SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM l0-Q

                   Quarterly Report Under Section 13 or 15(d)
                     of The Securities Exchange Act of 1934

                For the Quarterly Period Ended September 30, 2002

                         Commission file number O-17248


                         OWENS MORTGAGE INVESTMENT FUND,
                        a California Limited Partnership
             (Exact Name of Registrant as Specified In Its Charter)


             California                                  68-0023931
             ----------                                  ----------
    (State or other jurisdiction                       (I.R.S. Employer
  of incorporation or organization)                    Identification No.)


       2221 Olympic Boulevard
      Walnut Creek, California                              94595
------------------------------                              -----
(Address of principal executive office)                   (Zip Code)


           (925) 935-3840
           --------------
   (Registrant's Telephone number,
        including area code)


        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 X No____


<PAGE>




PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>
<CAPTION>

                         OWENS MORTGAGE INVESTMENT FUND,
                        a California Limited Partnership

                           Consolidated Balance Sheets

                    September 30, 2002 and December 31, 2001


                                                                            (UNAUDITED)
                                                                           September 30           December 31
                                                                               2002                  2001
                                                                               ----                  ----

                                     ASSETS

<S>                                                                      <C>                   <C>
Cash and cash equivalents                                                $    6,594,285        $    41,431,108
Loans secured by trust deeds, net of allowance for
  losses of $4,574,000 in 2002 and $4,425,000 in 2001                       258,347,982            209,278,469
Interest and other receivables                                                3,150,489              2,253,322
Due from affiliate                                                              192,647                128,215
Real estate held for sale, net of allowance for losses
  of $250,000 in 2002 and $634,000 in 2001                                   14,947,695             14,134,961
Real estate held for investment, net of accumulated depreciation
  and amortization of $550,125 in 2002 and $339,088 in 2001                  15,341,909             14,064,664
                                                                            -----------            -----------
                                                                           $298,575,007           $281,290,739
                                                                            ===========            ===========


                        LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES:
Accrued distributions payable                                           $       631,460         $      625,645
Due to general partner                                                        1,180,803              1,272,042
Accounts payable and accrued liabilities                                        129,429                 78,829
Line of credit payable                                                       10,311,469                      -
Note payable                                                                  7,385,101              6,919,829
                                                                            -----------           ------------

     Total Liabilities                                                       19,638,262              8,896,345
                                                                            -----------           ------------

Minority interest                                                               110,323                107,680
                                                                            -----------           ------------

PARTNERS' CAPITAL (units subject to redemption):
General partner                                                               2,743,488              2,677,867
Limited partners                                                            276,082,934            269,608,847
                                                                            -----------            -----------
     Total partners' capital                                                278,826,422            272,286,714
                                                                            -----------            -----------
                                                                           $298,575,007           $281,290,739
                                                                            ===========            ===========
The accompanying notes are an integral part of these financial statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                         OWENS MORTGAGE INVESTMENT FUND,
                        a California Limited Partnership

                        Consolidated Statements of Income
         For the Three and Nine Months Ended September 30, 2002 and 2001
                                  (Unaudited)

                                                             For the Three Months Ended             For the Nine Months Ended
                                                             --------------------------              -------------------------
                                                             September 30    September 30          September 30     September 30
                                                                 2002            2001                  2002            2001
                                                                 ----            ----                  ----            ----
REVENUES:
     <S>                                                  <C>              <C>                  <C>                 <C>
     Interest income on loans secured by trust deeds      $   6,896,321    $   6,181,831        $   19,215,659      $  18,542,064
     Gain on sale of real estate, net                           219,197          477,879             1,133,087          1,441,648
     Rental and other income from real estate properties        809,095          682,511             2,449,069          1,968,432
     Other income                                                50,854          220,299               296,044            416,992
                                                            -----------      -----------          ------------       ------------
     Total revenues                                           7,975,467        7,562,520            23,093,859         22,369,136
                                                            -----------      -----------          ------------       ------------

EXPENSES:
     Management fees to general partner                       1,361,523          654,532             2,641,896          2,280,210
     Servicing fees to general partner                          160,446          141,127               447,588            430,823
     Carried interest to general partner                          9,375          100,200                33,794            161,826
     Administrative                                               9,900            7,875                29,700             23,625
     Legal and accounting                                        41,523           29,108               170,697            100,004
     Rental and other expenses on real estate properties        684,590          259,009             2,047,095          1,027,997
     Interest expense                                            99,377           99,218               277,655            337,386
     Minority interest                                           16,445            5,840                 2,613              5,019
     Provision for loan losses                                  343,000          738,423             1,384,000            738,423
     Recovery of losses on real estate held for sale, net            --               --              (313,577)               --
     Other                                                        8,690           85,084                68,572            180,106
                                                            -----------      -----------         -------------       ------------
     Total expenses                                           2,734,869        2,120,416             6,790,033          5,285,419
                                                            -----------      -----------         -------------       ------------
     Net income                                           $   5,240,598    $   5,442,104        $   16,303,826     $   17,083,717
                                                            ===========      ===========          ============       ============

     Net income allocated to general partner              $      51,848    $      52,570        $      161,265     $      166,715
                                                            ===========      ===========          ============       ============

Net income allocated to limited partners                  $   5,188,750    $   5,389,534        $   16,142,561     $   16,917,002
                                                            ===========      ===========          ============       ============

Net income allocated to limited partners
    per weighted average limited partnership unit                  $.02             $.02                  $.06               $.07
                                                                    ===              ===                   ===                ===

Weighted average limited partnership units                  275,854,000      265,023,000           274,125,000        251,635,000
                                                            ===========      ===========           ===========        ===========

The accompanying notes are an integral part of these financial statements.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                         OWENS MORTGAGE INVESTMENT FUND,
                        a California Limited Partnership

                      Consolidated Statements of Cash Flows

              For the Nine Months Ended September 30, 2002 and 2001
                                   (UNAUDITED)
                                                                            September 30            September 30
                                                                                2002                    2001
                                                                                ----                    ----
CASH FLOWS FROM OPERATING ACTIVITIES:
     <S>                                                                  <C>                    <C>
     Net Income                                                           $   16,303,826         $    17,083,717
     Adjustments to reconcile net income
     to net cash provided by operating activities:
     Gain on sale of real estate properties                                   (1,133,087)             (1,441,648)
     Provision for loan losses                                                 1,384,000                 738,423
     Recovery of losses on real estate held for sale, net                       (313,577)                     --
     Depreciation and amortization                                               211,037                 171,028
     Changes in operating assets and liabilities:
       Interest and other receivables                                           (679,547)               (221,652)
       Due from affiliate                                                        (64,432)                     --
       Accounts payable and accrued liabilities                                   50,600                 (27,430)
       Due to general partner                                                    (91,239)               (436,377)
                                                                           -------------            ------------
          Net cash provided by operating activities                           15,667,581              15,866,061
                                                                           -------------            ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Origination of loans secured by trust deeds                            (127,033,197)           (110,722,744)
     Principal collected on loans                                                667,894                 963,280
     Loan payoffs                                                             70,801,797             107,842,252
     Investment in real estate properties                                     (8,567,887)             (2,165,244)
     Net proceeds from disposition of real estate properties                   3,077,908               4,214,040
     Proceeds from disposition of investment in real estate joint venture      9,528,000                      --
     Minority interest in limited liability company                                2,643                   5,019
     Proceeds from maturities of certificates of deposit                              --                  50,000
                                                                           -------------            ------------
         Net cash (used in) provided by investing activities                 (51,522,842)                186,603
                                                                           -------------            ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from sale of partnership units                                   2,813,655              32,748,594
     Accrued distributions payable                                                 5,815                  23,824
     Advances on note payable                                                    465,272                 178,909
     Advances on line of credit payable, net                                  10,311,469                      --
     Partners' cash distributions                                             (5,730,935)             (5,785,919)
     Partners' capital withdrawals                                            (6,846,838)            (10,921,568)
                                                                          --------------            ------------
         Net cash provided by financing activities                             1,018,438              16,243,840
                                                                          --------------            ------------

