REDWOOD MORTGAGE INVESTORS VIII

                       (a California Limited Partnership)

                               Index to Form 10-K

                                December 31, 1999

                                     Part I

                                                                        Page No.
Item 1 - Business                                                              3
Item 2 - Properties                                                          4-5
Item 3 - Legal Proceedings                                                     6
Item 4 - Submission of Matters to a vote of
         Security Holders (partners)                                           6

                                     Part II

Item 5 - Market for the Registrant's Partners' Capital and
         related matters                                                       6
Item 6 - Selected Financial Data                                             6-8
Item 7 - Management's Discussion and Analysis of Financial
         Condition and Results of Operations                               9 -13
Item 8 - Financial Statements and Supplementary Data                       13-37
Item 9 - Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure                                  38

                                    Part III

Item 10 - Directors and Executive Officers of the Registrant                  38
Item 11 - Executive Compensation                                              39
Item 12 - Security Ownership of Certain Beneficial Owners and management      40
Item 13 - Certain Relationships and Related Transactions                      40

                                     Part IV

Item 14 - Exhibits, Financial Statement Schedules,
          and Reports on Form 8-K.                                         40-41

Signatures                                                                    42




<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-K

                Annual Report Pursuant to Section 13 or 15 (d) of

                       the Securities Exchange Act of 1934

      For the year ended December 31, 1999 Commission file number 333-13113
--------------------------------------------------------------------------------

                         REDWOOD MORTGAGE INVESTORS VIII
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

      California                                             94-3158788
--------------------------------------------------------------------------------
(State or other jurisdiction of                 (I.R.S. Employer Identification)
 incorporation or organization)

650 El Camino Real Suite G, Redwood City, CA                           94063
--------------------------------------------------------------------------------
(address of principal executive offices)                            (zip code)

Registrant's telephone No. including area code                    (650) 365-5341
--------------------------------------------------------------------------------

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

Title of each class                    Name of each exchange on which registered
--------------------------------------------------------------------------------
Limited Partnership Units                                              None

--------------------------------------------------------------------------------

Securities registered pursuant to Section 12(g)
              of the Act:                              Limited Partnership Units

Indicate by check mark  whether the  registrant  (1) has filed all reports to be
filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of  1934  the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.

YES     XXXX                                                NO
---------------                                         ------------------------

As of  December  31,  1999,  the  limited  partnership  units  purchased  by non
affiliates was 351,109.41 units computed at $100.00 a unit for $35,110,941.

Documents incorporated by reference:

Portions  of  the  Prospectus  came  into  effect  on  December  4,  1996,  (the
"Prospectus")  are incorporated in Parts II, III, and IV. Exhibits filed as part
of Form S-11 Registration Statement #333-13113 are referenced in part IV.


<PAGE>


                                     Part I

Item 1 - Business

Redwood  Mortgage  Investors  VIII,  a  California   limited   partnership  (the
"Partnership"), is organized to engage in business as a mortgage lender, for the
primary  purpose of making loans secured  primarily by first and second deeds of
trust on  California  real  estate.  Loans are  arranged and serviced by Redwood
Mortgage  Corp.  The  Partnership's  objectives are to make loans that will: (i)
yield a high rate of return from mortgage lending; and (ii) preserve and protect
the  Partnership's  capital.  Investors  should not expect  the  Partnership  to
provide tax benefits of the type commonly  associated  with limited  partnership
tax shelter  investments.  The Partnership is intended to serve as an investment
alternative  for  investors  seeking  current  income.   However,  unlike  other
investments  which are intended to provide current income,  an investment in the
Partnership  will be less liquid,  not readily  transferable,  and not provide a
guaranteed return over its investment life.

Initially,  a minimum of 2,500 Units  ($250,000)  and a maximum of 150,000 Units
$15,000,000)  were sold.  This  initial  offering  closed on October  31,  1996.
Subsequently,  the  Partnership  commenced  a second  offering  of up to 300,000
additional  Units  ($30,000,000)  commencing on December 4, 1996.  All units are
being offered on a "best efforts" basis, which means that no one is guaranteeing
that any  minimum  number of Units will be sold,  through  broker-dealer  member
firms of the National Association of Securities Dealers, Inc. (See "TERMS OF THE
OFFERING" and " PLAN OF DISTRIBUTION").

The  Partnership  began selling Units in February,  1993, and began investing in
mortgages in April,  1993. At December 31, 1999, the Partnership has investments
in Mortgage Investments with principal balances totalling $35,693,147.  Interest
rates ranged from 8.00% to 14.00%.  Currently  First Trust Deeds comprise 51.81%
of the total amount of the Mortgage Investment  portfolio,  a decrease of 26.04%
over 1998  level of  70.05%.  Junior  loans  (2nd and 3rd Trust  Deeds)  make up
48.19%,  an increase of 60.90% over 1998 level of  29.95%.Owner-occupied  homes,
combined  with  non-owner  occupied  Mortgage  Investments,  total 51.25% of the
Mortgage Investment portfolio.  Loans secured by multi-family properties make up
0.85% of the total Mortgage Investments.  Commercial Mortgage  Investments,  now
comprise 47.90% of the portfolio,  an increase from 42.03% last year.  77.33% of
the total  Mortgage  Investments,  are in six counties of the San  Francisco Bay
Area.  The County of  Stanislaus  makes up 15.54% of the  Mortgage  Investments.
Stanislaus  County is an adjacent County to the San Francisco Bay Area,  located
approximately 65 miles from San Francisco.  The balance of Mortgage  Investments
are primarily in Northern  California.  Mortgage  Investment size increased this
past year,  and is now  averaging  $673,456  per  Mortgage  Investment,  up from
$580,108 in 1998.  This  increase is due to the  ability of the  Partnership  by
virtue of its  increasing  size to invest in larger  Mortgage  Investments.  The
average Mortgage Investment as of December 31, 1999, represents 1.82% of Limited
Partners  capital  and 1.89% of  outstanding  Mortgage  Investments,  similar to
December 31, 1998 average Mortgage  Investment size of 2.14% of Limited Partners
capital and 1.82% of  outstanding  Mortgage  Investments.  Some of the  Mortgage
Investments are fractionalized  between affiliated  partnerships with objectives
similar to those of the  Partnership to further reduce risk.  Average equity per
loan  transaction  stood at  38.56%,  a  decrease  in equity  of 1.94%  from the
previous year. This average equity is generally  considered  very  conservative.
Generally,  the more equity,  the more  protection  for the lender.  The General
Partners  believe the  Partnership's  Mortgage  Investment  portfolio is in good
condition with only one property in foreclosure as of the end of December, 1999.


<PAGE>


Item 2 - Properties

A summary of the Partnership's  Mortgage Investment Portfolio as of December 31,
1999, is set forth below.

Mortgage Investments as a Percentage of Total Mortgage Investments

First Trust Deeds                                                 $19,388,393.83
Appraised Value of Properties                                      32,360,133.00
  Total Investment as a % of Appraisal                                    59.91%
First Trust Deeds                                                  19,388,393.83
Second Trust Deed Mortgage Investments                             16,082,802.44
Third Trust Deed Mortgage Investments                                 221,951.22
                                                             -------------------
                                                                   35,693,147.49

First Trust Deeds due other Lenders                                21,119,420.00
Second Trust Deeds due other Lenders                                2,600,000.00

Total Debt                                                        $59,412,567.49

  Appraised Property Value                                        $97,556,330.00
  Total Investments as a % of Appraisal                                   60.90%

Number of Mortgage Investments Outstanding                                    53

Average Investment                                                   $673,455.61
Average Investment as a % of Net Assets                                    1.82%
Largest Investment Outstanding                                      2,600,000.00
Largest Investment as a % of Net Assets                                    7.02%

Loans as a Percentage of Total Mortgage Investments

First Trust Deeds                                                         54.32%
Second Trust Deeds                                                        45.06%
Third Trust Deeds                                                          0.62%
                                                              ------------------
Total                                                                    100.00%

Mortgage Investments by

Type of Property                          Amount             Percent

Owner Occupied Homes                    $7,336,275.45            20.55%
Non-Owner Occupied Homes                10,957,622.03            30.70%
Apartments                                 302,796.53             0.85%
Commercial                              17,096,453.48            47.90%
                                     -----------------       -----------

Total                                  $35,693,147.49           100.00%



<PAGE>


The  following  is a  distribution  of Mortgage  Investments  outstanding  as of
December 31, 1999 by Counties.

County                                 Total                     Percent
                               Mortgage Investments

San Francisco                          $11,922,534.32             33.40%
Santa Clara                              6,204,610.57             17.38%
San Mateo                                5,698,300.21             15.96%
Stanislaus                               5,545,878.38             15.54%
Marin                                    2,090,630.58              5.86%
Placer                                   1,355,608.45              3.80%
Contra Costa                             1,316,342.71              3.68%
Lake                                       737,500.00              2.07%
Alameda                                    406,037.29              1.14%
San Joaquin                                194,811.75              0.55%
Fresno                                     127,723.21              0.36%
Riverside                                   50,000.00              0.14%
Sacramento                                  43,170.02              0.12%
                              ------------------------        -----------

Total                                  $35,693,147.49            100.00%


Statement of Condition of Mortgage Investments
         Number of Mortgage Investments in Foreclosure        1

Scheduled maturity dates of mortgage  investments as of December 31, 1999 are as
follows:

                         Year Ending
                         December 31,

                      -------------------

                             2000                                    $16,579,435
                             2001                                     14,365,526
                             2002                                        962,638
                             2003                                        308,957
                             2004                                        950,000
                          Thereafter                                   2,526,591
                                                                ----------------
                                                                     $35,693,147

                                                                ================


The  scheduled  maturities  for  2000   include   approximately   nine  Mortgage
Investments  totalling $4,984,651 which were past maturity at December 31, 1999.
Interest payment on only four of these loans was delinquent.

In 1995,  the  Partnership  chose to allow a senior  lender to foreclose out its
deed of trust on one of its Mortgage  Investments.  The Partnership  commenced a
legal  action to collect  this debt.  A  settlement  was  reached  for this debt
collection.  As of  December  31,  1999,  $30,000  of the  amount  due has  been
collected.  The remaining balance due has been recorded as an account receivable
in the financial statements. Additional payments are expected in year 2000.

As of January 01, 1999, the Partnership  owned a vacant lot acquired through the
foreclosure of Mortgage Investment. The vacant lot was valued at $66,000 and was
subsequently  sold in April  1999 for  $85,000.  Additionally,  the  Partnership
wholly owns a limited  liability  company  (LLC) whose sole asset is a partially
completed  single  family  residence.  This  partially  completed  single family
residence was originally  foreclosed upon by the  Partnership  and  subsequently
transferred to the LLC at a cost of $181,139.  Additional  expenditures over the
$181,139 basis, have been primarily for completion of the  construction.  At the
time of  writing  this  report  (February,  2000),  the  construction  was fully
completed and the property was sold.


<PAGE>


Item 3 - Legal Proceedings

In the normal course of business, the Partnership may become involved in various
types of legal proceedings such as assignment of rents,  bankruptcy proceedings,
appointment of receivers,  unlawful detainers,  judicial  foreclosure,  etc., to
enforce the  provisions  of the deeds of trust,  collect the debt owed under the
promissory  notes,  or to protect/  recoup its investment from the real property
secured by the deeds of trust.  None of these actions would  typically be of any
material  importance.  As of the date hereof, the Partnership is not involved in
any legal  proceedings  other than those  that would be  considered  part of the
normal course of business.

Item 4 - Submission of matters to vote of Security Holders (Partners).

No matters have been submitted to a vote of the Partnership.

                                     Part II

Item 5 - Market for the Registrant's Units and Related Partnership Matters.

300,000 units at $100 each (minimum 20 units) are being offered  (150,000  units
were  previously  offered and sold)  through  broker-dealer  member firms of the
National  Association  of  Securities  Dealers  on a "best  efforts"  basis  (as
indicated in Part I item 1).  Investors have the option of withdrawing  earnings
on a monthly,  quarterly,  or annual basis or reinvesting  and  compounding  the
earnings.  Limited Partners may withdraw from the Partnership in accordance with
the terms of the  Partnership  Agreement  subject to possible  early  withdrawal
penalties. There is no established public trading market.

A description of the Partnership  units,  transfer  restrictions  and withdrawal
provisions is more fully  described under the section  entitled  "Description of
Units" and summary of Limited Partnership Agreement,  pages 67 through 75 of the
Prospectus,   a  part  of  the  referenced  Registration  Statement,   which  is
incorporated by reference.

