MODIFICATION
TO CREDIT AGREEMENT









This
Modification to Credit Agreement ("Modification") is made as of March 31, 2008,
by and among OWENS MORTGAGE
INVESTMENT FUND,a California limited partnership (“Borrower”) and CALIFORNIA BANK & TRUST, FIRST
BANKand CITY NATIONAL
BANK(which are collectively known as “Lenders”).




RECITALS




A.           Pursuant
to the terms of a Credit Agreement ("Credit Agreement") between Lenders and
Borrower dated as of August 31, 2001, Lenders agreed to make Revolving Loans to
Borrower up to the credit limit of the principal sum of
$20,000,000.  California Bank & Trust is the agent of Lenders
under the Credit Agreement (“Agent”).  The Credit Agreement was
amended by a Modification to Credit Agreement, dated February 28, 2002, executed
by the parties that, among other things, added Swing Loans to the
facility.  The Revolving Loans and Swing Loans are collectively
referred to as “Loans.”  By a Modification to Credit Agreement, dated
August 16, 2002, executed by the parties, the “Amount of Aggregate Commitment”
for each Lender was increased.  By a Modification to Credit Agreement
dated July 31, 2003, executed by the parties, the “Commitment Termination Date”
was extended to July 31, 2005.  By a further Modification to Credit
Agreement dated July 31, 2005, the “Commitment Termination Date” was extended to
September 30, 2005.  By another Modification to Credit Agreement,
dated September 30, 2005, the “Commitment Termination Date” was extended to July
31, 2007.  By another Modification to Credit Agreement, dated February
9, 2006, the Amount of Aggregate Commitment for each Lender through July 31,
2006 was amended and Second Replacement Revolving Promissory Notes were
executed.  By a Modification to Credit Agreement, dated August 15,
2006, compliance with section 11.25 of the Credit Agreement as of September 30,
2006 was waived. By a further Modification to Credit Agreement, dated February
23, 2007, the “Amount of Aggregate Commitment” for Loans was temporarily
increased through July 31, 2007, provision for an Unused Commitment Fee was
added, and Third Replacement Promissory Notes were executed.  The
Credit Agreement was last amended by a Modification to Credit Agreement, dated
July 20, 2007, by which the Commitment Termination Date was further
extended.




B.           In
response to Borrower's request and in reliance upon Borrower's representations
made to Lenders in support thereof, Lenders have agreed to further modify the
terms of the Credit Agreement, as set forth in this
Modification.  Capitalized terms shall have the meanings assigned to
them in the Credit Agreement, as previously modified, except as set forth in
this Modification.




AGREEMENT




NOW,
THEREFORE, Borrower and Lenders agree as follows:




1.           Adoption of
Recitals.  Borrower hereby represents and warrants that each of
the recitals set forth above is true, accurate and complete.




{Clients\CBT-LN\0091\agr\07003665.DOC}
 1


2.           Conditions
Precedent.  This Modification shall become effective only upon
Borrower's delivery or satisfaction of the following conditions in form and
substance acceptable to Agent:




(a)           There
shall be no Event of Default under the Credit Agreement;




(b)           Borrower
shall execute this Modification and the Fourth Replacement Revolving Promissory
Notes, as described below;




(c)           Guarantor
shall execute the Acknowledgment and Consent appended to the
Modification;




(d)           Borrower
shall pay to Agent all of Agent’s attorneys' fees incurred in the preparation of
this Modification and all out-of-pocket fees incurred by Agent in connection
with this Modification; and




(e)           Borrower
shall provide any other items or documents required by Agent in connection with
the consummation of this transaction.




3.           Representations and
Warranties.  Borrower hereby represents and warrants that no
event of default, breach or failure of condition has occurred or exists, or
would exist with notice or lapse of time, or both, under any of the Credit
Documents, and all representations and warranties of Borrower in this
Modification and the other Credit Documents are true and correct as of the date
of this Modification and shall survive the execution of this
Modification.




4.           Modification of Loan
Documents.  The Credit Documents are hereby supplemented,
amended and modified to incorporate the following, which shall supersede and
prevail over any existing and conflicting provisions thereof:




(a)        The
“Amount of Aggregate Commitment” for Loans as provided on the execution pages of
the Credit Agreement for each Lender shall be modified as follows:




$30,000,000.00
in the case of California Bank & Trust;




$15,000,000.00
in the case of First Bank; and




$10,000,000.00
in the case of City National Bank.




(b)
            Section
      5.4 to the Credit Agreement is restated and reaffirmed as
      follows:




Unused Commitment
Fee.Borrower agrees to pay a fee (“Unused Commitment Fee”)
equal to the multiple of one-tenth of one percent (1/10%) and the difference
between the Credit and the amount of all outstanding Loans extended to Borrower
in excess of $40,000,000, determined by the Average Loan Balance, as defined
below.  For purposes of this section, the “Average Loan Balance” is
calculated by dividing the sum of the daily outstanding balances on the Loans
during the applicable period by the number of days in that
period.  This fee is due and




{Clients\CBT-LN\0091\agr\07003665.DOC}
 2


payable
each calendar quarter in arrears, and is due on the tenth (10th) day of
each of the following months:  January, April, July and October,
respectively, except a prorated fee for the final quarter shall be due and
payable on the Commitment Termination Date.




