or broker fees with respect to loan sales conducted for the company; however, selling loans will increase members’ capital available for investing in new loans for which the manager will earn brokerage fees and other forms of compensation.

The manager has discretion to pay amounts (advances) to third parties on behalf of borrowers to protect the company’s interest in the loan. Advances include, but are not limited to, the payment of interest and principal on a senior lien to prevent foreclosure by the senior lien holder, property taxes, insurance premiums and attorney fees. Advances generally are stated at the amounts paid out on the borrower’s behalf and any accrued interest on amounts paid out, until repaid by the borrower. Interest is accrued daily on principal and advances, if any.

The company’s business is neither dependent on any one, nor concentrated with a few, major borrowers, investors, or lenders.

Distribution policy

Cash available for distribution at the end of each calendar month is allocated ninety-nine percent (99%) to the members and one percent (1%) to the manager. Cash available for distribution means cash flow from operations (excluding repayments for loan principal and other capital transaction proceeds) less amounts set aside for creation or restoration of reserves. The manager may withhold from cash otherwise distributable to the members with respect to any period the respective amounts of organization and offering expenses (“O&O expenses”) allocated to the members’ accounts for the applicable period pursuant to the company’s reimbursement to RMC and allocation to members’ accounts of O&O expenses. The amount otherwise distributable, less the respective amounts of O&O expenses allocated to members, is the net distribution. Pursuant to the terms of the Operating Agreement, cash available for distribution to the members is allocated among the members in proportion to their percentage interests (except with respect to differences in the amounts of O&O expenses allocated to the respective members during the applicable period) and in proportion to the number of days during the applicable month that they owned such percentage interests. (See Note 3 (Manager and Other Related Parties) to the financial statements for a detailed discussion on the allocation of O&O expenses to members’ accounts.)

Cash available for distributions is disbursed at the end of each calendar month. The manager’s allocable share of cash available for distribution is also distributed not more frequently than cash distributions to members.

Distribution reinvestment plan (“DRIP”), closed July 2024

The distribution reinvestment plan (“DRIP”) provision of the Operating Agreement permitted members to elect to have all or a portion of their monthly distributions reinvested in the purchase of additional units. Cash available for distributions allocable to members who had elected to participate in the DRIP was distributed and reinvested in units at each month end. In July 2024, members who had elected to participate in the DRIP were notified by a letter included with their June 2024 monthly statements that the DRIP was closed. As a result of this plan closure, members that previously did not receive quarterly income distributions because of their enrollment in the DRIP received income distribution checks for the quarter ended September 30, 2024 and will continue to receive quarterly income distributions thereafter to the extent of cash available for distribution.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

Liquidity and unit redemption program

There are substantial restrictions on transferability of units, and there is no established public trading and/or secondary market for the units and none is expected to develop. In order to provide liquidity to members, the Operating Agreement includes a unit redemption program, whereby a member may redeem all or part of their units, subject to certain limitations. The price paid for redeemed units is based on the lesser of the purchase price paid by the redeeming member or the member’s capital account balance as of the date of each redemption payment. The company redeems units quarterly, subject to certain limitations as provided for in the Operating Agreement. The maximum number of units which may be redeemed per quarter per individual member shall not exceed the greater of (i) 100 thousand units, or (ii) 25% of the member’s total outstanding units.

Pursuant to the Operating Agreement, eligible redemption requests are to be honored in the following order of priority:

•

first, to redemptions upon the death of a member, subject to a cap of $100 thousand per quarter for each deceased member’s account; and

•

next, to all other eligible redemption requests on a pro rata basis.

Pursuant to the Operating Agreement, the company will not, in any calendar year, redeem more than five percent (5%) and in any calendar quarter one and one-quarter percent (1.25%) of the weighted average number of units outstanding during the twelve (12) month period immediately prior to the date of the redemption; however, the manager may, but is not required to, waive this limitation if it deems it in the best interest of the company. In the event unit withdrawal requests exceed 5% in any calendar year, and are held by the company, units will be redeemed in the order of priority provided in the Operating Agreement. The manager may, in its sole discretion, waive any applicable holding periods or penalties in the event of the death of a member or other exigent circumstances or if the manager believes such waiver is in the best interests of the company. The manager has no present intention to exercise its discretionary power to waive or modify the enforcement of the redemption limitations in the foreseeable future.