Pursuant to  Post-effective  No. 9, effective as of February 28, 2000, each unit
of the Limited Partnership shall be offered at a price of $1.00 instead of $100.
This  has  been  done  as an  administrative  convenience  that  will  save  the
Partnership  considerable  expense.  The total number of units being offered has
increased to 30,000,000 from 300,000,  however, the aggregate offering amount of
$30,000,000  has not increased.  This is simply a semantic change with no effect
on an investor's  interest,  or the total aggregate dollar amount being offered.
The  Partnership  does not actually  issue  "units".  An investor's  interest is
determined based solely on his capital account balance.

Item 6 - Selected Financial Data

Redwood  Mortgage  Investors  VIII began  operations  in April  1993.  Financial
results for years 1984 through  December 31, 1998,  for prior  partnerships  are
incorporated by reference to the Prospectus (S-11) dated December 4, 1996, Table
III pages 104 through 138,  Supplement No.4 dated April 24, 1998, and Supplement
No. 5 dated April 28, 1999.


<PAGE>



Financial condition and results of operation for the Partnership for three years
to December 31, 1999 were:

<TABLE>
                                  Balance Sheet

                                     Assets

                                                                           December 31,
                                                       ------------------------------------------------------

                                                                  1999               1998               1997
                                                       ----------------     --------------     --------------
                                                       ----------------     --------------     --------------
<S>                                                         <C>                  <C>                <C>
Cash                                                        $1,602,568           $528,688           $663,159
Accounts Receivable:
   Mortgage Investments secured by Deeds of Trust           35,693,148         31,905,958         25,304,989
   Accrued interest and other fees                             711,521            459,418            341,976
   Advances on Mortgage Investments                             33,251            211,145            205,804
   Other receivables - Unsecured                                49,090             48,849             62,844
   Less allowance for losses                                 (834,359)          (414,073)          (257,500)
Investment in Limited Liability Corporation                    373,358            304,139            251,139
Real estate owned, net                                               0             66,000             70,138
Organization cost net of amortization                                0                  0              1,875
Prepaid Expenses                                                 6,332             11,835             10,151
Due from General Partners/Related Companies                          0                  0              2,999

                                                       ----------------     --------------     --------------
                                                       ----------------     --------------     --------------
                                                           $37,634,909        $33,121,959        $26,657,574
                                                       ================     ==============     ==============


                        Liabilities and Partners Capital

                                                                           December 31,
                                                       -----------------------------------------------------

                                                            1999                 1998                  1997
                                                 ----------------      ---------------       ---------------
Liabilities:
Deferred interest                                       $213,529             $124,805               $83,066
Note payable - Bank                                            0            5,947,000             5,640,000
Accounts payable                                          29,413                2,500                 3,355
Subscriptions to partnership in applicant                330,000                    0                     0
status

                                                 ----------------      ---------------      ----------------
                                                        $572,942           $6,074,305            $5,726,421
                                                 ----------------      ---------------      ----------------


Partners' Capital

  Limited partners subject to redemption              37,030,017           27,025,331            20,914,721
  General Partners                                        31,950               22,323                16,432
                                                                       ---------------      ----------------
                                                 ----------------      ---------------
                                                     $37,061,967          $27,047,654           $20,931,153
                                                 ----------------      ---------------
                                                                       ---------------      ----------------

                                                     $37,634,909          $33,121,959           $26,657,574
                                                 ================      ===============      ================


</TABLE>

<PAGE>

<TABLE>


                                                                   Statement of Income

                                                                            December 31,
                                                       --------------------------------------------------------
                                                                      1999                1998            1997
                                                       --------------------      --------------    ------------

<S>                                                             <C>                 <C>             <C>
Gross Revenue                                                   $4,426,245          $3,406,021      $2,629,457
Expenses                                                         1,482,051           1,127,439         820,937
                                                             --------------      --------------    ------------
Income  before  interest  credited to Partners in applicant      2,944,194           2,278,582       1,808,520
status

Interest credited to Partners in applicant status                    1,914               4,454           9,562
                                                             --------------      --------------    ------------

Net Income                                                      $2,942,280          $2,274,128      $1,798,958
                                                             ==============      ==============    ============

Net income to General Partners (1%)                                $29,423             $22,741         $17,990
                                                             ==============      ==============    ============

Net Income to Limited Partners (99%)                            $2,912,857          $2,251,387      $1,780,968
                                                             ==============      ==============    ============


Net Income  per $1,000  invested  by Limited  Partners  for
   - where income is reinvested and compounded                         $84                 $84             $84
                                                             ==============      ==============    ============

   - where partner receives income in monthly distributions            $81                 $81             $81
                                                             ==============      ==============    ============

</TABLE>


The annualized  yield for 1997 was 8.40%, for 1998 was 8.40% and for 1999 it was
8.42%. An average  annualized  yield since inception  through December 31, 1999,
was 8.36%.


<PAGE>


Item 7
          MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

                              RESULTS OF OPERATIONS

On December 31, 1999,  the  Partnership  was in the offering stage of its second
offering, ($30,000,000).  Contributed capital totalled $14,932,017 for the first
offering and  $20,178,924  for the second  offering an aggregate of  $35,110,941
(Limited Partners) as of December 31, 1999. Of this amount, $330,000 remained in
applicant  status.  Accordingly,  together  with  initial  approved  offering of
$15,000,000  the   Partnership  has  approval  for  an  aggregate   offering  of
$45,000,000 in Units of $100 each.

At  December  31,  1999,  the  Partnership's  Mortgage  Investments  outstanding
totalled $35,693,147. The primary reason for an increase in Mortgage Investments
Outstanding  from  $6,484,707 in 1994, to $12,047,252 in 1995, to $15,642,990 in
1996, to  $25,304,989  in 1997, to  $31,905,958  in 1998,  and to $35,693,147 to
December  31,  1999,  was the  additional  capital  admitted to the  Partnership
through sale of Limited  Partnership  Units and reinvestment of Limited Partners
earnings.  Additional  Limited  Partners'  Capital  contributions  have totalled
$4,508,824,  $3,834,799, $3,863,536, $5,565,372, $5,100,458, and $9,520,806, and
the  reinvestment  of earnings by Limited  Partners who have elected to reinvest
earnings have totalled $239,956, $524,988, $800,218, $1,119,465, $1,440,687, and
$1,911,554,  for the years ended December 31, 1994,  December 31, 1995, December
31,  1996,  December  31,  1997,  December  31,  1998  and  December  31,  1999,
respectively.  To a lesser extent,  Mortgage  Investments  outstanding have also
increased  through the  utilization  of the  Partnership's  line of credit.  The
effect of more outstanding  Mortgage  Investments  raised the interest earned on
Mortgage  Investments for the years ended December 31, 1994,  1995,  1996, 1997,
1998 and 1999 to $480,110, $1,031,029,  $1,718,208,  $2,613,008,  $3,376,293 and
$4,337,427  respectively.  Interest  rates on Mortgage  Investments  ranged from
8.00% to 14.00%. The Partnership began funding Mortgage Investments on April 14,
1993 and as of December 31, 1999,  distributed earnings at an average annualized
yield of 8.36%.

Since the Fall of 1999,  mortgage  interest rates have been rising due primarily
to  economic  forces and  by  the  Federal  Reserve  raising  its core  interest
rates.New Mortgage Investments will be originated at higher interest rates which
could  increase  the  average  return  across  the  entire  Mortgage  Investment
portfolio  held by the  Partnership.  In the future,  interest rates likely will
change  from their  current  levels.  The General  Partners  cannot at this time
predict at what levels interest rates will be in the future.  Although the rates
charged by the  Partnership are influenced by the level of interest rates in the
market,  the  General  Partners  do not  anticipate  that  rates  charged by the
Partnership  to its borrowers  will change  significantly  from the beginning of
2000 over the next 12 months.  Based upon the rates payable in  connection  with
the existing Mortgage Investments, the current and anticipated interest rates to
be charged by the Partnership and the General Partners' experience,  the General
Partners  anticipate  that the annualized  yield will range between eight & nine
percent (8% - 9%).

In 1995,  the  Partnership  established a line of credit with a commercial  bank
secured by its Mortgage  Investments  and since its  inception has increased the
limit from  $3,000,000  to  $9,000,000.  For the years ended  December 31, 1996,
1997, 1998 and December 31, 1999,  interest on Note  Payable-Bank  was $188,638,
$340,633,  $513,566 and  $526,697  respectively.  For 1997,  1998 and the twelve
months ended December 31, 1999,  the increase in interest on notes  payable-Bank
has been  attributed to a higher overall  credit  facility  utilization.  During
1999, the Partnership's  highest borrowing was $8,600,000 at an interest rate of
prime + 1/4%.  This facility could again increase as the  Partnership's  capital
increases.  This added source of funds will help in maximizing  the  Partnership
yield by allowing the Partnership to minimize the amount of funds in lower yield
investment  accounts when  appropriate  Mortgage  Investments  are not currently
available.  Additionally,  the Mortgage Investments made by the Partnership bear
interest at a rate in excess of the rate payable to the bank which  extended the
line of credit,  the amount to be retained by the Partnership,  after payment of
the line of credit  cost,  will be greater  than  without the use of the line of
credit.  As of December 31, 1999, the balance was $0 and in accordance  with the
line of credit,  the Partnership  paid all accrued interest as of that date. The
zero balance, as of December 31, 1999, was

primarily  due to a  combination  of  significant  loan  repayments  and  strong
Partnership unit sales in the fourth quarter.  The Partnership used these strong
cash flows to pay down its line of credit from  $4,452,000,  as of September 30,
1999, to $0 on December 31, 1999.

The Partnership's income and expenses, accruals and delinquencies are within the
normal range of the General Partners' expectations,  based upon their experience
in  managing  similar  partnerships  over the last  twenty-two  years.  Mortgage
servicing fees increased from $155,912 to $189,692,  to $295,052 and to $359,464
for the years  ended  December  31,  1996,  1997,  1998 and 1999.  The  mortgage
servicing fees increased  primarily due to increase in the outstanding  Mortgage
Investment  portfolio.  Asset Management fees increased from $17,053 to $24,966,
to $31,651 and to $42,215 for the years ended December 31, 1996,  1997, 1998 and
1999  respectively.  The Asset  Management fee increase was due primarily to the
increased  Partner's capital which the General Partners are managing.  All other
Partnership  expenses  fluctuated  within a narrow  range  commonly  expected to
occur,  except for interest on note payable - bank which is discussed earlier in
the  Management  Discussion  and Analysis of Financial  Condition and Results of
Operations.  Borrower's foreclosures,  as set forth under Results of Operations,
are  a  normal  aspect  of  Partnership  operations  and  the  General  Partners
anticipate  that they will not have a  material  effect  on  liquidity.  Cash is
constantly  being generated from interest  earnings,  late charges,  pre-payment
penalties,  amortization  of  principal  and  pay-off on  Mortgage  Investments.
Currently,   cash  flow  exceeds   Partnership   expenses  and  earnings  payout
requirements.  Excess  cash flow will be  invested  in new  Mortgage  Investment
opportunities  when available,  used to reduce the Partnership credit line or in
other Partnership business.

The  General  Partners  regularly  review the  Mortgage  Investments  portfolio,
examining the status of delinquencies,  the underlying collateral securing these
Mortgage  Investments,  borrowers payment records, etc. Data from the local real
estate  market and of the national and local  economy are  reviewed.  Based upon
this  information and other data,  loss reserves are increased or decreased.  In
1996, 1997, 1998 and 1999, the Partnership made provisions for doubtful accounts
of $55,383, $139,804,  $162,969 and $408,890 respectively.  These provisions for
doubtful  accounts  were made  primarily  as a prudent  action to guard  against
unidentified  collection  losses.  The  provision  for  doubtful  accounts as of
December  31,  1999,  of $834,359 is  considered  by the General  Partners to be
adequate.  Because of the number of  variables  involved,  the  magnitude of the
swings  possible  and the General  Partners  inability  to control many of these
factors actual results may and do sometimes differ  significantly from estimates
made by the General Partners.