Net (decrease) increase in cash and cash equivalents                         (34,836,823)             32,296,504

Cash and cash equivalents at beginning of period                              41,431,108               6,234,479
                                                                           -------------           -------------

Cash and cash equivalents at end of period                               $     6,594,285        $     38,530,983
                                                                            ============           =============

Supplemental Disclosures of Cash Flow Information
     Cash paid during the period for interest                                    285,859                 352,113
</TABLE>

See note 8 for supplemental disclosure of non-cash operating and investing
activities. The accompanying notes are an integral part of these financial
statements.
<PAGE>

                         OWENS MORTGAGE INVESTMENT FUND,
                        a California Limited Partnership

                   Notes to Consolidated Financial Statements

                               September 30, 2002


    (1)  Summary of Significant Accounting Policies

         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, 2001 filed with the Securities and Exchange Commission.
         The results of operations for the nine month period ended September 30,
         2002 are not necessarily indicative of the operating results to be
         expected for the full year.

         Basis of Presentation

         The consolidated financial statements include the accounts of the
         Partnership and its majority-owned limited liability companies. All
         significant inter-company transactions and balances have been
         eliminated in consolidation.

    (2)  Loans Secured by Trust Deeds and Allowance for Loan Losses

         The Partnership's investment in loans delinquent greater than ninety
         days was $29,250,000 and $18,604,000 as of September 30, 2002 and
         December 31, 2001, respectively. The Partnership's investment in
         delinquent loans consisted of 10 and 9 loans as of September 30, 2002
         and December 31, 2001, respectively. As of September 30, 2002,
         $14,071,000 of the delinquent loans has a specific related allowance
         for credit losses totaling $1,774,000. There is a non-specific
         allowance for credit losses of $2,800,000 for the remaining delinquent
         balance and for other loans. The Partnership has discontinued the
         accrual of interest on all impaired loans.

         As of September 30, 2002 and December 31, 2001, loans past maturity
         totaled approximately $34,300,000 and $40,927,000, respectively. Of the
         past maturity loans at September 30, 2002, $9,261,000 represent loans
         for which interest payments are delinquent more than ninety days.

         During the three months ended September 30, 2002 and 2001, the
         Partnership refinanced loans totaling $786,000 and $9,177,000,
         respectively.

         Changes in the  allowance  for loan losses for the three  months  ended
         September 30, 2002 and 2001 were as follows:

<TABLE>
<CAPTION>
                                                                 2002                2001
                                                                 ----                ----
              <S>                                             <C>                 <C>
              Balance, beginning of period                    $ 4,231,000         $ 4,000,000
                  Provision                                       343,000             738,000
                  Charge-off to real estate held for sale              --            (428,000)
                                                                ---------           ---------
              Balance, end of period                          $ 4,574,000         $ 4,310,000
                                                                =========           =========
</TABLE>

<PAGE>


                         OWENS MORTGAGE INVESTMENT FUND,
                        a California Limited Partnership

                   Notes to Consolidated Financial Statements

                               September 30, 2002


    (2)  Loans Secured by Trust Deeds and Allowance for Loan Losses, Continued

         The General Partner believes that the allowance for estimated loan
         losses is appropriate as of September 30, 2002. The allowance for loan
         losses is evaluated on a regular basis by management and is based upon
         management's periodic review of the collectibility of the loans in
         light of historical experience, the nature and volume of the loan
         portfolio, adverse situations that may affect the borrower's ability to
         repay, estimated value of any underlying collateral and prevailing
         economic conditions. This evaluation is inherently subjective as it
         requires estimates that are susceptible to significant revision as more
         information becomes available. Impairment is measured on a loan by loan
         basis by either the present value of expected future cash flows
         discounted at the loan's effective interest rate, the loan's obtainable
         market price, or the fair value of the underlying collateral.
(3)      Real Estate Held for Sale

         Real estate held for sale includes the following components as of
         September 30, 2002:

                Real estate held for sale                       $    7,716,156
                Investment in limited liability companies            3,606,009
                Investment in real estate joint venture              3,625,530
                                                                  ------------
                                                                 $  14,947,695
                                                                  ============

         During the quarter ended September 30, 2002, the Partnership
         transferred an office building located in Roseville, California in the
         amount of $765,000 from real estate held for sale to real estate held
         for investment.

         During the quarter ended September 30, 2002, the Partnership foreclosed
         on a 1st mortgage loan secured by a commercial building located in
         Albany, Oregon in the amount of $1,800,000 and obtained the property
         via a trustee's sale.

         During the quarter ended September 30, 2002, the Partnership sold a
         commercial building located in Gresham, Oregon for proceeds in the
         amount of $340,000 resulting in a loss of $70,000. An allowance in the
         amount of $70,000 was established on this property as of June 30, 2002
         and was reported net of the recovery of losses on real estate held for
         sale in the accompanying consolidated income statement for the nine
         months ended September 30, 2002.

         During the quarter ended September 30, 2002, eight lots (two including
         houses) located in a manufactured home subdivision development located
         in Ione, California (that were acquired by the Partnership through
         foreclosure in 1997) were sold for $455,000, resulting in a gain to the
         Partnership of approximately $122,000. An allowance in the amount of
         $384,000 that was previously established on this property was reversed
         during the quarter ended June 30, 2002 as a result of management's
         evaluation of the property's fair market value based on recent sales.
         There are 67 lots remaining to be sold on this property as of September
         30, 2002.



<PAGE>


                         OWENS MORTGAGE INVESTMENT FUND,
                        a California Limited Partnership

                   Notes to Consolidated Financial Statements

                               September 30, 2002

(3)      Real Estate Held for Sale, Continued

         During the quarter ended March 31, 2002, the Partnership foreclosed on
         a first mortgage loan secured by a hotel located in Phoenix, Arizona in
         the amount of $2,925,000 and obtained the property via the trustee's
         sale. The Partnership paid $335,000 in delinquent property taxes at the
         time of foreclosure which were capitalized to the basis of the
         property. The Partnership then wrote down the basis of the property by
         $1,235,000 to its estimated fair market value of approximately
         $2,025,000.

