UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly Period Ended September 30, 2005

                                       OR

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

         For the transition period from ______________ to ______________

                        Commission File Number: 000-19992

                         REDWOOD MORTGAGE INVESTORS VII,
                        a California Limited Partnership
             (Exact name of registrant as specified in its charter)

               California                                     94-3094928
(State or other jurisdiction of incorporation              (I.R.S. Employer
            or organization)                              Identification No.)

900 Veterans Blvd., Suite 500, Redwood City, CA                94063-1743
  (Address of principal executive offices)                     (Zip Code)

                                 (650) 365-5341
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
             (Former name, former address and former fiscal year,
                          if changed since last report)

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

Yes      XX             No
    --------------          -------------

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes                     No        XX
    --------------          -------------

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act).

Yes                     No        XX
    --------------          --------------


                                       1
<PAGE>

Part I - Item 1.    FINANCIAL STATEMENTS

                         REDWOOD MORTGAGE INVESTORS VII
                       (A California Limited Partnership)
                                 BALANCE SHEETS
              SEPTEMBER 30, 2005 and DECEMBER 31, 2004 (unaudited)


                                     ASSETS
<TABLE>
<S>                                                                        <C>                   <C>
                                                                           September 30,         December 31,
                                                                               2005                 2004
                                                                          ----------------     ---------------

   Cash and cash equivalents                                                $     658,700        $    346,393
                                                                          ----------------     ---------------

   Loans
      Loans, secured by deeds of trust                                          6,318,264           7,388,478
      Loans, unsecured, net discount of $91,318 and $107,433 for
        September 30, 2005 and December 31, 2004, respectively                    245,300             238,484
                                                                          ----------------     ---------------
                                                                                6,563,564           7,626,962
      Allowance for loan losses                                                 (746,356)           (745,476)
                                                                          ----------------     ---------------
            Net loans                                                           5,817,208           6,881,486

   Interest and other receivables
      Accrued interest and late fees                                              157,842             190,105
      Advances on loans                                                               256               8,188
                                                                          ----------------     ---------------
            Total interest and other receivables                                  158,098             198,293
                                                                          ----------------     ---------------

   Investment in limited liability company                                        881,617                   -
   Real estate held for sale, net                                               1,825,548           1,782,182
                                                                          ----------------     ---------------

            Total assets                                                    $   9,341,171        $  9,208,354
                                                                          ================     ===============

                        LIABILITIES AND PARTNERS' CAPITAL

   Liabilities

     Accounts payable                                                       $       3,678        $      4,951
     Payable to affiliate                                                          78,607              74,987
                                                                          ----------------     ---------------
            Total liabilities                                                      82,285              79,938
                                                                          ----------------     ---------------

   Partners' capital
      Limited partners' capital, subject to redemption                          9,246,913           9,116,443
      General partners' capital                                                    11,973              11,973
                                                                          ----------------     ---------------
            Total partners' capital                                             9,258,886           9,128,416
                                                                          ----------------     ---------------

            Total liabilities and partners' capital                         $   9,341,171        $  9,208,354
                                                                          ================     ===============
</TABLE>



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


                                       2
<PAGE>

                         REDWOOD MORTGAGE INVESTORS VII
                       (A California Limited Partnership)
                              STATEMENTS OF INCOME
   FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 and 2004 (unaudited)

<TABLE>
<S>                                                            <C>            <C>                 <C>            <C>
                                                               THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                                  SEPTEMBER 30,                      SEPTEMBER 30,
                                                         -------------------------------     ------------------------------

                                                               2005           2004                2005           2004
                                                            -----------    -----------         -----------    -----------
  Revenues
     Interest on loans                                        $197,654       $198,818            $517,709       $594,290
     Interest - interest bearing accounts                          770            629               2,005          2,435
     Late fees                                                   5,526          7,115               9,274         17,703
     Other                                                         641          8,747               2,311         25,939
                                                            -----------    -----------         -----------    -----------
                                                               204,591        215,309             531,299        640,367
                                                            -----------    -----------         -----------    -----------
  Expenses
     Mortgage servicing fees                                    22,729         20,457              54,692         60,219
     Interest expense                                                -          1,444                   -          2,512
     Clerical costs through Redwood Mortgage Corp.               3,498          4,337              10,284         13,753
     Asset management fees                                       8,642          8,520              25,824         25,507
     Provisions for (recovery of) losses on loans and
       real estate held for sale                                 5,372         16,185            (32,493)         42,438
     Professional services                                      13,222          7,293              38,746         37,066
     Printing, supplies and postage                              1,412          1,378               5,843          5,664
     Other                                                       1,141          6,362               5,384         25,334
                                                            -----------    -----------         -----------    -----------
                                                                56,016         65,976             108,280        212,493
                                                            -----------    -----------         -----------    -----------
  Net income                                                  $148,575       $149,333            $423,019       $427,874
                                                            ===========    ===========         ===========    ===========

  Net income:    to general partners (1%)                        1,486          1,493               4,230          4,279
                 to limited partners (99%)                     147,089        147,840             418,789        423,595
                                                            -----------    -----------         -----------    -----------
                                                              $148,575       $149,333            $423,019       $427,874
                                                            ===========    ===========         ===========    ===========

  Net income per $1,000 invested by limited
    partners for entire period

        -where income is compounded and retained              $  16.05       $  16.35            $  46.55       $  47.68
                                                            ===========    ===========         ===========    ===========

        -where partner receives income in monthly
           distributions                                      $  15.97       $  16.26            $  45.62       $  46.70
                                                            ===========    ===========         ===========    ===========
</TABLE>



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


                                       3
<PAGE>

                         REDWOOD MORTGAGE INVESTORS VII
                       (A California Limited Partnership)
                            STATEMENTS OF CASH FLOWS
        FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 and 2004 (unaudited)

<TABLE>
<S>      <C>                                                                      <C>               <C>
                                                                                    2005              2004
                                                                                --------------    -------------
          Cash flows from operating activities
            Net income                                                            $   423,019       $  427,874
            Adjustments to reconcile net income to net cash provided
               by operating activities
                  Provisions for (recovery of) losses on loans and real estate       (32,493)           42,438
                  Early withdrawal penalty credited to income                         (1,844)          (1,777)
                  Amortization of discount on unsecured loans                        (16,115)         (16,115)
                  Change in operating assets and liabilities
                    Accrued interest and advances on loans                           (20,278)        (183,164)
                    Accounts payable and other liabilities                              2,347           20,215
                    Prepaid expenses                                                        -          (1,741)
                                                                                --------------    -------------

          Net cash provided by operating activities                                   354,636          287,730
                                                                                --------------    -------------

          Cash flows from investing activities
            Principal collected on loans                                            4,462,402        3,020,006
            Loans originated                                                      (4,168,416)      (3,360,068)
            Recoveries of (payments for) real estate held for sale                    (9,994)           17,010
            Investment in limited liability company                                  (44,915)                -
            Proceeds from unsecured loans                                               9,299           11,804
                                                                                --------------    -------------

          Net cash provided by (used in) investing activities                         248,376        (311,248)
                                                                                --------------    -------------

          Cash flows from financing activities
            Net increase in line of credit                                                  -          500,000
            Partners' withdrawals                                                   (290,705)        (346,415)
                                                                                --------------    -------------
          Net cash provided by (used in) financing activities                       (290,705)          153,585
                                                                                --------------    -------------

          Net increase in cash and cash equivalents                                   312,307          130,067

          Cash and cash equivalents - beginning of period                             346,393          321,114
                                                                                --------------    -------------

          Cash and cash equivalents - end of period                                   658,700          451,181
                                                                                ==============    =============

          Cash payments for interest                                              $         -       $    2,512
                                                                                ==============    =============
</TABLE>


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


                                       4
<PAGE>

                         REDWOOD MORTGAGE INVESTORS VII
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2005 (unaudited)


NOTE 1 - GENERAL

     In the  opinion of the  management  of the  Partnership,  the  accompanying
unaudited  financial  statements contain all adjustments,  consisting of normal,
recurring  adjustments,  necessary to present  fairly the financial  information
included therein.  These financial statements should be read in conjunction with
the audited financial statements included in the Partnership's Form 10-K for the
fiscal year ended  December  31,  2004 filed with the  Securities  and  Exchange
Commission.  The results of operations for the nine month period ended September
30, 2005 are not necessarily  indicative of the operating results to be expected
for the full year.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Loans, secured by deeds of trust

     At  September  30, 2005 and  December  31, 2004 there were no loans and one
loan  categorized  as  impaired  by the  Partnership  totaling  $0 and  $96,716,
respectively.  In 2004 it was determined  that a reduction in carrying value was
no longer required on this loan. The real estate securing this loan  appreciated
in value over a period of time and the  borrower  began to pay down the advances
and accrued interest. The increase in value had been determined to be other than
temporary. As of September 30, 2005, all the advances were paid in full together
with a portion  of the  accrued  interest.  This loan was  evaluated  and it was
established that the loan was no longer impaired and as of September 30, 2005 it
was  recategorized  and all interest and late charges owed by the borrower  were
accrued and recognized as income. Thereafter,  interest and late charges will be
accrued.

