Redwood Mortgage Investors IX
05/20/2026 | Press release | Distributed by Public on 05/20/2026 13:16
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the unaudited financial statements and notes thereto, which are included in Item 1 of this report on Form 10-Q, as well as the audited financial statements and the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report"), filed with the U.S. Securities and Exchange Commission (or SEC). The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the operations results to be expected for the full year.
Forward-Looking Statements
Certain statements in this Annual Report on Form 10-Q ("this report") which are not historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), including statements regarding the company's expectations, hopes, intentions, beliefs and strategies regarding the future. Forward-looking statements, which are based on various assumptions (some of which are beyond our control), may be identified by reference to a future period or periods or by use of forward-looking terminology, such as "may," "will," "believe," "expect," "anticipate," "continue," "possible" or similar terms or variations on those terms or the negative of those terms. Forward-looking statements include statements regarding trends in the California real estate market; future interest rates and economic conditions and their effect on the company and its assets; estimates as to the allowance for loan losses; forecasts of future redemptions of units, forecasts of future funding of loans; loan payoffs and the possibility of future loan sales (and the gain thereon, net of expenses) to third parties, if any; future fluctuations in the net distribution rate; and beliefs relating to how the company will be affected by current economic conditions and trends in the financial and credit markets. Actual results may be materially different from what is projected by such forward-looking statements therefore, you should not place undue reliance on forward looking statements, which reflect our view only as of the date hereof.
Factors that might cause such a difference include, but are not limited to, the following:
•
changes in economic conditions, interest rates, or changes in California real estate markets;
•
the impact of competition and competitive pricing for mortgage loans;
•
the manager's ability to make and arrange for loans that fit our investment criteria;
•
whether we will have any future loan sales to unaffiliated third parties, and if we do, any gain, net of expenses, and the volume and timing of loan sales to unaffiliated third parties, which to date have provided only immaterial gains to us;
•
the concentration of credit risks to which we are exposed;
•
increases in payment delinquencies and defaults on our mortgage loans;
•
the timing and dollar amount of financial support, if any, from the manager and the corresponding impact on the net distribution rate to members;
•
changes in government regulation and legislative actions affecting our business; and
•
the impact of wildfires, floods, earthquakes and other natural disasters.
All forward-looking statements and reasons why results may differ included in this Form 10-Q are made as of the date hereof, and we assume no obligation to update any such forward-looking statement or reason why actual results may differ unless required by law.
Overview
Redwood Mortgage Investors IX, LLC ("we", "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"). See Note 3 (Manager and Other Related Parties) to the financial statements included in Part I, Item 1 of this report for a detailed presentation of the company's activities for which related parties are compensated and for other related party transactions.
Cash generated from loan payoffs and borrower payments of principal and interest is used for operating expenses, distributions to members and unit redemptions. The cash flow, if any, in excess of these uses and advances on the line of credit is reinvested in new loans.
Pursuant to the Operating Agreement, the company will not, in any calendar year, redeem more than five percent (5%) (or in any calendar quarter 1.25%) of the weighted average number of units outstanding during the twelve-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 (or 1.25% in any calendar quarter), 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, also waive any other holding periods or penalties applicable to redemptions 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 limitation in the foreseeable future. See "Results of Operations - Redemptions of members' capital" below for a detailed presentation on capital redemption limitations.
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 March 31, 2026, the difference between earnings allocated to members' capital accounts and net income available to members was approximately $279 thousand, and is expected to be offset by future earnings in excess of net distributions in 2026 resulting from the collection of foregone interest, late fees and post-maturity interest.
See Note 1 (Organization and General) to the financial statements included in Part I, Item 1 of this report for additional detail on the organization and operations of RMI IX which detail is incorporated by this reference into this Item 2.
Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for credit losses, including determining the fair value of the collateral, and the valuation of real estate owned. Actual results could differ significantly from these estimates.
Accounting estimates are an integral part of our financial statements. For a summary of our critical accounting estimates, see "Critical Accounting Estimates" in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Annual Report.
There have been no material changes to our critical accounting estimates since our 2025 Annual Report.
Results of Operations
The following discussion describes our results of operations for the three months ended March 31, 2026.