(c)        The
Fourth Replacement Revolving Promissory Notes executed
hereunder       shall supersede and replace
the Third Replacement Revolving Promissory Notes, dated February 23, 2007,
executed by Borrower in favor of each Lender.  All references to
“Note” in the Credit Agreement shall mean and refer to the Fourth Replacement
Revolving Line of Credit Notes.




(d)           Section
11.7 of the Credit Agreement, entitled “Minimum Tangible Net Worth,” is deleted
and replaced with the following:




Minimum Tangible Net
Worth.  With respect to Borrower as of the end ofeach fiscal
quarter, Borrower shall not permit or suffer Tangible NetWorth to be less than
$220,000,000.




(e)           As
used in the Credit Documents, the term “Banks” means and refers to the Lenders,
as defined in the Credit Agreement.




5.           Security
Instruments.  The Credit Documents which recite that they are
security instruments shall secure, in addition to any other obligations secured
thereby, the payment and performance by Borrower of all obligations under the
Credit Documents, as modified hereby, and any amendments, modifications,
extensions or renewals of the same which are hereafter agreed to in writing by
the parties.




6.           Governing
Law.  This Modification shall be construed, governed and
enforced in accordance with the laws of the State of California.




7.           Interpretation.  No
provision of this Modification is to be interpreted for or against either
Borrower or Lenders because that party, or that party's representative, drafted
such provision.




8.           Full Force and
Effect.  Except as set forth herein, all other terms and
conditions of the Loan Documents shall remain in full force and
effect.




9.           Reaffirmation.  Borrower
hereby acknowledges, reaffirms and confirms its obligations under the Credit
Documents, as amended and modified by this  Modification.




10.         Entire
Agreement.  This Modification and the Credit Documents
represent the entire agreement of the parties and supersede all prior oral and
written communication between the parties.  If there is any conflict
between this Modification and any documents referred to herein, this
Modification shall prevail.  No amendment of this Modification shall
be valid unless it is in writing and is signed by the parties to this
Modification.




{Clients\CBT-LN\0091\agr\07003665.DOC}
 3












11.           IN
WITNESS WHEREOF, the parties have executed this Modification as of the day and
year first above written.










OWENS MORTGAGE INVESTMENT
FUND,


a
California limited partnership,





By:           OWENS FINANCIAL GROUP,
INC.,


a California corporation, its general
partner











By:           /s/ Bryan H.
Draper


Name:      Bryan H.
Draper


Title:        CFO





2221 Olympic Boulevard


Walnut Creek, CA 94595


Fax: (925)
935-1486


{Clients\CBT-LN\0091\agr\07003665.DOC}
 4


CALIFORNIA BANK & TRUST, a
California


banking
corporation








By:           /s/ Carmen
Sanz


Name:      Carmen
Sanz


Title:        Vice
President





By:


Name:


Title:





San
Francisco Corporate Banking


465
California Street, First Floor


San
Francisco, CA 94104


Fax:  415/875-1456


{Clients\CBT-LN\0091\agr\07003665.DOC}
 5


FIRST BANK,a Missouri banking
corporation,formerly
FIRST BANK &
TRUST








By:           /s/ William G. Nelle,
Jr.


Name:     
William G.
Nelle


Title:        Senior Vice President and
Manager








By:


Name:


Title:





Commercial
and Private Banking


550
Montgomery Street


San
Francisco, CA 94111


Fax:  415/398-7190


{Clients\CBT-LN\0091\agr\07003665.DOC}
 6


CITY NATIONAL BANK, a
national


banking
corporation











By:           /s/ Jeanine A.
Smith


Name:      Jeanine A.
Smith


Title:        Vice
President








By:


Name:


Title:





555 South
Flower Street


Los Angeles, CA 90071


Fax:  213/673-9801








{Clients\CBT-LN\0091\agr\07003665.DOC}
 7


ACKNOWLEDGMENT
AND CONSENT




Guarantor
acknowledges and consents to the foregoing Modification to Credit Agreement and
all prior Modifications to Credit Agreement executed by Borrower and Lenders in
connection with the Credit Agreement.  Guarantor further acknowledges
that the Continuing Guaranty, dated August 31, 2001, executed by Guarantor in
favor of Agent and Banks remains in full force and effect without known defense
as to the indebtedness of Borrower under the Credit Agreement, as previously and
as herewith modified.




Dated:  March
31, 2008




OWENS
FINANCIAL GROUP, INC.,


a
California corporation








By:                   
 /s/ Bryan H.
Draper


Printed
Name:  Bryan
H. Draper


Title:                  CFO

















ACCEPTED
AND ACKNOWLEDGED BY:





CALIFORNIA
BANK & TRUST, AS AGENT FOR BANKS








By:                  
   /s/
Carmen Sanz





Printed
Name:   Carmen
Sanz





Title:                   Vice
President




















{Clients\CBT-LN\0091\agr\07003665.DOC}
 8