     As of  September  30, 2005 the  Partnership  had a combined  total of three
loans with outstanding  principal balances of $161,486 that were either past due
90 days or more in interest  payments  and/or past  maturity.  These three loans
included  two  loans  totaling  $64,770  that were  past  maturity  and one loan
totaling  $96,716 that was past due 90 days or more in interest  payments.  This
compares to a combined total of five loans totaling  $1,049,730 that were either
past  due 90 days or  more in  interest  payments  and/or  past  maturity  as of
December 31, 2004.  These five loans  included two loans  totaling  $64,850 that
were past maturity and three loans totaling  $984,880 that were past due 90 days
or more in  interest  payments.  A past  maturity  loan is a loan in  which  the
principal and/or any accrued  interest is due and payable,  but the borrower has
failed to make such payment of principal and/or accrued interest. In the opinion
of  management,  the  delinquent  and/or past maturity loans as of September 30,
2005  have  sufficient  collateral  to  cover  the  amount  outstanding  to  the
Partnership and are still accruing interest on these loans.

Allowance for loan losses

     The  composition  of the allowance for loan losses as of September 30, 2005
and December 31, 2004 was as follows:

                                            September 30,       December 31,
                                                2005                2004
                                          ----------------    ----------------

      Specified loans                       $     290,464       $     290,464
      General                                     226,952             231,443
      Unsecured loans                             228,940             223,569
                                          ----------------    ----------------
                                            $     746,356       $     745,476
                                          ================    ================



                                       5
<PAGE>

                         REDWOOD MORTGAGE INVESTORS VII
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2005 (unaudited)


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Allowance for loan losses (continued)

     Activity in the  allowance  for loan losses for the nine month period ended
September 30, 2005 and the year ended December 31, 2004 was as follows:

                                            September 30,       December 31,
                                                2005                2004
                                          ---------------     ---------------

  Beginning balance                         $    745,476        $    680,469
  Provision for (recoveries of)
    loan losses                                 (32,493)              65,007
  Transfers                                       33,373                   -
                                          ---------------     ---------------
                                            $    746,356        $    745,476
                                          ===============     ===============

Investment in limited liability company

     Investment in limited  liability company ("LLC") is accounted for using the
equity  method as one of the  Partnership's  general  partners  is the  managing
member of the LLC. In February,  2005 the Partnership acquired an 8% interest in
Larkin Property Company, LLC (see note 5).

Income taxes

     No  provision  for federal and state income taxes (other than an $800 state
minimum  tax) is made in the  financial  statements  since  income taxes are the
obligation of the partners if and when income taxes apply.

Reclassifications

     Certain reclassifications,  not affecting previously reported net income or
total  partners'  capital,  have been made to the  previously  issued  financial
statements to conform to the current year classification.

Profits and losses

     Profits and losses are allocated  among the limited  partners  according to
their respective capital accounts monthly after 1% of the profits and losses are
allocated to the general partners.

Management estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management  to make  estimates  and  assumptions  about the reported  amounts of
assets and liabilities, and disclosures of contingent assets and liabilities, at
the dates of the financial  statements and the reported  amounts of revenues and
expenses during the reported periods.  Such estimates relate  principally to the
determination  of the  allowance  for loan losses,  including  the  valuation of
impaired  loans and the valuation of real estate held for sale.  Actual  results
could differ significantly from these estimates.


                                       6
<PAGE>

                         REDWOOD MORTGAGE INVESTORS VII
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2005 (unaudited)


NOTE 3 - GENERAL PARTNERS AND RELATED PARTIES

     The following are commissions  and fees,  which will be paid to the general
partners.

Mortgage brokerage commissions

     For fees in connection with the review, selection, evaluation,  negotiation
and  extension of loans,  Redwood  Mortgage  Corp.,  an affiliate of the general
partners, may collect an amount equivalent to 12% of the loaned amount until six
months after the termination  date of the offering.  Thereafter,  loan brokerage
commissions  (points) will be limited to an amount not to exceed 4% of the total
Partnership  assets per year.  The loan  brokerage  commissions  are paid by the
borrowers and thus, are not an expense of the Partnership.

Mortgage servicing fees

     Monthly  mortgage  servicing  fees of up to 1/8 of 1% (1.5%  annual) of the
unpaid  principal  are paid to  Redwood  Mortgage  Corp.,  based  on the  unpaid
principal balance of the loan portfolio,  or such lesser amount as is reasonable
and customary in the geographic area where the property securing the mortgage is
located. Once a loan is categorized as impaired,  mortgage servicing fees are no
longer  accrued.  Additional  service fees are recorded  upon the receipt of any
subsequent payments on impaired loans.

Asset management fees

     The general  partners  receive monthly fees for managing the  Partnership's
loan  portfolio and operations of up to 1/32 of 1% of the "net asset value" (3/8
of 1% annually).

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.

Operating expenses

     Redwood Mortgage Corp., an affiliate of the general partners, is reimbursed
by the Partnership for all operating  expenses actually incurred by it 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.
Redwood Mortgage Corp. waived  reimbursement of approximately  $755 in operating
expenses during the second quarter of 2005.


NOTE 4 - REAL ESTATE HELD FOR SALE

     In 1993 the  Partnership,  together  with two  other  affiliates,  acquired
through  foreclosure a parcel of land located in East Palo Alto, CA, which is on
the market for sale.  The general  partners  believe that this property is worth
considerably more than its carrying value, but it may take a considerable amount
of  additional  time to sell the  property and realize its full  potential.  The
property is unique in that it may only be utilized for  commercial or industrial
uses. Until recently,  land sales activity has been slow. Interest in land sales
for  commercial  sites  has  been  improving.  As  of  September  30,  2005  the
Partnership's investment in this property was $62,720.


                                       7
<PAGE>

                         REDWOOD MORTGAGE INVESTORS VII
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2005 (unaudited)


NOTE 4 - REAL ESTATE HELD FOR SALE (continued)

     In December  2004, the  Partnership  acquired  undeveloped  parcels of land
through a deed in lieu of foreclosure. The land is located in Stanislaus County,
California. It is comprised of three separate lots, which total approximately 14
acres.  The  parcels  are  currently  for sale.  As of  September  30,  2005 the
Partnership's investment in this property totaled $1,762,828,  including accrued
interest and advances,  as of the date of the acquisition.  Management  believes
that the full value of this  investment will be recovered from the eventual sale
of the  property  based  upon its  current  estimate  of the  fair  value of the
property.  This property is jointly owned by two other affiliated  partnerships.
As  such,   during  the  quarter  ended  September  30,  2005,  the  Partnership
transferred  the entire reserve  against real estate of $33,373 to the allowance
for loan losses.

     In  February,  2005  the  Partnership  acquired  another  property  through
foreclosure (see Note 5).

     The following  schedule  reflects the costs of real estate acquired through
foreclosure  and the recorded  reductions  to estimated  fair values,  including
estimated costs to sell as of September 30, 2005 and December 31, 2004:

                                            September 30,       December 31,
                                                2005                2004
                                          ----------------    ---------------
  Costs of properties                       $   1,825,548       $  1,815,555
  Reduction in value                                    -           (33,373)
                                          ----------------    ---------------
     Real estate held for sale, net         $   1,825,548       $  1,782,182
                                          ================    ===============


NOTE 5 - INVESTMENT IN LIMITED LIABILITY COMPANY

     In February,  2005, the Partnership  acquired a multi-unit property through
foreclosure.  This  property  is  located  in an  upscale  neighborhood  in  San
Francisco.  At the time the  Partnership  took  ownership of the  property,  the
Partnership's   investment  totaled  $836,702  including  accrued  interest  and
advances. This property is jointly owned by three other affiliated Partnerships.
Upon acquisition the Partnership  transferred its interest (principally land and
building) to a limited liability company ("LLC"),  Larkin Property Company,  LLC
("Larkin"),  which is 8% owned by the Partnership,  and 92% owned by three other
affiliates. No allowance for loss has been set aside as management believes that
the fair value of the property exceeds the combined Partnerships'  investment in
the property.  The Partnership intends to undertake  additional  improvements to
the  property.  As  of  September  30,  2005  the  Partnership  has  capitalized
approximately $44,915 in costs related to this property.