The company has not established a cash reserve from which to fund redemptions. The company’s capacity to redeem units upon request is limited by the availability of cash and the company’s cash flow. The manager also has the right, in its sole discretion, at any time, to reject any request for redemption, or to suspend or terminate the acceptance of new redemption requests without prior notice, or to terminate, suspend or amend the unit redemption program upon 30-days’ notice.

Manager’s interest

If a manager is removed, withdrawn or terminated, the company will pay to the manager all amounts then accrued and due to the manager. Additionally, the company will terminate the manager’s interest in the company’s profits, losses, distributions and capital by payment of an amount in cash equal to the then-present fair value of such interest.

Term of the company

The term of the company will terminate on December 31, 2038 unless: (i) the term is further extended by RMC with the affirmative consent of a majority interest of the members; or (ii) the company is earlier terminated pursuant to the Operating Agreement or by operation of law.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Management estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates involve a significant level of uncertainty and have had or are reasonably likely to have a material impact on the company’s financial condition or results of operations. Such estimates relate principally to the determination of the allowance for credit losses (including the fair value of the collateral), and the valuation of real estate owned (“REO”) at acquisition and subsequently (RMI IX has not acquired REO since it commenced operations in 2009). Actual results could differ materially from these estimates.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

Fair value estimates

The fair value of real property (as to loan collateral and REO) is determined by exercise of judgment based on RMC’s management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values, and publicly available information on in-market transactions. Appraisals of commercial real property generally present three approaches to estimating value: 1) market-comparables or sales approach; 2) cost to replace; and 3) capitalized cash flows or income approach.

These approaches may or may not result in a common, single value. The market-comparables approach may yield different values depending on certain basic assumptions, including the consideration of adjustments made for any attributes specific to the real estate.

Management has the requisite familiarity with the markets it lends in generally and of the properties lent on specifically to analyze sales-comparables and assess their suitability/applicability. Management is acquainted with market participants – investors, developers, brokers, and lenders – that are useful, relevant secondary sources of data and information regarding valuation and valuation variability. These secondary sources may have familiarity with and perspectives on pending transactions, successful strategies to optimize value, and the history and details of specific properties – on and off the market – that enhance the process and analysis that is particularly and principally germane to establishing value in distressed markets and/or property types.

GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

Fair values of assets and liabilities are determined based on the fair-value hierarchy established in GAAP. The hierarchy is comprised of three levels of inputs to be used:

•

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

•

Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly in active markets and quoted prices for identical assets or liabilities that are not active, and inputs other than quoted prices that are observable, or inputs derived from or corroborated by market data.

•

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the company’s own assumptions about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the company’s own data.

Cash in banks

Certain of the company’s cash balances in banks exceed federally insured limits. The bank or banks in which funds are deposited are reviewed periodically for their general creditworthiness/investment grade credit rating.

Loans and interest income

Loans are carried at amortized cost, which is generally equal to the unpaid principal balance (principal).

The company may fund a specific loan net of an interest reserve (one to two years) to insure timely interest payments at the inception of the loan. Any interest reserve is amortized over the period that the amount is prepaid. In the event of an early loan payoff, any unapplied interest reserves would be first applied to any accrued but unpaid interest and then as a reduction to the principal.

Payments on loans are applied in the following order: accrued interest, advances, and lastly to principal. Late fees and post-maturity/default interest are recognized in the period received, as collectability is not assured until then. Amounts are calculated based on the terms of the note. Pursuant to California regulatory requirements, borrower payments are deposited into a trust account established by RMC with an independent bank (and are presented on the balance sheet as “Loan payments in trust”). Funds are disbursed to the company’s bank account as collected, which can range from same day for wire transfers and to two weeks after deposit for checks.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

The company funds loans with the intent to hold until maturity. From time to time the company may sell certain loans to unaffiliated third parties. Loans are classified as held-for-sale once a decision has been made to sell loans and the loans to be held-for-sale have been identified. Loans classified as held-for-sale are carried at the lower of amortized cost or fair value.

Performing loans that are maturing or have matured may be renewed at then current market rates of interest and terms for new loans. Such loan extensions are typically deemed to be modifications rather than new originations under GAAP per the manager’s evaluation of the changes to terms of the notes.

