##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 
 FORM 10-Q
  þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarter ended June 30, 2008
 or
 o
    
    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 000-52611
 IMH SECURED LOAN FUND, LLC
  Delaware
    
    81-0624254(State or other jurisdiction of incorporation or 
organization)
    
    (I.R.S. Employer Identification Number)
 11333 N. Scottsdale Rd #160
Scottsdale, Arizona, 85254
 (602) 889-3410
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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2




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##### 



IMH SECURED LOAN FUND, LLC
QUARTERLY REPORT ON FORM 10-Q
INDEX
 PART I  FINANCIAL INFORMATIONItem 1.
    
    Financial Statements.Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007
    
    
    4Consolidated Statements of Net Earnings for the Six and Three Months
Ended June 30, 2008 and 2007
    
    
    5Consolidated Statement of Members Equity for the Six Months Ended
June 30, 2008
    
    
    6Consolidated Statements of Cash Flows for the Six Months Ended June
30, 2008 and 2007
    
    
    7Notes to Consolidated Financial Statements
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations.
    
    
    17Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
    
    
    46Item 4T.
    
    Controls and Procedures.
    
    
    46PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings.
    
    
    47Item 1A.
    
    Risk Factors.
    
    
    47Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    49Item 6.
    
    Exhibits.
    
    
    51Signatures
    
    
    52Index to Exhibits
    
    
    53EX-31.1EX-31.2EX-32.1
  3




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PART I
 FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 IMH SECURED LOAN FUND, LLC
 
 Consolidated Balance Sheets
 (In thousands, except unit data)
 As of June 30,
    
    
    As of December 31,2008
    
    
    2007(Unaudited)ASSETSCash and Cash Equivalents
    
    $
    108,060
    
    
    $
    73,604Mortgage Loans:Mortgage Loan Note Obligations
    
    
    665,655
    
    
    
    578,925Less Undisbursed Portion of Loans-in-
process and Interest Reserves
    
    
    (115,970
    )
    
    
    (68,128
    )Principal Outstanding
    
    
    549,685
    
    
    
    510,797Less Allowance for Credit Loss
    
    
    (1,900
    )
    
    
    (1,900
    )Mortgage Loans, Net
    
    
    547,785
    
    
    
    508,897Accrued Interest and Other Receivables
    
    
    9,401
    
    
    
    8,058Real Estate Held for Development:Acquired through Foreclosure
    
    
    38,629
    
    
    
    Purchased for Investment
    
    
    7,432
    
    
    
    Deposits and Other Assets
    
    
    93
    
    
    
    Total Assets
    
    $
    711,400
    
    
    $
    590,559LIABILITIESPayables to Fund Manager
    
    $
    150
    
    
    $
    316Member Investments Pending Activation
    
    
    4,002
    
    
    
    4,491Redemptions Payable to Members
    
    
    27,246
    
    
    
    6,114Distributions Payable to Members
    
    
    2,734
    
    
    
    2,183Unearned Income and Other Funds Held
    
    
    38
    
    
    
    622Total Liabilities
    
    
    34,170
    
    
    
    13,726MEMBERS EQUITYRetained Earnings
    
    
    405
    
    
    
    49Members Equity  $10,000 per unit stated value,
authorized units set at discretion of the Manager 
67,682 and 57,678 units issued and outstanding at
June 30, 2008 and December 31, 2007, respectively
    
    
    676,825
    
    
    
    576,784Total Members Equity
    
    
    677,230
    
    
    
    576,833Commitments and Contingent LiabilitiesTotal Liabilities and Members Equity
    
    $
    711,400
    
    
    $
    590,559
 The accompanying notes are an integral part of these statements
 4




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IMH SECURED LOAN FUND, LLC
 
 Consolidated Statements of Net Earnings
 (Unaudited)
 (In thousands, except unit and per unit data)
 Six Months Ended June 30,
    
    
    Three Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007INTEREST AND FEE INCOMEMortgage Loans
    
    $
    32,198
    
    
    $
    20,720
    
    
    $
    16,468
    
    
    $
    11,366Investments and Money
Market Accounts
    
    
    1,322
    
    
    
    467
    
    
    
    542
    
    
    
    342Total Interest and Fee Income
    
    
    33,520
    
    
    
    21,187
    
    
    
    17,010
    
    
    
    11,708EXPENSESManagement Fees
    
    
    519
    
    
    
    425
    
    
    
    272
    
    
    
    231Interest Expense:Borrowings from Fund Manager
    
    
    
    
    
    
    345
    
    
    
    
    
    
    
    87Participations in Mortgage Loans
    
    
    
    
    
    
    700
    
    
    
    
    
    
    
    221Borrowings on Note Payable
    
    
    78
    
    
    
    
    
    
    
    49
    
    
    
    Interest Expense
    
    
    78
    
    
    
    1,045
    
    
    
    49
    
    
    
    308Total Expenses
    
    
    597
    
    
    
    1,470
    
    
    
    321
    
    
    
    539Net Earnings
    
    $
    32,923
    
    
    $
    19,717
    
    
    $
    16,689
    
    
    $
    11,169Net Earnings Allocated to Members
per Weighted Average Membership
Units Outstanding
    
    $
    522.80
    
    
    $
    587.81
    
    
    $
    255.02
    
    
    $
    295.18Distribututions to Members per
Weighted Average Membership Units
Outstanding
    
    $
    516.66
    
    
    $
    568.27
    
    
    $
    252.62
    
    
    $
    286.33Weighted Average Membership Units
Outstanding
    
    
    62,974
    
    
    
    33,542
    
    
    
    65,442
    
    
    
    37,837
 The accompanying notes are an integral part of these statements
 5




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IMH SECURED LOAN FUND, LLC
 
 Consolidated Statement of Members Equity
 Six months ended June 30, 2008
 (Unaudited)
 (In thousands, except unit data)
 TotalMembers
    
    
    Members
    
    
    Retained
    
    
    MembersUnits
    
    
    Capital
    
    
    Earnings
    
    
    EquityBalances at December 31, 2007
    
    
    57,678
    
    
    $
    576,784
    
    
    $
    49
    
    
    $
    576,833Net Earnings  Six Months Ended June 30, 2008
    
    
    
    
    
    
    
    
    
    
    32,923
    
    
    
    32,923Earnings Distributed
    
    
    
    
    
    
    
    
    
    
    (15,472
    )
    
    
    (15,472
    )Reinvestment of Earnings
    
    
    1,706
    
    
    
    17,064
    
    
    
    (17,064
    )
    
    
    Capital Investment  New Members
    
    
    12,671
    
    
    
    126,708
    
    
    
    
    
    
    
    126,708Capital Investment  Existing Members
    
    
    4,016
    
    
    
    40,163
    
    
    
    
    
    
    
    40,163Full Redemptions
    
    
    (5,329
    )
    
    
    (53,294
    )
    
    
    
    
    
    
    (53,294
    )Partial Redemptions
    
    
    (3,060
    )
    
    
    (30,600
    )
    
    
    
    
    
    
    (30,600
    )Retained Earnings Paid on Full Redemptions
    
    
    
    
    
    
    
    
    
    
    (31
    )
    
    
    (31
    )Net Activity for Period
    
    
    10,004
    
    
    
    100,041
    
    
    
    356
    
    
    
    100,397Balances at June 30, 2008
    
    
    67,682
    
    
    $
    676,825
    
    
    $
    405
    
    
    $
    677,230
 The accompanying notes are an integral part of these statements
 6




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IMH SECURED LOAN FUND, LLC
 
 Consolidated Statements of Cash Flows
 Six months ended June 30, 2008
 (Unaudited)
 (In thousands)
 Six months ended June 30,2008
    
    
    2007CASH FLOWS  Operating Activities:Net Earnings
    
    $
    32,923
    
    
    $
    19,717Adjustments
to Reconcile Net Earnings to Net Cash Provided by Operating ActivitiesAccretion of
Note Discount
    
    
    (6,054
    )
    
    
    Increase in Accrued Interest Receivable
    
    
    (2,586
    )
    
    
    (1,964
    )Increase in Deposits and Other Assets
    
    
    (93
    )
    
    
    Increase (Decrease) in Fees Payable to Fund Manager
    
    
    (166
    )
    
    
    31Increase (Decrease) in Deposit Refund Payable
    
    
    
    
    
    
    (62
    )Increase (Decrease) in Unearned Income
    
    
    (584
    )
    
    
    (20
    )Net Cash Provided by Operating Activities
    
    
    23,440
    
    
    
    17,702CASH FLOWS  Investing Activities:Mortgage Loans Fundings
    
    
    (133,930
    )
    
    
    (203,544
    )Mortgage Loan Repayments
    
    
    32,834
    
    
    
    59,666Mortgage Loan Repayment from Sale of Whole Loan
    
    
    31,325
    
    
    
    Investment in Real Estate Held for Development
    
    
    (7,881
    )
    
    
    Net Cash Used in Investing Activities
    
    
    (77,652
    )
    
    
    (143,878
    )CASH FLOWS  Financing Activities:Proceeds from Note Payable to Bank
    
    
    8,000
    
    
    
    Repayment of Note Payable to Bank
    
    
    (8,000
    )
    
    
    Proceeds from Sale of Whole Loans
    
    
    
    
    
    
    5,250Repurchase of Whole Loans Sold
    
    
    
    
    
    
    (7,675
    )Proceeds from Borrowings from Manager
    
    
    
    
    
    
    10,165Repayments of Borrowings from Manager
    
    
    
    
    
    
    (8,568
    )Proceeds from Loan Participations Issued
    
    
    
    
    
    
    37,498Loan Participations Reacquired
    
    
    
    
    
    
    (36,551
    )Increase (Decrease) in Member Investments
Pending Activation
    
    
    (489
    )
    
    
    1,894Members Capital Investments
    
    
    166,871
    
    
    
    173,393Members Redemptions
    
    
    (62,793
    )
    