NOTE 6 - BANK LINE OF CREDIT

     The  Partnership has a bank line of credit secured by its loan portfolio of
up to $2,500,000 at .25% over prime.  There were no balances  outstanding  as of
September  30, 2005 and December 31, 2004 and the interest rate was 7.00% (6.75%
prime plus .25%) at September  30, 2005.  This line of credit  expires  December
2007 and requires the Partnership to meet certain  financial  covenants.  To the
best of its knowledge, the Partnership was in compliance with all loan covenants
for the nine  month  period  ended  September  30,  2005 and for the year  ended
December 31, 2004. The Partnership  anticipates  that the line of credit will be
renewed at its  maturity.  In the event that a renewal is not  forthcoming,  the
Partnership  has the option to  convert  the line of credit to a three year term
loan beginning December 2007.


                                       8
<PAGE>

                         REDWOOD MORTGAGE INVESTORS VII
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2005 (unaudited)


NOTE 7 - NON-CASH TRANSACTIONS

     During the nine month  period  ended  September  30,  2005 the  Partnership
foreclosed  on a  property  (see  Note 5),  which  resulted  in an  increase  in
investment  in limited  liability  company  of  $836,702,  a  decrease  in loans
receivable of $776,228, a decrease in accrued interest of $51,598, a decrease in
advances of $5,876, and a decrease in late charge receivable of $3,000.


NOTE 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS

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

     Secured  loans  had a  carrying  value  of  $6,318,264  and  $7,388,478  at
September 30, 2005 and December 31, 2004, respectively.  The fair value of these
loans of $6,429,255  and  $7,531,668,  respectively,  was  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 loan
losses along with accrued  interest and advances  related thereto should also be
considered in evaluating the fair value versus the carrying value.


NOTE 9 - ASSET CONCENTRATIONS AND CHARACTERISTICS

     Most loans are secured by recorded  deeds of trust.  At September  30, 2005
and  December  31,  2004  there  were  26  and  28  secured  loans  outstanding,
respectively, with the following characteristics:
<TABLE>
<S> <C>                                                                      <C>                  <C>
                                                                             September 30,        December 31,
                                                                                 2005                 2004
                                                                           ----------------     ----------------
    Number of secured loans outstanding                                                 26                   28
    Total secured loans outstanding                                          $   6,318,264        $   7,388,478

    Average secured loan outstanding                                         $     243,010                    $
                                                                                                        263,874
    Average secured loan as percent of total secured loans                           3.85%                3.57%
    Average secured loan as percent of partners' capital                             2.63%                2.89%

    Largest secured loan outstanding                                         $     686,400        $     800,000
    Largest secured loan as percent of total secured loans                          10.86%               10.83%
    Largest secured loan as percent of partners' capital                             7.42%                8.76%
    Largest secured loan as percent of total assets                                  7.35%                8.69%

    Number of counties where security is located (all California)                       13                   13

    Largest percentage of loans in one county                                       24.19%               24.64%

    Average secured loan to appraised value of security based on
        appraised values and prior liens at time loan was consummated               71.29%               71.30%

    Number of secured loans in foreclosure status                                     None                    1
    Amount of secured loans in foreclosure status                                     None        $     776,228
</TABLE>

     Over  time,  loans  may  exceed  10%  of  the  secured  loan  portfolio  or
Partnership assets as the loan portfolio and assets of the Partnership  decrease
due to limited partner withdrawals and/or loan payoffs.


                                       9
<PAGE>

                         REDWOOD MORTGAGE INVESTORS VII
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2005 (unaudited)


NOTE 9 - ASSET CONCENTRATIONS AND CHARACTERISTICS (continued)

     The  following  categories of secured loans were held at September 30, 2005
and December 31, 2004:
<TABLE>
<S>  <C>                                                                  <C>                  <C>
                                                                          September 30,        December 31,
                                                                             2005                 2004
                                                                        ----------------    ----------------

     First trust deeds                                                    $   4,756,452       $   5,937,736
     Second trust deeds                                                       1,337,246           1,450,742
     Third trust deeds                                                          224,566                   -
                                                                        ----------------    ----------------
            Total loans                                                       6,318,264           7,388,478
     Prior liens due other lenders at time of loan                            5,148,635           1,944,172
                                                                        ----------------    ----------------

            Total debt                                                    $  11,466,899       $   9,332,650
                                                                        ================    ================

     Appraised property value at time of loan                             $  16,085,038       $  13,089,113
                                                                        ----------------    ----------------

     Total secured loans as percent of appraisals based on appraised
       values and prior liens at time loan was consummated                       71.29%              71.30%
                                                                        ----------------    ----------------

     Secured loans by type of property
         Owner occupied homes                                             $   2,866,033       $   2,532,045
         Non-owner occupied homes                                               250,000           1,961,474
         Apartments                                                             666,716             971,864
         Commercial                                                           2,100,349           1,923,095
         Land                                                                   435,166                   -
                                                                        ----------------    ----------------
                                                                          $   6,318,264       $   7,388,478
                                                                        ================    ================
</TABLE>

     Scheduled  maturity  dates of secured loans as of September 30, 2005 are as
follows:

             Year Ending December 31,
          ------------------------------

                       2005                     $      64,770
                       2006                           916,716
                       2007                         1,681,919
                       2008                                 -
                       2009                         1,806,127
                    Thereafter                      1,848,732
                                              ----------------

                       Total                    $   6,318,264
                                              ================

     The scheduled  maturities for 2005 above include  approximately  $64,770 in
two loans, which were past maturity at September 30, 2005.  Interest payments on
both of these loans were current as of September 30, 2005.


                                       10
<PAGE>

                         REDWOOD MORTGAGE INVESTORS VII
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2005 (unaudited)


NOTE 9 - ASSET CONCENTRATIONS AND CHARACTERISTICS (continued)

     At times, the Partnership's  cash deposits exceed federally insured limits.
Management  believes  deposits are  maintained in financially  secure  financial
institutions.

     The Partnership has a substantial amount of its loan receivable balance due
on two loans from one borrower. This borrower accounted for approximately 19.73%
of the loan balance and  approximately  16.26% of interest  revenue for the nine
month period ended  September 30, 2005.  The value of collateral  securing these
loans was less than the principal balance due under the loans.  Redwood Mortgage
Corp.  has  provided an indemnity  to the  Partnership  whereby it has agreed to
indemnify  and hold  harmless,  the  Partnership  from any  expenses  or  losses
incurred by the Partnership by reason of the Partnership's  inability to collect
all  principal  due under the loans  after the  Partnership  has  exhausted  all
reserves  set aside for these loans and all  remedies  available to it including
foreclosure  of the  underlying  collateral.  Real  estate  values  in  the  San
Francisco  Bay Area have  appreciated  considerably  over the years and a recent
appraisal  of  these  two  properties  by  an   independent   party  revealed  a
loan-to-value  ratio of 68%. This revised  valuation,  backed by the  indemnity,
enhances the Partnership's portfolio.  Therefore, these loans are not considered
impaired.  Neither  of  these  loans  is past  due 90  days or more on  interest
payments nor are they past maturity.


NOTE 10 - COMMITMENTS AND CONTINGENCIES

Workout agreements

     The  Partnership  has negotiated a contractual  workout  agreement with one
borrower who is  delinquent in making  payments.  Under the terms of the workout
agreement  the  Partnership  is not  obligated to make any  additional  monetary
advances for the maintenance or repair of the collateral securing the loan as of
September 30, 2005. As of September 30, 2005 the  Partnership had one loan under
workout agreement totaling $96,716.

Construction loans

     The Partnership makes construction and  rehabilitation  loans which are not
fully disbursed at loan inception.  The Partnership approves the borrowers up to
a maximum loan balance;  however,  disbursements  are made  periodically  during
completion  phases of the construction or  rehabilitation or at such other times
as required under the loan documents.  At September 30, 2005,  there was $52,334
in  undisbursed  loan funds  pertaining to one loan.  The  Partnership  does not
maintain a separate cash reserve to hold the undisbursed obligations,  which are
intended to be funded.

Legal proceedings

     The  Partnership is involved in various legal actions arising in the normal
course of business.  In the opinion of management,  such matters will not have a
material effect upon the financial position of the Partnership.


                                       11
<PAGE>

Part I - Item 2.

 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OF THE PARTNERSHIP

Critical Accounting Policies.

     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 dates and income and  expenses
during  the  reporting  periods.   Such  estimates  relate  principally  to  the
determination of (1) the allowance for loan losses (i.e. the amount of allowance
established  against loans  receivable as an estimate of potential  loan losses)
including   the  accrued   interest  and  advances  that  are  estimated  to  be
unrecoverable  based on estimates of amounts to be collected  plus  estimates of
the value of the  property as  collateral  and (2) the  valuation of real estate
acquired through foreclosure.  At September 30, 2005, the partnership owned five
pieces of real property.

     Loans and the related accrued interest, late fees and advances are analyzed
on a regular basis for recoverability. Delinquencies are identified and followed
as part of the loan  system.  A provision  is made for loan losses to adjust the
allowance for loan losses to an amount  considered by management to be adequate,
with due consideration to collateral  value, to provide for unrecoverable  loans
and receivables,  including impaired loans, other loans, accrued interest,  late
fees and  advances  on loans  and other  accounts  receivable  (unsecured).  The
Partnership charges off uncollectible loans and related receivables  directly to
the  allowance  account  once it is  determined  that  the  full  amount  is not
collectible.