Loans are placed on non-accrual status when the manager determines that the primary source of repayment will come from the acquisition by foreclosure (or acquisition by deed in lieu of foreclosure) and subsequent sale of the collateral securing the loan (e.g., a notice of sale is filed and/or when a borrower files for bankruptcy) or when the loan is no longer considered well-secured (i.e., the LTV for the loan based on the estimated net realizable value of the collateral and the total principal, advances and accrued interest (at the note rate) is at or greater than eighty percent (80%), seventy-five percent (75%) for lands outside of metropolitan areas) and the borrower has payments in arrears.

When a loan is placed on non-accrual status, the accrual of interest is discontinued – beginning with the then current month – for accounting purposes only; previously recorded interest is not reversed. A loan may return to accrual status when all delinquent loan payments are cured and the loan becomes current in accordance with the terms of the loan agreement and the loan balance is considered well collateralized.

Allowance for credit losses

The allowance for credit losses is recognized based on current expected lifetime credit losses at the time a loan is originated or acquired. For RMI IX’s loans, generally no loss is expected at origination, given the substantial protective equity (resulting from low LTVs), the predominance of first lien loans, the short duration of the loans, and the property-type and location of the collateral.

The present fair values of the collateral are reassessed periodically (determined by the manager’s assessment of markets and/or property types that are deemed possibly to have changed and the time since the last valuation of the loan’s collateral) and the resultant protective equity for each loan is determined. As used herein, “protective equity” is the dollar amount by which the net realizable value (i.e., fair value less the cost to sell) of the collateral, net of any senior liens and claims, exceeds the loan balance.

Loan balances (as stated on the Balance Sheets, is the sum of principal, advances and interest) are analyzed on a periodic basis for ultimate recoverability, and the allowance for credit losses is adjusted each period for changes in expected credit losses. The ultimate collectability of the amounts owed is reliant on the estimation of the present fair value of the real property collateral and the remaining time to maturity.

The determination of the probability-of-loss (and, accordingly, the determination of the amount of the allowance for expected credit losses) considers current fair value of collateral and the resultant protective equity, the time to maturity, the lien position, current real estate and financial markets, as well as reasonable and supportable forecasts about future economic scenarios and – to a lesser extent – historical loss experience. The forward-looking estimates consider the likelihood that any combination of events would adversely impact economic conditions and real estate markets in California such that the substantial protective equity existing for the loans would no longer be sufficient to collect the recorded amounts of principal, advances and accrued interest due on the loan.

Expected credit losses are determined on a collective (pool) basis when similar risk characteristic(s) exist. When determining risk characteristics to include in its pooling assessment, the following are most determinant.

- LTV: The ratio of the outstanding loan balance to the fair value of the underlying collateral, and thereby the amount of protective equity of the company’s loans, is the most determinant attribute at inception of the loan and ongoing in estimating incurred and lifetime expected credit losses. Further to reducing the risk of loss, the company’s loans are predominantly first mortgages, but second lien deeds of trust are not infrequent nor insignificant.

- Term: The duration (or expected term) of loan is a determinant attribute as the duration of the company’s loans are less than those of other conventional commercial real estate lenders (e.g., institutions, such as banks, insurance companies, private equity firms), typically in the range of one to three years. The expected duration of the loans (and thereby the forecast period) is shortened further as the loans are written without a prepayment penalty.

- Location and property type: The company’s loans are secured by commercial and residential real estate in coastal California metropolitan areas, typically in the Bay Area (including Silicon Valley) but also elsewhere in Northern and Southern California.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

Given the limited number of loans and the short terms for which the loans are written (and the potentially even shorter duration given that the loans are written without a prepayment penalty), at each reporting date the company performs a risk analysis as to real estate market conditions (by property type) in the California areas in which loan collateral is located and performs a loan-by-loan analysis to determine the current net realizable value of the real property collateral and the remaining time to maturity. Loans with similar LTVs are included in pools and the weighted average LTVs in forward periods are forecasted – by lien position – for those loans expected (on a contractual maturity basis) to be then outstanding. No expected extensions, renewals, or modifications are factored in as the company’s loans do not contain renewal options that can be unconditionally exercised by the borrowers. This methodology/analysis determines if there is any amount outstanding in any future period in the contractual lifetime of the loan(s) in which a real estate market decline in values is expected to occur that would be sufficient to put at risk – given the protective equity provided by the excess of the net realizable value of the collateral to the loan balance at origination – the collection in full of amounts owed, including accrued interest and advances, if any, secured by the deeds of trust. For loans (and/or pools of loans) for which the LTVs are such that a loss within the contractual lifetime is expected, loan by loan analyses are undertaken using the likelihood of loss and the percentage (and/or amount) of the loss to determine the expected loss.