         Investment in Limited Liability Companies

         Oregon Leisure Homes, LLC

         During 2001, a new entity named Oregon Leisure Homes, LLC (OLH) was
         formed between the Partnership and an unrelated developer for the
         purpose of developing and selling eight condominium units located in
         Lincoln City, Oregon, which were acquired by the Partnership via a deed
         in lieu of foreclosure. OLH also purchased a house located on the ocean
         in Lincoln City for renovation and ultimate sale. OLH will sell eleven
         interests in each condominium and seven interests in the ocean house.
         The Partnership is co-manager of OLH and is to receive 70% of the
         profits. The assets, liabilities, income and expenses of OLH have been
         consolidated into the accompanying consolidated balance sheet and
         income statement of the Partnership. During the quarter ended September
         30, 2002, the Partnership advanced an additional $50,000 to OLH (for a
         total of $1,318,000) for continued development and marketing of the
         condominium units and house that are currently for sale. OLH sold three
         interests in the condominiums during the quarter ended September 30,
         2002 for total proceeds of $74,000 and a note in the amount of $27,000.
         No gain or loss was recognized as a result of these sales. OLH sold two
         interests in the ocean house during the quarter ended September 30,
         2002 for proceeds of $121,000 and a note in the amount of $105,000, and
         recognized gain in the amount of $97,000. The net loss to the
         Partnership (including gains on sales) was approximately $22,000 for
         the quarter ended September 30, 2002.

         Dation, LLC

         During 2001, a new entity named Dation, LLC (Dation) was formed between
         the Partnership and an unrelated developer for the purpose of
         developing and selling lots in a mobile home park located in Lake
         Charles, Louisiana, which were acquired by the Partnership via a deed
         in lieu of foreclosure. The Partnership is advancing funds to Dation as
         needed under the terms of the loan to the original borrower and may
         provide additional financing. The Partnership is co-manager of Dation
         and is to receive 50% of the profits and losses. Dation sold three lots
         during the quarter ended September 30, 2002 and recorded no gain or
         loss. The net operating loss to the Partnership was approximately
         $53,000 during the quarter ended September 30, 2002. The Partnership's
         total investment in Dation was approximately $1,974,000 as of September
         30, 2002.


<PAGE>


                         OWENS MORTGAGE INVESTMENT FUND,
                        a California Limited Partnership

                   Notes to Consolidated Financial Statements

                               September 30, 2002

(3)      Real Estate Held for Sale, Continued

         Investment in Real Estate Joint Venture

         The Partnership has a construction loan on a housing development
         located in Hayward, California. The loan is reported in the financial
         statements as an investment in real estate held for sale to account for
         the investment pursuant to accounting guidelines for acquisition,
         development and construction arrangements. The Partnership is to
         receive interest on its advances to the joint venture at the rate of
         10.25% per annum and is to receive 30% of the net profits from the sale
         of each house after payment of a 10% loan fee in the amount of
         $1,640,000 ($55,000 per house) is made to Owens Financial Group, the
         General Partner. As of September 30, 2002, the Partnership has received
         all interest payments due on the loan but has not received any payments
         of residual profits. The Partnership advanced an additional $1,997,000
         to the joint venture and received repayment of advances in the amount
         of $4,936,000 during the quarter ended September 30, 2002. The
         Partnership's investment in the joint venture was approximately
         $3,626,000 as of September 30, 2002.
(4)      Real Estate Held for Investment

         During the quarter ended September 30, 2002, the Partnership
         transferred an office building located in Roseville, California in the
         amount of $765,000 from real estate held for sale to real estate held
         for investment.

         720 University, LLC

         The Partnership has an investment in a limited liabilty company, 720
         University, LLC (720 University), which owns a commercial retail
         property located in Greeley, Colorado. The Partnership receives 65% of
         the profits and losses in 720 University after priority return on
         partner contributions is allocated at the rate of 10% per annum. The
         assets, liabilities, income and expenses of 720 University have been
         consolidated into the accompanying consolidated balance sheet and
         income statement of the Partnership. The net income to the Partnership
         was approximately $110,000 during the quarter ended September 30, 2002.
         The minority interest of the joint venture partner of approximately
         $110,000 as of September 30, 2002 is reported in the accompanying
         consolidated balance sheet.

    (5)  Transactions with Affiliates

         The General Partner of the Partnership, Owens Financial Group, Inc.
         (OFG), is entitled to receive from the Partnership a management fee of
         up to 2.75% per annum of the average unpaid balance of the
         Partnership's mortgage loans at the end of each of the preceding twelve
         months for services rendered as manager of the Partnership.

         All of the Partnership's loans are serviced by OFG, in consideration
         for which OFG receives up to .25% per annum of the unpaid principal
         balance of the loans.

<PAGE>

                         OWENS MORTGAGE INVESTMENT FUND,
                        a California Limited Partnership

                   Notes to Consolidated Financial Statements

                               September 30, 2002


    (5)  Transactions with Affiliates, Continued

         OFG, at its sole discretion may, on a monthly basis, adjust the
         management and servicing fees as long as they do not exceed the
         allowable limits calculated on an annual basis. Even though the fees
         for a particular month may exceed one-twelfth of the maximum limits, at
         the end of the calendar year the sum of the fees collected for each of
         the twelve months may not exceed the stated limits. Management fees
         amounted to approximately $1,362,000 and $655,000 for the three months
         ended September 30, 2002 and 2001, respectively, and $2,642,000 and
         $2,280,000 for the nine months ended September 30, 2002 and 2001,
         respectively. Management fees as a percentage of the average unpaid
         balance of Partnership mortgage loans was 1.45% and 1.30% for the nine
         months ended September 30, 2002 and 2001, respectively. Service fee
         payments to OFG approximated $160,000 and $141,000 for the three months
         ended September 30, 2002 and 2001, respectively, and $448,000 and
         $431,000 for the nine months ended September 30, 2002 and 2001,
         respectively.

         The maximum servicing fees were paid to the General Partner during the
         three and nine months ended September 30, 2002. If the maximum
         management fees had been paid to the General Partner during the three
         and nine months ended September 30, 2002, the management fees would
         have been $1,765,000 (increase of $403,000) and $4,923,000 (increase of
         $2,281,000), respectively, which would have reduced net income
         allocated to limited partners by approximately 7.7% and 14.0%,
         respectively, and net income allocated to limited partners per weighted
         average limited partner unit by the same percentage to $.02 and $.05,
         respectively. In determining the management fees and hence the yield to
         the partners, OFG may consider a number of factors, including current
         market yields, delinquency experience, uninvested cash and real estate
         activities. OFG expects that the management fees that it receives from
         the Partnership will vary in amount and percentage from period to
         period, and it is highly likely that OFG will again receive less than
         the maximum management fees in the future. However, if OFG chooses to
         take the maximum allowable management fees in the future, the yield
         paid to limited partners may be reduced.

     (6) Note Payable

         The Partnership has a note payable with a bank through its investment
         in 720 University, which is secured by a retail development in Greeley,
         Colorado. The note requires monthly interest payments with the balance
         of unpaid principal and interest due on May 22, 2003. The interest rate
         on the note is variable based on the LIBOR rate plus 2.75% (4.5% at
         September 30, 2002). Interest expense for the quarter ended September
         30, 2002 and 2001 was approximately $82,000 and $99,000, respectively.
         The principal balance on the note as of September 30, 2002 and December
         31, 2001 was approximately $7,385,000 and $6,920,000, respectively. The
         Company drew an additional $465,000 on the note during the nine months
         ended September 30, 2002. The note contains certain covenants, which
         the Company has complied with as of September 30, 2002.