    
    (19,731
    )Members Distributions
    
    
    (14,921
    )
    
    
    (7,236
    )Net Cash Provided by Financing Activities
    
    
    88,668
    
    
    
    148,439Net Increase in Cash and Cash Equivalents
    
    
    34,456
    
    
    
    22,263Cash and Cash Equivalents:Beginning of Period
    
    
    73,604
    
    
    
    12,159End of Period
    
    $
    108,060
    
    
    $
    34,422Supplemental Cash Flow Information:Interest Paid
    
    $
    78
    
    
    $
    989Supplemental Disclosure of Non-Cash Financing and Investing Activities:Real Estate Acquired through Foreclosure
    
    $
    38,180
    
    
    $
    Loans Satisfied with Next-Phase Financing
    
    $
    29,839
    
    
    $
    
 The accompanying notes are an integral part of these statements
 7




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IMH SECURED LOAN FUND, LLC
 
     NOTE
1  FUND DESCRIPTION AND BASIS OF PRESENTATION
   NOTE 2  SIGNIFICANT ACCOUNTING POLICIES
 Basis of Accounting
  Statement of Cash Flows
  Real Estate Held for Development
 Accounting for the Impairment or Disposal of
Long-Lived Assets
 8




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IMH SECURED LOAN FUND, LLC
 NOTE 2  SIGNIFICANT ACCOUNTING POLICIES  CONTINUED
 Discounts on Acquired Loans
 Accounting for Certain Loans or Debt Securities Acquired in a Transfer
 Use of
Estimates
  Reclassifications
  NOTE 3  CASH AND CASH EQUIVALENTS
  June 30,
    
    
    December 31,2008
    
    
    2007Working Capital Reserve
    
    $
    20,305
    
    
    $
    17,304Retained Earnings
    
    
    405
    
    
    
    49Available for Operating Obligations and Lending
    
    
    87,350
    
    
    
    56,251$
    108,060
    
    
    $
    73,604
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES
   9




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IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 June 30, 2008Fixed Rate
    
    
    Variable Rate
    
    
    Total#
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    %Current Rate:8.00%
    
    
    1
    
    
    $
    3,500
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    3,500
    
    
    
    0.6
    %9.00%
    
    
    1
    
    
    
    7,404
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    7,404
    
    
    
    1.4
    %10.00%
    
    
    1
    
    
    
    25,633
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    25,633
    
    
    
    4.7
    %11.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    44,440
    
    
    
    1
    
    
    
    44,440
    
    
    
    8.1
    %11.50%
    
    
    1
    
    
    
    18,500
    
    
    
    4
    
    
    
    47,408
    
    
    
    5
    
    
    
    65,908
    
    
    
    12.0
    %11.75%
    
    
    1
    
    
    
    4,158
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    4,158
    
    
    
    0.8
    %12.00%
    
    
    9
    
    
    
    72,938
    
    
    
    14
    
    
    
    95,599
    
    
    
    23
    
    
    
    168,537
    
    
    
    30.8
    %12.25%
    
    
    1
    
    
    
    631
    
    
    
    6
    
    
    
    73,437
    
    
    
    7
    
    
    
    74,068
    
    
    
    13.5
    %12.50%
    
    
    1
    
    
    
    1,210
    
    
    
    6
    
    
    
    20,256
    
    
    
    7
    
    
    
    21,466
    
    
    
    3.9
    %12.75%
    
    
    1
    
    
    
    37,820
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    37,820
    
    
    
    6.9
    %13.00%
    
    
    5
    
    
    
    23,564
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    23,564
    
    
    
    4.3
    %13.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    2,784
    
    
    
    1
    
    
    
    2,784
    
    
    
    0.5
    %13.75%
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    6,555
    
    
    
    2
    
    
    
    6,555
    
    
    
    1.2
    %14.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    61,948
    
    
    
    1
    
    
    
    61,948
    
    
    
    11.3
    %Total
    
    
    22
    
    
    $
    195,358
    
    
    
    35
    
    
    $
    352,427
    
    
    
    57
    
    
    $
    547,785
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    35.7
    %
    
    
    
    
    
    
    64.3
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    
    
    11.37
    %
    
    
    
    
    
    
    12.36
    %
    
    
    
    
    
    
    12.00
    %Number of Loans
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    57Average Principal
    
    
    
    
    
    $
    8,880
    
    
    
    
    
    
    $
    10,069
    
    
    
    
    
    
    $
    9,610
 December 31, 2007Fixed Rate
    
    
    Variable Rate
    
    
    Total#
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    %Current Rate:11.50%
    
    
    2
    
    
    $
    26,964
    
    
    
    4
    
    
    $
    15,022
    
    
    
    6
    
    
    $
    41,986
    
    
    
    8.3
    %11.75%
    
    
    1
    
    
    
    3,112
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    3,112
    
    
    
    0.6
    %12.00%
    
    
    7
    
    
    
    52,150
    
    
    
    13
    
    
    
    88,709
    
    
    
    20
    
    
    
    140,859
    
    
    
    27.7
    %12.25%
    
    
    1
    
    
    
    631
    
    
    
    6
    
    
    
    68,948
    
    
    
    7
    
    
    
    69,579
    
    
    
    13.7
    %12.50%
    
    
    3
    
    
    
    40,274
    
    
    
    8
    
    
    
    46,793
    
    
    
    11
    
    
    
    87,067
    
    
    
    17.0
    %12.75%
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    63,371
    
    
    
    3
    
    
    
    63,371
    
    
    
    12.5
    %13.00%
    
    
    7
    
    
    
    26,094
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    26,094
    
    
    
    5.1
    %13.25%
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    45,764
    
    
    
    2
    
    
    
    45,764
    
    
    
    9.0
    %13.50%
    
    
    1
    
    
    
    5,680
    
    
    
    1
    
    
    
    4,840
    
    
    
    2
    
    
    
    10,520
    
    
    
    2.1
    %13.75%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    5,065
    
    
    
    1
    
    
    
    5,065
    
    
    
    1.0
    %14.00%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    15,480
    
    
    
    1
    
    
    
    15,480
    
    
    
    3.0
    %Total
    
    
    22
    
    
    $
    154,905
    
    
    
    39
    
    
    $
    353,992
    
    
    
    61
    
    
    $
    508,897
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    30.4
    %
    
    
    
    
    
    
    69.6
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    
    
    12.26
    %
    
    
    
    
    
    
    12.52
    %
    
    
    
    
    
    
    12.44
    %Number of Loans
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    61Average Principal
    
    
    
    
    
    $
    7,041
    
    
    
    
    
    
    $
    9,077
    
    
    
    
    
    
    $
    8,343
 10




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
   June
30, 2008Quarter
    
    Amount
    
    
    Percent
    
    
    #Matured
    
    $
    127,656
    
    
    
    23.3
    %
    
    
    12Q3 2008
    
    
    179,146
    
    
    
    32.8
    %
    
    
    25Q4 2008
    
    
    67,081
    
    
    
    12.2
    %
    
    
    8Q1 2009
    
    
    40,209
    
    
    
    7.3
    %
    
    
    3Q2 2009
    
    
    120,648
    
    
    
    22.0
    %
    
    
    6Q4 2009
    
    
    2,141
    
    
    
    0.4
    %
    
    
    1Q1 2010
    
    
    7,404
    
    
    
    1.4
    %
    
    
    1Q1 2011
    
    
    3,500
    
    
    
    0.6
    %
    
    
    1$
    547,785
    
    
    
    100.0
    %
    
    
    57
   11




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
  Percent
    
    
    
    
    
    
    Principal
    
    
    Accrued
    
    
    Non-Accrued
    
    
    
    
    
    
    Wtd. Averageof Principal
    
    
    #
    
    
    Balance
    
    
    Interest
    
    
    Note Interest
    
    
    Total
    
    
    Loan-to-ValueArizona
    
    
    40.4
    %
    
    
    8
    
    
    $
    68,064
    
    
    
    1,537
    
    
    
    2,915
    
    
    $
    72,516
    
    
    
    87.5
    %California
    
    
    24.1
    %
    
    
    5
    
    
    
    40,623
    
    
    
    969
    
    
    
    
    
    
    
    41,592
    
    
    
    85.0
    %Idaho
    
    
    29.5
    %
    
    
    2
    
    
    
    49,563
    
    
    
    1,768
    
    
    
    2,263
    
    
    
    53,594
    
    
    
    85.0
    %Texas
    
    
    3.5
    %
    
    
    1
    
    
    
    5,858
    
    
    
    230
    
    
    
    58
    
    
    
    6,146
    
    
    
    80.0
    %New Mexico
    
    
    2.5
    %
    
    
    1
    
    
    
    4,171
    
    
    
    123
    
    
    
    
    
    
    
    4,294
    
    
    
    61.7
    %100.0
    %
    
    
    17
    
    
    $
    168,279
    
    
    $
    4,627
    
    
    $
    5,236
    
    
    $
    178,142
    
    
    
    85.0
    %
    June 30, 2008
    
    
    December 31, 2007Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Pre-entitled Land:Processing Entitlements
    
    $
    214,171
    
    
    
    39.1
    %
    
    
    15
    
    
    $
    201,266
    
    
    
    39.6
    %
    
    
    19214,171
    
    
    
    39.1
    %
    
    
    15
    
    
    
    201,266
    
    
    
    39.6
    %
    
    
    19Entitled Land:Held for Investment
    
    
    116,122
    
    
    
    21.2
    %
    
    
    12
    
    
    
    135,060
    
    
    
    26.5
    %
    
    
    11Infrastructure under Construction
    
    
    56,417
    
    
    
    10.3
    %
    
    
    5
    
    
    
    60,037
    
    
    
    11.8
    %
    
    
    5Improved and Held for Vertical Construction
    
    
    19,877
    
    
    
    3.6
    %
    
    
    4
    
    
    
    14,800
    
    
    
    2.9
    %
    
    
    3192,416
    
    
    