The  February  18,  2000  issue of the  "Alert"  publication,  published  by the
California Chamber of Commerce,  said the following about California's  thriving
economy:

"Job  gains  grew in the  fourth  quarter  of 1999,  as the  California  economy
accelerated.  For  the  year  as  a  whole,  employment  grew  by  2.9  percent,
considerably  stronger  than in the  nation.  This gain  likely  will be revised
upward to 3.3 percent,  or so, in the benchmark revisions to be released in late
February.

State  unemployment,  at 4.9 percent in the last four  months,  is lower than in
more than 30 years. Tax revenues are flooding into  Sacramento,  in part because
of the strong  economy,  but also because of  exercised  stock  options,  strong
bonuses and huge realized stock market gains.

The state economy's  strength has been widespread across major  industries,  but
concern about residential real estate is growing.

Housing permits were issued at an annual rate of 139,000 units through  November
1999, well below almost  everyone's  expectations and the 220,000 units averaged
annually in the 1980s. Clearly, not enough housing is being built in the state.

High land prices,  restrictive local land use policies,  the re-emergence of the
slow  growth/no  growth  movement,  and federal  environmental  regulations  are
constraining  home  building.  As a result,  affordability  is  declining  at an
alarming rate.

The  affordability of existing homes is low in San Diego and Orange counties and
extremely  low almost  everywhere  in the San  Francisco Bay Area. In what seems
like a paradox,  an oversupply of expensive new homes is  developing.  This also
happened under similar circumstances in the late 1980s.

In areas of particularly high land prices and long permitting and other building
delays,  building entry and mid-level  housing becomes more difficult to "pencil
out".  As  developers  turn  increasingly  to expensive  housing,  the supply of
expensive  housing can quickly outstrip demand.  Also, the  affordability of new
homes can dip considerably below that of existing homes.

In Orange County,  for example,  a relatively low 32 percent of households could
afford to buy the median-priced existing home sold in November;  only 19 percent
could afford to buy the median-priced new home."

To the  Partnership,  the above  evaluation of the  California  economy means an
increase in property values, job growth, personal income growth, etc., which all
translates  into  more  loan  activity,  which of  course,  is  healthy  for the
Partnership's lending activity.

At the  time  of  subscription  to the  Partnership,  Limited  Partners  make an
irrevocable decision to either take distributions of earnings monthly, quarterly
or annually or to compound  earnings  in their  capital  account.  For the years
ended December 31, 1996,  December 31, 1997,  December 31, 1998 and December 31,
1999, the Partnership  made  distributions of earnings to Limited Partners after
allocation of syndication  costs of, $418,380,  $495,480,  $614,383 and $826,291
respectively.  Distribution of Earnings to Limited  Partners after allocation of
syndication  costs for the years ended  December  31,  1996,  December 31, 1997,
December 31, 1998 and December 31, 1999, to Limited  Partners'  capital accounts
and  not  withdrawn  was  $800,218,   $1,119,465,   $1,440,687   and  $1,911,554
respectively.  As of December 31, 1996, December 31, 1997, December 31, 1998 and
December 31, 1999,  Limited Partners electing to withdraw  earnings  represented
34%, 30%, 30% and 31% respectively of the Limited Partners  outstanding  capital
accounts.  These percentages are remaining  relatively stable as new Partnership
unit sales continue to mirror previous sales of compounding and  non-compounding
unit sales. Liquidations are not occurring  disproportionately to compounding or
non-compounding accounts.

The  Partnership  also allows the Limited  Partners  to withdraw  their  capital
account  subject  to  certain   limitations  (see   liquidation   provisions  of
Partnership  Agreement).  Once a Limited Partner's initial five year hold period
has passed the General Partners expect to see an increase in liquidations due to
the ability of Limited  Partners to withdraw  without  penalty.  This ability to
withdraw  five  years  after a Limited  Partner's  investment  has the effect of
providing  Limited Partner  liquidity  which the General  Partners then expect a
portion of the Limited Partners to avail themselves of. This has the anticipated
effect of the Partnership growing, primarily through reinvestment of earnings in
years one through five. The General Partners expect to see increasing numbers of
Limited Partner withdrawals in years five through eleven, at which time the bulk
of those Limited Partners who have sought withdrawal have been liquidated. After
year eleven,  liquidation  generally subsides and the Partnership  capital again
tends to increase through earnings reinvestment. Since the five year hold period
for most of the  investors  has yet to expire,  as of December  31,  1999,  many
Limited  Partners  may  not  as yet  avail  themselves  of  this  provision  for
liquidation. Earnings and capital liquidations including early withdrawals since
inception, 1993 through December 31, 1999 were:
<TABLE>

<S>                    <C>         <C>          <C>         <C>         <C>         <C>           <C>
                       1993        1994         1995        1996        1997        1998          1999
                     ---------- ------------ ----------- ----------- ----------- ------------ -------------

Earnings
Capital Liquidation

                             0            0      $5,640    $146,755    $132,619     $257,344      $592,357
                     ---------- ------------ ----------- ----------- ----------- ------------ -------------

Total                  $46,855     $165,814    $309,117    $565,135    $628,099     $871,727    $1,418,648
                     ========== ============ =========== =========== =========== ============ =============
</TABLE>



<PAGE>



 Additionally,  Limited  Partners may withdraw over a period of one year subject
to certain  limitations  and  penalties.  For the years ended December 31, 1996,
December 31, 1997, December 31, 1998 and December 31, 1999, $146,755,  $132,619,
$244,213 and $411,838  respectively  were liquidated  subject to the 10% penalty
for early withdrawal.  This represents only 1.00%, 0.63%, 0.90% and 1.11% of the
Limited  Partners  ending capital for the years ended  December 31, 1996,  1997,
1998  and  1999,  respectively.   These  withdrawals  are  within  the  normally
anticipated  range that the General Partners would expect in their experience in
this and other Partnerships. The General Partners expect that a small percentage
of Limited Partners will elect to liquidate their capital accounts over one year
with a 10% early withdrawal penalty.  In originally  conceiving the Partnership,
the General  Partners wanted to provide Limited  Partners  needing their capital
returned a degree of liquidity. Generally, Limited Partners electing to withdraw
over one  year  need to  liquidate  investment  to raise  cash.  The  trend  the
Partnership is  experiencing in withdrawals by Limited  Partners  electing a one
year  liquidation  program  represents  a small  percentage  of Limited  Partner
capital as of December  31,  1996,  December  31,  1997,  December  31, 1998 and
December  31,  1999,  respectively,  and is expected by the General  Partners to
commonly occur at these levels.

         The Year 2000 was  considered  by most to be a challenge for the entire
world with respect to the conversion of existing  computerized  operations.  The
Partnership relies on Redwood Mortgage Corp., third parties and various software
vendors for its hardware and software  needs.  Since year 2000 has come, we have
not experienced any computer hardware breakdowns. We assume that our testing and
upgrading of computer  hardware prior to year 2000 identified all hardware areas
of concern.  Computer  software  programs  are all  operational  with only minor
problems  being  experienced  with  some  programs.  These  problems  are  being
addressed  by the  appropriate  software  vendors or software  programmers.  All
month-end,  quarterly,  and annual computerized functions have not yet been run,
however  testing  of the  operations  has  taken  place.  We do not  expect  any
significant problems.

         The costs of updating our computer systems were substantially  borne by
the non affiliated  software vendors and the in house system conversion costs to
the partnership were marginal.

         Year 2000  issues do not appear to have  affected,  in any  significant
manner, any industries or businesses in the marketplace in which the Partnership
places its loans. We believe that year 2000 issues are a non-event and will have
little if any future effect on the Partnership, its affiliates or the people and
businesses with which it associates.

         The  foregoing  analysis of year 2000 issues  includes  forward-looking
statements  and  predictions  about  possible  or  future  events,   results  of
operations,  and  financial  condition.  As such,  this analysis may prove to be
inaccurate  because of  assumptions  made by the general  partners or the actual
development  of  future  events.  No  assurance  can be given  that any of these
statements or predictions  will ultimately  prove to be correct or substantially
correct.

     On February 7, 2000, the General  Partners,  pursuant to Section 12.4(d) of
the  Partnership  Agreement,  admitted  Redwood  Mortgage  Corp.,  a  California
corporation, as a General Partner of the Partnership.  Redwood Mortgage Corp. is
an affiliate of the General Partners. Redwood Mortgage Corp. was incorporated in
1978. Its principal  stockholder is D. Russell Burwell, a General Partner of the
Partnership.  Redwood  Mortgage  Corp.  is a licensed real estate broker and has
been  engaged   primarily  in  the  business  of  arranging  and  servicing  the
Partnership's  loans since its inception.  The General Partners believe that the
addition of Redwood  Mortgage  Corp as a General  Partner  will  strengthen  the
Partnership's management team.


<PAGE>



On February 17, 2000 the  Partnership  filed  Post-Effective  Amendment No. 9 to
it's initial  Registration  Statement dated December 4, 1996 (the  "Amendment").
The Amendment was declared  effective by the Securities and Exchange  Commission
(the  "Commission")  on February 28,  2000.  The  Amendment  contained a revised
Prospectus for the Partnership  intended to meet the plain English  requirements
of the  Commission.  The  Prospectus  also includes  updated  financials for the
Partnership  and the General  Partners and  incorporates  the  disclosure  items
previously  included in Supplement  No. 5 dated April 26, 1999.  The  Prospectus
additionally  includes  disclosure  with  respect  to the fact that (1)  Redwood
Mortgage Corp. has been admitted as an additional General Partner (see Part III,
item 10 below); (2) the offering price of units has been changed to $1 (see Part
II, item 5 above);  and (3) that in order to provide greater  flexibility to its
investors, the General Partners intend to file a Dividend Reinvestment Plan with
the Commission in the first half of 2000.

              Item 8 - Financial Statements and Supplementary Data

Redwood  Mortgage  Investors VIII, a California  Limited  Partnership's  list of
Financial Statements and Financial Statement schedules:

A-Financial Statements

The  following  financial  statements  of Redwood  Mortgage  Investors  VIII are
included in Item 8:

             -  Independent Auditor's Report,
             - Balance  Sheets - December  31,  1999,  and  December 31, 1998, -
             Statements of Income for the three years ended December 31, 1999. -
             Statements of Partners'  Capital for the three years ended December
             31,  1999.  -  Statements  of Cash Flows for the three  years ended
             December 31,  1999. - Notes to Financial  Statements - December 31,
             1999.

B-Financial Statement Schedules

The following  financial  statement schedules of Redwood Mortgage Inventors VIII
are included in Item 8.

             -  Schedule II,   - Amounts receivable from related parties and
             underwriters, promoters, and employees other than related parties

             - Schedule VIII - Valuation of Qualifying Accounts, - Schedule IX -
             Short Term  Borrowings.  - Schedule XII - Mortgage  Investments  on
             real estate.

All other  schedules for which  provision is made in the  applicable  accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.


<PAGE>



                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                              FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

                         (With Auditor's Report Thereon)


<PAGE>


                        Caporicci, Cropper & Larson, LLP

                          CERTIFIED PUBLIC ACCOUNTANTS

                            1575 Treat Blvd. Ste. 208

                             Walnut Creek, CA 94598

                                 (925) 932-3860

                          INDEPENDENT AUDITOR'S REPORT

THE PARTNERS
REDWOOD MORTGAGE INVESTORS VIII

We have  audited  the  financial  statements  and related  schedules  of REDWOOD
MORTGAGE INVESTORS VIII (A California Limited  Partnership)  listed in Item 8 on
form 10-K  including  balance  sheets as of  December  31, 1999 and 1998 and the
statements of income,  changes in partners' capital and cash flows for the three
years ended December 31, 1999. These financial statements are the responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of REDWOOD MORTGAGE INVESTORS VIII
as of December  31, 1999 and 1998,  and the results of its  operations  and cash
flows for the three years ended December 31, 1999, in conformity  with generally
accepted  accounting  principles.  Further, it is our opinion that the schedules
referred to above present fairly the information set forth therein in compliance
with the  applicable  accounting  regulations  of the  Securities  and  Exchange
Commission.

