Company: RWT-PA
Filing Date: 2025-03-03
Form Type: S-3ASR
Source: 0001104659-25-019828
Chunk: 54

Company: REDWOOD TRUST INC
Filing Date: 2025-03-03
Form: S-3ASR
Chunk 54
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 U.S. federal income tax purposes and that all interest income, original issue discount and market discount from such
CMBS will be qualifying income for the 95% gross income test. In the case of CMBS treated as interests in a REMIC, income derived from
REMIC interests will generally be treated as qualifying income for purposes of the 75% and 95% gross income tests. As discussed above,
if less than 95% of the assets of the REMIC are real estate assets, however, then only a proportionate part of our income derived from
the REMIC interest will qualify for purposes of the 75% gross income test. In addition, some REMIC securitizations include imbedded interest
swap or cap contracts or other derivative instruments that potentially could produce non-qualifying income for the holder of the related
REMIC securities. In the case of CMBS treated as interests in grantor trusts, we would be treated as owning an undivided beneficial ownership
interest in the mortgage loans held by the grantor trust. The interest, original issue discount and market discount on such mortgage
loans would be qualifying income for purposes of the 75% gross income test to the extent that the obligation is secured by real property
and, if an obligation is secured by a mortgage on both real property and personal property, the fair market value of such personal property
does not exceed 15% of the total fair market value of all such property, as discussed above.

We believe that the interest
income that we receive from our mortgage-related investments and securities generally will be qualifying income for purposes of both
the 75% and 95% gross income tests. However, to the extent we own non-REMIC collateralized mortgage obligations or other debt instruments
secured by mortgage loans (rather than by real property) or secured by non-real estate assets, or debt securities that are not secured
by mortgages on real property or interests in real property, the interest income received with respect to such securities generally will
be qualifying income for purposes of the 95% gross income test, but not the 75% gross income test.

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Fee Income

We may receive various fees
in connection with our operations. The fees generally will be qualifying income for purposes of both the 75% and 95% gross income tests
if they are received in consideration for entering into an agreement to make a loan secured by real property and the fees are not determined
by