Key Performance Indicators
Key performance indicators as of and for the three months ended March 31, 2026 and 2025 are presented in the following table ($ in thousands).
|
2026 |
2025 |
||||||||
|
Members' capital, gross - end of period balance |
$ |
61,093 |
$ |
64,600 |
|||||
|
Members' capital, gross - average daily balance |
$ |
61,900 |
$ |
65,963 |
|||||
|
Member redemptions(1) |
$ |
799 |
$ |
840 |
|||||
|
Secured loans principal - end of period balance |
$ |
58,100 |
$ |
48,652 |
|||||
|
Secured loans principal - average daily balance |
$ |
58,931 |
$ |
48,738 |
|||||
|
First trust deeds |
28 |
24 |
|||||||
|
Principal - first trust deeds |
$ |
49,725 |
$ |
43,060 |
|||||
|
Weighted average OLTV - first trust deeds(2) |
54.4 |
% |
61.6 |
% |
|||||
|
Second trust deeds |
6 |
7 |
|||||||
|
Principal - second trust deeds |
$ |
8,375 |
$ |
5,592 |
|||||
|
Weighted average OLTV - second trust deeds(2) |
57.0 |
% |
57.2 |
% |
|||||
|
Interest income |
$ |
1,404 |
$ |
1,079 |
|||||
|
Portfolio interest rate(3) |
10.2 |
% |
9.8 |
% |
|||||
|
Effective rate(4) |
9.5 |
% |
8.9 |
% |
|||||
|
Line of credit - end of period balance |
$ |
1,900 |
$ |
- |
|||||
|
Line of credit - average daily balance(5) |
$ |
1,604 |
$ |
3,874 |
|||||
|
Interest expense |
$ |
37 |
$ |
27 |
|||||
|
Interest rate - line of credit(5) |
7.2 |
% |
7.8 |
% |
|||||
|
Provision for credit losses |
$ |
- |
$ |
- |
|||||
|
Total operations expense |
$ |
720 |
$ |
848 |
|||||
|
Net income |
$ |
655 |
$ |
217 |
|||||
|
Percent of average members' capital(6)(7) |
4.2 |
% |
1.3 |
% |
|||||
|
Member distributions |
$ |
515 |
$ |
713 |
|||||
|
Percent of average members' capital(6)(8) |
3.3 |
% |
4.3 |
% |
|||||
(1)
Redemption requests at March 31, 2026 were approximately $26.7 million and are carried forward to subsequent quarters until paid. See Note 3 (Manager and Other Related Parties) to the financial statements included in Part I, Item 1 of this report for a detailed discussion of redemptions of members' capital.
(2)
The LTVs use the fair value at origination of the loans (OLTV). See table below for LTVs based on updated collateral fair market values and loan balances
(3)
Stated note interest rate, weighted daily average (annualized).
(4)
Percent of secured loans - average daily balance (annualized).
(5)
Interest rate of Line of Credit, weighted daily average (annualized). See Note 5 (Line of Credit) to the financial statements included in Part 1, Item 1 of this report for a presentation of the activity and discussion of the terms and conditions of the loan agreement.
(6)
Percent of members' capital, gross - average daily balance (annualized).
(7)
Percent based on the net income available to members (excluding 1% allocated to manager).
(8)
Members Distributions is net of O&O expenses allocated to members' accounts during the year.
Redemptions of members' capital
The Operating Agreement provides for a unit redemption program, whereby a member may redeem all or part of their units, subject to certain limitations. For more information about the unit redemption program, see Note 1 (Organization and General) - "Liquidity and unit redemption program" to the financial statements included in Part I, Item 1 of this report.
Redemptions of members' capital received by the manager and unpaid at March 31, 2026 approximated $26.7 million, of which,
•
$24.9 million were received at or prior to December 31, 2025; and
•
$1.7 million were received in the quarter ended March 31, 2026 (and will be eligible at June 30, 2026).
Secured loans
Loan origination for three months ended March 31, 2026 increased by approximately $2.6 million compared to the same period in 2025. This increase is primarily due to utilization of the line of credit.
Secured loans, principal, advances and interest unpaid, by LTV and lien position
LTVs presented in the following tables have been updated for changes in fair values of the collateral as indicated by appraisals, broker opinion of value, or other external market evidence received by the manager after the origination of the loan, if any.