                                /s/ Bruce Cropper

                        Caporicci, Cropper & Larson, LLP

Walnut Creek, California
March 15, 2000


<PAGE>
<TABLE>



                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                                 BALANCE SHEETS

                           DECEMBER 31, 1999 AND 1998

                                     ASSETS

<S>                                                                        <C>                  <C>
                                                                           1999                 1998
                                                                       --------------       --------------

Cash                                                                      $1,602,568             $528,688
                                                                       --------------       --------------

Accounts receivable:
  Mortgage Investments, secured by deeds of trust                         35,693,148           31,905,958
  Accrued Interest on Mortgage Investments                                   711,521              459,418
  Advances on Mortgage Investments                                            33,251              211,145
  Accounts receivables, unsecured                                             49,090               48,849
                                                                       --------------       --------------
                                                                          36,487,010           32,625,370

  Less allowance for doubtful accounts                                       834,359              414,073
                                                                       --------------       --------------
                                                                          35,652,651           32,211,297
                                                                       --------------       --------------

Real Estate owned, acquired through foreclosure,
 held for sale                                                                     0               66,000
Investment in limited liability corporation, at cost which
  approximates market                                                        373,358              304,139
Prepaid expense-deferred loan fee                                              6,332               11,835
                                                                       --------------       --------------

                                                                         $37,634,909          $33,121,959
                                                                       ==============       ==============



See accompanying notes to financial statements
</TABLE>


<PAGE>
<TABLE>


                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                                 BALANCE SHEETS

                           DECEMBER 31, 1999 AND 1998

                        LIABILITIES AND PARTNERS' CAPITAL

<S>                                                                        <C>                  <C>
                                                                           1999                 1998
                                                                       --------------       --------------

Liabilities:
  Accounts payable and accrued expenses                                      $29,413               $2,500
  Note payable - bank line of credit                                               0            5,947,000
  Deferred interest income                                                   213,529              124,805
  Investors in applicant status                                              330,000                    0
                                                                       --------------       --------------
                                                                       --------------       --------------

                                                                             572,942            6,074,305
                                                                       --------------       --------------
                                                                       --------------       --------------


Partners' Capital:
     Limited partners' capital, subject to redemption (note 4E):
          Net of unallocated syndication costs of $342,334 and
          $353,875 for 1999 and 1998, respectively:
          and formation loan receivable of $2,158,674 and $1,640,904
          for 1999 and 1998, respectively                                 37,030,017           27,025,331

     General Partners' Capital, net of unallocated syndication costs
          of $3,458 and $3,574 for 1999 and 1998, respectively                31,950               22,323
                                                                       --------------       --------------

                      Total Partners' Capital                             37,061,967           27,047,654
                                                                       --------------       --------------

                      Total Liabilities and Partners' Capital            $37,634,909          $33,121,959
                                                                       ==============       ==============


See accompanying notes to financial statements.
</TABLE>


<PAGE>
<TABLE>


                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                              STATEMENTS OF INCOME

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999

                                                                              YEARS ENDED DECEMBER 31,

                                                                 ----------------------------------------------------

<S>                                                                  <C>               <C>               <C>
                                                                     1999              1998              1997
                                                                 --------------    -------------    ---------------
Revenues:
  Interest on Mortgage Investments                                  $4,337,427       $3,376,293         $2,613,008
  Interest on bank deposits                                              8,197            8,946              9,487
  Late charges                                                          27,859           19,384              6,432
  Miscellaneous                                                         52,762            1,398                530
                                                                 --------------
                                                                                   -------------    ---------------
                                                                     4,426,245        3,406,021          2,629,457
                                                                 --------------    -------------    ---------------

Expenses:
  Mortgage servicing fees                                              359,464          295,052            189,692
  Interest on note payable - bank                                      526,697          513,566            340,633
  Amortization of loan origination fees                                 10,503           11,415             16,819
  Provision for doubtful accounts and losses on real estate
    acquired through foreclosure                                       408,890          162,969            139,804
  Asset management fee - General Partner                                42,215           31,651             24,966
  Amortization of organization costs                                         0            1,875              2,500
  Clerical costs through Redwood Mortgage Corp.                         85,171           67,453             54,549
  Professional services                                                 31,814           27,462             36,717
  Printing, supplies and postage                                         7,102            7,089              9,584
  Other                                                                 10,195            8,907              5,673
                                                                  -------------    -------------    ---------------
                                                                     1,482,051        1,127,439            820,937
                                                                 --------------    -------------    ---------------

Income before interest credited to partners in applicant status      2,944,194        2,278,582          1,808,520

Interest credited to partners in applicant status                        1,914            4,454              9,562
                                                                 --------------    -------------    ---------------

Net Income                                                          $2,942,280       $2,274,128         $1,798,958
                                                                 ==============    =============    ===============

Net income:  To General Partners(1%)                                   $29,423          $22,741            $17,990
                     To Limited Partners (99%)                       2,912,857        2,251,387          1,780,968
                                                                 --------------    -------------    ---------------
Total - net income                                                  $2,942,280       $2,274,128         $1,798,958
                                                                 ==============    =============    ===============

Net income per $1,000 invested by Limited Partners for entire period:

-where income is reinvested and compounded                                 $84              $84                $84
                                                                 ==============    =============    ===============

-where partner receives income in monthly distributions                    $81              $81                $81
                                                                 ==============    =============    ===============


See accompanying notes to financial statements.
</TABLE>


<PAGE>
<TABLE>


                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999

                                                                                   PARTNERS' CAPITAL
                                                             ---------------------------------------------------------------
                                                                               LIMITED PARTNERS' CAPITAL
                                                             --------------------------------------------------------------
                                                               Capital
                                           Partners In         Account       Unallocated       Formation
                                            Applicant          Limited       Syndication          Loan
                                              Status          Partners          Costs          Receivable         Total
                                          ---------------    ------------    -------------    -------------    -------------

<S>                                             <C>          <C>              <C>                        <C>
Balances at December 31, 1996                   $310,937     $16,181,189      $ (414,190)                $      $14,693,293

Contributions on Application                   5,251,969               0                0                0                0
Formation Loan increases                               0               0                0        (420,510)        (420,510)
Formation Loan payments                                0               0                0           98,999           98,999
Interest credited to partners in applicant status  9,562               0                0                0                0

Upon admission to Partnership:
    Interest withdrawn                           (1,849)               0                0                0                0
    Transfers to Partners' capital           (5,570,619)       5,565,372                0                0        5,565,372

Net Income                                             0       1,780,968                0                0        1,780,968
Syndication costs incurred                             0               0        (188,517)                0        (188,517)
Allocation of syndication costs                        0       (166,023)          166,023                0                0
Partners' withdrawals                                  0       (614,837)                0                0        (614,837)
Early withdrawal penalties                             0        (13,261)            4,690            8,524             (47)
                                          ---------------    ------------    -------------    -------------    -------------

Balances at December 31, 1997                         $0     $22,733,408       $(431,994)     $(1,386,693)      $20,914,721

Contributions on Application                   5,105,559               0                0                0                0
Formation Loan increases                               0               0                0        (403,518)        (403,518)
Formation Loan payments                                0               0                0          133,580          133,580
Interest credited to partners in applicant status  4,454               0                0                0                0

Upon admission to Partnership:
    Interest withdrawn                           (1,553)               0                0                0                0
    Transfers to Partners' capital           (5,108,460)       5,103,359                0                0        5,103,359

Net Income                                             0       2,251,387                0                0        2,251,387
Syndication costs incurred                             0               0        (126,453)                0        (126,453)
Allocation of syndication costs                        0       (196,317)          196,317                0                0
Partners' withdrawals                                  0       (847,661)                0                0        (847,661)
Early withdrawal penalties                             0        (24,066)            8,255           15,727             (84)
                                          ---------------    ------------    -------------    -------------    -------------

Balances at December 31, 1998                         $0     $29,020,110       $(353,875)     $(1,640,904)      $27,025,331

Contributions on Application                   9,530,318               0                0                0                0
Formation Loan increases                               0               0                0        (708,461)        (708,461)
Formation Loan payments                                0               0                0          164,731          164,731
Interest credited to partners in applicant status  1,914               0                0                0                0

Upon admission to Partnership:
    Interest withdrawn                           (1,002)               0                0                0                0
    Transfers to Partners' capital           (9,201,230)       9,191,719                0                0        9,191,719

Net Income                                             0       2,912,857                0                0        2,912,857
Syndication costs incurred                             0               0        (177,099)                0        (177,099)
Allocation of syndication costs                        0       (175,012)          175,012                0                0
Partners' withdrawals                                  0     (1,378,924)                0                0      (1,378,924)
Early withdrawal penalties                             0        (39,725)           13,628           25,960            (137)
                                          ---------------    ------------    -------------    -------------    -------------

Balances at December 31, 1999                   $330,000     $39,531,025       $(342,334)     $(2,158,674)      $37,030,017
                                          ===============    ============    =============    =============    =============

See accompanying notes to financial statements
</TABLE>


<PAGE>
<TABLE>



                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999

                                                                           PARTNERS' CAPITAL

                                              -----------------------------------------------------------------------------
                                                                        GENERAL PARTNERS' CAPITAL
                                              -----------------------------------------------------------------------------

                                                 Capital           Unallocated                                   Total
                                                 Account           Syndication              Total              Partners'
                                                 General              Costs                                     Capital
                                                Partners
                                             ----------------    -----------------    ------------------    ----------------

<S>                                                  <C>                <C>                     <C>             <C>
Balances at December 31, 1996                        $15,549            $ (4,184)               $11,365         $14,704,658

Contributions on Application                               0                    0                     0                   0
Formation Loan increases                                   0                    0                     0           (420,510)
Formation Loan payments                                    0                    0                     0              98,999
Interest credited to partners in applicant status          0                    0                     0                   0

Upon admission to partnership:
    Interest withdrawn                                     0                    0                     0                   0
    Transfers to Partners' capital                     5,247                    0                 5,247           5,570,619

Net Income                                            17,990                    0                17,990           1,798,958
Syndication costs incurred                                 0              (1,904)               (1,904)           (190,421)
Allocation of syndication costs                      (1,677)                1,677                     0                   0
Partners' withdrawals                               (16,313)                    0              (16,313)           (631,150)
Early withdrawal penalties                                 0                   47                    47                   0
                                             ----------------    -----------------    ------------------    ----------------

Balances at December 31, 1997                        $20,796             $(4,364)               $16,432         $20,931,153

Contributions on Application                               0                    0                     0                   0
Formation Loan increases                                   0                    0                     0           (403,518)
Formation Loan payments                                    0                    0                     0             133,580
Interest credited to partners in applicant status          0                    0                     0                   0

Upon admission to partnership:
    Interest withdrawn                                     0                    0                     0                   0
    Transfers to Partners' capital                     5,101                    0                 5,101           5,108,460

Net Income                                            22,741                    0                22,741           2,274,128
Syndication costs incurred                                 0              (1,277)               (1,277)           (127,730)
Allocation of syndication costs                      (1,983)                1,983                     0                   0
Partners' withdrawals                               (20,758)                    0              (20,758)           (868,419)
Early withdrawal penalties                                 0                   84                    84                   0
                                             ----------------    -----------------    ------------------    ----------------

Balances at December 31, 1998                        $25,897             $(3,574)               $22,323         $27,047,654

Contributions on Application                               0                    0                     0                   0
Formation Loan increases                                   0                    0                     0           (708,461)
Formation Loan payments                                    0                    0                     0             164,731
Interest credited to partners in applicant status          0                    0                     0                   0

Upon admission to partnership:
    Interest withdrawn                                     0                    0                     0                   0
    Transfers to Partners' capital                     9,511                    0                 9,511           9,201,230

Net Income                                            29,423                    0                29,423           2,942,280
Syndication costs incurred                                 0              (1,789)               (1,789)           (178,888)
Allocation of syndication costs                      (1,768)                1,768                     0                   0
Partners' withdrawals                               (27,655)                    0              (27,655)         (1,406,579)
Early withdrawal penalties                                 0                  137                   137                   0
                                             ----------------    -----------------    ------------------    ----------------
Balances at December 31, 1999                        $35,408             $(3,458)               $31,950         $37,061,967
                                             ================    =================    ==================    ================

See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>


                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                            STATEMENTS OF CASH FLOWS

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999

                                                                        1999                1998              1997
                                                                   ---------------     ---------------    --------------
Cash flows from operating activities:

<S>                                                                    <C>                 <C>               <C>
  Net income                                                           $2,942,280          $2,274,128        $1,798,958
  Adjustments to reconcile net income to net cash provided by
       operating activities:
    Amortization of organization costs                                          0               1,875             2,500
    Provision for doubtful accounts.                                      420,286             156,573           139,804
    Provision for losses (gains) on real estate held for sale            (11,396)               6,396                 0
    Increase (decrease) in accounts payable                                26,913               (855)          (17,270)
    (Increase) in accrued interest & advances                            (74,209)           (122,783)         (342,571)
    (Increase) decrease in amount due from related companies                (241)               2,999           (2,688)
    (Increase) decrease in deferred loan fee                                5,503             (1,684)            10,569
    Increase (decrease ) in deferred interest income                       88,724              41,739         (134,414)
                                                                   ---------------     ---------------    --------------