<PAGE>

                         OWENS MORTGAGE INVESTMENT FUND,
                        a California Limited Partnership

                   Notes to Consolidated Financial Statements

                               September 30, 2002


    (7)  Line of Credit Payable

         The Partnership finalized a line of credit agreement with a group of
         banks in August 2001, which provides interim financing on mortgage
         loans invested in by the Partnership. The amount of credit available
         under this line of credit is $40,000,000 (pursuant to an amendment in
         August 2002). There was a balance of $10,311,469 outstanding on the
         line of credit as of September 30, 2002. Interest expense for the
         quarter ended September 30, 2002 was approximately $17,000. Borrowings
         under the line of credit bear interest at the bank's prime rate, which
         was 4.75% as of September 30, 2002. The line of credit expires on July
         31, 2003. The Partnership is required to maintain non-interest bearing
         accounts in the total amount of $500,000 with two of the banks. The
         agreement requires the Partnership to meet certain financial covenants
         including minimum tangible net worth and total liabilities to tangible
         net worth. The Partnership has complied with these covenants as of
         September 30, 2002.

    (8)  Supplemental  Disclosure of Non-Cash Operating and Investing Activities

         Loans foreclosed and transferred to real estate held
         for sale, net of allowance previously established          $  5,109,993

         Sales of real estate included in interest and
         other receivables                                          $    217,620



<PAGE>


         Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Forward Looking Statements

         Some of the information in this Form 10-Q may contain forward-looking
statements. Such statements can be identified by the use of forward-looking
words such as "may," "will," "expect," "anticipate," "estimate," "continue" or
other similar words. These statements discuss future expectations, contain
projections of results of operations or of financial conditions or state other
forward-looking information. When considering such forward-looking statements
you should keep in mind the risk factors and other cautionary statements in the
Partnership's Form 10-Q. Although management of the Partnership believes that
the expectations reflected in such forward-looking statements are based on
reasonable assumptions, there are certain factors, in addition to these risk
factors and cautioning statements, such as general economic conditions, local
real estate conditions, adequacy of reserves, or weather and other natural
occurrences that might cause a difference between actual results and those
forward-looking statements.

Results of Operations

Three Months Ended September 30, 2002 Compared to 2001

The net income decrease of $202,000 (3.7%) for 2002 compared to 2001, was due
to:

o        a decrease in gain on sale of real estate of $259,000;

o        a decrease in other income of $169,000;

o        an increase in management fees to the general partner of $707,000; and

o        an increase in rental and other expenses of $426,000.

The net income decrease in 2002 as compared to 2001, was offset by:

o        an increase in interest income on loans secured by trust deeds of
         $714,000;

o        an increase in rental and other income on real estate properties of
         $127,000;

o        a decrease in carried interest to the general partner of $91,000;

o        a decrease in other expenses of $76,000; and

o        a net decrease in the provision for loan losses of $395,000.

         Gain on sale of real estate decreased by $259,000 (54.1%) for the
quarter ended September 30, 2002, as compared to the same period in 2001 due to
the sale of an industrial building for a gain of $478,000 during the quarter
ended September 30, 2001. During the quarter ended September 30, 2002, the
Partnership sold eight lots (two including houses) in a manufactured home
subdivision and five interests in the condos and ocean house within Oregon
Leisure Homes, LLC (OLH), resulting in a total gain of $219,000.

         Interest income on investments (other income) decreased by $169,000
(76.9%) for the quarter ended September 30, 2002, as compared to the same period
in 2001 due to a decrease of approximately $15,900,000 in the average amount of
cash and equivalents held by the Partnership during the quarter ended September
30, 2002 as compared to 2001 and a decrease in the average yield on the
Partnership's investments from 4.0% to 1.6% due to a decrease in general market
interest rates.

         Management fees to the General Partner are paid pursuant to the
Partnership Agreement and are determined at the sole discretion of the General
Partner. The increase in management fees of $707,000 (108%) during the quarter
ended September 30, 2002 as compared to 2001 was primarily a result of an
increase in interest income collected on loans, particulary past due interest
collected on two delinquent loans in the total amount of $423,000 in October
2002.

         In determining the management fees and hence the yield to the partners,
the General Partner may consider a number of factors, including current market
yields, delinquency experience, uninvested cash and real estate activities. The
General Partner expects that the management fees that it receives from the
Partnership will vary in amount and percentage from period to period, and it is
highly likely that the General Partner will again receive less than the maximum
management fees in the future. However, if the General Partner chooses to take
the maximum allowable management fees in the future, the yield paid to limited
partners may be reduced.

         If the maximum management fees had been paid to the General Partner
during the quarter ended September 30, 2002, the management fees would have been
$1,765,000 (increase of $403,000), which would have reduced net income allocated
to limited partners by approximately 7.7%, and net income allocated to limited
partners per weighted average limited partner unit by the same percentage to
$.02.

         The increase in rental and other expenses on real estate properties of
$426,000 (164.3%) and the increase in rental and other income on real estate
properties of $127,000 (18.6%) was primarily the result of the foreclosure of a
hotel located in Phoenix, Arizona during the quarter ended March 31, 2002 and
its subsequent operation, the acquisition of a commercial building through
foreclosure in the last half of 2001, and the losses incurred from the
Partnership's investments in OLH and Dation during the quarter ended September
30, 2002. See further discussion under "Real Estate Properties Held for Sale and
Investment" below.

         Interest income on loans secured by trust deeds increased $714,000
(11.6%) for the quarter ended September 30, 2002, as compared to the same period
in 2001. This increase was a result of an increase in the average loan portfolio
of 13.7% during the three months ended September 30, 2002 as compared to 2001
and an increase in the weighted average yield of the loan portfolio from 11.75%
for the three months ended September 30, 2001 to 11.84% for the three months
ended September 30, 2002. The increase was partially offset by an increase in
loans delinquent greater than ninety days during the quarter ended September 30,
2002. See "Financial Condition - Loan Portfolio" below.

                  The decrease in carried interest to the general partner of
$91,000 (90.6%) is a result of decreased limited partner contributions to the
Partnership during the quarter ended September 30, 2002 as the Partnership has
been closed to most new investments since September 1, 2001. On a monthly basis,
the General Partner receives an additional carried interest in the Partnership
equal to 1/2 of 1% of the net increase in the capital accounts of the limited
partners pursuant to the Partnership Agreement.

         The decrease in other expenses of $76,000 (89.8%) was due primarily to
registration fees paid to the Securities and Exchange Commission, National
Association of Securities Dealers and various states related to a new
Partnership registration statement originally filed in September 2001. No
filings requiring the payment of fees occurred in 2002.

         The provision for loan losses of $343,000 for the quarter ended
September 30, 2002 was based on an analysis performed on the loan portfolio as
of September 30, 2002. See "Financial Condition - Loan Portfolio" below.

Nine Months Ended September 30, 2002 Compared to 2001

The net income decrease of $780,000 (4.6%) for 2002 compared to 2001, was due
to:

o        a decrease in gain on sale of real estate of $309,000;

o        a decrease in other income of $121,000;

o        an increase in management fees to the general partner of $362,000;

o        an increase in rental and other expenses of $1,019,000;

o        an increase in legal and accounting expenses of $71,000;  and

o        an increase in provision for loan losses of $646,000.