In arriving at the market determinations above, the manager consults a range of banking, industry and academic studies and forecasts.

If foreclosure (or negotiation of a deed in lieu of foreclosure) is concluded to be probable, the loan is considered to be collateral-dependent and the recorded investment in the loan would be adjusted to an amount not to exceed the net realizable value of the real estate and other assets to be acquired, net of senior liens/mortgage debt plus the liabilities to be assumed. The determination of whether a loan is determined to be collateral-dependent requires judgment and considers the status of the loan (i.e., legal action is undertaken to enforce the lender’s rights to repayment) and the status of the borrower (e.g. has the borrower filed for bankruptcy protection).

For a loan that is deemed collateral dependent for repayment, a provision for credit losses is recorded, if necessary, to adjust the allowance for credit losses by an amount such that the net carrying amount (the loan balance, net of foregone interest for loans in non-accrual status) would be reduced to the lower of the net realizable value of the related collateral, net of any senior liens or the loan balance.

Uncollectible loans are charged off directly to the allowance for credit losses once it is determined the full amount is not collectible. Any amounts collected after a charge off is deemed a recovery.

Real estate owned (“REO”)

Real estate owned, or REO, is property acquired in full or partial settlement of loan obligations generally through foreclosure and is recorded at acquisition at the property’s fair value less estimated costs to sell, as are other assets acquired and liabilities assumed (or any senior debt the property is taken subject to). The fair value estimates are derived from information available in the real estate markets including similar property, and often require the experience and judgment of third parties such as commercial real estate appraisers and brokers. The estimates figure materially in calculating the value of the property at acquisition, the level of charge to the allowance for credit losses and any subsequent valuation reserves. After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred. REO is analyzed periodically for changes in fair values and any subsequent write down is charged to operations expenses. Any recovery in the fair value subsequent to such a write down is recorded and is not to exceed the value recorded at acquisition. Recognition of gains or losses on the sale of real estate is dependent upon the transaction meeting certain criteria related to the nature of the property and the terms of the sale including potential seller financing.

Debt issuance costs

Debt issuance costs are the fees and commissions incurred in the course of obtaining a line of credit for services from banks, law firms and other professionals and are amortized on a straight-line basis as interest expense over the term of the line of credit.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

Recent accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and are expected to require little, if any, additional disclosure for the company.

NOTE 3 – MANAGER AND OTHER RELATED PARTIES

The Operating Agreement provides for compensation to the manager and for the reimbursement of qualifying costs as detailed below. RMC is entitled to 1% of the net income or loss of the company. RMC – at its sole discretion – collected less than the maximum allowable reimbursement of qualifying costs attributable to RMI IX (Costs from RMC on the Statements of Income), which increased the net income, cash available for distribution, and the net-distribution rate. The cost-reimbursement waivers in the three and six months ended June 30, 2025 and 2024, by RMC were not made for the purpose of providing RMI IX with sufficient funds to satisfy any required level of distributions, as the Operating Agreement has no such required level of distributions, nor to meet withdrawal requests.

Mortgage servicing fees

The manager is entitled to receive a servicing fee of up to one-quarter of one percent (0.25%) annually of secured loan principal. The mortgage servicing fees are accrued monthly on all loans. Remittance to RMC is made monthly unless the loan has been assigned a specific loss reserve, at which point remittance is deferred until the specific loss reserve is no longer required, or the property securing the loan has been acquired by the company.

Asset Management Fees

The manager is entitled to receive a monthly asset management fee for managing RMI IX’s assets, liabilities, and operations in an amount up to three-quarters of one percent (0.75%) annually of the portion of the capital originally committed to investment in mortgages, not including leverage, and including up to two percent (2%) of working capital reserves.