     If the probable  ultimate  recovery of the carrying  amount of a loan, with
due  consideration  for the fair value of  collateral,  is less than amounts due
according to the  contractual  terms of the loan  agreement and the shortfall in
the amounts due are not  insignificant,  the carrying  amount of the  investment
shall be reduced to the  present  value of future cash flows  discounted  at the
loan's effective interest rate. If a loan is collateral dependent,  it is valued
at the estimated fair value of the related collateral.  If events and or changes
in  circumstances  cause  management  to have  serious  doubts about the further
collectibility  of the  contractual  payments,  a loan  may  be  categorized  as
impaired and interest is no longer accrued.  Any subsequent payments on impaired
loans are applied to reduce the  outstanding  loan  balances  including  accrued
interest and advances.

     Recent  trends in the  economy  have been taken into  consideration  in the
aforementioned  process of arriving at the  allowance  for loan  losses.  Actual
results could vary from the aforementioned provisions for losses.

     Real estate held for sale includes real estate acquired through foreclosure
and is stated  at the lower of the  recorded  investment  in the loan,  plus any
senior  indebtedness,  or at the property's estimated fair value, less estimated
costs to sell.

     The Partnership  periodically compares the carrying value of real estate to
expected  undiscounted  future  cash  flows for the  purpose  of  assessing  the
recoverability  of the recorded  amounts.  If the carrying  value exceeds future
undiscounted cash flows, the assets are reduced to estimated fair value.

Forward Looking Statements.

     Certain  statements  in this  Report on Form 10-Q which are not  historical
facts may be considered forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
and  Exchange  Act of 1934,  as  amended,  including  statements  regarding  the
Partnership's expectations,  hopes, intentions, beliefs and strategies regarding
the future.  Forward-looking statements include statements regarding future loan
payoffs,  future interest rates and economic  conditions and their effect on the
Partnership  and its assets,  future sales of properties held by the Partnership
and the proceeds from such sales,  trends in the California  real estate market,
estimates  as to the  allowance  for loan losses,  estimates  of future  limited
partner  withdrawals and 2005 annualized yield estimates.  Actual results may be
materially different from what is projected by such forward-looking  statements.
Factors  that  might  cause  such a  difference  include  unexpected  changes in
economic   conditions  and  interest  rates,   the  impact  of  competition  and
competitive  pricing  and  downturns  in the real  estate  markets  in which the
Partnership  has made  loans.  All  forward-looking  statements  and reasons why
results may differ  included  in this Form 10-Q are made as of the date  hereof,
and we assume no  obligation  to update any such  forward-looking  statement  or
reason why actual results may differ.


                                       12
<PAGE>

Related Parties.

     The general  partners of the Partnership are Gymno  Corporation and Michael
R. Burwell.  Most  Partnership  business is conducted  through Redwood  Mortgage
Corp.,  an affiliate  of the general  partner,  which  arranges,  services,  and
maintains  the loan  portfolio  for the benefit of the  Partnership.  Michael R.
Burwell  is  President  and Chief  Financial  Officer of Gymno  Corporation  and
Redwood  Mortgage  Corp.  The fees  received  by the  affiliate  to the  general
partners are paid pursuant to the  Partnership  Agreement and are  determined at
the sole  discretion of the affiliate to the general  partner.  In the past, the
affiliate  to  the  general  partners  has  elected  not  to  take  the  maximum
compensation.  The  following is a list of various  Partnership  activities  for
which related parties are compensated.

     o Mortgage  Brokerage  Commissions  For fees in connection with the review,
selection,  evaluation,  negotiation  and extension of loans,  Redwood  Mortgage
Corp.  may  collect an amount  equivalent  to 12% of the loaned  amount  until 6
months  after  the  termination  date  of the  offering.  Thereafter,  the  loan
brokerage  commissions (points) will be limited to an amount not to exceed 4% of
the total Partnership  assets per year. The loan brokerage  commissions are paid
by the  borrowers,  and  thus,  are  not an  expense  of the  Partnership.  Loan
brokerage  commissions  paid by the borrowers  were $103,848 and $59,128 for the
nine month periods ended September 30, 2005 and 2004, and $50,198 and $9,600 for
the three month periods ended September 30, 2005 and 2004, respectively.

     o Mortgage  Servicing Fees Monthly mortgage  servicing fees of up to 1/8 of
1% (1.5% on an annual basis) of the unpaid principal of the Partnership's  loans
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 $54,692 and $60,219 were incurred for the
nine month  periods ended  September 30, 2005 and 2004,  and $22,729 and $20,457
were  incurred for the three month  periods  ended  September 30, 2005 and 2004,
respectively.

     o Asset  Management  Fees The general  partners  receive  monthly  fees for
managing the Partnership's portfolio and operations up to 1/32 of 1% of the `net
asset  value'  (3/8 of 1% on an annual  basis).  Management  fees to the general
partners of $25,824 and $25,507 were  incurred by the  Partnership  for the nine
month  periods  ended  September  30, 2005 and 2004,  and $8,642 and $8,520 were
incurred  for the  three  month  periods  ended  September  30,  2005 and  2004,
respectively.

     o Other Fees The Partnership  Agreement  provides that the general partners
may receive other fees such as  processing  and escrow,  reconveyance,  mortgage
assumption and mortgage  extension fees. Such fees are incurred by the borrowers
and are paid to the general partners. Such fees aggregated $7,629 and $6,606 for
the nine month  periods ended  September 30, 2005 and 2004,  and $3,474 and $906
for the three month periods ended September 30, 2005 and 2004, respectively.

     o Income and Losses  All  income  and  losses  are  credited  or charged to
partners in relation to their respective Partnership  interests.  The allocation
to the general partners  (combined) shall be a total of 1%, which was $4,230 and
$4,279 for the nine month periods ended  September 30, 2005 and 2004, and $1,486
and  $1,493 for the three  month  periods  ended  September  30,  2005 and 2004,
respectively.

     o Operating  Expenses An affiliate  of the  Partnership,  Redwood  Mortgage
Corp.,  is reimbursed by the  Partnership  for all operating  expenses  actually
incurred  by it 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
statements of income.  Operating  expenses  totaling $10,284 and $13,753 for the
nine month periods ended  September 30, 2005 and 2004, and $3,498 and $4,337 for
the three month periods ended  September 30, 2005 and 2004,  respectively,  were
reimbursed to Redwood Mortgage Corp. In June, 2005, Redwood Mortgage Corp waived
approximately $755 of this cost.

     o  Contributed   Capital  The  general   partners   jointly  and  severally
contributed 1/10 of 1% in cash contributions as proceeds from the offerings were
received from the limited partners. As of September 30, 2005 and 2004, a general
partner,  Gymno  Corporation,  had contributed  $11,973 as capital in accordance
with Section 4.02(a) of the Partnership Agreement.


                                       13
<PAGE>

     Results of  Operations - For the nine and three months ended  September 30,
2005 and 2004

     Changes in the Partnership's operating results for the nine and three month
periods ended September 30, 2005 versus 2004 are discussed below:
<TABLE>
<S>  <C>                                                      <C>                         <C>
                                                              Changes during the          Changes during the
                                                              nine months ended           three months ended
                                                              September 30, 2005          September 30, 2005
                                                                 versus 2004                  versus 2004
                                                            ----------------------      ----------------------

     Net income increase/(decrease)                              $    (4,855)                  $     (758)
                                                               ===============               ==============

       Revenue
          Interest on loans                                      $   (76,581)                  $   (1,164)
          Interest - interest bearing accounts                          (430)                          141
          Late fees                                                   (8,429)                      (1,589)
          Other                                                      (23,628)                      (8,106)
                                                               ---------------               ---------------
                                                                 $  (109,068)                  $  (10,718)
                                                               ---------------               ---------------

       Expenses
          Mortgage servicing fees                                $    (5,527)                  $     2,272
          Interest expense                                            (2,512)                      (1,444)
          Clerical costs through Redwood Mortgage Corp.               (3,469)                        (839)
          Asset management fees                                           317                          122
          Provisions for (recovery of) losses on loans and
            real estate held for sale                                (74,931)                     (10,813)
          Professional services                                         1,680                        5,929
          Printing, supplies and postage                                  179                           34
          Other                                                      (19,950)                      (5,221)
                                                               ---------------               ---------------
                                                                 $  (104,213)                  $   (9,960)
                                                               ---------------               ---------------

                Net income increase/(decrease)                   $    (4,855)                  $     (758)
                                                               ===============               ===============
</TABLE>

     The  decrease in interest on loans of $76,581  (12.89%)  for the nine month
period and $1,164 (0.59%) for the three month period ended September 30, 2005 as
compared to the same periods in 2004 was primarily due to a decrease in the loan
portfolio  outstanding to $6,318,264 as of September 30, 2005 from $8,620,888 as
of September 30, 2004.  Average loan portfolio balance for the nine month period
ended September 30, 2005 and 2004 was $6,512,678 and  $7,993,287,  respectively.
The  decrease  in  interest  is also  attributed  to a decrease  in the  average
interest  rate,  which  stood at 9.24% as of  September  30, 2005 as compared to
9.66% as of  September  30,  2004.  The  decrease in interest on loans of $1,164
during the third  quarter  of 2005 as  compared  to the same  period in 2004 was
mitigated,  as to the  continuing  nine  month  downward  trend,  by  accrual of
interest  totaling  $42,472  on a loan  that  was  previously  considered  to be
impaired.  There is a strong  likelihood  that during the fourth quarter of 2005
two loans with principal balances totaling approximately $1,450,000 will be paid
off. Should this occur,  interest income may be significantly  reduced until the
funds can be placed into new mortgage loans.