    35.1
    %
    
    
    21
    
    
    
    209,897
    
    
    
    41.2
    %
    
    
    19Construction & Existing Structures:New Structure  Construction in-process
    
    
    74,963
    
    
    
    13.7
    %
    
    
    16
    
    
    
    70,864
    
    
    
    13.9
    %
    
    
    17Existing Structure Held for Investment
    
    
    21,795
    
    
    
    4.0
    %
    
    
    4
    
    
    
    26,870
    
    
    
    5.3
    %
    
    
    6Existing Structure  Improvements
    
    
    44,440
    
    
    
    8.1
    %
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    141,198
    
    
    
    25.8
    %
    
    
    21
    
    
    
    97,734
    
    
    
    19.2
    %
    
    
    23$
    547,785
    
    
    
    100.0
    %
    
    
    57
    
    
    $
    508,897
    
    
    
    100.0
    %
    
    
    61
 12




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
  June 30, 2008
    
    
    December 31, 2007Amount
    
    
    Percent
    
    
    #
    
    
    Amount
    
    
    Percent
    
    
    #Arizona
    
    $
    306,869
    
    
    
    56.0
    %
    
    
    34
    
    
    $
    228,363
    
    
    
    44.8
    %
    
    
    34California
    
    
    146,020
    
    
    
    26.6
    %
    
    
    13
    
    
    
    171,560
    
    
    
    33.7
    %
    
    
    15New Mexico
    
    
    5,241
    
    
    
    1.0
    %
    
    
    2
    
    
    
    4,469
    
    
    
    0.9
    %
    
    
    2Texas
    
    
    16,960
    
    
    
    3.1
    %
    
    
    4
    
    
    
    32,114
    
    
    
    6.3
    %
    
    
    5Idaho
    
    
    49,563
    
    
    
    9.0
    %
    
    
    2
    
    
    
    48,635
    
    
    
    9.6
    %
    
    
    2Minnesota
    
    
    15,163
    
    
    
    2.8
    %
    
    
    1
    
    
    
    14,781
    
    
    
    2.9
    %
    
    
    1Nevada
    
    
    7,969
    
    
    
    1.5
    %
    
    
    1
    
    
    
    8,975
    
    
    
    1.8
    %
    
    
    2$
    547,785
    
    
    
    100.0
    %
    
    
    57
    
    
    $
    508,897
    
    
    
    100.0
    %
    
    
    61Average Loan Principal Balance
    
    $
    9,610
    
    
    
    
    
    
    
    
    
    
    $
    8,343
     13




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 Accretable Discounts on Acquired Loans
  June 30, 2008Total
    
    
    Fund
    
    
    ManagerAccretion
    
    
    Allocation
    
    
    AllocationAccretable discount:Balance, beginning of period
    
    $
    
    
    
    
    
    
    
    
    New acquisitions
    
    
    18,418
    
    
    
    14,157
    
    
    
    4,261Accretion
    
    
    (6,749
    )
    
    
    (5,236
    )
    
    
    (1,513
    )Balance, end of period
    
    $
    11,669
    
    
    
    8,921
    
    
    
    2,748
 NOTE 5  REAL ESTATE HELD FOR DEVELOPMENT
   14




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 6  NET EARNINGS, DISTRIBUTIONS REINVESTED AND DISTRIBUTIONS PAYABLE TO MEMBERS AND
REDEMPTIONS
   NOTE 7  NOTE PAYABLE TO BANK
  NOTE 8  MANAGEMENT FEES AND RELATED PARTY ACTIVITY
 Management Fees
    15




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 8  MANAGEMENT FEES AND RELATED PARTY ACTIVITY  CONTINUED
 Related Party Investments and Borrowings
  NOTE 9  COMMITMENTS AND CONTINGENCIES
    *******************************************************************************
 16




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Forward Looking Statements
   
    
    Our units lack liquidity and marketability and our Members have a limited ability to
sell their units or have their units redeemed. As a result, our Members may lose their
entire investment or may not be able to sell their units or have them redeemed in a timely
manner, or at all, or at the price they paid.
    
    As a mortgage lender, we are subject to a variety of external forces that could have a
material adverse effect our operations and results, including, without limitation,
fluctuations in interest rates, fluctuations in economic conditions (which are exacerbated
by our limited geographic diversity), competition and amount of available capital and the
effect that regulators or bankruptcy courts could have on our operations and rights as a
secured lender.
    
    In recent periods, the homebuilding and capital markets have experienced a severe
downturn. Although we are not a direct participant in these markets, we face secondary
exposure to downturns in these markets because the markets we serve are directly impacted
by events that occur in the homebuilding and capital markets. As a result, we have
experienced an increase in delinquencies on our loans and foreclosure activity relating to
the collateral securing our loans, which may adversely affect our liquidity.
 17




---



##### Table of Contents




    
    Real estate assets acquired in foreclosure or through other means are generally non-earning
assets that reduce the distributable yield to investors. Moreover, the ultimate disposition
and liquidation of such assets may not occur for an extended period of time, which would
adversely affect our liquidity.
    
    Our borrowers are exposed to various risks associated with owning real estate, and
unexpected costs or liabilities could reduce the likelihood that our borrowers will be able
to develop or sell the real estate, which could increase the likelihood that our borrowers
will default on the loans.
    
    We are subject to risks generally associated with the ownership of real estate and real
estate-related assets, including changing economic conditions, environmental risks, the
cost of and ability to obtain insurance and risks related to developing and leasing of
properties.
    
    Our loans, which are not guaranteed by any government agency, are risky and are not sold
on any secondary market, and our underwriting standards may not protect Members from loan
defaults or ensure that sufficient collateral, including collateral pledged by guarantors,
will exist to protect Members from any such defaults.
    
    We rely exclusively on our Manager to select and manage the mortgage loans in which we
invest, and our Manager has limited experience with such activities or sponsoring mortgage
funds, although certain employees of the Manager do have such experience. Our Members have
no right to participate in decisions relating to the activities of our Manager, including,
without limitation, the right to participate in selecting and managing mortgage
investments.
    
    The Fund may not be able to identify and close suitable loans for funding in a timely
manner or in a time frame that corresponds with the raising of investor capital, thereby
resulting in lower or varying Member yields.
    
    We are transitioning our lending strategies to increase the percentage of our assets allocated to loans on commercial and income-producing properties.  We are also beginning to emphasize smaller loans, in the $2 million to $10 million range, although we also intend to consider making larger loans - over $50 million - on a select basis.  There can be no assurance that we will be able to implement these
strategies or that, if implemented, they will be successful.  Making loans above $50 million would result in higher loan concentrations, and greater dependence on single borrowers, which may increase the risk of loss to investors.
    
    We are experiencing higher levels of redemptions from Members.  If we are unable to replace these funds with new investor contributions or other funding sources, we may be unable to satisfy our liquidity needs.
    
    We are obligated to pay certain fees to our Manager, which may materially and adversely
impact our operating results and reduce cash available for investment and distributions.
    
    Our Manager will face conflicts of interest, including, without limitation, competing
demands upon its time, its involvement with other activities and entities and its desire to
generate origination proceeds at the risk of extending or participating in loans not
suitable for the Fund, all of which could have a material adverse effect on us.
    
    As a publicly reporting company, we will be required to divert considerable resources to
new compliance initiatives, including refining our disclosure controls and procedures and
internal control over financial reporting.
    
    There are material income tax and retirement plan risks associated with ownership of our
units.
  Overview of the Business
  18




---



##### Table of Contents



Industry Conditions and Fund Strategy
  
    
    Continued economic, legislative and regulatory pressure on housing values and
mortgage origination volumes, which has adversely affected and we believe will continue
to adversely affect the demand for the residential and commercial projects our
borrowers participate in and develop;
    
    Increasing delinquencies of our loans and foreclosure activity relating to the
collateral securing our loans, which reduces the earning asset base of our asset
portfolio; and
    
    Continued disruptions in the secondary mortgage and debt capital markets, which
adversely affects the ability of some of our borrowers to find alternative or follow-on
financing and repay our loans.
  
    
    Asset Class Avoidance: IMH minimized the Funds investment in a number of asset
classes because IMH believed such investments would have resulted in an unnecessary
risk to investor capital. These asset classes included condominium conversions,
high-rise condominiums, public homebuilder projects, large land parcels not in
proximity to existing development, and office condominiums.
 19




---



##### Table of Contents




    
    Portfolio Diversification: Although the Funds portfolio is concentrated in Arizona
and California, over the past several years the Fund has diversified into several
markets that IMH believes reflect long-term affordability and economic growth. IMH
anticipates increased geographic diversification in the latter half of 2008.
IMH also plan to increase the percentage of its assets allocated to loans on commercial properties.  The Fund may also explore increasing its emphasis on smaller loans, in the $2 million to $10 million range (although it also intends to consider making larger loans  over $50 million  on a select basis).
    