The net income decrease in 2002 as compared to 2001, was offset by:

o        an increase in interest income on loans secured by trust deeds of
         $674,000;

o        an increase in rental and other income on real estate properties of
         $481,000;

o        a decrease in carried interest to the general partner of $128,000;

o        a decrease in interest expense of $60,000;

o        a decrease in other expenses of $112,000; and

o        the recovery of losses on real estate held for sale of $314,000.

         Gain on sale of real estate decreased by $309,000 (21.4%) for the nine
months ended September 30, 2002, as compared to the same period in 2001. During
the nine months ended September 30, 2002, the Partnership sold sixteen lots (six
including houses) in a manufactured home subdivision for a gain of $185,000, a
commercial parcel for a gain of $734,000, a commercial building for a gain of
$117,000, and seven interests in the ocean house and condos within OLH for a
gain of $97,000 (total gain of $1,133,000). During the nine months ended
September 30, 2001, the Partership sold four properties for a total gain of
$1,442,000.

         Interest income on investments (other income) decreased by $121,000
(29.0%) for the nine months ended September 30, 2002, as compared to the same
period in 2001 due primarily to a decrease in the average yield on the
Partnership's investments from 4.0% to 1.6% due to a decrease in general market
interest rates.

         Management fees to the General Partner are paid pursuant to the
Partnership Agreement and are determined at the sole discretion of the General
Partner. The increase in management fees of $362,000 (15.9%) during the nine
months ended September 30, 2002 as compared to 2001 was primarily a result of an
increase in interest income collected on loans, particularly past due interest
collected on two delinquent loans in the total amount of $423,000 in October
2002.

         In determining the management fees and hence the yield to the partners,
the General Partner may consider a number of factors, including current market
yields, delinquency experience, uninvested cash and real estate activities. The
General Partner expects that the management fees that it receives from the
Partnership will vary in amount and percentage from period to period, and it is
highly likely that the General Partner will again receive less than the maximum
management fees in the future. However, if the General Partner chooses to take
the maximum allowable management fees in the future, the yield paid to limited
partners may be reduced.

         If the maximum management fees had been paid to the General Partner
during the nine months ended September 30, 2002, the management fees would have
been $4,923,000 (increase of $2,281,000), which would have reduced net income
allocated to limited partners by approximately 14.0%, and net income allocated
to limited partners per weighted average limited partner unit by the same
percentage to $.05.

         The increase in rental and other expenses on real estate properties of
$1,019,000 (99.1%) and the increase in rental and other income on real estate
properties of $481,000 (24.4%) was primarily the result of the foreclosure of a
hotel located in Phoenix, Arizona during the quarter ended March 31, 2002 and
its subsequent operation, the acquisition of a commercial building through
foreclosure in the last half of 2001, and the losses incurred from the
Partnership's investments in OLH and Dation during the nine months ended
September 30, 2002. See further discussion under "Real Estate Properties Held
for Sale and Investment" below.

         Legal and accounting expenses increased $71,000 (70.7%) for the nine
months ended September 30, 2002, as compared to the same period in 2001 due
primarily to certain legal fees incurred related to delinquent loans and
professional fees incurred in the first quarter of 2002 as a result of a new
S-11 filing with the Securities and Exchange Commission in January 2002 and the
S-11 Post-Effective Amendment filing in April 2002.

         The provision for loan losses of $1,384,000 for the nine months ended
September 30, 2002 was based on an analysis performed on the loan portfolio as
of September 30, 2002. See "Financial Condition - Loan Portfolio" below.

         Interest income on loans secured by trust deeds increased $674,000
(3.6%) for the nine months ended September 30, 2002, as compared to the same
period in 2001. This increase was a result of an increase in the average loan
portfolio of 3.9% during the nine months ended September 30, 2002 as compared to
2001 and an increase in the weighted average yield of the loan portfolio from
11.71% for the nine months ended September 30, 2001 to 11.89% for the nine
months ended September 30, 2002. The increase was partially offset by the
increase in loans delinquent greater than ninety days during the nine months
ended September 30, 2002. See "Financial Condition - Loan Portfolio" below.

                  The decrease in carried interest to the general partner of
$128,000 (79.1%) is a result of decreased limited partner contributions to the
Partnership during the nine months ended September 30, 2002 as the Partnership
has been closed to most new investments since September 1, 2001. On a monthly
basis, the General Partner receives an additional carried interest in the
Partnership equal to 1/2 of 1% of the net increase in the capital accounts of
the limited partners pursuant to the Partnership Agreement.

         The decrease in other expenses of $112,000 (61.9%) was due primarily to
registration fees paid to the Securities and Exchange Commission, National
Association of Securities Dealers and various states related to a new
Partnership registration statement originally filed in September 2001. No
filings requiring the payment of fees occurred in 2002.

                  The net recovery of losses on real estate held for sale of
$314,000 (100% increase) was the result of the reversal of an allowance in the
amount of $384,000 previously established on the manufactured home subdivision
development located in Ione, California, due to management's evaluation of the
property's fair market value based on recent sales. This recovery was offset by
an allowance in the amount of $70,000 established on the commercial building
located in Gresham, Oregon in June 2002, which was sold by the Partnership in
July 2002.

Financial Condition

September 30, 2002 and December 31, 2001

Loan Portfolio

         The number of Partnership mortgage investments increased from 97 to
101, and the average loan balance increased from $2,203,000 to $2,603,000
between December 31, 2001 and September 30, 2002. The average loan balance in
the Partnership's portfolio has been steadily increasing for several years. This
is due to the fact that there are more lenders competing for short-term bridge
financing at loan levels of $1,000,000 and less, and many of these lenders have
the financial capabilities of funding these loans at more competitive rates.
However, the current opportunities for maximizing the return to the Partnership
are greater for larger loan amounts.

         Approximately $29,250,000 (11.1%) and $18,604,000 (8.7%) of the loans
invested in by the Partnership were more than 90 days delinquent in payment as
of September 30, 2002 and December 31, 2001, respectively. Of these amounts,
approximately $6,078,000 (2.3%) and $5,327,000 (2.5%), respectively, were in the
process of foreclosure, and approximately $10,341,000 (3.9%) and $6,182,000
(2.9%), respectively, involved loans to borrowers who were in bankruptcy.

         Delinquent loans increased $10,646,000 (57.2%) between December 31,
2001 and September 30, 2002 due to one loan with a principal balance of
$11,417,000 that became delinquent during the nine months ended September 30,
2002. This loan is secured by leasehold interests in nine commercial properties
located in Washington, Idaho and Nevada. The largest tenant in one of the
properties recently vacated which significantly reduced the cash flow to the
borrower. A modification agreement was signed in August 2002 whereby the
borrower is to make reduced minimum monthly payments of $100,000 until the
borrower's cash situation improves. In August 2002, the borrower sold one of the
properties securing the loan and paid down loan principal by $828,000. The
Partnership has been applying all payments received since June 2002 to reduction
in principal and has not accrued any past due interest on the loan. The
Partnership has also established a specific loan loss allowance in the amount of
$621,000 as of September 30, 2002.