Secured loans, principal by LTV and lien position at March 31, 2026 are presented in the following table ($ in thousands).
|
Secured loans, principal |
|||||||||||||||||||||
|
LTV(1) |
First trust |
Percent(2) |
Second trust |
Percent(2) |
Total |
Percent(2) |
|||||||||||||||
|
<40% |
$ |
6,395 |
11.0 |
% |
$ |
1,100 |
1.9 |
% |
$ |
7,495 |
12.9 |
% |
|||||||||
|
40-49% |
1,953 |
3.4 |
- |
0.0 |
1,953 |
3.4 |
|||||||||||||||
|
50-59% |
20,897 |
35.9 |
4,800 |
8.3 |
25,697 |
44.2 |
|||||||||||||||
|
60-69% |
11,821 |
20.3 |
1,250 |
2.2 |
13,071 |
22.5 |
|||||||||||||||
|
Subtotal <70% |
41,066 |
70.6 |
7,150 |
12.4 |
48,216 |
83.0 |
|||||||||||||||
|
70-79% |
7,669 |
13.2 |
- |
0.0 |
7,669 |
13.2 |
|||||||||||||||
|
Subtotal <80% |
48,735 |
83.8 |
7,150 |
12.4 |
55,885 |
96.2 |
|||||||||||||||
|
≥80%(3) |
990 |
1.7 |
1,225 |
2.1 |
2,215 |
3.8 |
|||||||||||||||
|
Total |
$ |
49,725 |
85.5 |
% |
$ |
8,375 |
14.5 |
% |
$ |
58,100 |
100.0 |
% |
|||||||||
(1)
LTV classifications in the table above are based on the sum of principal, advances and interest unpaid at March 31, 2026.
(2)
Percent of secured loans principal, end of period balance.
(3)
See the table below for specific details of the loans that have an LTV over 80%.
Secured loans (loan balance), with payments in arrears, by LTV and lien position at March 31, 2026 are presented in the following table ($ in thousands).
|
Secured loans with payments in arrears, principal |
|||||||||||||||||||||
|
LTV(4) |
First trust |
Percent(5) |
Second trust |
Percent(5) |
Total |
Percent(5) |
|||||||||||||||
|
60-69% |
8,570 |
14.8 |
1,250 |
2.2 |
9,820 |
17.0 |
|||||||||||||||
|
70-79% |
6,223 |
10.7 |
- |
0.0 |
6,223 |
10.7 |
|||||||||||||||
|
Subtotal <80% |
14,793 |
25.5 |
1,250 |
2.2 |
16,043 |
27.7 |
|||||||||||||||
|
≥80% |
990 |
1.7 |
1,225 |
2.1 |
2,215 |
3.8 |
|||||||||||||||
|
Total |
$ |
15,783 |
27.2 |
% |
$ |
2,475 |
4.3 |
% |
$ |
18,258 |
31.5 |
% |
|||||||||
(4)
LTV classifications in the table above are based on the sum of principal, advances and interest unpaid at March 31, 2026.
(5)
Percent of secured loans principal, end of period balance.
The $18.3 million of loans with payments in arrears is comprised of the following nine loans:
•
In San Francisco (LTV 106%, principal $990 thousand), a three-unit mixed use building (first lien deed of trust) - The loan matured in December 2025, and the borrower is 180 days or more delinquent on monthly payments.
•
In Los Angeles (LTV 83%, principal $625 thousand), a multi-family building (second lien deed of trust) - The loan matured in August 2025 and the borrower continues making monthly payments. The loan paid off in April 2026.
•
In Los Angeles (LTV 89%, principal $600 thousand), a multi-family building (second lien deed of trust) - The loan matured in April 2025 and the borrower continues making monthly payments.
•
In Palo Alto, Santa Clara County (LTV 78%, principal $4.7 million), an office building with approved plans for a senior living housing facility (first lien deed of trust) - The loan matured in October 2023. On March 31, 2026, the borrower and the company entered into an agreement (the "2026 agreement"), pursuant to which the borrower agreed to a payment plan consisting of ten (10) weekly payments of $20 thousand (commencing March 31, 2026 to June 2, 2026) and payment in full of the note balance on or before June 17, 2026.
•
In Napa (LTV 72%, principal $633 thousand), a single-family residence (first lien deed of trust) - The loan matured in December 2024, and the borrower is 180 days or more delinquent on monthly payments.
•
In Los Angeles (LTV 69%, principal $1.3 million), an office building (second lien deed of trust) - The loan matured in December 2025, and the borrower continues making monthly payments.