Costs from RMC

The manager is entitled to request reimbursement for operations expense incurred on behalf of RMI IX, including without limitation, RMC’s personnel and non-personnel costs incurred for qualifying business activities, including investor services, accounting, tax and data processing, postage and out-of-pocket general and administration expenses. Qualifying personnel/compensation costs and consulting fees are tracked by business activity, and then costs of qualifying activities are allocated to RMI IX pro-rata based on the percentage of RMI IX’s members’ capital to the total capital of all related mortgage funds managed by RMC. Certain other non-personnel, qualifying costs such as postage and out-of-pocket general and administrative expenses can be tracked by RMC as specifically attributable to RMI IX; other non-personnel, qualifying costs (e.g., RMC’s accounting and audit fees, legal fees and expenses, occupancy, and insurance premiums) are allocated pro-rata based on the percentage of RMI’s members’ capital to total capital of the related mortgage funds managed by RMC.

The amount of qualifying costs attributable to RMI IX incurred by RMC was approximately $148 thousand and $115 thousand in the three months ended June 30, 2025 and 2024, respectively, and $288 thousand and $271 thousand in the six months ended June 30, 2025 and 2024, respectively. The reimbursement of costs waived by RMC was approximately $0 and $43 thousand in the three months ended June 30, 2025 and 2024, respectively, and $0 and $109 thousand in the six months ended June 30, 2025 and 2024, respectively. In October 2024, RMC began collecting the full amount of the qualifying costs attributable to RMI IX to which it is entitled.

Loan administrative fees

The manager is entitled to receive a loan administrative fee of up to one percent (1%) of the principal amount of each new loan funded or acquired for services rendered in connection with the selection and underwriting of loans payable upon the closing or acquisition of each loan. Since August 2015, RMC, at its sole discretion, has waived loan administrative fees on new originations. The total amount of loan administrative fees waived was approximately $110 thousand and $269 thousand in the three months ended June 30, 2025 and 2024, respectively, and $212 thousand and $352 thousand in the six months ended June 30, 2025 and 2024, respectively.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

Formation loan

Commissions for unit sales to new members paid to broker-dealers (“B/D sales commissions”) and premiums paid to certain investors upon the purchase of units were paid by RMC and were not paid directly by RMI IX out of unit-sales proceeds. Instead, RMI IX advanced to RMC amounts sufficient to pay the B/D sales commissions and premiums to be paid to investors. Such advances in total were not to exceed seven percent (7%) of offering proceeds, and when offerings of units to new members ended on April 30, 2019 totaled $5.6 million. The receivable arising from the advances is unsecured and non-interest bearing and is referred to as the “formation loan”.

Formation loan transactions for the six months ended June 30 are presented in the following table ($ in thousands).


	2025			2024
Balance, January 1	$	2,694		$	2,902
Payments received from RMC		(104	)		(104	)
Balance, June 30	$	2,590		$	2,798

The formation loan is being repaid in annual installments of approximately $208 thousand to coincide with the term of the company. The installments may be paid by RMC either in full on December 31st of each calendar year during the term of the company or in four equal quarterly installments. The primary source of repayment of the formation loan are the loan brokerage commissions earned by RMC. The formation loan is forgiven if the manager is removed and RMC is no longer receiving payments for services rendered. As such, the formation loan is presented as contra equity.

Redemptions of members’ capital

Redemptions of members’ capital for the three and six months ended June 30 are presented in the following table ($ in thousands).


	Three Months Ended June 30,				Six Months Ended June 30,
Redemptions	2025		2024		2025		2024
Without penalty	$	834	$	864	$	1,674	$	1,746
With penalty		—		1		—		1
Total	$	834	$	865	$	1,674	$	1,747
Early withdrawal penalties	$	—	$	—	$	—	$	—

Pursuant to the Operating Agreement, unless waived by the manager, the company will not redeem in any calendar year more than five percent (5.0%) and in any calendar quarter one and one-quarter percent (1.25%) of the weighted average number of units outstanding in the twelve (12) month period immediately prior to the date of redemption. The manager has no present intention to exercise its discretionary power to waive or modify the enforcement of the redemption limitation in the foreseeable future.

Redemptions of members' capital received by the manager and unpaid at June 30, 2025 approximated $24.8 million, of which,

•

$24.3 million were received at or prior to March 31, 2025; and

•

$0.5 million were received in the quarter ended June 30, 2025 (and will be eligible at September 30, 2025).