    Underwriting: IMH utilizes residual analysis methodology in its underwriting
process. This methodology results in an assessment of whether there is there
sufficient equity in the loan that, in the event of a default and foreclosure, we
could complete development of the project in a manner such that the fair value of the
project in the marketplace would exceed our aggregate investment, ideally generating a
return of 18%-20% or more. We believe this type of analysis mitigates the likelihood
of loaning too much money in relation to a projects value and has allowed the Fund to
remain well-positioned in a volatile market.
   20




---



##### Table of Contents



Selected Financial Data
  (Unaudited)
    
    (Unaudited)As of and for the
    
    As of and for the
    
    As of and for theSix Months Ended June 30,
    
    Three Months Ended June 30,
    
    Year Ended2008
    
    2007
    
    2008
    
    2007
    
    December 31, 2007Cash and cash equivalents
    
    $
    108,060
    
    
    $
    34,422
    
    
    $
    108,060
    
    
    $
    34,422
    
    
    $
    73,604Total assets
    
    $
    711,400
    
    
    $
    443,905
    
    
    $
    711,400
    
    
    $
    443,905
    
    
    $
    590,559Interest income and fees
    
    $
    33,520
    
    
    $
    21,187
    
    
    $
    17,010
    
    
    $
    11,708
    
    
    $
    49,763Management fees
    
    $
    519
    
    
    $
    425
    
    
    $
    272
    
    
    $
    231
    
    
    $
    968Interest expense
    
    $
    78
    
    
    $
    1,045
    
    
    $
    49
    
    
    $
    308
    
    
    $
    1,220Net earnings
    
    $
    32,923
    
    
    $
    19,717
    
    
    $
    16,689
    
    
    $
    11,169
    
    
    $
    45,675Net distributions to Members
    
    $
    32,536
    
    
    $
    19,061
    
    
    $
    16,532
    
    
    $
    10,834
    
    
    $
    46,920Net Member distribution as a % of net earnings
    
    
    98.8
    %
    
    
    96.7
    %
    
    
    99.1
    %
    
    
    97.0
    %
    
    
    102.7
    %Net earnings allocated to Members per weighted average
membership units outstanding
    
    $
    522.80
    
    
    $
    587.81
    
    
    $
    255.02
    
    
    $
    295.18
    
    
    $
    1,073.47Net distributions to Members per weighted average
membership units
    
    $
    516.66
    
    
    $
    568.27
    
    
    $
    252.62
    
    
    $
    286.32
    
    
    $
    1,102.72Average annualized yield to Members
    
    
    10.29
    %
    
    
    11.51
    %
    
    
    10.02
    %
    
    
    11.52
    %
    
    
    11.09
    %Member Equity Related:Retained earnings (Loan Loss Reserve)
    
    $
    405
    
    
    $
    2,037
    
    
    $
    405
    
    
    $
    2,037
    
    
    $
    49Total Members equity
    
    $
    677,230
    
    
    $
    424,644
    
    
    $
    677,230
    
    
    $
    424,644
    
    
    $
    576,833Number of Member accounts
    
    
    4,335
    
    
    
    2,409
    
    
    
    4,335
    
    
    
    2,409
    
    
    
    3,472Average Member account balance
    
    $
    156
    
    
    $
    176
    
    
    $
    156
    
    
    $
    176
    
    
    $
    166States in which the Fund has Members
    
    
    49
    
    
    
    46
    
    
    
    49
    
    
    
    46
    
    
    
    49Member
investments (excluding reinvestments)
    
    $
    166,871
    
    
    $
    173,393
    
    
    $
    90,715
    
    
    $
    91,717
    
    
    $
    349,523Member earnings distributed
    
    $
    15,472
    
    
    $
    7,954
    
    
    $
    7,889
    
    
    $
    4,660
    
    
    $
    20,755Member earnings reinvested
    
    $
    17,064
    
    
    $
    11,107
    
    
    $
    8,643
    
    
    $
    6,174
    
    
    $
    26,165Retained earnings additions (distributed)
    
    $
    387
    
    
    $
    655
    
    
    $
    157
    
    
    $
    335
    
    
    $
    (1,245
    )% of total earnings reinvested
    
    
    51.83
    %
    
    
    56.33
    %
    
    
    51.79
    %
    
    
    55.28
    %
    
    
    57.28
    %Redemptions
    
    $
    83,894
    
    
    $
    20,647
    
    
    $
    41,458
    
    
    $
    11,342
    
    
    $
    57,790Redemptions as % of new investment (incl. reinvestments)
    
    
    45.61
    %
    
    
    11.19
    %
    
    
    41.73
    %
    
    
    11.59
    %
    
    
    15.38
    %Loan Related:Loan deployment ratio
    
    
    82.7
    %
    
    
    95.4
    %
    
    
    81.8
    %
    
    
    93.2
    %
    
    
    89.0
    %Note balances originated
    
    $
    235,268
    
    
    $
    316,111
    
    
    $
    141,848
    
    
    $
    212,080
    
    
    $
    428,777Number of notes originated
    
    
    11
    
    
    
    22
    
    
    
    6
    
    
    
    12
    
    
    
    38Average note balance originated
    
    $
    21,388
    
    
    $
    14,369
    
    
    $
    23,641
    
    
    $
    17,673
    
    
    $
    11,284Net principal balances outstanding
    
    $
    547,785
    
    
    $
    404,918
    
    
    $
    547,785
    
    
    $
    404,918
    
    
    $
    508,896Number of loans outstanding
    
    
    57
    
    
    
    50
    
    
    
    57
    
    
    
    50
    
    
    
    61Average principal balance
    
    $
    9,610
    
    
    $
    8,098
    
    
    $
    9,610
    
    
    $
    8,098
    
    
    $
    8,343% of Portfolio Principal  Fixed interest rate
    
    
    35.7
    %
    
    
    48.9
    %
    
    
    35.7
    %
    
    
    48.9
    %
    
    
    30.4
    %Number of fixed rate loans
    
    
    22
    
    
    
    25
    
    
    
    22
    
    
    
    25
    
    
    
    22Weighted average interest rate  Fixed
    
    
    11.37
    %
    
    
    12.20
    %
    
    
    11.37
    %
    
    
    12.20
    %
    
    
    12.26
    %% of portfolio  Variable interest rate
    
    
    64.3
    %
    
    
    51.1
    %
    
    
    64.3
    %
    
    
    51.1
    %
    
    
    69.6
    %Number of variable rate loans
    
    
    35
    
    
    
    25
    
    
    
    35
    
    
    
    25
    
    
    
    39Weighted average interest rate  Variable
    
    
    12.36
    %
    
    
    12.72
    %
    
    
    12.36
    %
    
    
    12.72
    %
    
    
    12.52
    %Principal balance % by state:Arizona
    
    
    56.0
    %
    
    
    47.9
    %
    
    
    56.0
    %
    
    
    47.9
    %
    
    
    44.8
    %California
    
    
    26.7
    %
    
    
    29.3
    %
    
    
    26.7
    %
    
    
    29.3
    %
    
    
    33.7
    %New Mexico
    
    
    1.0
    %
    
    
    0.7
    %
    
    
    1.0
    %
    
    
    0.7
    %
    
    
    0.9
    %Texas
    
    
    3.1
    %
    
    
    6.5
    %
    
    
    3.1
    %
    
    
    6.5
    %
    
    
    6.3
    %Idaho
    
    
    9.0
    %
    
    
    10.9
    %
    
    
    9.0
    %
    
    
    10.9
    %
    
    
    9.6
    %North Carolina
    
    
    0.0
    %
    
    
    4.7
    %
    
    
    0.0
    %
    
    
    4.7
    %
    
    
    0.0
    %Minnesota
    
    
    2.8
    %
    
    
    0.0
    %
    
    
    2.8
    %
    
    
    0.0
    %
    
    
    2.9
    %Nevada
    
    
    1.5
    %
    
    
    0.0
    %
    
    
    1.5
    %
    
    
    0.0
    %
    
    
    1.8
    %Interest payments over 30 days delinquent
    
    $
    1,088
    
    
    $
    
    
    
    $
    1,088
    
    
    $
    
    
    
    $
    2,741Loans past scheduled maturity
    
    
    12
    
    
    
    6
    
    
    
    12
    
    
    
    6
    
    
    
    15Principal balances past scheduled maturity
    
    $
    127,656
    
    
    $
    22,013
    
    
    $
    127,656
    
    
    $
    22,013
    
    
    $
    133,532Loans in non accrual status
    
    
    6
    
    
    
    4
    
    
    
    6
    
    
    
    4
    
    
    
    10Principal balances in non accrual status
    
    $
    80,341
    
    
    $
    15,458
    
    
    $
    80,341
    
    
    $
    15,458
    
    
    $
    73,346Allowance for credit losses
    
    $
    1,900
    
    
    $
    
    
    
    $
    1,900
    
    
    $
    
    
    
    $
    1,900Allowance for credit losses as % of loan principal
    
    
    0.3
    %
    
    
    0.0
    %
    
    
    0.3
    %
    
    
    0.0
    %
    
    
    0.4
    %
 
 *
    
    Where applicable, quarterly results are annualized to allow for compatability with annual
results. 21




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##### Table of Contents



Results of Operations for the Six and Three Months Ended June 30, 2008 and 2007
  Revenues
 Six Months Ended June 30,
    
    
    
    Three Months Ended June 30,Interest and Fee Income:
    
    2008
    
    
    2007
    
    
    $ Change
    
    
    % Change
    
    
    
    2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeMortgage Loans
    
    $
    32,198
    
    
    $
    20,720
    
    
    $
    11,478
    
    
    
    55.4
    %
    
    
    $
    16,468
    
    
    $
    11,366
    
    
    $
    5,102
    
    
    
    44.9
    %Investments
and Money Market Accounts
    
    
    1,322
    
    
    
    467
    
    
    
    855
    
    
    
    183.1
    %
    
    
    
    542
    
    
    
    342
    
    
    
    200
    
    
    
    58.5
    %Total Interest and Fee Income
    
    $
    33,520
    
    
    $
    21,187
    
    
    $
    12,333
    
    
    
    58.2
    %
    
    
    $
    17,010
    
    
    $
    11,708
    
    
    $
    5,302
    
    
    
    45.3
    %
    22




---



##### Table of Contents



Expenses
 Six Months Ended June 30,
    
    
    
    Three Months Ended June 30,Expenses:
    
    2008
    
    
    2007
    
    
    $ Change
    
    
    % Change
    
    
    
    2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeManagement Fees
    
    $
    519
    
    
    $
    425
    
    
    $
    94
    
    
    
    22.1
    %
    
    
    $
    272
    
    
    $
    231
    
    
    $
    41
    
    
    
    17.7
    %Interest Expense:Borrowings from Fund Manager
    
    
    
    
    
    
    345
    
    
    
    (345
    )
    
    
    (100.0
    %)
    
    
    