      Net cash provided by operating activities                         3,397,860           2,358,388         1,454,888
                                                                   ---------------     ---------------    --------------

Cash flows from investing activities:

    Principal collected on Mortgage Investments                        20,243,729          14,262,838        10,279,337
    Mortgage Investments made                                        (24,030,919)        (20,863,807)      (19,941,336)
    Disposition of real estate held for sale                               79,282                   0                 0
    Additions to real estate held for sale                                (1,886)             (2,258)           (3,254)
    Additions to Limited Liability Corporation                           (69,219)            (53,000)          (60,000)
    Accounts receivables, unsecured - (disbursements) receipts                  0              13,995            12,490
                                                                   ---------------     ---------------    --------------

      Net cash used in investing activities                           (3,779,013)         (6,642,232)       (9,712,763)
                                                                   ---------------     ---------------    --------------

Cash flows from financing activities

   Increase (decrease) in note payable-bank                           (5,947,000)             307,000         4,140,000
   Contributions by partner applicants                                  9,530,318           5,105,559         5,251,969
   Interest credited to partners in applicant status                        1,914               4,454             9,562
   Interest withdrawn by partners in applicant status                     (1,002)             (1,553)           (1,849)
   Partners withdrawals                                               (1,406,579)           (868,419)         (631,150)
   Syndication costs incurred                                           (178,888)           (127,730)         (190,421)
   Formation Loan increases                                             (708,461)           (403,518)         (420,510)
   Formation Loan collections                                             164,731             133,580            98,999
                                                                   ---------------     ---------------    --------------

      Net cash provided by financing activities                         1,455,033           4,149,373         8,256,600
                                                                   ---------------     ---------------    --------------

Net increase (decrease) in cash and cash equivalents                    1,073,880           (134,471)           (1,275)

Cash - beginning of period                                                528,688             663,159           664,434
                                                                   ---------------     ---------------    --------------

Cash - end of period                                                   $1,602,568            $528,688          $663,159
                                                                   ===============     ===============    ==============


See accompanying notes to financial statements.
</TABLE>


<PAGE>



                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

NOTE 1 - ORGANIZATION AND GENERAL

Redwood Mortgage  Investors VIII, (the  "Partnership")  is a California  Limited
Partnership,  of which the General Partners are D. Russell  Burwell,  Michael R.
Burwell and Gymno  Corporation,  a California  corporation owned and operated by
the individual  General  Partners.  The  Partnership  was organized to engage in
business  as a  mortgage  lender  for the  primary  purpose  of making  Mortgage
Investments  secured  by  Deeds of Trust on  California  real  estate.  Mortgage
Investments  are being  arranged  and  serviced by Redwood  Mortgage  Corp.,  an
affiliate of the General Partners.  At December 31, 1999, the Partnership was in
the offering stage,  wherein contributed capital totalled $35,110,941 in limited
partner contributions of an approved aggregate offering of $45,000,000, in units
of $100 each  (351,109.41).  As of  December  31,  1999,  $330,000  remained  in
applicant status.

A minimum of 2,500 units ($250,000) and a maximum of 150,000 units ($15,000,000)
were initially offered through qualified  broker-dealers.  This initial offering
was closed in October,  1996.  In December  1996,  the  Partnership  commenced a
second  offering  of an  additional  300,000  Units  ($30,000,000)  As  Mortgage
Investments are identified,  partners are transferred  from applicant  status to
admitted partners participating in Mortgage Investment operations.  Each month's
income is  distributed  to  partners  based  upon their  proportionate  share of
partners  capital.  Some partners have elected to withdraw  income on a monthly,
quarterly or annual basis.

A. Sales Commissions - Formation Loan

Sales  commissions  are not paid directly by the Partnership out of the offering
proceeds. Instead, the Partnership loans to Redwood Mortgage Corp., an affiliate
of the  General  Partners,  amounts  to pay all sales  commissions  and  amounts
payable in connection with unsolicited  orders.  This loan is referred to as the
"Formation Loan". It is unsecured and non-interest bearing.

The  Formation  Loan  relating  to the  initial  $15,000,000  offering  totalled
$1,074,840,  which was 7.2% of limited  partners  contributions  of  $14,932,017
(under the limit of 9.1% relative to the initial offering).  It is to be repaid,
without interest,  in ten annual  installments of principal,  which commenced on
January 1, 1997,  following the year the initial offering  closed,  which was in
1996.

The  Formation  Loan  relating  to the second  offering  ($30,000,000)  totalled
$1,547,875  at  December  31,  1999,  which  was  7.7% of the  limited  partners
contributions  of $20,178,924.  Sales  commissions  range from 0% (units sold by
General Partners) to 9% of gross proceeds. The Partnership  anticipates that the
sales  commissions  will  approximate  7.6% based on the assumption  that 65% of
investors will elect to reinvest earnings,  thus generating 9% commissions.  The
principal  balance of the Formation  Loan will  increase as additional  sales of
units are made each year.  The amount of the  annual  installment  payment to be
made by Redwood Mortgage Corp., during the offering stage, will be determined at
annual  installments of one-tenth of the principal balance of the Formation Loan
as of  December  31 of each  year.  Such  payment  shall be due and  payable  by
December 31 of the following year with the first such payment beginning December
31, 1997.  Upon  completion of the  offering,  the balance will be repaid in ten
equal annual installments.


<PAGE>
<TABLE>


                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

The following summarizes Formation Loan transactions to December 31, 1999:

                                                 Initial             Subsequent
                                               Offering of          Offering of
                                               $15,000,000          $30,000,000              Total

                                              --------------       ---------------      ----------------

<S>                                             <C>                   <C>                   <C>
Limited Partner contributions                   $14,932,017           $20,178,924           $35,110,941
                                              ==============       ===============      ================

Formation Loan made                              $1,074,840             1,547,875             2,622,715
Payments to date                                  (281,701)             (124,569)             (406,270)
Early withdrawal penalties applied                 (57,771)                     0              (57,771)
                                              --------------       ---------------      ----------------
                                              --------------       ---------------      ----------------

Balance December 31, 1999                          $735,368            $1,423,306            $2,158,674
                                              ==============       ===============      ================

Percent loaned of Partners' contributions              7.2%                  7.7%                  7.5%
                                              ==============       ===============      ================
</TABLE>

     The Formation  Loan,  which is receivable  from Redwood  Mortgage Corp., an
affiliate of the General  Partners,  has been  deducted  from Limited  Partners'
Capital in the balance  sheet.  As amounts are collected  from Redwood  Mortgage
Corp., the deduction from capital will be reduced.

B. Other Organizational and Offering Expenses

Organizational and offering expenses,  other than sales commissions,  (including
printing costs,  attorney and accountant fees,  registration and filing fees and
other costs), will be paid by the Partnership.

Through December 31, 1999,  organization  costs of $12,500 and syndication costs
of  $1,167,649  had  been  incurred  by  the  Partnership   with  the  following
distribution:

                                      Syndication      Organization

                                        Costs             Costs            Total


                                      ------------    ------------- ------------
Costs incurred                          $1,167,649         $12,500    $1,180,149
Early withdrawal penalties applied        (31,555)               0      (31,555)
Allocated and amortized to date          (790,302)        (12,500)     (802,802)
                                      ------------    ------------- ------------

December 31, 1999 balance                 $345,792               0      $345,792
                                      ============    ============= ============

Organization  and  syndication  costs   attributable  to  the  initial  offering
($15,000,000)  were  limited  to the  lesser  of 10% of the  gross  proceeds  or
$600,000 with any excess being paid by the General  Partners.  Applicable  gross
proceeds were $14,932,017.  Related  expenditures  totalled  $582,365  ($569,865
syndication costs plus $12,500 organization expense) or 3.90%.

As of  December  31,  1999  syndication  costs  attributable  to the  subsequent
offering  ($30,000,000)  totalled $597,784,  (3.0% of  contributions),  with the
costs of the offering  being greater at the initial  stages due to  professional
and filing fees related to formulating the offering  documents.  The syndication
costs payable by the  Partnership  are estimated to be $1,200,000 if the maximum
is sold (4% of  $30,000,000).  The  General  Partners  will pay any  syndication
expenses  (excluding selling  commissions) in excess of ten percent of the gross
proceeds or $1,200,000.


<PAGE>


                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A Accrual Basis

Revenues and  expenses  are  accounted  for on the accrual  basis of  accounting
wherein  income is recognized as earned and expenses are recognized as incurred.
Once a Mortgage  Investment is  categorized  as impaired,  interest is no longer
accrued thereon.

B. Management Estimates

In preparing the financial statements,  management is required to make estimates
based on the  information  available that affect the reported  amounts of assets
and  liabilities  as of the balance sheet date and revenues and expenses for the
related periods.  Such estimates relate  principally to the determination of the
allowance for doubtful  accounts,  including the valuation of impaired  mortgage
investments,  and the  valuation of real estate  acquired  through  foreclosure.
Actual results could differ significantly from these estimates.

C. Mortgage Investments, Secured by Deeds of Trust

The Partnership has both the intent and ability to hold the Mortgage Investments
to maturity,  i.e., held for long-term investment.  Therefore they are valued at
cost for financial statement purposes with interest thereon being accrued by the
simple interest method.

Financial  Accounting  Standards Board Statements  (SFAS) 114 and 118 (effective
January 1, 1995) provide that if the probable  ultimate recovery of the carrying
amount of a Mortgage  Investment,  with due  consideration for the fair value of
collateral, is less than the recorded investment and related amounts due and the
impairment is considered to be other than temporary,  the carrying amount of the
investment  (cost)  shall be reduced to the present  value of future cash flows.
The adoption of these statements did not have a material effect on the financial
statements of the Partnership  because that was the valuation method  previously
used on impaired loans.

At  December  31,  1999,  1998,  and 1997,  there were no  Mortgage  Investments
categorized as impaired by the Partnership. Had there been a computed amount for
the reduction in carrying  values of impaired  loans,  the reduction  would have
been included in the allowance for doubtful accounts.

As  presented  in Note 10 to the  financial  statements,  the  average  Mortgage
Investment  to  appraised  value  of  security  at  the  time  the  losses  were
consummated  was  60.90%.  When a loan is valued  for  impairment  purposes,  an
updating is made in the valuation of collateral  security.  However,  such a low
loan to value ratio has the tendency to minimize reductions for impairment.

D. Cash and Cash Equivalents

For purposes of the statements of cash flows, cash and cash equivalents  include
interest bearing and non-interest bearing bank deposits.

E. Real Estate Owned, Held for Sale

Real  Estate  owned,  held for  sale,  includes  real  estate  acquired  through
foreclosure  and is  stated  at the  lower  of the  recorded  investment  in the
property,  net of any senior  indebtedness,  or at the property's estimated fair
value,  less  estimated  costs to sell.  At  December  31,  1999,  there were no
properties acquired by the Partnership as real estate owned (REO).


<PAGE>



                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

Effective  January 1, 1996, the Partnership  adopted the provisions of Statement
No 121 (SFAS 121) of the Financial Accounting  Standards Board,  "Accounting for
the  Impairment  of Long Lived  Assets and for Long Lived  Assets to be disposed
of".  The  adoption  of  SFAS  121  did  not  have  a  material  impact  on  the
Partnership's  financial position because the methods indicated were essentially
those previously used by the Partnership.

F. Investment in Limited Liability Corporation (see Note 7)

The  Partnership  carries its investment in a Limited  Liability  Corporation as
investment  in real estate,  which is at the lower of costs or fair value,  less
estimated costs to sell.

G. Income Taxes

No  provision  for  Federal  and  State  income  taxes is made in the  financial
statements  since  income taxes are the  obligation  of the partners if and when
income taxes apply.

H. Organization and Syndication Costs

The Partnership  bears its own  organization  and syndication  costs (other than
certain  sales  commissions  and  fees  described  above)  including  legal  and
accounting  expenses,   printing  costs,  selling  expenses,  and  filing  fees.
Organizational  costs have been  capitalized and were amortized over a five year
period.  Syndication  costs are charged against  partners' capital and are being
allocated to individual partners consistent with the partnership agreement.