     The decrease in other income of $23,628  (91.09%) for the nine month period
and $8,106  (92.67%)  for the three month  period  ended  September  30, 2005 as
compared to the same periods in 2004 was  primarily  due to the  Partnership  no
longer receiving  non-refundable  option payments on a property sold in October,
2004.  During  the first  nine  months of 2004  these  option  payments  totaled
$23,143.  The property  against  which the payments  were being made was sold in
October, 2004.

     The decrease in late  charges of $8,429  (47.61%) for the nine month period
and $1,589  (22.33%)  for the three month  period  ended  September  30, 2005 as
compared  to the  same  periods  in 2004 was  primarily  due to a  reduction  in
delinquent loans.


                                       14
<PAGE>

     The  decrease in  mortgage  servicing  fees of $5,527  (9.18%) for the nine
month period  ended  September  30, as compared to the same period in 2004,  was
primarily  due to a decrease in the loan  portfolio  balance to $6,318,264 as of
September  30, 2005 from a portfolio  balance of  $8,620,888 as of September 30,
2004.  The  average  loan  portfolio  balance for the nine month  periods  ended
September 30, 2005 and 2004 was $6,512,678  and  $7,993,287,  respectively.  The
increase  in  mortgage  servicing  fees of $2,272  (11.11%)  for the three month
period ended  September  30, 2005 as compared to the same period in 2004 was due
to the  accrual  of  servicing  fees of  $8,014  on a loan  that was  previously
considered to be impaired.  Mortgage servicing fees on impaired loans are due as
borrower  payments are received.  The servicing fees on the previously  impaired
loan also reduced the decrease in servicing fees for the nine month period ended
September 30, 2005.

     The  decrease  in  provisions  for losses on loans and real estate held for
sale of $74,931 (176.57%) for the nine month period and $10,813 (66.81%) for the
three month period ended  September  30, 2005 as compared to the same periods in
2004 is due to management's  determination that the allowance for loan losses of
$746,356 as of  September  30, 2005 was adequate to offset  potential  losses on
loans.  There were no filed notices of default as of September 30, 2005 and none
are expected in the foreseeable future.

     The  increase  in  professional  fees of $1,680  (4.53%) for the nine month
period and $5,929  (81.30%) for the three month period ended  September 30, 2005
as compared to the same periods in 2004 is due to an increase in fees and timing
of billings in 2005 compared to 2004.

     The decrease in interest expense of $2,512 (100%) for the nine month period
and  $1,444  (100%) for the three  month  period  ended  September  30,  2005 as
compared to the same periods in 2004,  is due to non-usage of the line of credit
facility  during the first nine months of 2005  compared to an average  usage of
$236,667 during the corresponding period of 2004.

     The  decrease  in other  expenses  of $19,950  (78.75%)  for the nine month
period and $5,221  (82.07%) for the three month period ended  September 30, 2005
as  compared to the same  periods in 2004 was  primarily  due to a reduction  in
upkeep costs for the real estate held for sale properties. The Partnership spent
$2,745 and $21,772  during the nine month periods  ended  September 30, 2005 and
2004,  and $1,116 and $6,286 during the three month periods ended  September 30,
2005 and 2004.

     The decrease in clerical costs of $3,469 (25.22%) for the nine month period
and $839  (19.35%)  for the three  month  period  ended  September  30,  2005 as
compared to the same periods in 2004 is primarily due to lower servicing  costs.
The decrease of $3,469 for the nine months ended  September  30, 2005 would have
been only $2,714 had  Redwood  Mortgage  Corp.  not waived $755 in such costs in
June 2005.

     Partnership  capital  increased by $130,470 during the first nine months of
2005 as the aggregate of earnings  distributions  and capital  liquidations  was
less than the net income  level of the  Partnership.  For the nine month  period
ended  September 30, 2005 limited  partners' net income was $418,789 as compared
to earnings  distributions  of $135,245  and capital  liquidations  of $153,218,
which totaled $288,463,  as compared to limited partners' net income of $423,595
as compared to earnings  distributions  of $145,076 and capital  liquidations of
$198,838,  which totaled $343,914 for the  corresponding  period in 2004. During
the third quarter of 2005 limited  partners' net income was $147,089 as compared
to earnings  distributions of $44,961 and capital liquidations of $36,198, which
totaled  $81,159,  as  compared to limited  partners'  net income of $147,840 as
compared  to earnings  distributions  of $49,828  and  capital  liquidations  of
$51,018,  which totaled $100,846 for the corresponding  period in 2004. Earnings
and capital liquidations are a factor of limited partner elections and currently
limited  partners  seeking  liquidations  of earnings or their  capital  account
continues to decline.  Limited partner income,  which has continued to be higher
than  earnings  distributions  and  capital  liquidations  for the past  several
quarters, has grown the limited partners' capital.

     At September 30, 2005 there were no outstanding loans with filed notices of
default.


                                       15
<PAGE>

     Redwood  Mortgage  Corp.,  an affiliate of the general  partners,  received
mortgage  brokerage  commissions from loan borrowers of $103,848 and $50,198 for
the nine and three month periods ended September 30, 2005 as compared to $59,128
and $9,600 for the same  periods in 2004.  The  increase of $44,720 for the nine
month period and $40,598 for the three month period ended  September 30, 2005 as
compared  to the same  periods  in 2004 is due to more  loans  that were  funded
totaling $4,168,416 and $3,360,068, respectively.

Allowance for Losses.

     The general  partners  regularly  review the loan portfolio,  examining the
status  of  delinquencies,  the  underlying  collateral  securing  these  loans,
borrowers' payment records, etc. Based upon this information and other data, the
allowance for loan losses is increased or decreased. Borrower foreclosures are a
normal aspect of Partnership  operations.  The Partnership is not a credit based
lender and hence  while it reviews the credit  history and income of  borrowers,
and if  applicable,  the income from income  producing  properties,  the general
partners expect that we will on occasion take back real estate security.  During
2002 and 2003, the California economy stabilized.  During 2004 and continuing in
2005  the  economy  and  the  Northern   California   Real  Estate   Market  has
strengthened.  At September  30, 2005 the  Partnership  had one loan past due 90
days or more in interest payments totaling $96,716 with no loans in foreclosure.
In addition,  two loans with total principal  balance of $64,770 were current in
interest  payments  but were past  maturity  as of  September  30,  2005,  for a
combined  total of three  loans  past due 90 days or more in  interest  payments
and/or past maturity totaling $161,486.

     Periodically, the Partnership enters into workout agreements with borrowers
who are past maturity or delinquent in their regular  payments.  The Partnership
has one  loan  totaling  $96,716  in a  workout  agreement  with  the  borrower.
Typically,  a workout  agreement allows the borrower to extend the maturity date
of the  balloon  payment  and/or  allows the  borrower to make  current  monthly
payments  while  deferring  for periods of time,  past due  payments and balloon
payments  and  allows  time to pay the  loan in  full.  Workout  agreements  and
foreclosures  generally  exist  within our loan  portfolio  to greater or lesser
degrees,  depending  primarily  on the  health  of the  economy.  The  number of
foreclosures  and  workout  agreements  will  generally  rise  during  difficult
economic times and conversely  fall during good economic  times.  The number and
amount of workout  agreements  existing at September 30, 2005,  in  management's
opinion,  does not have a  material  effect  on our  results  of  operations  or
liquidity.  Workout  agreements are  considered  when  management  arrives at an
appropriate  allowance for loan losses,  and based on our  experience;  they are
reflective  of our loan  marketplace  segment.  In the remainder of 2005, we may
initiate  foreclosure  by filing  notices of default on delinquent  borrowers or
borrowers who become  delinquent  during the year.  Borrower  foreclosures are a
normal aspect of Partnership operations and the general partners anticipate that
they will not have a material  effect on  liquidity.  As a prudent guard against
potential losses,  the general partners have made provisions for losses on loans
and real estate held for sale through  foreclosure  of $746,356 at September 30,
2005. These provisions for losses were made to guard against  collection losses.
The total  provision  for losses as of September  30, 2005 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.  Total provision for
losses on loans and real estate held for sale of  $746,356 as of  September  30,
2005 is considered to be reasonable.