    
    
    
    
    87
    
    
    
    (87
    )
    
    
    (100.0
    )%Participations in Mortgage Loans
    
    
    
    
    
    
    700
    
    
    
    (700
    )
    
    
    (100.0
    %)
    
    
    
    
    
    
    
    221
    
    
    
    (221
    )
    
    
    (100.0
    )%Borrowings on Note Payable
    
    
    78
    
    
    
    
    
    
    
    78
    
    
    
    100.0
    %
    
    
    
    49
    
    
    
    
    
    
    
    49
    
    
    
    100.0
    %Interest Expense
    
    
    78
    
    
    
    1,045
    
    
    
    (967
    )
    
    
    (92.5
    %)
    
    
    
    49
    
    
    
    308
    
    
    
    (259
    )
    
    
    (84.1
    )%Total Expenses
    
    $
    597
    
    
    $
    1,470
    
    
    $
    (873
    )
    
    
    (59.4
    %)
    
    
    $
    321
    
    
    $
    539
    
    
    $
    (218
    )
    
    
    (40.4
    )%
   Net Earnings
 Six Months Ended June 30,
    
    
    
    Three Months Ended June 30,2008
    
    
    2007
    
    
    $ Change
    
    
    % Change
    
    
    
    2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeNet Earnings
    
    $
    32,923
    
    
    $
    19,717
    
    
    $
    13,206
    
    
    
    67.0
    %
    
    
    $
    16,689
    
    
    $
    11,169
    
    
    $
    5,520
    
    
    
    49.4
    %
  23




---



##### Table of Contents



Fund Manager Fund-Related Income and Expense
   Six months ended June 30,
    
    
    Three months ended June 30,Fund-related Expenses Paid by Manager:
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Operations-related expenses
    
    $
    7,408
    
    
    $
    7,487
    
    
    $
    4,480
    
    
    $
    4,350Origination-related expenses
    
    
    4,204
    
    
    
    4,248
    
    
    
    2,542
    
    
    
    2,468Total
    
    $
    11,612
    
    
    $
    11,735
    
    
    $
    7,022
    
    
    $
    6,818
 Changes in the Loan Portfolio Profile
   Average Loan Size
  24




---



##### Table of Contents



Geographic Diversification
  June 30, 2008
    
    
    December 31, 2007Amount
    
    
    Percent
    
    
    #
    
    
    Amount
    
    
    Percent
    
    
    #Arizona
    
    $
    306,869
    
    
    
    56.0
    %
    
    
    34
    
    
    $
    228,363
    
    
    
    44.8
    %
    
    
    34California
    
    
    146,020
    
    
    
    26.6
    %
    
    
    13
    
    
    
    171,560
    
    
    
    33.7
    %
    
    
    15New Mexico
    
    
    5,241
    
    
    
    1.0
    %
    
    
    2
    
    
    
    4,469
    
    
    
    0.9
    %
    
    
    2Texas
    
    
    16,960
    
    
    
    3.1
    %
    
    
    4
    
    
    
    32,114
    
    
    
    6.3
    %
    
    
    5Idaho
    
    
    49,563
    
    
    
    9.0
    %
    
    
    2
    
    
    
    48,635
    
    
    
    9.6
    %
    
    
    2Minnesota
    
    
    15,163
    
    
    
    2.8
    %
    
    
    1
    
    
    
    14,781
    
    
    
    2.9
    %
    
    
    1Nevada
    
    
    7,969
    
    
    
    1.5
    %
    
    
    1
    
    
    
    8,975
    
    
    
    1.8
    %
    
    
    2$
    547,785
    
    
    
    100.0
    %
    
    
    57
    
    
    $
    508,897
    
    
    
    100.0
    %
    
    
    61
  Interest Rate Information
    25




---



##### Table of Contents



June 30, 2008Fixed Rate
    
    
    Variable Rate
    
    
    Total#
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    %Current Rate:8.00%
    
    
    1
    
    
    $
    3,500
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    3,500
    
    
    
    0.6
    %9.00%
    
    
    1
    
    
    
    7,404
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    7,404
    
    
    
    1.4
    %10.00%
    
    
    1
    
    
    
    25,633
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    25,633
    
    
    
    4.7
    %11.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    44,440
    
    
    
    1
    
    
    
    44,440
    
    
    
    8.1
    %11.50%
    
    
    1
    
    
    
    18,500
    
    
    
    4
    
    
    
    47,408
    
    
    
    5
    
    
    
    65,908
    
    
    
    12.0
    %11.75%
    
    
    1
    
    
    
    4,158
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    4,158
    
    
    
    0.8
    %12.00%
    
    
    9
    
    
    
    72,938
    
    
    
    14
    
    
    
    95,599
    
    
    
    23
    
    
    
    168,537
    
    
    
    30.8
    %12.25%
    
    
    1
    
    
    
    631
    
    
    
    6
    
    
    
    73,437
    
    
    
    7
    
    
    
    74,068
    
    
    
    13.5
    %12.50%
    
    
    1
    
    
    
    1,210
    
    
    
    6
    
    
    
    20,256
    
    
    
    7
    
    
    
    21,466
    
    
    
    3.9
    %12.75%
    
    
    1
    
    
    
    37,820
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    37,820
    
    
    
    6.9
    %13.00%
    
    
    5
    
    
    
    23,564
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    23,564
    
    
    
    4.3
    %13.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    2,784
    
    
    
    1
    
    
    
    2,784
    
    
    
    0.5
    %13.75%
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    6,555
    
    
    
    2
    
    
    
    6,555
    
    
    
    1.2
    %14.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    61,948
    
    
    
    1
    
    
    
    61,948
    
    
    
    11.3
    %Total
    
    
    22
    
    
    $
    195,358
    
    
    
    35
    
    
    $
    352,427
    
    
    
    57
    
    
    $
    547,785
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    35.7
    %
    
    
    
    
    
    
    64.3
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    
    
    11.37
    %
    
    
    
    
    
    
    12.36
    %
    
    
    
    
    
    
    12.00
    %Number of Loans
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    57Average Principal
    
    
    
    
    
    $
    8,880
    
    
    
    
    
    
    $
    10,069
    
    
    
    
    
    
    $
    9,610
 26




---



##### Table of Contents



December 31, 2007Fixed Rate
    
    
    Variable Rate
    
    
    Total#
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    %Current Rate:11.50%
    
    
    2
    
    
    $
    26,964
    
    
    
    4
    
    
    $
    15,022
    
    
    
    6
    
    
    $
    41,986
    
    
    
    8.3
    %11.75%
    
    
    1
    
    
    
    3,112
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    3,112
    
    
    
    0.6
    %12.00%
    
    
    7
    
    
    
    52,150
    
    
    
    13
    
    
    
    88,709
    
    
    
    20
    
    
    
    140,859
    
    
    
    27.7
    %12.25%
    
    
    1
    
    
    
    631
    
    
    
    6
    
    
    
    68,948
    
    
    
    7
    
    
    
    69,579
    
    
    
    13.7
    %12.50%
    
    
    3
    
    
    
    40,274
    
    
    
    8
    
    
    
    46,793
    
    
    
    11
    
    
    
    87,067
    
    
    
    17.0
    %12.75%
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    63,371
    
    
    
    3
    
    
    
    63,371
    
    
    
    12.5
    %13.00%
    
    
    7
    
    
    
    26,094
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    26,094
    
    
    
    5.1
    %13.25%
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    45,764
    
    
    
    2
    
    
    
    45,764
    
    
    
    9.0
    %13.50%
    
    
    1
    
    
    
    5,680
    
    
    
    1
    
    
    
    4,840
    
    
    
    2
    
    
    
    10,520
    
    
    
    2.1
    %13.75%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    5,065
    
    
    
    1
    
    
    
    5,065
    
    
    
    1.0
    %14.00%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    15,480
    
    
    
    1
    
    
    
    15,480
    
    
    
    3.0
    %Total
    
    
    22
    
    
    $
    154,905
    
    
    
    39
    
    
    $
    353,992
    
    
    
    61
    
    
    $
    508,897
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    30.4
    %
    
    
    
    
    
    
    69.6
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    
    
    12.26
    %
    
    
    
    
    
    
    12.52
    %
    
    
    
    
    
    
    12.44
    %Number of Loans
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    61Average Principal
    
    
    
    
    
    $
    7,041
    
    
    
    
    
    
    $
    9,077
    
    
    
    
    
    
    $
    8,343
 Concentration by Category based on Collaterals Development Status
  June 30, 2008
    
    
    December 31, 2007Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Pre-entitled Land:Processing Entitlements
    
    $
    214,171
    
    
    
    39.1
    %
    
    
    15
    
    
    $
    201,266
    
    
    
    39.6
    %
    
    
    19214,171
    
    
    
    39.1
    %
    
    
    15
    
    
    
    201,266
    
    
    
    39.6
    %
    
    
    19Entitled Land:Held for Investment
    
    
    116,122
    
    
    
    21.2
    %
    
    
    12
    
    
    
    135,060
    
    
    
    26.5
    %
    
    
    11Infrastructure under Construction
    
    
    56,417
    
    
    
    10.3
    %
    
    
    5
    
    
    
    60,037
    
    
    
    11.8
    %
    
    
    5Improved and Held for Vertical Construction
    
    
    19,877
    
    
    
    3.6
    %
    
    
    4
    
    
    
    14,800
    
    
    
    2.9
    %
    
    
    3192,416
    
    
    
    35.1
    %
    
    
    21
    
    
    
    209,897
    
    
    
    41.2
    %
    
    
    19Construction & Existing Structures:New Structure  Construction in-process
    
    
    74,963
    
    
    
    13.7
    %
    
    
    16
    
    
    
    70,864
    
    
    
    13.9
    %
    
    
    17Existing Structure Held for Investment
    
    
    21,795
    
    
    
    4.0
    %
    
    
    4
    
    
    
    26,870
    
    
    