Eligible redemption requests are to be honored in the following order of priority:

•

first, to redemptions upon the death of a member, subject to a cap of $100 thousand per quarter for each deceased member’s account; and

•

next, to all other eligible redemption requests on a pro rata basis.

Organization and offering expenses

The manager is required to be reimbursed for O&O expenses incurred in connection with the organization of the company and the offering of the units of membership interest including, without limitation, attorneys’ fees, accounting fees, printing costs and other selling expenses (other than sales commissions) in a total amount not exceeding 4.5% of the original purchase price of all units (other than DRIP units) sold in all offerings (hereafter, the “maximum O&O expenses”). RMC paid the O&O expenses in excess of the maximum O&O expenses.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

The O&O expenses incurred by RMI IX are allocated to the members as follows – for each of forty (40) calendar quarters or portion thereof after December 31, 2015 that a member holds units (other than DRIP units), the O&O expenses incurred by RMI IX are allocated to and debited from that member’s capital account in an annual amount equal to 0.45% of the member’s original purchase price for those units, in equal quarterly installments of 0.1125% each commencing with the later of the first calendar quarter of 2016 or the first full calendar quarter after a member’s purchase of units, and continuing through forty (40) calendar quarters or the quarter in which such units are redeemed.

Unallocated O&O transactions for the six months ended June 30 are summarized in the following table ($ in thousands).


	2025			2024
Balance, January 1	$	471		$	742
O&O expenses allocated		(113	)		(121	)
O&O expenses paid by RMC(1)		(11	)		(18	)
Balance, June 30	$	347		$	603

(1)

RMC is obligated per the Operating Agreement to repay RMI IX for the amount of unallocated O&O expenses attributed to a member’s capital account if the member redeems prior to the 40 quarterly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of June 30, 2025, to be approximately $5 thousand.

Other related party transactions

Payable to/receivable from related parties

From time to time, in the normal course of business operations, the company may have payables to and/or receivables from related parties. At June 30, 2025, the payable to related parties balance of approximately $68 thousand consisted exclusively of accounts payable to the manager.

At December 31, 2024,the payable to related party balance of approximately $93 thousand consisted exclusively of accounts payable to the manager.

Loan transactions with related parties

In the ordinary course of business, performing loans may be transferred by executed assignment, in-part or in-full, between the RMC managed mortgage funds at par value, which approximates market value.

No loans were transferred to or from related mortgage funds in the six months ended June 30, 2025 and 2024.

NOTE 4 – LOANS

Loans generally are funded at a fixed interest rate with a loan term of up to five years. Loans acquired between related mortgage funds are generally done so within the first six months of origination and are purchased at par value, which approximates fair value. See Note 3 (Manager and Other Related Parties) for a description of loans transferred by executed assignments between the related mortgage funds.

The company’s loans are primarily secured by real estate in coastal California metropolitan areas. The portfolio segments are first and second trust deeds mortgages and the key credit quality indicator is the LTV. First mortgages are predominant, but second lien deeds of trust are not infrequent nor insignificant. First-mortgage loans comprised 88% of the portfolio at June 30, 2025 (88% at December 31, 2024).

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

Secured loans unpaid principal balance (principal)

Secured loan transactions for the three and six months ended June 30, 2025 are summarized in the following table ($ in thousands).


	2025									2025
	Three Months Ended June 30, 2025									Six Months Ended June 30, 2025
	Total			First Trust Deeds			Second Trust Deeds			Total			First Trust Deeds			Second Trust Deeds
Principal, beginning of period	$	48,652		$	43,060		$	5,592		$	53,475		$	46,945		$	6,530
Loans funded		11,021			10,050			971			15,002			14,031			971
Principal collected(1)		(14,488	)		(13,331	)		(1,157	)		(23,292	)		(21,197	)		(2,095	)
Loans transferred from held for sale		—			—			—			1,065			1,065			—
Loans sold to non-affiliate		—			—			—			(1,065	)		(1,065	)		—
Principal, end of period	$	45,185		$	39,779		$	5,406		$	45,185		$	39,779		$	5,406

(1)

Includes principal collected and held in trust at June 30, 2025 of $0, offset by principal collected and held in trust at December 31, 2024 of approximately $1 thousand which was disbursed to the company in January 2025.