     As of September  30,  2005,  the  Partnership  had an average loan to value
ratio computed based on appraised values and prior liens as of the date the loan
was made of 71.29%.  This  percentage  does not  account  for any  increases  or
decreases  in  property  values  since the date the loan was  made,  nor does it
include any reductions in principal  through  amortization of payments after the
loan was made.  This low loan to value  ratio  will  assist the  Partnership  in
weathering loan delinquencies and foreclosures should they eventuate.


                                       16
<PAGE>

PORTFOLIO REVIEW - For the nine months ended September 30, 2005 and 2004

Loan Portfolio

     The Partnership's  loan portfolio  consists primarily of short-term (one to
five years),  fixed rate loans secured by real estate.  As of September 30, 2005
and 2004 the Partnership's loans secured by real property collateral in five San
Francisco Bay Area counties (San Francisco, San Mateo, Santa Clara, Alameda, and
Contra Costa)  represented  $4,718,050  (74.67%) and $5,417,331  (62.84%) of the
outstanding secured loan portfolio.  The remainder of the portfolio  represented
loans secured by real estate located primarily in Northern California.

     As of September  30, 2005 and 2004,  the  Partnership  held 26 and 29 loans
respectively in the following categories:
<TABLE>
<S>  <C>                                     <C>                      <C>       <C>                     <C>
                                                 September 30, 2005                 September 30, 2004
                                           -------------------------------    ------------------------------

     Single Family Homes (1-4 units)         $ 3,116,033              49%       $ 3,716,448             43%
     Commercial                                2,100,349              33%         2,598,804             30%
     Apartments (5+ units)                       666,716              11%         1,012,221             12%
     Land                                        435,166               7%         1,293,415             15%
                                           --------------    -------------    --------------   -------------

        Total                                $ 6,318,264             100%       $ 8,620,888            100%
                                           ==============    =============    ==============   =============
</TABLE>

     As of September 30, 2005, the Partnership held 26 loans secured by deeds of
trust. The following table sets forth the priorities,  asset  concentrations and
maturities of the loans held by the Partnership as of September 30, 2005:


            PRIORITIES, ASSET CONCENTRATIONS AND MATURITIES OF LOANS
                            As of September 30, 2005
<TABLE>
<S> <C>                                                          <C>                 <C>              <C>
                                                                 # of Loans          Amount           Percent
                                                                -------------    ---------------    -------------

    1st Mortgages                                                         16       $  4,756,452              75%
    2nd Mortgages                                                          8          1,337,246              21%
    3rd Mortgages                                                          2            224,566               4%
                                                                =============    ===============    =============
           Total                                                          26       $  6,318,264             100%

    Maturing 12/31/05 and prior                                            2       $     64,770               1%
    Maturing prior to 12/31/06                                             3            916,716              14%
    Maturing prior to 12/31/07                                             3          1,681,919              27%
    Maturing after 12/31/07                                               18          3,654,859              58%
                                                                =============    ===============    =============
           Total                                                          26       $  6,318,264             100%

    Average Secured Loan                                                           $    243,010               4%
    Largest Secured Loan                                                                686,400              11%
    Smallest Secured Loan                                                                11,541            0.18%
    Average Loan-to-Value based upon appraisals and prior
        liens at time loan was consummated                                                                71.29%
</TABLE>

     The  Partnership's  largest  loan  in  the  principal  amount  of  $686,400
represents 10.86% of outstanding  secured loans and 7.35% of Partnership assets.
Over  time,  loans may  increase  above 10% of the  secured  loan  portfolio  or
Partnership assets as the loan portfolio and assets of the Partnership  decrease
due to limited partner withdrawals and/or loan payoffs.


                                       17
<PAGE>

Liquidity and Capital Resources.

     The Partnership  relies upon loan payoffs and borrowers'  mortgage payments
for the  source of funds for  loans.  Recently,  mortgage  interest  rates  have
decreased somewhat from those available at the inception of the Partnership.  If
interest rates were to increase  substantially,  the yield of the  Partnership's
loans may provide lower yields than other comparable  debt-related  investments.
Additionally,  since the  Partnership  has made primarily  fixed rate loans,  if
interest rates were to rise, the likely result would be a slower prepayment rate
for the  Partnership.  This could cause a lower degree of liquidity as well as a
slowdown  in the  ability  of the  Partnership  to  invest  in loans at the then
current interest rates. Conversely, in the event interest rates were to decline,
the Partnership could experience significant borrower prepayments, which, if the
Partnership  can only obtain the then existing lower rates of interest may cause
a  dilution  of  the  Partnership's   yield  on  loans,   thereby  lowering  the
Partnership's  overall yield to the limited  partners.  Cash is constantly being
generated from borrower interest  payments,  late charges,  amortization of loan
principal and loan payoffs.  Currently,  cash flow exceeds Partnership expenses,
earnings and limited partner capital payout requirements.  Excess cash flow will
be invested in new loan opportunities,  when available, and in other Partnership
business.  During the fourth  quarter of 2005 it is  anticipated  that two loans
with outstanding  principal  balances of  approximately  $1,450,000 will be paid
off. Alone,  payoff of these two loans represents 23% of the Partnership's  loan
portfolio at September  30, 2005.  The  Partnership  will endeavor to place cash
proceeds into suitable mortgage loan investments.  However,  it is unlikely that
the cash will  immediately be placed in new loans. As a result,  interest income
may decline until suitable replacement loans are funded.

     At the time of subscription  to the  Partnership,  limited  partners made a
decision to either take distributions of earnings monthly, quarterly or annually
or to compound  earnings in their capital account.  For the nine and three month
periods ended September 30, 2005 and 2004, the Partnership made distributions of
earnings to limited  partners of $135,245 and $145,076 for the nine months,  and
$44,961 and $49,828 for the three months, respectively. Distribution of earnings
to limited  partners,  which  were not  withdrawn  for the nine and three  month
periods  ended  September  30, 2005 and 2004 were  $283,544 and $278,519 for the
nine months, and $102,128 and $98,012 for the three months, respectively.  As of
September  30, 2005 and 2004,  limited  partners  electing to withdraw  earnings
represented 35% and 34% of the limited partners' capital.

     The Partnership  also allows the limited partners to withdraw their capital
account  subject to certain  limitations.  For the nine and three month  periods
ended September 30, 2005 and 2004,  $23,045 and $22,213 for the nine months, and
$5,489 and $8,950 for the three months, respectively, were liquidated subject to
the 10% penalty for early withdrawal.  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  their  investment to raise cash.  The trend the
Partnership is  experiencing in withdrawals by limited  partners  electing a one
year liquidation  program is that such withdrawals  represent a small percentage
of limited partner capital as of September 30, 2005 and 2004.

     Additionally, for the nine and three month periods ended September 30, 2005
and 2004, $130,173 and $176,625 for the nine months, and $30,708 and $42,068 for
the three months,  respectively,  were  liquidated by limited  partners who have
elected a  liquidation  program  over a period  of five  years or  longer.  This
ability to  withdraw  after five  years by  limited  partners  has the effect of
providing  limited partner  liquidity.  The general partners expect a portion of
the  limited  partners  to  take  advantage  of  this  provision.  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,
after which time the bulk of those limited  partners who have sought  withdrawal
have been liquidated. After year eleven, liquidation generally subsides.


                                       18
<PAGE>

     In some  cases in order to  satisfy  Broker  Dealers  and  other  reporting
requirements, the general partners have valued the limited partners' interest in
the  Partnership  on a basis which  utilizes a per Unit  system of  calculation,
rather than based upon the investors' capital account. This information has been
reported  in this manner in order to allow the  Partnership  to  integrate  with
certain  software used by the Broker Dealers and other  reporting  entities.  In
those cases, the Partnership will report to Broker Dealers,  Trust Companies and
others a  "reporting"  number of Units based upon a $1.00 per Unit  calculation.
The number of reporting Units provided will be calculated based upon the limited
partner's  capital  account  value  divided by $1.00.  Each  investor's  capital
account balance is set forth  periodically on the Partnership  account statement
provided  to  investors.  The  reporting  Units are solely  for  Broker  Dealers
requiring such information for their software programs and do not reflect actual
Units owned by a limited  partner or the limited  partners' right or interest in
cash flow or any other  economic  benefit in the  Partnership.  Each  investor's
capital  account balance is set forth  periodically  on the Partnership  account
statement  provided  to  investors.  The  amount of  Partnership  earnings  each
investor is entitled to receive is determined by the ratio that each  investor's
capital account bears to the total amount of all investor  capital accounts then
outstanding.  The capital account balance of each investor should be included on
any NASD member client account statement in providing a per Unit estimated value
of the client's investment in the Partnership in accordance with NASD Rule 2340.