•
In Livermore, Alameda County (LTV 65%, principal $1.2 million), a commercial condominium (first lien deed of trust) - The loan matured in October 2025.
•
In San Diego (LTV 62%, principal $7.4 million), an industrial building (first lien deed of trust) -The borrower is 90-179 days delinquent on monthly payments. The loan matured in March 2026.
•
In San Francisco (LTV 75%, principal $858 thousand), a warehouse building (first lien deed of trust) - The loan matured in January 2026, and the borrower continues making monthly payments.
Payments in arrears for secured loans (i.e., principal and interest payments past due 30 or more days) for the above nine secured loans at March 31, 2026 totaled approximately $18.8 million of which approximately $18.3 million was principal and approximately $514 thousand was accrued interest. As noted above, a loan with principal of $4.7 million has an agreement dated March 2026, that provided for ten (10) weekly payments of $20 thousand (commencing March 31, 2026 to June 2, 2026) and final payment in full of the note balance on or before June 17, 2026.
Secured loans (loan balance) past maturity of approximately $18.3 million comprised of the same nine loans with payments in arrears.
See Note 4 (Loans) to the financial statements included in Part I, Item 1 of this report for detailed presentations as to the secured loan portfolio, including loan characteristics, scheduled maturities, delinquency and payments in arrears, loans in non-accrual status and the allowance for credit losses.
Performance overview/net income 2026 v. 2025
Net income available to members as a percent of members' capital, gross - average daily balance (annualized) was 4.2% and 1.3% for the three months ended March 31, 2026 and 2025, respectively. Net income increased approximately $438 thousand for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to an increase in interest income of approximately $325 thousand and a decrease in operations expenses of approximately $128 thousand, partially offset by an increase in interest expense of approximately $10 thousand. The portfolio interest rate on secured loans has increased by 0.4 percentage points to 10.2% since March 31, 2025. The effective rate increased by 0.60 percentage points to 9.5% due to a decrease in foregone interest.
Analysis and discussion of income from operations 2026 v. 2025 (three months ended)
Significant changes to net income for the three months ended March 31, 2026 and 2025 are summarized in the following table ($ in thousands).
|
Net interest |
Provision for |
Operations |
Net |
|||||||||||||
|
Three months ended |
||||||||||||||||
|
March 31, 2026 |
$ |
1,367 |
- |
720 |
$ |
655 |
||||||||||
|
March 31, 2025 |
1,052 |
- |
848 |
217 |
||||||||||||
|
Change |
$ |
315 |
- |
(128 |
) |
$ |
438 |
|||||||||
|
Change |
||||||||||||||||
|
Increase in secured loans principal - average daily balance |
$ |
227 |
- |
4 |
$ |
223 |
||||||||||
|
Effective rate |
98 |
- |
- |
98 |
||||||||||||
|
Decrease in members' capital - average daily balance |
- |
- |
(8 |
) |
8 |
|||||||||||
|
Increase in RMI IX capital as a percent of total related mortgage funds capital managed by RMC |
- |
- |
22 |
(22 |
) |
|||||||||||
|
Interest on line of credit |
(10 |
) |
- |
- |
(10 |
) |
||||||||||
|
Late fees |
- |
- |
- |
3 |
||||||||||||
|
Gain on sale, loans |
- |
- |
- |
(8 |
) |
|||||||||||
|
Decrease in allocable expenses from RMC |
- |
- |
(19 |
) |
19 |
|||||||||||
|
REO acquired |
- |
- |
20 |
(20 |
) |
|||||||||||
|
Tax compliance services |
- |
- |
(3 |
) |
3 |
|||||||||||
|
Legal services |
- |
- |
(30 |
) |
30 |
|||||||||||
|
Independent contractors |
- |
- |
9 |
(9 |
) |
|||||||||||
|
Audit services |
- |
- |
(120 |
) |
120 |
|||||||||||
|
Other |
- |
- |
(3 |
) |
3 |
|||||||||||
|
Change |
$ |
315 |
- |
(128 |
) |
$ |
438 |
|||||||||
The table above presents only the significant changes to net income for the period, and is not intended to cross-foot.