    5.3
    %
    
    
    6Existing Structure  Improvements
    
    
    44,440
    
    
    
    8.1
    %
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    141,198
    
    
    
    25.8
    %
    
    
    21
    
    
    
    97,734
    
    
    
    19.2
    %
    
    
    23$
    547,785
    
    
    
    100.0
    %
    
    
    57
    
    
    $
    508,897
    
    
    
    100.0
    %
    
    
    61
  27




---



##### Table of Contents



June 30, 2008
    
    
    December 31, 2007Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Residential
    
    $
    228,330
    
    
    
    41.7
    %
    
    
    32
    
    
    $
    229,260
    
    
    
    45.0
    %
    
    
    34Mixed Use
    
    
    217,490
    
    
    
    39.7
    %
    
    
    14
    
    
    
    219,753
    
    
    
    43.2
    %
    
    
    16Commercial
    
    
    101,965
    
    
    
    18.6
    %
    
    
    11
    
    
    
    59,884
    
    
    
    11.8
    %
    
    
    11$
    547,785
    
    
    
    100.0
    %
    
    
    57
    
    
    $
    508,897
    
    
    
    100.0
    %
    
    
    61
  Borrower and Borrower Groups
  Changes in the Portfolio Profile  Scheduled Maturities
  June
30, 2008Quarter
    
    Amount
    
    
    Percent
    
    
    #Matured
    
    $
    127,656
    
    
    
    23.3
    %
    
    
    12Q3 2008
    
    
    179,146
    
    
    
    32.8
    %
    
    
    25Q4 2008
    
    
    67,081
    
    
    
    12.2
    %
    
    
    8Q1 2009
    
    
    40,209
    
    
    
    7.3
    %
    
    
    3Q2 2009
    
    
    120,648
    
    
    
    22.0
    %
    
    
    6Q4 2009
    
    
    2,141
    
    
    
    0.4
    %
    
    
    1Q1 2010
    
    
    7,404
    
    
    
    1.4
    %
    
    
    1Q1 2011
    
    
    3,500
    
    
    
    0.6
    %
    
    
    1$
    547,785
    
    
    
    100.0
    %
    
    
    57
  28




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##### Table of Contents



Real Estate Held for Development
  # of
    
    
    Aggregate
    
    
    Estimated
    
    
    Book Value as %Projects
    
    
    Book Value
    
    
    Realizable Value
    
    
    of Est. ValueCalifornia
    
    
    3
    
    
    
    19,710
    
    
    
    24,923
    
    
    
    79.1
    %Texas
    
    
    1
    
    
    
    16,383
    
    
    
    23,159
    
    
    
    70.7
    %Arizona
    
    
    2
    
    
    
    9,968
    
    
    
    11,778
    
    
    
    84.6
    %Total
    
    
    6
    
    
    
    46,061
    
    
    
    59,860
    
    
    
    76.9
    %
    Important Relationships Between Capital Resources and Results of Operations
 Loan Loss Reserve
  29




---



##### Table of Contents



Mortgage Loans, Participations and Loan Sales
   30




---



##### Table of Contents



Distributions to Members
  Annualized Rate of Return to Members on Distributions
  31




---



##### Table of Contents



Redemptions
   32




---



##### Table of Contents



Trends and Uncertainties
 Prospective Trends
      
    
    Estimated net realizable value of any underlying collateral in relation to the
outstanding mortgage balance, including accrued interest and related costs;
    
    Recency and reliability of valuation;
    
    The financial condition of the borrower and any adverse factors that may affect its
ability to pay;
    
    Prevailing economic conditions, including all known relevant internal and external
factors that may affect loan collectibility (and modified for new factors);
    
    Historical experience by market and in general; and
    
    Evaluation of industry trends;
  33




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34




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##### Table of Contents



Percent
    
    
    
    
    
    
    Principal
    
    
    Accrued
    
    
    Non-Accrued
    
    
    
    
    
    
    Wtd. Averageof Principal
    
    
    #
    
    
    Balance
    
    
    Interest
    
    
    Note Interest
    
    
    Total
    
    
    Loan-to-ValueArizona
    
    
    40.4
    %
    
    
    8
    
    
    $
    68,064
    
    
    
    1,537
    
    
    
    2,915
    
    
    $
    72,516
    
    
    
    87.5
    %California
    
    
    24.1
    %
    
    
    5
    
    
    
    40,623
    
    
    
    969
    
    
    
    
    
    
    
    41,592
    
    
    
    85.0
    %Idaho
    
    
    29.5
    %
    
    
    2
    
    
    
    49,563
    
    
    
    1,768
    
    
    
    2,263
    
    
    
    53,594
    
    
    
    85.0
    %Texas
    
    
    3.5
    %
    
    
    1
    
    
    
    5,858
    
    
    
    230
    
    
    
    58
    
    
    
    6,146
    
    
    
    80.0
    %New Mexico
    
    
    2.5
    %
    
    
    1
    
    
    
    4,171
    
    
    
    123
    
    
    
    
    
    
    
    4,294
    
    
    
    61.7
    %100.0
    %
    
    
    17
    
    
    $
    168,279
    
    
    $
    4,627
    
    
    $
    5,236
    
    
    $
    178,142
    
    
    
    85.0
    %
     Loan
    
    
    
    Market DeflationTo
    
    
    
    LTV With
    
    
    LTV With
    
    
    LTV WithValue
    
    
    
    10%
    
    
    25%
    
    
    35%Portfolio at June 30, 2008 (dollars in thousands)
    
    
    
    (LTV)
    
    
    
    Decline
    
    
    Decline
    
    
    DeclinePrincipal
    
    
    Percent by
    
    
    Note
    
    
    
    As
    
    
    
    In
    
    
    In
    
    
    InPeriod
    
    #
    
    
    Outstanding
    
    
    Qtr
    
    
    Year
    
    
    Total
    
    
    
    Originated
    
    
    
    Value
    
    
    Value
    
    
    Value2005:Q1
    
    
    1
    
    
    $
    15,895
    
    
    
    2.9
    %
    
    
    
    
    
    $
    16,682
    
    
    
    
    56.0
    %
    
    
    
    62.2
    %
    
    
    74.7
    %
    
    
    86.2
    %Q2
    
    
    1
    
    
    
    2,203
    
    
    
    0.4
    %
    
    
    
    
    
    
    2,164
    
    
    
    
    67.6
    %
    
    
    
    75.1
    %
    
    
    90.1
    %
    
    
    104.0
    %Q3
    
    
    4
    
    
    
    15,132
    
    
    
    2.8
    %
    
    
    
    
    
    
    15,135
    
    
    
    
    68.6
    %
    
    
    
    76.2
    %
    
    
    91.5
    %
    
    
    105.5
    %Q4
    
    
    2
    
    
    
    14,464
    
    
    
    2.6
    %
    
    
    8.7
    %
    
    
    16,284
    
    
    
    
    72.7
    %
    
    
    
    80.8
    %
    
    
    96.9
    %
    
    
    111.8
    %2006:Q1
    
    
    2
    
    
    
    5,594
    
    
    
    1.0
    %
    
    
    
    
    
    
    5,584
    
    
    
    
    62.1
    %
    
    
    
    69.0
    %
    
    
    82.8
    %
    
    
    95.6
    %Q2
    
    
    2
    
    
    
    30,688
    
    
    
    5.6
    %
    
    
    
    
    
    
    31,969
    
    
    
    
    50.4
    %
    
    
    
    56.0
    %
    
    
    67.2
    %
    
    
    77.6
    %Q3
    
    
    6
    
    
    
    46,324
    
    
    
    8.5
    %
    
    
    
    
    
    
    61,366
    
    
    
    
    66.5
    %
    
    
    
    73.8
    %
    
    
    88.6
    %
    
    
    102.2
    %Q4
    
    
    3
    
    
    
    34,423
    
    
    
    6.3
    %
    
    
    21.4
    %
    
    
    35,571
    
    
    
    
    64.2
    %
    
    
    
    71.3
    %
    
    
    85.6
    %
    
    
    98.8
    %2007:Q1
    
    
    6
    
    
    
    54,631
    
    
    
    10.0
    %
    
    
    
    
    
    
    56,835
    
    
    
    
    46.3
    %
    
    
    
    51.4
    %
    
    
    61.7
    %
    
    
    71.2
    %Q2
    
    
    6
    
    
    
    94,189
    
    
    
    17.2
    %
    
    
    
    
    
    
    112,102
    
    
    
    
    56.5
    %
    
    
    
    62.8
    %
    
    
    75.3
    %
    
    
    86.9
    %Q3
    
    
    8
    
    
    
    42,496
    
    
    
    7.8
    %
    
    
    
    
    
    
    46,368
    
    
    
    
    55.4
    %
    
    
    
    61.5
    %
    
    
    73.8
    %
    
    
    85.2
    %Q4
    
    
    6
    
    
    
    24,874
    
    
    
    4.5
    %
    
    
    39.5
    %
    
    
    30,746
    
    
    
    
    58.2
    %
    
    
    
    64.7
    %
    
    
    77.6
    %
    
    
    89.5
    %2008:Q1
    
    
    3
    
    
    
    66,952
    
    
    
    12.20
    %
    
    
    
    
    
    
    93,002
    
    
    
    
    66.1
    %
    
    
    
    73.5
    %
    
    
    88.2
    %
    
    
    101.8
    %Q2
    
    
    7
    
    
    
    99,920
    
    
    
    18.20
    %
    
    
    30.4
    %
    
    
    141,847
    
    
    
    
    67.0
    %
    
    
    
    74.4
    %
    
    
    89.3
    %
    
    
    103.0
    %Total
    
    
    57
    
    
    $
    547,785
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    $
    665,655
    
    
    
    
    60.1
    %
    
    
    
    66.8
    %
    
    
    80.1
    %
    
    
    92.4
    %
 35




---



##### Table of Contents



MarketPortfolio at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Decline
    
    
    