     While the general  partners have set an estimated value for the Partnership
Units,  such  determination  may not be  representative  of the  ultimate  price
realized  by an  investor  for such Units upon sale.  No public  trading  market
exists for the Partnership's Units and none is likely to develop. Thus, there is
no certainty  that the Units can be sold at a price equal to the stated value of
the capital account. Furthermore, the ability of an investor to liquidate his or
her investment is limited subject to certain  liquidation rights provided by the
Partnership, which may include early withdrawal penalties.

Current Economic Conditions.

     From July 1, 2004 through September 30, 2005, the Federal Reserve increased
the  Federal  Funds Rate to 3.75% from 1%. The  recent  upward  movement  in the
Federal Funds Rate during 2004 and 2005 has raised  short-term  rates; and while
long-term  interest  rates  have  risen,  they  have  not  increased  at a  pace
comparable to the rise in short-term  rates. In the future the general  partners
anticipate that interest rates will likely change from their current levels. The
general  partners  cannot,  at this time,  predict at what levels interest rates
will be in the future.  The general  partners  anticipate that new loans will be
placed during 2005 at rates  slightly  above those that  prevailed in 2004.  The
recent  increases in short term interest rates, and to a lesser extent long term
interest rates,  have  encouraged  those borrowers with interest rates above the
current  going  rates  to  refinance   their   indebtedness  to  lock  in  these
historically  low interest rates should they increase in the future.  Demand for
loans from  qualified  borrowers  continues to be strong and as loan  repayments
occur,  the general  partners expect to replace the paid off loans with loans at
interest rates  attainable in the then existing  interest rate  environment.  At
this time, the general partners believe that the average loan portfolio interest
rate will remain  relatively  stable over the remainder of 2005.  Based upon the
rates payable in connection with the existing loans,  anticipated interest rates
to be charged by the  Partnership,  and the general  partners'  experience,  the
general partners  anticipate that the Partnership's  annualized yield will range
between 5.75% and 6.50% in 2005.

     During the third  quarter of 2005,  the  United  States  economy as a whole
performed  well.  Early  estimates of a 3.8% third  quarter Real Gross  Domestic
Product  shows a  continuation  of the  previous  nine  consecutive  quarters of
expansion in excess of 3% (BEA 11/05).  The United States  unemployment rate for
October,  2005 was 5% and has hovered close to that level  throughout the second
and third quarters of 2005. Regionally,  the San Francisco Bay Area demonstrated
a very similar unemployment rate with an unemployment rate of 4.9% for the month
ended  August,  2005.  The San  Francisco  Bay area  unemployment  rate has been
declining  from  5.3%  in  January,  2005 to the  current  4.9%  (United  States
Department  of Labor  11/05).  The rate of inflation  concerns  many with energy
costs having risen  significantly  over the last year.  The consumer price index
spiked  upward 1.2% in  September,  2005 and was 4.7% higher than in  September,
2004 (United  States  Department of Labor 11/05).  It remains to be seen whether
increased  energy  costs will ripple  through  the  economy and drive  inflation
upward,  which could push interest rates higher.  These  statistics  indicate an
economy that is continuing to grow,  which is good for both mortgage lenders and
the real estate industry as a whole.

     The Partnership makes loans primarily in Northern  California.  As such the
regional  real estate  market is of primary  concern to the  Partnership.  As of
September  30,  2005 and 2004,  approximately  74.67%  ($4,718,050)  and  62.84%
($5,417,331) of the loans held by the Partnership were in five San Francisco Bay
Area  Counties,  respectively.  The  remainder  of the  loans  held was  secured
primarily by Northern  California  real estate  outside of the San Francisco Bay
Area.


                                       19
<PAGE>

     California  residential real estate continued to appreciate in value during
the third quarter of 2005.  In the San Francisco Bay Area, as of September  2005
single family home median sales prices increased by 19.4%,  22.1%,  15.7% 10.3%,
21.0%  and  18.5% to  $616,000,  $580,000,  $899,000,  $757,500,  $816,500,  and
$705,000 for the Alameda,  Contra Costa,  Marin,  San  Francisco,  San Mateo and
Santa Clara counties from September 2004,  respectively  (DataQuick  Information
Systems).  The  total  sales  volumes  and the  number  of homes  sold have been
declining. Sales volumes for the nine months ended September 2005 as compared to
September 2004 were typically 5% lower.  Mortgage  interest rates for both fixed
and adjustable rate loans have been rising,  decreasing  housing  affordability.
During the week of October  14,  2005,  30 year fixed rate  mortgages  increased
above a 6%  interest  rate for the first time since  March 2005  (Freddie  Mac).
Rising interest rates will likely slow down the rate of housing  appreciation we
have seen over the last two years. A strong  residential real estate marketplace
increases lending opportunities and assists in providing adequate equity to help
repay mortgage debt should borrowers become delinquent in their payments.

     Commercial real estate in the San Francisco Bay Area continued its rebound.
Occupancy is  increasing  and rents are either  stagnant or  increasing  in most
markets  throughout  the San  Francisco  Bay Area.  Grubb and Ellis reports that
class A space in San Francisco  average rents are $32.60 up 3.6% from the second
quarter and that vacancy is at 17.6%t down from 18.5% in the second  quarter and
21.2% in the  third  quarter  of 2004.  The San  Francisco  leasing  market  has
absorbed  an  estimated  1.9  million  square  feet net  during  2005.  Sales of
commercial  office  buildings are brisk with record per square foot prices being
attained  and 2005 being on track to be a record  volume  sales year.  A healthy
commercial real estate market  increases  lending  opportunities  and assists in
providing  adequate  equity  to repay  mortgage  debt  should  borrowers  become
delinquent in their payments.

     For Partnership loans outstanding as of September 30, 2005, the Partnership
had an average loan-to-value ratio of 71.29%, computed based on appraised values
and  senior  liens as of the date the loan was made.  This  percentage  does not
account for any  increases or  decreases  in property  values since the date the
loan was  made,  nor does it  include  any  reductions  in  principal  on senior
indebtedness  through amortization of payments after the loan was made. This low
loan-to-value ratio will assist the Partnership in weathering loan delinquencies
and foreclosures should they eventuate.

Contractual Obligations Table.

     A summary of the contractual obligations of the Partnership as of September
30, 2005 is set forth below:
<TABLE>
<S>   <C>                                <C>              <C>                     <C>                   <C>
      Contractual Obligation             Total            Less than 1 Year        1-3 Years             3-5 Years
    ----------------------------    -----------------    ------------------    -----------------    ----------------

    Line of credit                                 -                    -                    -                   -
    Rehabilitation loans              $       52,334       $       52,334                    -                   -
                                    -----------------    -----------------    -----------------    ----------------
         Total                        $       52,334       $       52,334                    -                   -
                                    =================    =================    =================    ================
</TABLE>


                                       20
<PAGE>

Part I - Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     The  following  table  contains  information  about  the cash held in money
market  accounts,  loans held in the  Partnership's  portfolio  and loans to the
partnership  pursuant  to its line of  credit  as of  September  30,  2005.  The
presentation,  for each  category  of  information,  aggregates  the  assets and
liabilities  by their  maturity  dates for  maturities  occurring in each of the
years 2005  through  2009 and  separately  aggregates  the  information  for all
maturities  arising  after  2009.  The  carrying  values  of  these  assets  and
liabilities approximate their fair market values as of September 30, 2005:
<TABLE>
<S>                                 <C>         <C>          <C>           <C>           <C>        <C>             <C>
                                    2005        2006         2007          2008          2009       Thereafter      Total
                               ----------------------------------------------------------------------------------------------
Interest earning assets:
Money market accounts            $ 642,888                                                                        $  642,888
Average interest rate                0.68%                                                                             0.68%
Unsecured loans                                                          $ 245,300                                $  245,300
Average interest rate                                                           0%                                        0%
Loans secured by deeds
   of trust                      $  64,770     916,716     1,681,919             -     1,806,127     1,848,732    $6,318,264
Average interest rate               10.00%       8.91%         9.13%             -         9.16%         9.25%         9.15%
Interest bearing liabilities:
Line of credit                   $       -                                                                        $        -
Interest rate                        7.00%                                                                             7.00%
</TABLE>

Market Risk.

     The Partnership's line of credit bears interest at a variable rate, tied to
the prime rate. As a result, the Partnership's primary market risk exposure with
respect to its  obligations is to changes in interest  rates,  which will affect
the interest cost of outstanding  amounts on the line of credit. The Partnership
may also suffer market risk tied to general trends  affecting real estate values
that may impact the Partnership's security for its loans.