Net interest income
Net interest income increased by approximately $315 thousand (29.9%) for the three months ended March 31, 2026 compared to the same period in 2025. The increase is due to an increase in interest income of approximately $325 thousand due to an increase in the average daily balance - secured loans of approximately $10.2 million (20.9%), partially offset by an increase in interest expense due to utilizing the line of credit. See Key performance indicators table included above in Item 2 of this report for specific details of average interest rate on the line of credit.
Provision/allowance for credit losses
See Note 4 (Loans) to the financial statements included in Part I, Item 1 of this report for a detailed presentation of the provision/allowance for credit losses.
Operations expense
Significant changes to operations expense for the three months ended March 31, 2026 and 2025 are summarized in the following table ($ in thousands).
|
Mortgage |
Asset |
Costs |
Professional |
REO holding costs |
Other |
Total |
||||||||||||||||||||||
|
Three months ended |
||||||||||||||||||||||||||||
|
March 31, 2026 |
$ |
36 |
110 |
143 |
396 |
20 |
15 |
$ |
720 |
|||||||||||||||||||
|
March 31, 2025 |
32 |
118 |
140 |
532 |
- |
26 |
848 |
|||||||||||||||||||||
|
Change |
$ |
4 |
(8 |
) |
3 |
(136 |
) |
20 |
(11 |
) |
$ |
(128 |
) |
|||||||||||||||
|
Change |
||||||||||||||||||||||||||||
|
Increase in secured loans principal - average daily balance |
$ |
4 |
- |
- |
- |
- |
- |
$ |
4 |
|||||||||||||||||||
|
Decrease in members' capital - average daily balance |
- |
(8 |
) |
- |
- |
- |
- |
(8 |
) |
|||||||||||||||||||
|
Increase in RMI IX capital as a percent of total related mortgage funds capital managed by RMC |
- |
- |
22 |
- |
- |
- |
22 |
|||||||||||||||||||||
|
Decrease in allocable expenses from RMC |
- |
- |
(19 |
) |
- |
- |
- |
(19 |
) |
|||||||||||||||||||
|
REO acquired |
- |
- |
- |
- |
20 |
- |
20 |
|||||||||||||||||||||
|
Tax compliance services |
- |
- |
- |
(3 |
) |
- |
- |
(3 |
) |
|||||||||||||||||||
|
Legal services |
- |
- |
- |
(30 |
) |
- |
- |
(30 |
) |
|||||||||||||||||||
|
Independent contractors |
- |
- |
- |
9 |
- |
- |
9 |
|||||||||||||||||||||
|
Audit services |
- |
- |
- |
(120 |
) |
- |
- |
(120 |
) |
|||||||||||||||||||
|
Other |
- |
- |
- |
8 |
- |
(11 |
) |
(3 |
) |
|||||||||||||||||||
|
Change |
$ |
4 |
(8 |
) |
3 |
(136 |
) |
20 |
(11 |
) |
$ |
(128 |
) |
|||||||||||||||
Mortgage servicing fees
The increase in mortgage servicing fees of approximately $4 thousand for the three months ended March 31, 2026 as compared to the same period in 2025 was due to an increase in the average daily balance - secured loans of approximately $10.2 million at the annual mortgage servicing fee to RMC of 0.25%.
Asset Management Fees
The decrease in asset management fees of approximately $8 thousand was due to a decrease in the members' capital base at year-end December 31, 2025 compared to year-end December 31, 2024. The decrease in the members' capital base is due to quarterly redemptions made. Members' capital is expected to continue to decrease as pending redemptions are paid out. See Redemptions in members' capital above for detail on redemption requests received but unpaid as of March 31, 2026. The asset management fee is computed using the prior year end member's capital base which is the then fair value of the company's loans plus working capital reserves less outstanding debt.
Costs from RMC, net
RMC 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.
The amount of qualifying costs attributable to RMI IX incurred by RMC was approximately $143 thousand and $140 thousand in the three months ended March 31, 2026 and 2025, respectively.
Professional Services
Professional services consist primarily of information technology, legal, audit and tax compliance, and consulting expenses.
The decrease in professional services of approximately $136 thousand for the three months ended March 31, 2026 compared to the same period in 2025 was due to reduced legal services and timing of the audit services, partially offset by an increase in fees to independent contractors.