    ChangeJune 30, 2008 (dollars in thousands)
    
    
    
    As
    
    
    
    12/31/2007
    
    
    
    Q2 2008
    
    
    
    Needed
    
    
    
    FromPrincipal
    
    
    Note
    
    
    
    Originated
    
    
    
    Estimated
    
    
    
    Estimated
    
    
    
    For 100%
    
    
    
    OriginalPeriod
    
    #
    
    
    Outstanding
    
    
    Total
    
    
    
    LTV
    
    
    
    LTV
    
    
    
    LTV
    
    
    
    LTV
    
    
    
    LTV2005:Q1
    
    
    1
    
    
    $
    15,895
    
    
    $
    16,682
    
    
    
    
    56.0
    %
    
    
    
    88.6
    %
    
    
    
    87.0
    %
    
    
    
    (13.0
    %)
    
    
    
    55.4
    %Q2
    
    
    1
    
    
    
    2,203
    
    
    
    2,164
    
    
    
    
    67.6
    %
    
    
    
    85.0
    %
    
    
    
    85.0
    %
    
    
    
    (15.0
    %)
    
    
    
    25.7
    %Q3
    
    
    4
    
    
    
    15,132
    
    
    
    15,135
    
    
    
    
    68.6
    %
    
    
    
    46.2
    %
    
    
    
    44.5
    %
    
    
    
    (55.5
    %)
    
    
    
    (35.1
    %)Q4
    
    
    2
    
    
    
    14,464
    
    
    
    16,284
    
    
    
    
    72.7
    %
    
    
    
    87.5
    %
    
    
    
    87.5
    %
    
    
    
    (12.5
    %)
    
    
    
    20.3
    %2006:Q1
    
    
    2
    
    
    
    5,594
    
    
    
    5,584
    
    
    
    
    62.1
    %
    
    
    
    86.9
    %
    
    
    
    81.7
    %
    
    
    
    (18.3
    %)
    
    
    
    31.5
    %Q2
    
    
    2
    
    
    
    30,688
    
    
    
    31,969
    
    
    
    
    50.4
    %
    
    
    
    66.9
    %
    
    
    
    55.5
    %
    
    
    
    (44.5
    %)
    
    
    
    10.2
    %Q3
    
    
    6
    
    
    
    46,324
    
    
    
    61,366
    
    
    
    
    66.5
    %
    
    
    
    83.7
    %
    
    
    
    89.5
    %
    
    
    
    (10.5
    %)
    
    
    
    34.6
    %Q4
    
    
    3
    
    
    
    34,423
    
    
    
    35,571
    
    
    
    
    64.2
    %
    
    
    
    71.8
    %
    
    
    
    72.2
    %
    
    
    
    (27.8
    %)
    
    
    
    12.4
    %2007:Q1
    
    
    6
    
    
    
    54,631
    
    
    
    56,835
    
    
    
    
    46.3
    %
    
    
    
    66.6
    %
    
    
    
    65.8
    %
    
    
    
    (34.2
    %)
    
    
    
    42.2
    %Q2
    
    
    6
    
    
    
    94,189
    
    
    
    112,102
    
    
    
    
    56.5
    %
    
    
    
    65.6
    %
    
    
    
    77.7
    %
    
    
    
    (22.3
    %)
    
    
    
    37.6
    %Q3
    
    
    8
    
    
    
    42,496
    
    
    
    46,368
    
    
    
    
    55.4
    %
    
    
    
    55.3
    %
    
    
    
    63.0
    %
    
    
    
    (37.0
    %)
    
    
    
    13.8
    %Q4
    
    
    6
    
    
    
    24,874
    
    
    
    30,746
    
    
    
    
    58.2
    %
    
    
    
    62.0
    %
    
    
    
    64.0
    %
    
    
    
    (36.0
    %)
    
    
    
    9.9
    %2008:Q1
    
    
    3
    
    
    
    66,952
    
    
    
    93,002
    
    
    
    
    66.1
    %
    
    
    
    N/A
    
    
    
    
    66.1
    %
    
    
    
    (33.9
    %)
    
    
    
    (0.1
    %)Q2
    
    
    7
    
    
    
    99,920
    
    
    
    141,847
    
    
    
    
    67.0
    %
    
    
    
    N/A
    
    
    
    
    67.0
    %
    
    
    
    (33.0
    %)
    
    
    
    0.0
    %Total
    
    
    57
    
    
    $
    547,785
    
    
    $
    665,655
    
    
    
    
    60.1
    %
    
    
    
    66.0
    %
    
    
    
    69.2
    %
    
    
    
    (30.8
    %)
    
    
    
    15.2
    %
  36




---



##### Table of Contents



37




---



##### Table of Contents



As of June 30, 2008Yield
    
    
    Various Deployment Ratio BlendsAsset:Loans
    
    
    12.00
    %
    
    
    90
    %
    
    
    85
    %
    
    
    80
    %
    
    
    75
    %
    
    
    70
    %
    
    
    65
    %Cash
    
    
    2.00
    %
    
    
    2
    %
    
    
    7
    %
    
    
    12
    %
    
    
    17
    %
    
    
    22
    %
    
    
    27
    %Other assets
    
    
    0.00
    %
    
    
    8
    %
    
    
    8
    %
    
    
    8
    %
    
    
    8
    %
    
    
    8
    %
    
    
    8
    %Total Assets
    
    
    
    
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Weighted AverageYield on Assets
    
    
    
    
    
    
    10.84
    %
    
    
    10.34
    %
    
    
    9.84
    %
    
    
    9.34
    %
    
    
    8.84
    %
    
    
    8.34
    %
   
    
    pending fundings of loans that have completed the underwriting process;
    
    anticipated loan fundings in the loan origination pipeline;
    
    average size of loans in the underwriting process;
    
    expected loan reductions or payoffs;
    
    pending Member redemptions;
    
    direct expenses, and
    
    other anticipated liquidity needs.
  38




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Contractual Obligations
  Liquidity and Capital Resources
  Requirements:
    
    
    
    Sources of Liquidity:
    
    Loan Fundings
    
    
    
    New Member Investments
    
    Management Fees and Loan Enforcement Costs
    
    
    
    Participations and Whole Loans Sold
    
    Interest Expense
    
    
    
    Interest Income
    
    Distributions to Members
    
    
    
    Loan Payment
    
    Member Redemptions
    
    
    
    Supplemental Liquidity
  Requirements
    39




---



##### Table of Contents



Sources of Liquidity
  40




---



##### Table of Contents



Critical Accounting Policies
 Revenue Recognition
  41




---



##### Table of Contents



Mortgage Loans
       42




---



##### Table of Contents



Accounting by Creditors for Impairment of a Loan
    Accounting for Certain Mortgage Banking Activities
   43




---



##### Table of Contents



Accounting for the Impairment or Disposal of
Long-Lived Assets
 44




---



##### Table of Contents



Use of Estimates
  Fund Expenses
  45




---



##### Table of Contents



Recent
Accounting Pronouncements
 The Hierarchy of Generally Accepted Accounting Principles The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk.
    Matured
    
    
    Q3 2008
    
    
    Q4 2008
    
    
    Q1 2009
    
    
    Q2 2009
    
    
    Q4 2009
    
    
    Q1 2010
    
    
    Q1 2011
    
    
    TotalLoan Rates:Variable
    
    $
    47,716
    
    
    $
    158,466
    
    
    $
    56,804
    
    
    $
    
    
    
    $
    87,300
    
    
    $
    2,141
    
    
    $
    
    
    
    $
    
    
    
    $
    352,427Fixed
    
    
    79,940
    
    
    
    20,680
    
    
    
    10,277
    
    
    
    40,209
    
    
    
    33,348
    
    
    
    
    
    
    
    7,404
    
    
    
    3,500
    
    
    
    195,358$
    127,656
    
    
    $
    179,146
    
    
    $
    67,081
    
    
    $
    40,209
    
    
    $
    120,648
    
    
    $
    2,141
    
    
    $
    7,404
    
    
    $
    3,500
    
    
    $
    547,785
  
 Item 4T. Controls and Procedures
 Disclosure Controls and Procedures
   46




---



##### Table of Contents



Changes to Internal Control over Financial Reporting
   
 PART II
 OTHER INFORMATION
 
 Item 1. Legal Proceedings.
   
 Item 1A. Risk Factors.
  47




---



##### Table of Contents



Defaults on our mortgage loans will decrease our revenue and distributions.
  We
are transitioning our lending strategies to increase the percentage of out assets allocated to loans on commercial and income-producing properties, although there can be no assurance that we will be able to implement
 these strategies or that, if implemented, they will be successful.
  We
are experiencing higher levels of redemptions from Members.  If we
are unable to replace these funds with new investor contributions or
other funding sources, we may be unable to satisfy our liquidity needs.
  Members have a limited ability to have their units redeemed and may not receive a return of their capital contribution, in whole or in part, in a timely manner, or at all.
  
    
    Requests to redeem units may only be submitted after the units have been held for at least 60 days.
    
    Redemptions are made only to the extent we have cash available and, in the judgment of the Manager, the redemption
 would not impair the liquidity or operation of the Fund.
    
    All requests for withdrawal are on a
first-come, first-served basis. If the amount needed to fund withdrawals in any particular month exceeds the amount of cash available for withdrawals, funds will be distributed to
the Members in the order in which their requests were received.
    
    If a Members capital account is reduced below $10,000 due to any withdrawal payment, we may distribute all remaining amounts in the capital account to the Member in cancellation of
the units, and the Member will then cease to be a Member.
    
    Unless the Manager determines otherwise, the total amount withdrawn by all Members during any fiscal year may not exceed
 10% of the amount of capital accounts of all the Members.
    
    We are not required to sell any portion of our assets to fund a withdrawal.
    
    We only make redemption payments once a month.
    