     The Partnership's  primary market risk in terms of its profitability is the
exposure to  fluctuations  in earnings  resulting from  fluctuations  in general
interest rates. The majority of the  Partnership's  mortgage loans earn interest
at fixed  rates.  Changes  in  interest  rates may also  affect the value of the
Partnership's   investment  in  mortgage  loans  and  the  rates  at  which  the
Partnership  reinvests  funds  obtained  from loan  repayments  and new  capital
contributions  from limited partners.  If interest rates increase,  the interest
rates the Partnership obtains from reinvested funds will generally increase, but
the value of the Partnership's existing loans at fixed rates will generally tend
to decrease.  The risk is mitigated  by the fact that the  Partnership  does not
intend to sell its loan  portfolio,  rather  such  loans are held until they are
paid off. If interest  rates  decrease,  the amounts  becoming  available to the
Partnership  for  investment  due  to  repayment  of  Partnership  loans  may be
reinvested at lower rates than the  Partnership had been able to obtain in prior
investments,  or than the rates on the repaid loans. In addition,  interest rate
decreases may encourage  borrowers to refinance their loans with the Partnership
at a time where the  Partnership  is unable to reinvest  in loans of  comparable
value.

     The  Partnership  does not hedge or otherwise seek to manage  interest rate
risk. The Partnership does not enter into risk sensitive instruments for trading
purposes.


ASSET QUALITY

     A consequence  of lending  activities is that  occasionally  losses will be
experienced  and that the  amount  of such  losses  will vary from time to time,
depending  upon the risk  characteristics  of the loan  portfolio as affected by
economic  conditions and the financial  experiences of borrowers.  Many of these
factors  are beyond the  control of the  general  partners.  There is no precise
method of predicting  specific  losses or amounts that ultimately may be charged
off on  particular  segments of the loan  portfolio,  especially in light of the
current economic environment.


                                       21
<PAGE>

     The conclusion that a loan may become  uncollectible,  in whole or in part,
is  a  matter  of  judgment.  Although  institutional  lenders  are  subject  to
requirements and regulations  that, among other things,  require them to perform
ongoing analyses of their portfolios,  loan-to-value ratios, reserves, etc., and
to obtain and maintain  current  information  regarding  their borrowers and the
securing properties, the Partnership is not subject to these regulations and has
not  adopted  certain of these  practices.  Rather,  the  general  partners,  in
connection  with  the  periodic  closing  of  the  accounting   records  of  the
Partnership and the preparation of the financial  statements,  determine whether
the allowance for loan losses is adequate to cover  potential loan losses of the
Partnership.  As of September 30, 2005 the general partners have determined that
the allowance  for loan losses of $746,356  (8.06% of net assets) is adequate in
amount. 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.  As of September 30, 2005, one loan totaling  $96,716 was
delinquent 90 days or more in interest payments.  Management believes that there
is sufficient  collateral to cover the amount  outstanding to the Partnership on
this loan. The allowance for loan losses of $746,356 as of September 30, 2005 is
considered  reasonable  to  offset  potential  loss in loan  collections  in the
future.


Part I - Item 4.    CONTROLS AND PROCEDURES

     As of September 30, 2005, the Partnership carried out an evaluation,  under
the  supervision  and with the  participation  of the  general  partners  of the
effectiveness  of the  design  and  operation  of the  Partnership's  disclosure
controls and procedures  pursuant to Rule 13a-15 of the Securities  Exchange Act
of 1934, as amended. Based upon that evaluation,  the general partners concluded
that the  Partnership's  disclosure  controls and  procedures  are  effective in
timely  alerting the general  partners to material  information  relating to the
Partnership  that is required to be included in our  periodic  filings  with the
Securities and Exchange  Commission.  There were no  significant  changes in the
Partnership's internal control over financial reporting during the Partnership's
third fiscal quarter that have materially affected,  or are reasonably likely to
materially affect, the Partnership's internal control over financial reporting.





                                       22
<PAGE>

PART II - OTHER INFORMATION


 Item 1.  Legal Proceedings

          The Partnership periodically is a defendant in various legal
          actions. Please refer to Note 10 of the Financial Statements.


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

          Not Applicable


 Item 3.  Defaults upon Senior Securities

          Not Applicable


 Item 4.  Submission of Matters to a Vote of Security Holders

          Not Applicable


 Item 5.  Other Information

          Not Applicable


 Item 6.  Exhibits

          31.1 Certification of General Partner pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002
          31.2 Certification of General Partner pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002
          32.1 Certification of General Partner pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002
          32.2 Certification of General Partner pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002



                                       23
<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 14th day of
November 2005.


REDWOOD MORTGAGE INVESTORS VII


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


By:  Gymno Corporation, General Partner


     By:   /S/ Michael R. Burwell
          ----------------------------------------------
           Michael R. Burwell, President,
           Secretary/Treasurer & Chief Financial Officer





                                       24
<PAGE>
                                                                   Exhibit 31.1

                          GENERAL PARTNER CERTIFICATION

     I, Michael R. Burwell, General Partner, certify that:

     1. I have reviewed this quarterly  report on Form 10-Q of Redwood  Mortgage
Investors VII, a California Limited Partnership (the "Registrant");

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this quarterly report;

     4. The  Registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures,  or caused such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  Registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this quarterly report is being prepared;

     (b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     (c)  disclosed  in this  report  any  change in the  Registrant's  internal
control over financial  reporting  that occurred  during the  Registrant's  most
recent fiscal quarter (the Registrant's  fourth fiscal quarter in the case of an
annual  report)  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the Registrant's  internal control over financial  reporting;
and

     5. The Registrant's other certifying  officers and I have disclosed,  based
on our most recent evaluation of internal control over financial  reporting,  to
the  Registrant's  auditors  and the audit  committee of  Registrant's  board of
directors (or persons performing the equivalent function):

     (a) all significant  deficiencies and material  weaknesses in the design or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  Registrant's  ability  to  record,  process,
summarize and report financial data; and

     (b) any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the Registrant's  internal control over
financial reporting.




 /s/ Michael R. Burwell
-----------------------------------
Michael R. Burwell, General Partner
November 14, 2005


                                       25
<PAGE>
                                                                   Exhibit 31.2

               PRESIDENT AND CHIEF FINANCIAL OFFICER CERTIFICATION

     I,  Michael R.  Burwell,  President  and Chief  Financial  Officer of Gymno
Corporation, General Partner, certify that:

     1. I have reviewed this quarterly  report on Form 10-Q of Redwood  Mortgage
Investors VII, a California Limited Partnership (the "Registrant");

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this quarterly report;

     4. The  Registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures,  or caused such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  Registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this quarterly report is being prepared;

     (b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     (c)  disclosed  in this  report  any  change in the  Registrant's  internal
control over financial  reporting  that occurred  during the  Registrant's  most
recent fiscal quarter (the Registrant's  fourth fiscal quarter in the case of an
annual  report)  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the Registrant's  internal control over financial  reporting;
and

     5. The Registrant's other certifying  officers and I have disclosed,  based
on our most recent evaluation of internal control over financial  reporting,  to
the  Registrant's  auditors  and the audit  committee of  Registrant's  board of
directors (or persons performing the equivalent function):

     (a) all significant  deficiencies and material  weaknesses in the design or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  Registrant's  ability  to  record,  process,
summarize and report financial data; and

     (b) any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the Registrant's  internal control over
financial reporting.




 /s/ Michael R. Burwell
---------------------------------
Michael R. Burwell, President and
Chief Financial Officer of Gymno
Corporation, General Partner
November 14, 2005


                                       26
<PAGE>
                                                                   Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Quarterly Report of Redwood  Mortgage  Investors VII
(the  "Partnership")  on Form 10-Q for the period  ending  September 30, 2005 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, I, Michael R. Burwell, General Partner of
the Partnership, certify, that to the best of my knowledge:

     (1) The Report fully  complies  with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Partnership at the dates and for the periods indicated.




 /s/ Michael R. Burwell
-----------------------------------
Michael R. Burwell, General Partner
November 14, 2005






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<PAGE>
                                                                   Exhibit 32.2


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Quarterly Report of Redwood  Mortgage  Investors VII
(the  "Partnership")  on Form 10-Q for the period  ending  September 30, 2005 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to Section
906 of the  Sarbanes-Oxley  Act of  2002,  I,  Michael  R.  Burwell,  President,
Secretary/Treasurer  & Chief  Financial  Officer of Gymno  Corporation,  General
Partner of the Partnership, certify that to the best of my knowledge:

     (1) The Report fully  complies  with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Partnership at the dates and for the periods indicated.




 /s/ Michael R. Burwell
-----------------------------------
Michael R. Burwell, President,
Secretary/Treasurer & Chief Financial
Officer of Gymno Corporation, General Partner
November 14, 2005





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