Cash flows and liquidity
Cash flows by business activity for the three months ended March 31, 2026 and 2025 are presented in the following table ($ in thousands).
|
2026 |
2025 |
||||||||
|
Members' capital |
|||||||||
|
Distributions to members, net of DRIP |
$ |
(527 |
) |
$ |
(768 |
) |
|||
|
Redemptions, net |
(799 |
) |
(840 |
) |
|||||
|
O&O expenses repaid by RMC |
3 |
6 |
|||||||
|
Cash - members' capital, net |
(1,323 |
) |
(1,602 |
) |
|||||
|
Borrowings |
|||||||||
|
Line of credit borrowings (payments), net |
1,900 |
(4,000 |
) |
||||||
|
Interest paid |
(17 |
) |
(76 |
) |
|||||
|
Debt issuance costs paid |
(66 |
) |
- |
||||||
|
Cash - borrowings, net |
1,817 |
(4,076 |
) |
||||||
|
Cash - members' capital and borrowings, net |
494 |
(5,678 |
) |
||||||
|
Loan principal/advances/interest |
|||||||||
|
Loans funded & advances, net |
(6,706 |
) |
(3,993 |
) |
|||||
|
Principal collected |
3,953 |
8,804 |
|||||||
|
Loans sold to non-affiliate |
1,750 |
1,076 |
|||||||
|
Interest received, net |
1,162 |
1,073 |
|||||||
|
Late fees |
33 |
(17 |
) |
||||||
|
Cash - loans, net |
192 |
6,943 |
|||||||
|
Formation loan collected |
156 |
52 |
|||||||
|
Operations expense |
(269 |
) |
(857 |
) |
|||||
|
REO holding costs |
(130 |
) |
- |
||||||
|
Net change in cash |
$ |
443 |
$ |
460 |
|||||
|
Cash, end of year |
$ |
1,005 |
$ |
12,518 |
|||||
Distributions to members
To determine the amount of cash to be distributed in any month, the company relies in part on its forecast of full-year net income, which takes into account the difference between the forecasted net income for the remainder of the year and actual results in the year to date and the requirement to maintain a cash reserve. As of March 31, 2026, the difference between earnings allocated to members' capital accounts and net income available to members was approximately $279 thousand, and is expected to be offset by future earnings in excess of net distributions in 2026 resulting from the collection of foregone interest, late fees and post-maturity interest.
Liquidity, borrowings and capital resources
The ongoing sources of funds are the proceeds from:
•
loan payoffs;
•
borrowers' monthly principal and interest payments;
•
line of credit advances (to fund secured loans only);
•
loan sales to unaffiliated third parties; and
•
payments from RMC on the outstanding balance of the formation loan.
The company's cash balances are maintained at levels sufficient to support on-going operations and satisfy obligations, without reducing loan fundings or suspending distributions or redemptions, although these options are available if future circumstances warrant. If at any time the company has fully deployed the capital available to lend, the manager would continue to utilize loan assignments to related mortgage funds and loan sales to unaffiliated third parties to maintain liquidity of the company. The manager believes these sources of funds will provide sufficient funds to adequately meet financial obligations for the next twelve months.
In addition, the company has a $10 million revolving line of credit (subject to a borrowing base) and term loan facility which expires on March 13, 2028. Advances on the line of credit are to be used exclusively to fund secured loans. The credit agreement for the facility contains various covenants, including a credit payment delinquency rate (measured quarterly), which, if exceeded, would not allow the company to make further borrowings under the facility until the company regains compliance. See Note 5 (Line of Credit) to the financial statements included in Part II, Item 8 of this report for a detailed presentation of the activity and discussion on additional terms and provisions of the credit agreement (and subsequent modifications), which presentation is incorporated by this reference into this Item II. There can be no assurance that the company will have adequate funds from which loans may be funded.
See Note 5 (Line of Credit) to the financial statements included in Part I, Item 1 of this report for a detailed presentation of the activity and discussion on the terms and provisions of the credit agreement (and subsequent modifications), which presentation is incorporated by this reference into this Item 2.
Contractual obligations and commitments
At March 31, 2026, the company had no construction or rehabilitation loans outstanding, no loan commitments pending, and no off-balance sheet arrangements as such arrangements are not permitted by the Operating Agreement. Note 3 (Manager and Other Related Parties) to the financial statements included in Part I, Item 1 of this report presents detailed discussion of the company's contractual obligations to RMC.
Redwood Mortgage Investors IX published this content on May 20, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 20, 2026 at 19:17 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]