    If units are redeemed, the redemption will typically be paid within 60 to 90 days following the end of the month in which the request is received by IMH.
  Retirement Plan Risks
 If we fail to satisfy an ERISA exemption by limiting the investments of certain employee benefit plans to less than 25% of the Fund, we could become subject to personal liability, civil penalties, and to non-deductible excise taxes, all of which could have a negative impact on the Fund
and certain members who have purchased our units.
  48




---



##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  49




---



##### Table of Contents



Member Investments
    
    
    RedemptionsAdditional FirstInitial
    
    
    Year
    
    
    Additional
    
    
    ReinvestmentInvestment
    
    
    Contributions
    
    
    Contributions
    
    
    Contributions
    
    
    Full
    
    
    Partial
    
    
    NetBalance, beginning of periodDollars
    
    $
    453,550
    
    
    $
    68,296
    
    
    $
    102,401
    
    
    $
    43,705
    
    
    $
    (42,113
    )
    
    $
    (49,055
    )
    
    $
    576,784# Members
    
    
    3,754
    
    
    
    789
    
    
    
    1,124
    
    
    
    16,764
    
    
    
    (282
    )
    
    
    (355
    )
    
    
    3,472# Units
    
    
    45,353
    
    
    
    6,830
    
    
    
    10,240
    
    
    
    4,371
    
    
    
    (4,211
    )
    
    
    (4,905
    )
    
    
    57,678January 1,
2008  March 31, 2008DirectDollars
    
    $
    4,934
    
    
    $
    395
    
    
    $
    9,587
    
    
    $
    3,133
    
    
    $
    (7,006
    )
    
    $
    (7,369
    )
    
    $
    3,674# Members
    
    
    33
    
    
    
    3
    
    
    
    58
    
    
    
    1,555
    
    
    
    (30
    )
    
    
    (43
    )
    
    
    3# Units
    
    
    493
    
    
    
    40
    
    
    
    959
    
    
    
    313
    
    
    
    (701
    )
    
    
    (737
    )
    
    
    367Broker/DealerDollars
    
    $
    45,516
    
    
    $
    767
    
    
    $
    14,955
    
    
    $
    5,288
    
    
    $
    (21,524
    )
    
    $
    (6,536
    )
    
    $
    38,466# Members
    
    
    457
    
    
    
    12
    
    
    
    142
    
    
    
    4,411
    
    
    
    (138
    )
    
    
    (41
    )
    
    
    319# Units
    
    
    4,552
    
    
    
    77
    
    
    
    1,495
    
    
    
    529
    
    
    
    (2,152
    )
    
    
    (654
    )
    
    
    3,847First Quarter TotalsDollars
    
    $
    50,450
    
    
    $
    1,162
    
    
    $
    24,542
    
    
    $
    8,421
    
    
    $
    (28,530
    )
    
    $
    (13,905
    )
    
    $
    42,140# Members
    
    
    490
    
    
    
    15
    
    
    
    200
    
    
    
    5,966
    
    
    
    (168
    )
    
    
    (84
    )
    
    
    322# Units
    
    
    5,045
    
    
    
    116
    
    
    
    2,454
    
    
    
    842
    
    
    
    (2,853
    )
    
    
    (1,391
    )
    
    
    4,214April 1,
2008  June 30, 2008DirectDollars
    
    $
    4,753
    
    
    $
    410
    
    
    $
    5,069
    
    
    $
    2,937
    
    
    $
    (6,093
    )
    
    $
    (6,351
    )
    
    $
    725# Members
    
    
    28
    
    
    
    5
    
    
    
    46
    
    
    
    1,551
    
    
    
    (18
    )
    
    
    (47
    )
    
    
    10# Units
    
    
    475
    
    
    
    41
    
    
    
    507
    
    
    
    294
    
    
    
    (609
    )
    
    
    (635
    )
    
    
    72Broker/DealerDollars
    
    $
    65,232
    
    
    $
    4,699
    
    
    $
    10,550
    
    
    $
    5,706
    
    
    $
    (18,669
    )
    
    $
    (10,343
    )
    
    $
    57,176# Members
    
    
    608
    
    
    
    45
    
    
    
    112
    
    
    
    5,235
    
    
    
    (76
    )
    
    
    (48
    )
    
    
    532# Units
    
    
    6,523
    
    
    
    470
    
    
    
    1,055
    
    
    
    571
    
    
    
    (1,867
    )
    
    
    (1,034
    )
    
    
    5,717Second Quarter TotalsDollars
    
    $
    69,985
    
    
    $
    5,109
    
    
    $
    15,619
    
    
    $
    8,643
    
    
    $
    (24,762
    )
    
    $
    (16,694
    )
    
    $
    57,901# Members
    
    
    636
    
    
    
    50
    
    
    
    158
    
    
    
    6,786
    
    
    
    (94
    )
    
    
    (95
    )
    
    
    542# Units
    
    
    6,999
    
    
    
    511
    
    
    
    1,562
    
    
    
    864
    
    
    
    (2,476
    )
    
    
    (1,669
    )
    
    
    5,789Fiscal 2008 TotalsDollars
    
    $
    120,437
    
    
    $
    6,271
    
    
    $
    40,163
    
    
    $
    17,064
    
    
    $
    (53,294
    )
    
    $
    (30,600
    )
    
    $
    100,041# Members
    
    
    1,126
    
    
    
    65
    
    
    
    358
    
    
    
    12,752
    
    
    
    (262
    )
    
    
    (179
    )
    
    
    863# Units
    
    
    12,044
    
    
    
    627
    
    
    
    4,016
    
    
    
    1,706
    
    
    
    (5,329
    )
    
    
    (3,060
    )
    
    
    10,003Inception to June 30, 2008Dollars
    
    $
    573,987
    
    
    $
    74,567
    
    
    $
    142,564
    
    
    $
    60,769
    
    
    $
    (95,407
    )
    
    $
    (79,655
    )
    
    $
    676,825# Members
    
    
    4,880
    
    
    
    854
    
    
    
    1,482
    
    
    
    29,516
    
    
    
    (544
    )
    
    
    (534
    )
    
    
    4,335# Units
    
    
    57,397
    
    
    
    7,457
    
    
    
    14,256
    
    
    
    6,077
    
    
    
    (9,541
    )
    
    
    (7,965
    )
    
    
    67,682
 50




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##### Table of Contents



Item 6. Exhibits
 ExhibitNo.
    
    Description3.1
    
    IMH Secured Loan Fund, LLC Certificate of Formation
(incorporated by reference to Exhibit 3.1 of the Annual Report
on Form 10-K, filed by IMH Secured Loan Fund, LLC on March 31,
2008).4.1
    
    IMH Secured Loan Fund, LLC Restated Limited Liability Company
Operating Agreement (incorporated by reference to Exhibit 4.1
of the Registration Statement on Form 10, File No. 000-52611,
filed by IMH Secured Loan Fund, LLC on April 30, 2007)4.2
    
    Form Subscription Agreement (incorporated by reference to
Exhibit 4.2 of the Registration Statement on Form 10, File No.
000-52611, filed by IMH Secured Loan Fund, LLC on April 30,
2007)31.1*
    
    Certification of Chief Executive Officer of Investors Mortgage
Holdings, Inc., manager of IMH Secured Loan Fund, LLC pursuant
to Section 302 of the Sarbanes-Oxley Act of 200231.2*
    
    Certification of Chief Financial Officer of Investors Mortgage
Holdings, Inc., manager of IMH Secured Loan Fund, LLC pursuant
to Section 302 of the Sarbanes-Oxley Act of 200232.1*
    
    Certification of Chief Executive Officer and the Chief
Financial Officer of Investors Mortgage Holdings, Inc.,
manager of IMH Secured Loan Fund, LLC pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
 
 *
    
    Filed herewith.
    
    This certification is being furnished solely to accompany this report pursuant to 18 U.S.C.
Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act, and is
not to be incorporated by reference into any filings of the Fund, whether made before or after
the date hereof, regardless of any general incorporation language in such filing. 51




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##### Table of Contents



SIGNATURES
  Date: August 14, 2008
    
    IMH SECURED LOAN FUND, LLCBy:
    
    Investors Mortgage Holdings, Inc.Its:
    
    ManagerBy:
    
    /s/ Steven Darak

Steven DarakChief Financial Officer(Principal Financial and Accounting Officer andDuly Authorized Officer)
 52




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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNo.
    
    Description3.1
    
    IMH Secured Loan Fund, LLC Certificate of Formation
(incorporated by reference to Exhibit 3.1 of the Annual Report
on Form 10-K, filed by IMH Secured Loan Fund, LLC on March 31,
2008).4.1
    
    IMH Secured Loan Fund, LLC Restated Limited Liability Company
Operating Agreement (incorporated by reference to Exhibit 4.1
of the Registration Statement on Form 10, File No. 000-52611,
filed by IMH Secured Loan Fund, LLC on April 30, 2007)4.2
    
    Form Subscription Agreement (incorporated by reference to
Exhibit 4.2 of the Registration Statement on Form 10, File No.
000-52611, filed by IMH Secured Loan Fund, LLC on April 30,
2007)31.1*
    
    Certification of Chief Executive Officer of Investors Mortgage
Holdings, Inc., manager of IMH Secured Loan Fund, LLC pursuant
to Section 302 of the Sarbanes-Oxley Act of 200231.2*
    
    Certification of Chief Financial Officer of Investors Mortgage
Holdings, Inc., manager of IMH Secured Loan Fund, LLC pursuant
to Section 302 of the Sarbanes-Oxley Act of 200232.1**
    
    Certification of Chief Executive Officer and the Chief
Financial Officer of Investors Mortgage Holdings, Inc.,
manager of IMH Secured Loan Fund, LLC pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
 
 *
    
    Filed herewith.
    
    This certification is being furnished solely to accompany this report pursuant to 18 U.S.C.
Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act, and is
not to be incorporated by reference into any filings of the Fund, whether made before or after
the date hereof, regardless of any general incorporation language in such filing. 53