During the three and six months ended June 30, 2025, the company renewed one and three maturing (or matured) loans with aggregate principal of approximately $241 thousand and $4.0 million, respectively, which are not included in the activity shown in the table above. The one loan extended in the three months ended June 30, 2025 was extended for 36 months and the three loans extended in the six months ended June 30, 2025 have an average extension period of approximately 17 months and each was current and deemed well collateralized (i.e., the current LTV for the collateral was within lending guidelines as discussed in Note 2 to these financial statements). Interest rates charged to borrowers may be adjusted in conjunction with the loan extensions to reflect current market conditions (in the six months ended June 30, 2025, one extension included a rate increase).

In the three and six months ended June 30, 2025, one loan with principal of approximately $1.1 million was sold to an unaffiliated third party. The company recognized a gain of approximately $8 thousand, net of a commission.

As of June 30, 2025, there were no commitments to lend outstanding and no construction or rehabilitation loans outstanding.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

Loan characteristics

Secured loans had the characteristics presented in the following table ($ in thousands).


	June 30,			December 31,
	2025			2024
Number of secured loans		29			36
First trust deeds		23			27
Second trust deeds		6			9

Secured loans – principal	$	45,185		$	53,475
First trust deeds	$	39,779		$	46,945
Second trust deeds	$	5,406		$	6,530

Secured loans – lowest interest rate (fixed)		7.8	%		7.8	%
Secured loans – highest interest rate (fixed)		12.5	%		12.5	%

Average secured loan – principal	$	1,558		$	1,485
Average principal as percent of total principal		3.4	%		2.8	%
Average principal as percent of members’ and manager’s capital, net		2.5	%		2.3	%
Average principal as percent of total assets		2.6	%		2.2	%

Largest secured loan – principal	$	7,400		$	8,106
Largest principal as percent of total principal		16.4	%		15.2	%
Largest principal as percent of members’ and manager’s capital, net		11.7	%		12.4	%
Largest principal as percent of total assets		12.2	%		12.1	%

Smallest secured loan – principal	$	200		$	185
Smallest principal as percent of total principal		0.4	%		0.3	%
Smallest principal as percent of members’ and manager’s capital, net		0.3	%		0.3	%
Smallest principal as percent of total assets		0.3	%		0.3	%

Number of California counties where security is located		12			13
Largest percentage of principal in one California county		23.4	%		19.7	%

Number of secured loans with prepaid interest		—			1
Prepaid interest	$	—		$	11

As of June 30, 2025, 21 loans with an aggregate principal of approximately $39.3 million provide for monthly payments of interest only, with the principal due at maturity, and 8 loans with an aggregate principal of approximately $5.9 million (representing 13% of the aggregate principal of the company’s loan portfolio) provide for monthly payments of principal and interest, typically calculated on a 30-year amortization, with the remaining principal due at maturity.

As of June 30, 2025, RMI IX’s largest loan with principal of $7.4 million, has an LTV at origination (OLTV) of 59%, and is in first lien position. The loan is secured by an industrial property located in San Diego County, with an interest rate of 12.50% and is scheduled to mature on March 1, 2026.

As of June 30, 2025, there were 6 loans in second lien position. The aggregate principal of these loans is approximately $5.4 million and the weighted average OLTV is 54%. There were three loans in second lien position which were delinquent as of June 30, 2025. One of the three delinquent loans has principal outstanding of $760 thousand (OLTV 70%), is secured by an industrial property located in Santa Clara County, bears interest at a rate of 8.88%, and matured on August 1, 2023. The borrower included this note/debt in a bankruptcy estate in December 2023 (notification received in March 2024) and continues to make monthly payments. Another one of the three delinquent loans has principal outstanding of $1.9 million (OLTV 47%), is secured by an industrial property located in Riverside County, bears interest at a rate of 11.25% and matured on June 1, 2025. The last one of the three delinquent loans has principal outstanding of $600 thousand (OLTV 71%), is secured by a multi-family property located in Los Angeles County, bears interest at a rate of 8.99% and matured on April 1, 2025.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

Lien position/OLTV

At funding, secured loans had the lien positions presented in the following table ($ in thousands).