I. Allowance for Doubtful Accounts

Mortgage  Investments and the related accrued  interest,  fees, and advances are
analyzed on a continuous basis for recoverability.  Delinquencies are identified
and followed as part of the Mortgage  Investment system. A provision is made for
doubtful  accounts to adjust the  allowance  for doubtful  accounts to an amount
considered by management to be adequate,  with due  consideration  to collateral
values, to provide for unrecoverable  accounts  receivable,  including  impaired
Mortgage Investments, other Mortgage Investments,  accrued interest and advances
on  Mortgage  Investments,   and  other  accounts  receivable  (unsecured).  The
composition of the allowance for doubtful  accounts as of December 31, 1999, and
1998 was as follows:

                                                    December 31,
                                    --------------------------------------------
                                            1999                       1998
                                    ---------------             ----------------

Impaired mortgage investments                 $0                         $0
Unspecified mortgage investments         795,268                    370,073
Amounts receivable, unsecured             39,091                     44,000
                                    ---------------             ----------------
                                        $834,359                   $414,073
                                    ===============             ================




<PAGE>


                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

J. Net Income Per $1,000 Invested

Amounts  reflected in the statements of income as net income per $1,000 invested
by Limited  Partners  for the entire  period are  actual  amounts  allocated  to
Limited  Partners  who have  their  investment  throughout  the  period and have
elected to either  leave their  earnings to compound or have  elected to receive
monthly  distributions of their net income.  Individual income is allocated each
month  based on the  Limited  Partners'  pro rata  share of  Partners'  Capital.
Because the net income percentage varies from month to month, amounts per $1,000
will vary for those  individuals  who made or  withdrew  investments  during the
period,  or select other  options.  However,  the net income per $1,000  average
invested  has  approximated  those  reflected  for those whose  investments  and
options have remained constant.

NOTE 3 - GENERAL PARTNERS AND RELATED PARTIES

The following are commissions and/or fees which are paid to the General Partners
and/or related parties.

A. Mortgage Brokerage Commissions

For fees in connection with the review, selection,  evaluation,  negotiation and
extension  of  Partnership  Mortgage  Investments  in an amount up to 12% of the
Mortgage  Investments until 6 months after the termination date of the offering.
Thereafter,  Mortgage  Investment  brokerage  commissions  will be limited to an
amount not to exceed 4% of the total  Partnership  assets per year. The Mortgage
Investment brokerage commissions are paid by the borrowers, and thus, are not an
expense of the  Partnership.  In 1999 and 1998,  Mortgage  Investment  brokerage
commissions paid by the borrowers were $682,118 and $604,836, respectively.

B. Mortgage Servicing Fees

Monthly  mortgage  servicing fees of up to 1/8 of 1% (1.5% annual) of the unpaid
principal,  is paid to  Redwood  Mortgage  Corp.,  or such  lesser  amount as is
reasonable and customary in the geographic area where the property  securing the
mortgage is located. Mortgage servicing fees of $359,464,  $295,052 and $189,692
were incurred for years 1999, 1998 and 1997, respectively.

C. Asset Management Fee

The  General  Partners  receive  monthly  fees for  managing  the  Partnership's
Mortgage Investment  portfolio and operations up to 1/32 of 1% of the "net asset
value" (3/8 of 1% annual).  Management fees of $42,215, $31,651 and $24,966 were
incurred for years 1999, 1998 and 1997, respectively.

D. Other Fees

The Partnership Agreement provides for other fees such as reconveyance, mortgage
assumption and mortgage  extension fees. Such fees are incurred by the borrowers
and are paid to parties related to the General Partners.

E. Income and Losses

All income  will be  credited  or  charged  to  partners  in  relation  to their
respective  partnership  interests.  The  partnership  interest  of the  General
Partners (combined) shall be a total of 1%.


<PAGE>


                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

F. Operating Expenses

The General Partners or their affiliate  (Redwood Mortgage Corp.) are reimbursed
by the  Partnership  for all  operating  expenses  actually  incurred by them on
behalf of the Partnership,  including without limitation,  out-of-pocket general
and administration expenses of the Partnership, accounting and audit fees, legal
fees and expenses,  postage and preparation of reports to Limited Partners. Such
reimbursements are reflected as expenses in the Statement of Income.

The General Partners  collectively or severally were to contribute 1/10 of 1% in
cash contributions as proceeds from the offering are admitted to Limited Partner
capital.  As of December  31, 1999 a General  Partner,  GYMNO  Corporation,  had
contributed  $35,100,  as  capital in  accordance  with  Section  4.02(a) of the
Partnership Agreement.

NOTE 4 - OTHER PARTNERSHIP PROVISIONS

A. Applicant Status

Subscription  funds  received  from  purchasers of units are not admitted to the
Partnership until appropriate  lending  opportunities are available.  During the
period prior to the time of admission,  which is anticipated to be between 1-120
days in most cases,  purchasers'  subscriptions will remain irrevocable and will
earn interest at money market rates, which are lower than the anticipated return
on the Partnership's Mortgage Investment portfolio.

During the periods ending  December 31, 1999, 1998 and 1997,  interest  totaling
$1,914, $4,454 and $9,562,  respectively,  was credited to partners in applicant
status.  As Mortgage  Investments  were made and partners  were  transferred  to
regular status to begin sharing in income from Mortgage  Investments  secured by
deeds of trust,  the  interest  credited  was either  paid to the  investors  or
transferred to partners' capital along with the original investment.

B. Term of the Partnership

The term of the Partnership is approximately 40 years,  unless sooner terminated
as provided. The provisions provide for no capital withdrawal for the first five
years,  subject to the  penalty  provision  set forth in (E) below.  Thereafter,
investors have the right to withdraw over a five-year period, or longer.

C. Election to Receive Monthly, Quarterly or Annual Distributions

At subscription,  investors elect either to receive monthly, quarterly or annual
distributions of earnings allocations, or to allow earnings to compound. Subject
to certain  limitations,  a  compounding  investor may  subsequently  change his
election, but an investor's election to have cash distributions is irrevocable.

D. Profits and Losses

Profits and losses are allocated among the Limited  Partners  according to their
respective capital accounts after 1% is allocated to the General Partners.


<PAGE>



                           REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

E. Liquidity, Capital Withdrawals and Early Withdrawals

There are substantial  restrictions on  transferability of Units and accordingly
an investment in the Partnership is non-liquid.  Limited  Partners have no right
to  withdraw  from the  Partnership  or to obtain  the  return of their  capital
account for at least one year from the date of  purchase  of Units.  In order to
provide a certain degree of liquidity to the Limited Partners after the one-year
period, Limited Partners may withdraw all or part of their Capital Accounts from
the Partnership in four quarterly  installments beginning on the last day of the
calendar  quarter  following  the quarter in which the notice of  withdrawal  is
given,  subject to a 10% early withdrawal penalty. The 10% penalty is applicable
to the  amount  withdrawn  as stated in the  Notice  of  Withdrawal  and will be
deducted from the Capital Account.

After five years from the date of purchase of the Units,  Limited  Partners have
the right to withdraw from the  Partnership on an installment  basis.  Generally
this is done over a five year period in twenty (20) quarterly installments. Once
a Limited  Partner has been in the Partnership for the minimum five year period,
no penalty  will be  imposed  if  withdrawal  is made in twenty  (20)  quarterly
installments  or longer.  Notwithstanding  the five-year (or longer)  withdrawal
period,  the General  Partners may liquidate all or part of a Limited  Partner's
capital account in four quarterly  installments beginning on the last day of the
calendar  quarter  following  the quarter in which the notice of  withdrawal  is
given. This withdrawal is subject to a 10% early withdrawal  penalty  applicable
to any sums withdrawn prior to the time when such sums could have been withdrawn
without penalty.

The Partnership will not establish a reserve from which to fund withdrawals and,
accordingly, the Partnership's capacity to return a Limited Partner's capital is
restricted to the availability of Partnership cash flow.

F. Guaranteed Interest Rate For Offering Period

During the period  commencing  with the day a Limited Partner is admitted to the
Partnership and ending 3 months after the offering termination date, the General
Partners  shall  guarantee  an  earnings  rate  equal to the  greater  of actual
earnings from mortgage operations or 2% above The Weighted Average cost of Funds
Index for the Eleventh  District Savings  Institutions  (Savings & Loan & Thrift
Institutions)  as computed by the Federal  Home Loan Bank of San  Francisco on a
monthly basis, up to a maximum interest rate of 12%. To date, actual realization
exceeded the guaranteed amount for each month.

NOTE 5- LEGAL PROCEEDINGS

The Partnership is not a defendant in any legal actions.

NOTE 6 - NOTE PAYABLE - BANK LINE OF CREDIT

The Partnership has a bank line of credit expiring  September 30, 2000, of up to
$9,000,000 at .25% over prime secured by its Mortgage Investment portfolio.  The
note payable  balances were $0 and  $5,947,000  at December 31, 1999,  and 1998,
respectively, and the interest rate was 8.75% at December 31, 1999, (8.50% prime
plus .25%).

NOTE 7 - INVESTMENT IN LIMITED LIABILITY CORPORATION

As a result of acquiring real property through foreclosure,  the Partnership has
contributed its interest (principally land) to a Limited Liability  Corporation,
which is owned 100% by the Partnership, and which will complete the construction
and sell the  property.  The  Partnership  expects to realize a profit  from the
venture.
<PAGE>

                            REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

NOTE 8 - INCOME TAXES

The following  reflects a  reconciliation  from net assets  (Partners'  Capital)
reflected in the financial statements to the tax basis of those net assets:

                                                       December 31,
                                        ----------------------------------------
                                               1999                      1998
                                        ------------------      ----------------

Net Assets - Partners' Capital per
   financial statements                     $37,061,967              $27,047,654
Non-amortized syndication costs                 345,792                  357,449
Allowance for doubtful accounts                 834,359                  414,073
Formation loans receivable                    2,158,674                1,640,904
                                        ------------------      ----------------

Net assets tax basis                        $40,400,792              $29,460,080
                                        ==================      ================

In 1999 and 1998,  approximately  58% and 61% of taxable income was allocated to
tax exempt organizations,  i.e., retirement plans,  respectively.  Such plans do
not have to file income tax returns  unless their  "unrelated  business  income"
exceeds $1,000.  Applicable  amounts become taxable when distribution is made to
participants.

NOTE 9 - FAIR VALUE OF FINANCIAL INVESTMENTS

The following  methods and  assumptions  were used to estimate the fair value of
financial instruments:

     (a) Cash and Cash  Equivalents.  The carrying amount equals fair value. All
amounts, including interest bearing, are subject to immediate withdrawal.

(b) The Carrying Value of Mortgage  Investments  (see note 2(c)) is $35,693,148.
The fair value of these  investments  of  $35,825,175  is  estimated  based upon
projected cash flows discounted at the estimated current interest rates at which
similar loans would be made. The applicable amount of the allowance for doubtful
accounts along with accrued interest and advances related thereto should also be
considered in evaluating the fair value versus the carrying value.


<PAGE>


                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

NOTE 10- ASSET CONCENTRATIONS AND CHARACTERISTICS

The Mortgage Investments are secured by recorded deeds of trust. At December 31,
1999,  there  were  53  Mortgage  Investments  outstanding  with  the  following
characteristics:

Number of Mortgage Investments outstanding                                    53
Total Mortgage Investments outstanding                               $35,693,148

Average Mortgage Investment outstanding                                 $673,456
Average Mortgage Investment as percent of total                            1.89%
Average Mortgage Investment as percent of Partners' Capital                1.82%

Largest Mortgage Investment outstanding                                2,600,000
Largest Mortgage Investment as percent of total                            7.28%
Largest Mortgage Investment as percent of Partners' Capital                7.02%

Number of counties where security is located (all California)                 13
Largest percentage of Mortgage Investments in one county                  33.40%
Average Mortgage Investment to appraised value of security
   at time loan was consummated                                           60.90%

Number of Mortgage Investments in foreclosure status                           1
Amount of Mortgage Investments in foreclosure                         $2,600,000

The following  categories of mortgage  investments are pertinent at December 31,
1999 and 1998:

                                                     December 31,
                                      ------------------------------------------
                                               1999                    1998
                                      ------------------      ------------------

First Trust Deeds                            $19,388,394             $22,349,185
Second Trust Deeds                            16,082,803               8,469,460
Third Trust Deeds                                221,951               1,087,313
                                      ------------------      ------------------
  Total mortgage investments                  35,693,148              31,905,958
Prior liens due other lenders                 23,719,420              26,411,096
                                      ------------------      ------------------
  Total debt                                 $59,412,568             $58,317,054
                                      ==================      ==================

Appraised property value at time of loan     $97,556,330             $98,011,150
                                      ==================      ==================

Total investments as a percent of appraisals      60.90%                  59.50%
                                      ==================      ==================

Investments by Type of Property

Owner occupied homes                          $7,336,276              $6,450,199
Non-Owner occupied homes                      10,957,622               8,789,445
Apartments                                       302,797               3,256,602
Commercial                                    17,096,453              13,409,712
                                      ------------------      ------------------
                                             $35,693,148             $31,905,958
                                      ==================      ==================

The  interest  rates on the mortgage  investments  range from 8.00% to 14.00% at
December 31, 1999.