         Loans in the process of foreclosure as of December 31, 2001 consisted
of three loans, of which one was foreclosed on by the Partnership in January
2002 (see "Real Estate Properties Held for Sale and Investment" below), one paid
off in full resulting in no loss to the Partnership, and one is still delinquent
and in foreclosure. In addition, three other delinquent loans with a total
principal balance of approximately $4,478,000 entered into foreclosure during
the nine months ended September 30, 2002. The Partnership has established a
specific loan loss allowance in the amount of $353,000 on one of these loans as
of September 30, 2002.

         Loans to borrowers who were in bankruptcy increased by $4,159,000
(67.3%) due to three delinquent loans with a total principal balance of
approximately $6,758,000, the borrowers of which entered into bankruptcy
proceedings during the nine months ended September 30, 2002. The Partnership has
established a specific loan loss allowance in the amount of $800,000 on one of
these loans as of September 30, 2002. In addition, one loan in the amount of
$2,600,000, the borrower of which had been in bankruptcty as of December 31,
2001, was paid down by approximately $980,000 from the sale of one of the
properties securing the loan and the other property located in Gresham, Oregon
was received by the Partnership as a result of the trustee's sale (see "Real
Estate Properties Held for Sale and Investment" below).

         As of September 30, 2002 and December 31, 2001, the Partnership held
the following types of mortgages:
<TABLE>
<CAPTION>

                                                September 30,             December 31,
                                                    2002                      2001
                                                    ----                      ----

         <S>                                    <C>                        <C>
         1st Mortgages                          $  244,714,222             205,139,594
         2nd Mortgages                              18,207,760               8,563,875
                                                   -----------             -----------
         Total                                  $  262,921,982          $  213,703,469
                                                   ===========             ===========

         Income Producing Properties            $  226,662,321          $  180,506,295
         Construction                               17,054,697              14,773,984
         Unimproved Land                            17,827,200              15,360,822
         Residential                                 1,377,764               3,062,368
                                                   -----------             -----------
            Total                               $  262,921,982          $  213,703,469
                                                   ===========             ===========
</TABLE>

         As of September 30, 2002 and December 31, 2001, approximately 43% and
54% of the Partnership's mortgage loans are secured by real property located in
Northern California.

         The Partnership's investment in residential loans decreased by
$1,685,000 (55%) since December 31, 2001 due to partial repayments received on
one residential loan during the nine months ended September 30, 2002. All of the
residential loans are first trust deeds.

 The Partnership's investment in construction loans increased by $2,281,000
(15.4%) since December 31, 2001. This increase was primarily due to additional
advances made on various construction loans and the origination of two new loans
during the period, net of a payoff received on one large construction loan in
the amount of approximately $7,500,000 during the period.

         The Partnership's investment in loans on unimproved land increased by
$2,466,000 (16.1%) since December 31, 2001. This increase was primarily due to
the origination or purchase of three loans on unimproved land in the total
amount of $5,700,000 during the nine months ended September 30, 2002, net of
loans that paid off in the amount of $3,200,000. All loans on unimproved land
are first trust deeds. Two of these loans in the total amount of $4,625,000 are
greater than 90 days delinquent in payments.

         Changes in the allowance for loan losses for the quarter ended
September 30, 2002 and 2001 were as follows:

                                                    2002                 2001
                                                    ----                 ----
    Balance, beginning of period                $ 4,231,000         $ 4,000,000
    Provision, net                                  343,000             738,000
    Charge-off to real estate held for sale              --            (428,000)
                                                  ---------           ---------
    Balance, end of period                      $ 4,574,000         $ 4,310,000
                                                  =========           =========


Real Estate Properties Held for Sale and Investment

                  The Partnership currently holds title to thirteen properties
that were foreclosed on or purchased by the Partnership since 1994 in the amount
of $30,290,000 (including properties held in three limited liability companies
and one real estate joint venture), net of allowance for losses of $250,000. As
of September 30, 2002, properties held for sale total $14,948,000 and properties
held for investment total $15,342,000. When the Partnership acquires property by
foreclosure, it typically earns less income on those properties than could be
earned on mortgage loans and may not be able to sell the properties in a timely
manner.

         During the quarter ended September 30, 2002, eight lots (two including
houses) located in a manufactured home subdivision development located in Ione,
California (acquired by the Partnership through foreclosure in 1997) were sold
for $455,000, resulting in a gain to the Partnership of approximately $122,000.
An allowance in the amount of $384,000 that was previously established on this
property was reversed during the quarter ended June 30, 2002 as a result of
management's evaluation of the property's fair market value based on recent
sales. There are 67 lots remaining to be sold on this property as of September
30, 2002.

         During the quarter ended September 30, 2002, the Partnership sold a
commercial building located in Gresham, Oregon for proceeds in the amount of
$340,000 resulting in a loss of $70,000. An allowance in the amount of $70,000
was established on this property as of June 30, 2002 and is reported net of the
recovery of losses on real estate held for sale for the nine months ended
September 30, 2002.

         During the quarter ended September 30, 2002, the Partnership foreclosed
on a 1st mortgage loan secured by an industrial building located in Albany,
Oregon in the amount of $1,800,000 and obtained the property via a trustee's
sale.

         During 2001, a new entity named Oregon Leisure Homes, LLC (OLH) was
formed between the Partnership and an unrelated developer for the purpose of
developing and selling eight condominium units located in Lincoln City, Oregon,
which were acquired by the Partnership via a deed in lieu of foreclosure. OLH
also purchased a house located on the ocean in Lincoln City for renovation and
ultimate sale. OLH will sell eleven interests in each condominium and seven
interests in the ocean house. The Partnership is co-manager of OLH and is to
receive 70% of the profits. During the quarter ended September 30, 2002, the
Partnership advanced an additional $50,000 to OLH (for a total of $1,318,000)
for continued development and marketing of the condominium units and house that
are currently for sale. OLH sold three interests in the condominiums during the
quarter ended September 30, 2002 for total proceeds of $74,000 and a note in the
amount of $27,000. No gain or loss was recognized as a result of these sales.
OLH sold two interests in the ocean house during the quarter ended September 30,
2002 for total proceeds of $121,000 and a note in the amount of $105,000, and
recognized gain the amount of $97,000 as a result of these sales. The net
operating loss to the Partnership (including gains on sales) was approximately
$22,000 for the quarter ended September 30, 2002.

         During 2001, a new entity named Dation, LLC (Dation) was formed between
the Partnership and an unrelated developer for the purpose of developing and
selling lots in a mobile home park located in Lake Charles, Louisiana, which
were acquired by the Partnership via a deed in lieu of foreclosure. The
Partnership is advancing funds to Dation as needed under the terms of the loan
to the original borrower and may provide additional financing. The Partnership
is co-manager of Dation and is to receive 50% of the profits and losses. Dation
sold three lots during the quarter ended September 30, 2002 and recorded no gain
or loss as a result of these sales. The net operating loss to the Partnership
was approximately $53,000 during the quarter ended September 30, 2002. The
Partnership's total investment in Dation was approximately $1,974,000 as of
September 30, 2002.