	June 30, 2025								December 31, 2024
	Loans		Principal			Percent			Loans		Principal			Percent
First trust deeds		23	$	39,779			88	%		27	$	46,945			88	%
Second trust deeds		6		5,406			12			9		6,530			12
Total principal, secured loans		29		45,185			100	%		36		53,475			100	%
Liens due other lenders at loan closing				15,812								19,442
Total debt			$	60,997							$	72,917
Appraised property value at loan closing			$	117,347							$	132,521
OLTV (weighted average)				55.6	%							58.9	%

At the time a loan is funded, the LTV is such that the protective equity in the collateral securing the loan is sufficient to preclude any expected credit losses – principal unless there is a forward period adverse event that is uninsured and/or there are market conditions so adverse (and are other-than-temporary) that the protective equity is reduced to an amount not sufficient to recover the principal owed.

Secured loans, principal by OLTV and lien position at June 30, 2025 are presented in the following table ($ in thousands).


	Secured loans, principal
LTV(2)	First trust deeds		Percent			Count		Second trust deeds		Percent			Count		Total principal		Percent
<40%	$	2,355		5.2	%		6	$	550		1.2	%		1	$	2,905		6.4	%
40-49%		6,450		14.3			2		1,900		4.2			1		8,350		18.5
50-59%		16,866		37.3			6		971		2.2			1		17,837		39.5
60-69%		6,721		14.9			5		—		0.0			0		6,721		14.9
Subtotal <70%		32,392		71.7			19		3,421		7.6			3		35,813		79.3

70-79%		7,387		16.3			4		1,985		4.4			3		9,372		20.7
Subtotal <80%		39,779		88.0			23		5,406		12.0			6		45,185		100.0

≥80%(3)		—		0.0			—		—		0.0			—		—		0.0

Total	$	39,779		88.0	%		23	$	5,406		12.0	%		6	$	45,185		100.0	%

(2)

LTV classifications in the table above are based on principal, advances and interest unpaid at June 30, 2025.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

Property type

Secured loans summarized by property type are presented in the following table ($ in thousands).


	June 30, 2025							December 31, 2024
	Loans		Principal		Percent			Loans		Principal		Percent
Single family(3)		9	$	8,722		19	%		15	$	15,081		28	%
Commercial
Office		2		5,540		12			3		5,725		11
Retail		3		3,606		8			3		2,512		5
Industrial		5		11,661		26			5		10,463		20
Commercial – Other		5		12,710		29			5		14,972		27
Commercial Total		15		33,517		75			16		33,672		63
Multi-family		5		2,946		6			5		4,722		9
Total principal, secured loans		29	$	45,185		100	%		36	$	53,475		100	%

(3)

Single family includes 1-4 unit residential buildings, condominium units, townhouses and condominium complexes. At June 30, 2025, single family consists of six loans with an aggregate principal of approximately $7.5 million that are owner occupied and three loans with an aggregate principal of approximately $1.3 million that are non-owner occupied. At December 31, 2024, single family consisted of eight loans with an aggregate principal of approximately $7.3 million that are owner occupied and seven loans with an aggregate principal of approximately $7.7 million that are non-owner occupied.

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

June 30, 2025 (unaudited)

Distribution of secured loans - principal by California counties

The distribution of secured loans within California by counties – and for one loan secured by a property in Illinois – is presented in the following table ($ in thousands).


	June 30, 2025					December 31, 2024
	Principal		Percent			Principal		Percent
San Francisco Bay Area(4)
San Francisco	$	2,398		5.3	%	$	8,377		15.7	%
San Mateo		5,455		12.1			8,305		15.5
Santa Clara		6,542		14.5			10,074		18.8
Alameda		6,372		14.1			2,021		3.8
Contra Costa		319		0.7			1,220		2.3
Napa		634		1.4			636		1.2
Solano		—		0.0			185		0.3
Marin		400		0.9			400		0.8
		22,120		49.0			31,218		58.4
Other Northern California
Butte		—		0.0			1,203		2.2
Santa Cruz		1,410		3.1			—		0.0
		1,410		3.1			1,203		2.2
Northern California total		23,530		52.1			32,421		60.6

Southern California Coastal
Los Angeles		10,570		23.4			10,533		19.7
Orange		800		1.8

Redwood Mortgage Investors IX 10-Q