<PAGE>


                         REDWOOD MORTGAGE INVESTORS VIII

                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

Scheduled maturity dates of mortgage  investments as of December 31, 1999 are as
follows:

                         Year Ending
                         December 31,

                      -------------------

                             2000                                    $16,579,436
                             2001                                     14,365,526
                             2002                                        962,638
                             2003                                        308,957
                             2004                                        950,000
                          Thereafter                                   2,526,591
                                                                ----------------
                                                                     $35,693,148
                                                                ================


The scheduled maturities for 2000 include  approximately  $4,984,651 in Mortgage
Investments  which are past maturity at December 31, 1999.  Interest  payment on
only four of these loans was delinquent.

The cash  balance  at  December  31,  1999 of  $1,602,568  was in one bank  with
interest  bearing  balances  totalling  $1,481,699.  The balances  exceeded FDIC
insurance limits (up to $100,000 per bank) by $1,502,568.  This bank is the same
financial  institution  that has provided the  Partnership  with the  $9,000,000
limit line of credit.  At December 31, 1999, draw down against this facility was
$0.  As  and  when  deposits  in  the   Partnership's   bank  accounts  increase
significantly  beyond the  insured  limit,  the funds are  either  placed on new
Mortgage Investments or used to pay-down on the line of credit balance.


<PAGE>
<TABLE>



                                 SCHEDULE II AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,

         PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES. Rule 12-03

Column A                     Column B               Column C            Column D                   Column E
Name of Debtor               Balance Beginning      Additions                 Deductions            Balance at end of period
                             of period 12/31/98                          (1)            (2)           (1)            (2)
                                                                       Amounts        Amounts       Current      Not Current
                                                                      collected     written off             12/31/99

<S>                            <C>                    <C>             <C>             <C>              <C>        <C>
Redwood Mortgage Corp.         $1,640,904             $708,460        $164,730        $25,960          0          $2,158,674
                               -------------- -------------------- ---------------- ------------- ------------- ---------------

Total                          $1,640,904             $708,460        $164,730        $25,960          0          $2,158,674
                               ============== ==================== ================ ============= ============= ===============
</TABLE>

The above schedule  represents  the Formation Loan borrowed by Redwood  Mortgage
Corp. from the Partnership to pay for the selling commissions on units. It is an
unsecured loan and will not bear interest.  It will be repaid to the Partnership
in ten annual installments as described in Note 1 A to the financial statements.
The amount written off in column D (2) represents  the  proportionate  amount of
early  withdrawal  penalties  allocated to the Formation Loan as provided in the
prospectus.


<PAGE>
<TABLE>


                SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS

                         REDWOOD MORTGAGE INVESTORS VIII

<S>                 <C>                             <C>                     <C>              <C>
Column A            Column B                        Column C                Column D         Column E
Description         Balance                         Additions               Deductions       Balance at
                    beginning of              (1)                 (2)       Describe         End of Period
                    of period             Charged to           Charged
                                                            (credited) to

                                      Costs & Expenses      Other accounts -
                                                            Describe

Year Ended
12/31/99

Deducted from
Asset accounts:

Allowance for
Doubtful accts      $414,073           $420,286                0                0         $834,359

Cumulative
write-down of
Real Estate
held for sale
(REO)                $11,396          ($11,396)                0                0                0

                ----------------- -------------------- ------------------ ---------------- ----------------
Totals              $425,469          $408,890                 0                0         $834,359
                ================= ==================== ================== ================ ================


</TABLE>



<PAGE>
<TABLE>


                                  SCHEDULE XII

                      MORTGAGE INVESTMENTS ON REAL ESTATE.

                    RULE 12-29 MORTGAGE LOANS ON REAL ESTATE

<S>        <C>      <C>       <C>          <C>             <C>            <C>               <C>         <C>        <C>
Col. A     Col. B   Col. C    Col. D       Col. E          Col. F         Col. G            Col. H      Col. I     Col. J
------     ------   ------    ------       ------          ------         ------            ------      ------     ------
Descp.     Interest Final     Periodic     Prior Liens     Face Amt. of   Carrying         Principal    Type of    Geographic
           Rate     Maturity  Payment                      Mortgage       amount of         amt of      Lien       County
                    Date      Terms                        Investments    Mortgage         Mortgage                Location
                                                           (original      Investments     Investments
                                                           amount)                        subject to
                                                                                            Delinq.
                                                                                         Principal or
                                                                                           Interest

========== ======== ========= ============ =============== ============== ============== ============== ========== =============

Comm         13.75  11/01/99     2,044.77      156,750.00     175,500.00     166,317.85           0.00    2nd mtg       Alameda
Comm         13.75  10/01/96       458.33            0.00      40,000.00      15,745.00           0.00    1st mtg   Santa Clara
Comm         11.00  09/01/05       846.15      846,019.00      67,500.00      43,170.02           0.00    2nd mtg    Sacramento
Comm         10.00  12/01/98     1,689.33            0.00     192,500.00     189,719.44     189,719.44    1st mtg       Alameda
Comm         12.00  02/01/99     5,131.14            0.00     503,457.45     503,457.45     503,457.45    1st mtg   Santa Clara
Apts         11.00  11/01/99     1,980.58      713,917.00     200,000.00     194,811.75           0.00    2nd mtg San Francisco
Res          11.00  12/01/03     3,185.37    1,060,486.00     325,000.00     308,956.27           0.00    2nd mtg San Francisco
Apts         11.00  04/01/05       330.09            0.00     400,000.00      33,333.33           0.00    1st mtg   San Joaquin
Comm         12.00  07/01/00     1,387.44            0.00     130,000.00     127,723.21           0.00    1st mtg        Fresno
Comm         11.75  02/01/99     1,018.34            0.00     104,000.00      92,917.26           0.00    1st mtg  Contra Costa
Comm         12.00  03/01/01       789.92            0.00      75,000.00      72,617.12           0.00    1st mtg     San Mateo
Res          11.00  04/01/06     1,039.81            0.00     105,000.00     102,718.58           0.00    1st mtg San Francisco
Comm         12.00  03/01/01       684.60       74,754.00      65,000.00      63,351.99           0.00    2nd mtg     San Mateo
Comm         12.00  02/01/99       186.00       46,800.00      18,000.00      18,000.00      18,000.00    2nd mtg   Santa Clara
Comm         14.00  04/01/06    12,160.05            0.00     700,000.00     610,628.80           0.00    1st mtg San Francisco
Comm         10.75  04/01/00       447.92      121,264.00      50,000.00      50,000.00           0.00    2nd mtg     Riverside
Comm         11.75  05/01/02     3,828.76            0.00     370,000.00     282,756.35           0.00    1st mtg     San Mateo
Res          12.00  06/01/99       500.00      262,342.00      50,000.00      50,000.00           0.00    2nd mtg       Alameda
Res          10.00  07/01/00     5,068.88            0.00     579,300.00     579,300.00      15,206.64    1st mtg San Francisco
Comm         12.00  10/01/02     1,562.50            0.00     150,000.00     129,881.93           0.00    1st mtg San Francisco
Res          11.00  04/01/99    11,661.04      579,300.00   1,320,000.00   1,320,000.00   1,320,000.00    2nd mtg San Francisco
Apts         11.00  10/01/99    18,944.44            0.00     220,000.00      36,226.00           0.00    1st mtg     San Mateo
Comm         11.00  10/01/07     6,190.11            0.00     650,000.00     642,936.06           0.00    1st mtg San Francisco
Res           8.00  11/01/27     1,834.42            0.00     250,000.00     244,882.25           0.00    1st mtg     San Mateo
Res          12.00  05/01/99    11,310.80            0.00   2,400,000.00   2,063,898.25           0.00    1st mtg San Francisco
Land         11.00  09/01/99     3,354.17            0.00     350,000.00     350,000.00           0.00    1st mtg    Stanislaus
Res          12.00  04/01/00     8,940.00            0.00     894,000.00     894,000.00      71,520.00    1st mtg         Marin
Comm         11.00  12/01/00    10,273.34            0.00   1,072,000.00     573,927.16           0.00    1st mtg    Stanislaus
Res          11.00  03/01/00     1,126.59      579,300.00     950,700.00     595,673.94           0.00    2nd mtg San Francisco
Res          11.00  05/01/00     8,720.83            0.00     910,000.00     910,000.00           0.00    1st mtg San Francisco
Res          11.00  06/01/00    11,068.75    1,320,000.00   1,155,000.00     612,520.86           0.00    2nd mtg San Francisco
Res          11.00  05/01/00     9,132.92      910,000.00     953,000.00   1,269,988.85           0.00    2nd mtg San Francisco
Comm         11.00  12/01/00    16,500.00            0.00   1,800,000.00   1,800,000.00           0.00    1st mtg   Santa Clara
Res          10.87  12/01/99    23,562.50            0.00   2,600,000.00   2,600,000.00           0.00    1st mtg     San Mateo
Res          12.00  03/01/01    12,336.18            0.00   1,210,000.00   1,196,630.58           0.00    1st mtg         Marin
Res          11.00  09/01/00     8,359.30           $0.00     896,000.00     874,486.61           0.00    1st mtg   Santa Clara
Comm         10.50  03/01/01    17,937.50    3,753,523.00   2,050,000.00   2,050,000.00           0.00    2nd mtg     San Mateo
Res          12.00  05/01/00     4,303.45    2,400,000.00     430,344.83     430,344.83           0.00    2nd mtg San Francisco
Comm         12.00  06/01/01     8,500.00            0.00     850,000.00     850,000.00           0.00    1st mtg San Francisco
Land         11.34  07/01/01     1,133.40            0.00     120,000.00     120,000.00           0.00    1st mtg   Santa Clara
Land         11.00  01/01/01    16,500.00      363,035.00   1,800,000.00   1,800,000.00           0.00    2nd mtg    Stanislaus
Land         11.00  07/01/01    23,833.33      358,116.00   2,600,000.00   2,600,000.00      23,562.50    2nd mtg    Stanislaus
Res          10.87  02/01/01     2,670.05      264,025.00     950,000.00     348,466.50           0.00    2nd mtg     San Mateo
Comm         12.00  06/01/01     6,742.08      850,000.00   1,028,095.22     912,352.62           0.00    2nd mtg San Francisco
Res          10.50  08/01/04     8,312.50            0.00     950,000.00     950,000.00           0.00    1st mtg   Santa Clara
Res          10.50  09/01/01     6,453.13      454,885.00     737,500.00     737,500.00           0.00    2nd mtg          Lake
Res          10.25  09/01/09     7,616.86      668,433.00     850,000.00     848,921.51           0.00    2nd mtg   Santa Clara
Apts         12.50  03/14/00       435.55        5,733.00      38,727.14      38,425.45           0.00    2nd mtg  Contra Costa

</TABLE>
<PAGE>
<TABLE>




<S>        <C>      <C>       <C>          <C>             <C>            <C>            <C>            <C>        <C>
Col. A     Col. B   Col. C    Col. D       Col. E          Col. F         Col. G         Col. H         Col. I     Col. J
------     ------   ------    ------       ------          ------         ------         ------         ------     ------
Descp.     Interest Final     Periodic     Prior Liens     Face Amt. of   Carrying       Principal      Type of    Geographic
           Rate     Maturity  Payment                      Mortgage       amount of      amt of         Lien       County
                    Date      Terms                        Investments    Mortgage       Mortgage                  Location
                                                           (original      Investments    Investments
                                                           amount)                       subject to
                                                                                         Delinq.
                                                                                         Principal or
                                                                                         Interest
========== ======== ========= ============ =============== ============== ============== ============== ========== =============

Res          12.00  05/01/01    11,469.28            0.00   3,297,500.00   1,355,608.45           0.00    1st mtg        Placer
Land         11.00  11/01/00     2,034.55    2,968,393.00     221,951.22     221,951.22           0.00    3rd mtg    Stanislaus
Comm         10.25  12/01/01    10,121.88            0.00   1,185,000.00   1,185,000.00           0.00    1st mtg  Contra Costa
Comm         12.75  12/01/01    11,411.25    4,467,314.00   1,074,000.00   1,074,000.00           0.00    2nd mtg   Santa Clara
Comm         11.00  01/01/02     5,041.67      495,031.00     550,000.00     550,000.00           0.00    2nd mtg San Francisco

                              ============ =============== ============== ============== ==============
                              ============ =============== ============== ============== ==============
                              $352,171.83   $23,719,420.00 $40,664,075.86 $35,693,147.49  $2,141,466.03
</TABLE>


Notes:

     -  None  of  the  above  Mortgage  Investments  is  considered  "impaired".
Therefore,  none of them has been  written  down.  The  allowance  for  doubtful
accounts  includes  $795,268  relating  to the above  Mortgage  Investments  and
accrued interest receivable and advances related thereto.