         Five of the Partnership's thirteen properties do not currently generate
revenue. Expenses from rental properties have increased from approximately
$259,000 to $685,000 (164.3%) for the quarter ended September 30, 2001 and 2002,
respectively, and revenues associated with these properties have increased from
$683,000 to $809,000 (18.6%), respectively, thus generating a net income from
real estate of $124,000 and $424,000 during the quarters ended September 30,
2002 and 2001, respectively. The increases in income and expenses are primarily
a result of the foreclosure and subsequent operation of a hotel located in
Phoenix, Arizona during the quarter ended March 31, 2002, the acquisition of a
commercial building through foreclosure in the last half of 2001, and the losses
incurred from the Partnership's investments in OLH and Dation during the quarter
ended September 30, 2002.

Cash and Cash Equivalents

                  Cash and cash equivalents decreased from approximately
$41,431,000 as of December 31, 2001 to $6,594,000 as of September 30, 2002
($34,837,000 or 84.1%) due primarily to a greater amount of loans funded or
purchased than repayments on loans received during the nine months ended
September 30, 2002.

Interest and Other Receivables

         Interest and other receivables increased from approximately $2,253,000
as of December 31, 2001 to $3,150,000 as of September 30, 2002 ($897,000 or
39.8%) due primarily to three notes taken back in the amount of $218,000 on the
sales of interests in the ocean house and condos in OLH during the nine months
ended September 30, 2002, an increase in loans secured by trust deeds, and past
due interest received on two delinquent loans in the amount of $423,000 in
October 2002 (which was accrued as of September 30, 2002).

Due to General Partner

         Due to General Partner decreased from approximately $1,272,000 as of
December 31, 2001 to $1,181,000 as of September 30, 2002 ($91,000 or 7.2%) due
to decreased management fees owed to the General Partner as of September 30,
2002 pursuant to the Partnership Agreement (see "Results of Operations" above).

Note Payable

         Note payable increased from approximately $6,920,000 as of December 31,
2001 to $7,385,000 ($465,000 or 6.7%) as of September 30, 2002 due to additional
advances made on the note payable securing the Greeley, Colorado retail property
to complete improvements to the property. There is an additional $1,515,000
available that may be advanced from the note for construction and tenant
improvements.

Line of Credit Payable

         Line of credit payable increased $10,311,469 (100%) from December 31,
2001 to September 30, 2002 as a result of the Partnership's decision to advance
from the line of credit to fund investments in certain loans during the quarter
ended September 30, 2002. There is an additional $29,688,531 available to be
advanced from the line of credit as of September 30, 2002.

                                  Asset Quality

         Some losses are normal when lending money and the amounts of losses
vary as the loan portfolio is affected by changing economic conditions and the
financial condition of borrowers. There is no precise method of predicting
specific losses or amounts that ultimately may be charged off on particular
segments of the loan portfolio.

         The conclusion that a Partnership loan may become uncollectible, in
whole or in part, is a matter of judgment. Although lenders such as banks and
savings and loans are subject to regulations that require them to perform
ongoing analyses of their loan portfolios (including analyses of loan to value
ratios, reserves, etc.), and to obtain current information regarding its
borrowers and the securing properties, the Partnership is not subject to these
regulations and has not adopted these practices. Rather, management of the
General Partner, in connection with the quarterly closing of the accounting
records of the Partnership and the preparation of the financial statements,
evaluates the Partnership's mortgage loan portfolio. The allowance for loan
losses is established through a provision for loan losses based on the General
Partner's evaluation of the risk inherent in the Partnership's loan portfolio
and current economic conditions. Such evaluation, which includes a review of all
loans on which full collectibility may not be reasonably assured, considers
among other matters:

o        prevailing economic conditions;

o        historical experience;

o        the types and dollar amounts of the loans in the portfolio;

o    borrowers' financial condition and adverse situations that may affect the
     borrowers' ability to pay;

o        evaluation of industry trends;

o        review and evaluation of loans identified as having loss potential; and

o    estimated net realizable value or fair value of the underlying collateral.

         Based upon this evaluation, a determination is made as to whether the
allowance for loan losses is adequate to cover potential losses of the
Partnership. Additions to the allowance for loan losses are made by charges to
the provision for loan losses. Loan losses deemed to be uncollectible are
charged against the allowance for loan losses. Recoveries of previously charged
off amounts are credited to the allowance for loan losses. There was a $70,000
loss realized upon the sale of a Partnership property during the nine months
ended September 30, 2002. There was a total loss of $614,000 realized on two
Partnership loans during the year ended December 31, 2001. There were no losses
realized on loans by the Partnership during the years ended December 31, 2000,
1999 and 1998. However, the Partnership realized a loss on real estate in the
amount of $712,000 from the sale of a foreclosed property to the General Partner
at its fair market value during 1998. As of September 30, 2002, management
believes that the allowance for loan losses of $4,574,000 is adequate.


                         Liquidity and Capital Resources

         Sales of Units to investors and portfolio loan payoffs provide the
capital for new mortgage investments. If general market interest rates were to
rise substantially, investors might turn to interest-yielding investments other
than Partnership Units, which would reduce the liquidity of the Partnership and
its ability to make additional mortgage investments to take advantage of the
generally higher interest rates. In contrast, a significant increase in the
dollar amount of loan payoffs and additional limited partner investments without
the origination of new loans of the same amount would increase the liquidity of
the Partnership. This increase in liquidity could result in a decrease in the
yield paid to limited partners as the Partnership would be required to invest
the additional funds in lower yielding, short term investments. As of the date
of this filing, the Partnership has suspended the offer and sale of new Units to
all investors other than individual retirement accounts, qualified retirement
plans, and participants in the Distribution Reinvestment Plan. The General
Partner will evaluate when to commence sales of Partnership Units, based on
liquidity requirements.

         There was little variation in the percentage of capital withdrawals to
total capital invested by the limited partners between 1994 and 2001, excluding
regular distributions of net income to limited partners. There has been a a
substantial decrease in withdrawals during the nine months ended September 30,
2002. Withdrawal percentages have been 7.37%, 6.11%, 7.85%, 6.63%, 7.33%, 7.99%,
6.64%, 5.45%, and 3.3% (annualized) for the years ended December 31, 1994, 1995,
1996, 1997, 1998, 1999, 2000 and 2001, and the nine months ended September 30,
2002, respectively. These percentages are the annual average of the limited
partners' capital withdrawals in each calendar quarter divided by the total
limited partner capital as of the end of each quarter.

         The limited partners may withdraw, or partially withdraw, from the
Partnership and obtain the return of their outstanding capital accounts at $1.00
per Unit within 61 to 91 days after written notices are delivered to the General
Partner, subject to the following limitations, among others:

o    No withdrawal of Units can be requested or made until at least one year
     from the date of purchase of those Units, other than Units received under
     the Partnership's Reinvested Distribution Plan.

o    Any such payments are required to be made only from net proceeds and
     capital contributions (as defined) during said 91-day period.

o    A maximum of $100,000 per partner may be withdrawn during any calendar
     quarter.

o    The General Partner is not required to establish a reserve fund for the
     purpose of funding such payments.

o    No more than 10% of the total outstanding limited partnership interests may
     be withdrawn during any calendar year except upon a plan of dissolution of
     the Partnership.