     - Amounts  reflected in column G (carrying amount of Mortgage  Investments)
represents both cost and the tax basis of the loans.


<PAGE>


Schedule XII

     Reconciliation  of carrying amount (cost) of Mortgage  Investments at close
of periods

                                              Year ended December 31,
                                    -------------------------------------------
                                       1999            1998           1997
                                   -------------  --------------  --------------
                                   -------------  --------------  --------------

Balance at beginning of year        $31,905,958     $25,304,989    $15,642,990
                                   -------------  --------------  --------------

Additions during period:
  New Mortgage Investments           24,030,920      20,863,807     19,941,336
  Other                                       0               0              0
                                   -------------  --------------  --------------
         Total Additions             24,030,920      20,863,807     19,941,336
                                   -------------  --------------  --------------


Deductions during period:
  Collections of principal           20,243,730      14,262,838     10,279,337
  Foreclosures                                0               0              0
  Cost of Mortgage Investments
  Amortization of Premium                     0               0              0
  Other                                       0               0              0
                                   -------------  --------------  --------------
         Total Deductions            20,243,730      14,262,838     10,279,337
                                   -------------  --------------  --------------
Balance at close of year            $35,693,148     $31,905,958    $25,304,989
                                   =============  ==============  ==============



<PAGE>

<TABLE>




                                   SCHEDULE IX

                              SHORT TERM BORROWINGS

                  REDWOOD MORTGAGE INVESTORS VIII - RULE 12-10

<S>                       <C>             <C>                 <C>                   <C>                  <C>
Column A                  Column B        Column C            Column D              Column E             Column F
Category of Aggregate     Balance at End  Weighted Average    Maximum Amount        Average Amount       Weighted Average
Short-Term Borrowings     of Period       Interest Rate       Outstanding           Outstanding          Interest Rate
                                                              During the Period     During the Period    the period
------------------------- --------------- ------------------- --------------------- -------------------- -------------------


Year-Ended 12/31/99             $0              8.40%              $8,600,000           $6,268,227             8.40%

</TABLE>





<PAGE>



            Item 9 - Changes in and Disagreements with Accountants on

                       Accounting and Financial Disclosure

A. Bruce Cropper,  a partner in the accounting firm of Parodi & Cropper has been
providing audit and accounting  services to the Partnership  since its inception
in 1993. Mr. Cropper also has been performing  audit and accounting  services to
the General  Partners of the Partnership and their affiliates for over 15 years.
In 1999, Mr. Cropper's  partner sold his portion of their practice.  Mr. Cropper
decided to merge his portion of the practice  into an existing CPA firm known as
"Caporicci & Larson" with offices in Irvine and Walnut Creek,  California.  Upon
the merging, the firm of Parodi & Cropper was dissolved,  and Caporicci & Larson
became  Caporicci,  Cropper and Larson,  LLP. As a result,  the  Partnership has
retained the firm of  Caporicci,  Cropper and Larson,  LLP, to provide its audit
and financial  services.  Thus,  although  there has been a change in accounting
firms,  there  has not been a change in  accountants  and there has not been any
disagreement  on any matter of  accounting  principles,  practices  or financial
status disclosures.

                                    Part III

          Item 10 - Directors and Executive Officers of the Registrant

     The Partnership has no Officers or Directors. Rather, the activities of the
Partnership  are managed by the three General  Partners of which two individuals
are D. Russell  Burwell and Michael R.  Burwell.  The third  General  Partner is
Gymno Corporation,  a California corporation,  formed in 1986. The Burwell's are
the two shareholders of Gymno Corporation, a California corporation, on an equal
(50-50) basis.

     Effective as of February 7, 2000,  Redwood  Mortgage Corp., an affiliate of
the General  Partners has been  admitted,  pursuant to Paragraph 12.4 (d) of the
Limited  Partnership  agreement,   as  an  additional  General  Partner  of  the
Partnership.   Redwood   Mortgage   Corp.  is  a  licensed  real  estate  broker
incorporated  in 1978 under the laws of the State of California,  and is engaged
primarily in the business of arranging and servicing mortgage loans.




<PAGE>


Item 11 - Executive Compensation

COMPENSATION OF THE GENERAL PARTNERS AND AFFILIATES BY PARTNERSHIP

As indicated above in Item 10, the Partnership has no officers or directors. The
Partnership is managed by the General Partners. There are certain fees and other
items paid to management and related parties.

A  more  complete  description  of  management  compensation  is  found  in  the
Prospectus,  pages 6-7, under the section  "Compensation of the General Partners
and the Affiliates",  which is incorporated by reference.  Such  compensation is
summarized below.

The following  compensation has been paid to the General Partners and Affiliates
for  services  rendered  during  the year  ended  December  31,  1999.  All such
compensation  is in compliance  with the guidelines and limitations set forth in
the Prospectus.
<TABLE>

<S>                                     <C>                                                  <C>
Entity Receiving Compensation           Description of Compensation and Services             Amount
                                                        Rendered
-------------------------------------- -------------------------------------------- -------------------------

I. Redwood Mortgage Corp.             Mortgage Servicing Fee for servicing
                                      Mortgage Investments......................           $359,464

General Partners &/or Affiliates      Asset Management Fee for managing assets              $42,215

General Partners                      1% interest in profits....................            $29,423
                                      Less allocation of syndication costs......              1,768
                                                                                          ---------
                                                                                            $27,655

General Partners &/or Affiliates      Portion of early withdrawal penalties
                                      applied to reduce Formation Loan..........            $13,628


II. FEES PAID BY BORROWERS ON MORTGAGE  LOANS PLACED BY COMPANIES  RELATED TO THE GENERAL  PARTNERS
WITH THE  PARTNERSHIP  (EXPENSES OF BORROWERS NOT OF THE PARTNERSHIP)

Redwood Mortgage Corp.                Mortgage Brokerage Commissions for services in
                                      connection with the review, selection,
                                      evaluation, negotiation, and extension of the
                                      Mortgage Investments paid by the borrowers and
                                      not by the Partnership....................           $682,118

Redwood Mortgage Corp.                Processing and Escrow Fees for services in
                                      connection with notary, document preparation,
                                      credit investigation, and escrow fees payable
                                      by the Partnership........................            $13,164


Gymno Corporation, Inc.               Reconveyance Fee..........................             $7,075

III. IN ADDITION,  THE GENERAL  PARTNERS  AND/OR RELATED  COMPANIES PAY CERTAIN
EXPENSES ON BEHALF OF THE  PARTNERSHIP FOR WHICH IT IS REIMBURSED AS NOTED IN
THE STATEMENT OF INCOME.                                                                    $85,171

</TABLE>

<PAGE>


Item 12 - Security Ownership of Certain Beneficial Owners and Management

The  General  Partners  are to own a  combined  total  of 1% of the  Partnership
including a 1% portion of income and losses.

Item 13 - Certain Relationships and Related Transactions

Refer to footnote 3 of the notes to financial statements in Part II item 8 which
describes related party fees and data.

Also refer to the  Prospectus  dated December 4, 1996,  (incorporated  herein by
reference) on pages 4-5  "Compensation  of General  Partners and Affiliates" and
page 5 "Conflicts of Interest".

                                     Part IV

Item 14 - Exhibits, Financial Statements and Schedules, and Reports on Form 8-K.

A.       Documents filed as part of this report are incorporated:

     1. In Part II, Item 8 under A - Financial Statements.

     2. The Financial Statement Schedules are listed in Part II - Item 8 under B
- Financial Statement Schedules.



<PAGE>



3.  Exhibits.

Exhibit No.   Description of Exhibits

----------    -------------------------

3.1           Limited Partnership Agreement

3.2           Form of Certificate of Limited Partnership Interest
3.3           Certificate of Limited Partnership

10.1          Escrow Agreement
10.2          Servicing Agreement

10.3          (a)  Form of Note secured by Deed of Trust for Construction Loans
                   which provides for principal and interest payments
              (b)  Form of Note secured by Deed of Trust for Commercial and
                   Multi-Family loans which provides for principal and interest
                   payments
              (c)  Form of Note secured by Deed of Trust for Commercial and
                   Multi-Family loans which provides for interest only payments
              (d)  Form of Note secured by Deed of Trust for Single Family
                   Residential Loans which provides for interest and principal
                   payments
              (e)  Form of Note secured by Deed of Trust for Single Family
                   Residential loans which provides for interest only payments

10.4          (a)  Deed of Trust, Assignment of Leases and Rents, Security
                   Agreement and Fixture Filing to accompany Exhibits 10.3 (a),
                   and (c)
              (b)  Deed of Trust, Assignment of Leases and Rents, Security
                   Agreement and Fixture Filing to accompany Exhibit 10.3 (b)
              (c)  Deed of Trust, Assignment of Leases and Rents, Security
                   Agreement and Fixture Filing to accompany Exhibit 10.3 (c)

10.5              Promissory Note for Formation Loan

10.6              Agreement to Seek a Lender

24.1              Consent of Caporicci, Cropper & Larson,  LLP

24.3              Consent of  Landels, Ripley & Diamond



All of these  exhibits  were  previously  filed as the exhibits to  Registrant's
Statement on Form S-11 (Registration No. 333-13113 and incorporated by reference
herein).

B.       Reports of Form 8-K.

         No reports on Form 8-K have been filed  during the last  quarter of the
         period covered by this report. A Form 8-K was filed on February 7, 2000
         relating  to a change  in  accounting  firms and the  admittance  of an
         additional General Partner. (see Item 9 and 10 above, respectively)

C.       See A (3) above.

D.       See A (2) above.  Additional  reference is made to the Prospectus dated
         December 4, 1996 (filed as part of the S-11) and the revised Prospectus
         dated   February  28,  2000  for   financial   data  related  to  Gymno
         Corporation, a General Partner.


<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934 the  registrant  has duly  caused  this  report  to be signed on its
behalf by the  undersigned,  thereto duly  authorized  on the 24th day of March,
2000.

REDWOOD MORTGAGE INVESTORS VIII

By:       /S/ D. Russell Burwell
          ---------------------------------------------
          D. Russell Burwell, General Partner

By:       /S/ Michael R. Burwell
          ---------------------------------------------
          Michael R. Burwell, General Partner

By:       Gymno Corporation, General Partner

          By:     /S/ D. Russell Burwell

                  ---------------------------------------------
                  D. Russell Burwell, President

          By:     /S/ Michael R. Burwell

                  ---------------------------------------------
                  Michael R. Burwell, Secretary/Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacity indicated on the 24th day of March, 2000.

Signature                                 Title                            Date

/S/ D. Russell Burwell

-----------------------------------
D. Russell Burwell                        General Partner         March 24, 2000


/S/ Michael R. Burwell

-----------------------------------
Michael R. Burwell                        General Partner         March 24, 2000



/S/ D. Russell Burwell

-----------------------------------
D. Russell Burwell             President of Gymno Corporation,    March 24, 2000
                               (Principal Executive Officer);
                               Director of Gymno Corporation

/S/ Michael R. Burwell

-----------------------------------
Michael R. Burwell             Secretary/Treasurer of Gymno       March 24, 2000
                               Corporation (Principal Financial
                               and Accounting Officer);
                               Director of Gymno Corporation