         In March 2001, the Partnership amended its Limited Partnership
Agreement, with the consent of a majority of limited partners, to allow the
Partnership to incur indebtedness for the purpose of investing in mortgage
loans. The total amount of indebtedness incurred by the Partnership cannot
exceed 50% of the aggregate fair market value of all Partnership loans. The
Partnership finalized a line of credit agreement with a group of banks in August
2001, which provides interim financing on mortgage loans invested in by the
Partnership. The amount of credit available under this line of credit was
increased in August 2002 to $40,000,000. As of September 30, 2002, there was
$10,311,469 outstanding on the line of credit.

                              Contingency Reserves

         The Partnership maintains cash, cash equivalents and marketable
securities as contingency reserves in an aggregate amount of 2% of the limited
partners' capital accounts to cover expenses in excess of revenues or other
unforeseen obligations of the Partnership. Although the General Partner believes
that contingency reserves are adequate, it could become necessary for the
Partnership to sell or otherwise liquidate certain of its investments to cover
such contingencies on terms which might not be favorable to the Partnership.


                           Current Economic Conditions

         The current economic climate in Northern California and the Western
United States has shown increasing signs of a slowdown. Interest rates have
continued to decline and several key indices are at the lowest levels in
decades. Despite the Partnership's historical ability to purchase mortgage loans
with relatively strong yields, increased competition by other mortgage lenders
or changes in the economy could have the effect of reducing mortgage yields in
the future. Present loans with relatively high yields could be replaced with
loans with lower yields, which in turn could reduce the net yield paid to the
limited partners. In addition, if there is less demand by borrowers for loans
and, thus, fewer loans for the Partnership to invest in, the Partnership may be
required to invest its excess cash in short-term alternative investments
yielding considerably less than investments in mortgage loans.

         The Partnership Agreement permits the General Partner to purchase
delinquent loans from the Partnership as long as certain criteria are met.
Although the General Partner has purchased some delinquent loans from the
Partnership in the past, it is not required to do so; therefore, the Partnership
could sustain losses with respect to loans secured by properties located in
areas of declining real estate values. This could result in a reduction of the
net income of the Partnership for a year in which those losses occur.


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 a note payable
securing a real estate property owned by the Partnership as of September 30,
2002. The presentation, for each category of information, aggregates the assets
and liabilities by their maturity dates for maturities occurring in each of the
years 2003 through 2007 and separately aggregates the information for all
maturities arising after 2007. The carrying values of these assets and
liabilities approximate their fair values as of September 30, 2002.
<TABLE>
<CAPTION>

            Interest Earning Assets and Interest Bearing Liabilities,
                           Aggregated by Maturity Date
                         Nine Months Ended September 30,

                            2003          2004          2005         2006         2007        Thereafter        Total
                            ----          ----          ----         ----         ----        ----------        -----
<S>                      <C>           <C>          <C>                    <C>   <C>         <C>
Interest earning
assets:
Money market
  accounts               $  5,957,869                                                                         $ 5,957,869
                                                 -             -           -             -              -
Average interest rate            1.6%                                                                                1.6%
                                                 -             -           -             -              -
Loans secured by
  trust deeds            $151,857,243  $53,267,187  $ 41,430,977           -     $ 293,783   $ 16,072,792   $ 262,921,982

Average interest rate           12.3%        11.3%         11.2%           -         10.0%          11.6%           11.8%

Interest bearing
liabilities:
Note payable to bank       $7,385,101            -             -           -             -              -     $ 7,385,101

Average interest rate            4.5%            -             -           -             -              -            4.5%

Line of credit payable   $ 10,311,469            -             -           -             -              -    $ 10,311,469

Average interest rate           4.75%            -             -           -             -              -           4.75%

Market Risk
</TABLE>

         Market risk is the exposure to loss resulting from changes in interest
rates, equity prices and real estate values. The Partnership's note payable
bears interest at a variable rate, tied to the LIBOR rate of interest. As a
result, the Partnership's primary market risk exposure is to changes in interest
rates, which will affect the interest cost of outstanding amounts on the note
payable.

         The majority of the Partnership's mortgage loans (87.1% as of September
30, 2002) 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. As interest rates increase,
although the interest rates the Partnership obtains from reinvested funds will
generally increase, the value of the Partnership's existing loans at fixed rates
will generally tend to decrease. As interest rates decrease, the amounts
becoming available to the Partnership for investment due to repayment of
Partnership loans may be invested at lower rates than the Partnership had been
able to obtain in prior investments, or than the rates on the repaid loans.

         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.


Item 4. Controls and Procedures

         Within the 90 days prior to the date of this report, the General
Partner of the Partnership carried out an evaluation, under the supervision and
with the participation of the General Partner's management, including the
General Partner's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Partnership's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that
evaluation, the Chief Executive Office and Chief Financial Officer of the
General Partner concluded that the Partnership's disclosure controls and
procedures are effective. There were no significant changes in the Partnership's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation.


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

The Partnership is not presently involved in any material legal proceedings.


Item 6(b).  Reports on Form 8-K

No reports on Form 8-K have been filed during the quarter for which this report
is filed.


<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


Dated:   November 12, 2002     OWENS MORTGAGE INVESTMENT FUND,
                               a California Limited Partnership

                               By:  Owens Financial Group, Inc., General Partner


Dated:   November 12, 2002     By: /s/ William C. Owens
                                   ---------------------
                                   William C. Owens, President


Dated:   November 12, 2002     By: /s/ Bryan H. Draper
                                   -------------------
                                   Bryan H. Draper, Chief Financial Officer


Dated:   November 12, 2002     By: /s/ Melina A. Platt
                                   -------------------
                                   Melina A. Platt, Controller
<PAGE>




                      CHIEF EXECUTIVE OFFICER CERTIFICATION


I, William C. Owens,  President and Chief  Executive  Officer of Owens Financial
Group, Inc., General Partner, certify that:

1.   I have  reviewed  this  quarterly  report  on Form  10-Q of Owens  Mortgage
     Investment Fund, 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 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 as of a date within 90 days prior to the filing date of this
         quarterly report (the "Evaluation Date"); and

     (c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date.

5.   The Registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, 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 in the design or operation of internal
         controls which could adversely affect the Registrant's ability to
         record, process, summarize and report financial data and have
         identified for the Registrant's auditors any material weaknesses in
         internal controls; and

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

6.   The Registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Dated:  November 12, 2002

/s/ William C. Owens

William C. Owens
President and Chief Executive Officer
Owens Financial Group, Inc., General Partner
<PAGE>


                      CHIEF FINANCIAL OFFICER CERTIFICATION


I, Bryan H. Draper,  Chief  Financial  Officer of Owens Financial  Group,  Inc.,
General Partner, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Owens Mortgage
     Investment Fund, 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 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 as of a date within 90 days prior to the filing date of this
         quarterly report (the "Evaluation Date"); and

     (c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date.

5.   The Registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, 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 in the design or operation of internal
         controls which could adversely affect the Registrant's ability to
         record, process, summarize and report financial data and have
         identified for the Registrant's auditors any material weaknesses in
         internal controls; and

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

6.   The Registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Dated:  November 12, 2002

/s/ Bryan H. Draper

Bryan H. Draper
Chief Financial Officer
Owens Financial Group, Inc., General Partner