REDWOOD MORTGAGE INVESTORS VI
                       (a California Limited Partnership)
                               Index to Form 10-K

                                December 31, 2005

<TABLE>
<S>     <C>                                                                                                  <C>
                                                       Part I

                                                                                                             Page No.
                                                                                                          ------------
Item 1  - Business                                                                                            4
Item 2  - Properties                                                                                          8
Item 3  - Legal Proceedings                                                                                   8
Item 4  - Submission of Matters to a Vote of Security Holders (Partners)                                      8

                                                       Part II


Item 5  - Market for the Registrant's "Limited Partnership Units" and Related Unitholder Matters              8
Item 6  - Selected Financial Data                                                                             9
Item 7  - Management's Discussion and Analysis of Financial Condition and Results of Operations               10
Item 7a - Quantitative and Qualitative Disclosures About Market Risk                                          18
Item 8  - Financial Statements and Supplementary Data                                                         20
Item 9  - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                42
Item 9a - Controls and Procedures                                                                             42
Item 9b - Other Information                                                                                   42

                                                      Part III


Item 10 - Directors and Executive Officers of the Registrant                                                  42
Item 11 - Executive Compensation                                                                              43
Item 12 - Security Ownership of Certain Beneficial Owners and Management                                      44
Item 13 - Certain Relationships and Related Transactions                                                      44
Item 14 - Principal Accountant Fees and Services                                                              44

                                                       Part IV

Item 15 - Exhibits, Financial Statements and Schedules                                                        45

Signatures                                                                                                    46

Certifications                                                                                                47
</TABLE>



                                       1
<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-K


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

                      For the Year Ended December 31, 2005

                                       OR

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

         For the transition period from ______________ to ______________


                        Commission File Number: 000-17573


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


          California                                      94-3031211
(State or other jurisdiction of                (I.R.S. Employer Identification)
  incorporation or organization)


900 Veterans Blvd., Suite 500, Redwood City, CA             94063
  (address of principal executive offices)               (zip code)


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


Securities registered pursuant to Section
12 (b) of the Act:                                               NONE

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


                                       2
<PAGE>

     Indicate by check mark if the registrant is a well-known  seasoned  issuer,
as defined in Rule 405 of the Securities Act of 1933, as amended.

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

     Indicate by check mark if the  registrant  is not required to file pursuant
to Section 13 or Section 15(d) of the Securities Act of 1934, as amended.

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

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

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

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [ ]   Accelerated Filer [ ]   Non-Accelerated Filer [X]

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

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

     As of June 30, 2005, the aggregate value of limited  partnership Units held
by  non-affiliates  was  $6,391,203.  This  calculation  is based on the capital
account balance of the limited partners and excludes limited  partnership  Units
held by the general partners.

Documents incorporated by reference:

     Portions of the Prospectus for Redwood  Mortgage  Investors VI, included as
part of the form  S-11  Registration  Statement,  SEC File  No.  33-12519  dated
September 3, 1987 and Supplement No. 6 dated May 16, 1989, are  incorporated  in
Parts II, III, and IV.


                                       3
<PAGE>

                                     Part I


     Item 1 - Business

     Redwood  Mortgage  Investors VI is a California  Limited  Partnership  (the
"Partnership").  Michael R. Burwell,  an individual,  and Gymno  Corporation,  a
California  corporation,  are the general  partners.  The address of the general
partners is 900 Veterans Blvd.,  Suite 500, Redwood City,  California 94063. The
Partnership's primary purpose is to invest its capital in first and second deeds
of trust secured primarily by Northern California properties. Loans are arranged
and serviced by Redwood  Mortgage Corp.,  an affiliate of the general  partners.
The Partnership's objectives are to make investments which will: (i) provide the
maximum possible cash returns which limited partners may elect to (a) receive as
monthly, quarterly or annual cash distributions or (b) have earnings credited to
their capital  accounts and used to invest in Partnership  activities;  and (ii)
preserve  and protect  the  Partnership's  capital.  The  Partnership's  general
business  is  more  fully  described  under  the  section  entitled  "Investment
Objectives  and  Criteria",  pages  23-26  of  the  Prospectus,  a  part  of the
above-referenced Registration Statement, which is incorporated by reference.

     The  Partnership  was formed in September  1987,  with an approved  120,000
Units of $100 each  ($12,000,000).  The Units were  offered on a "best  efforts"
basis  through  broker/dealer  member  firms  of  the  National  Association  of
Securities Dealers,  Inc. It immediately began issuing Units and began investing
in loans in October 1987. The offering  terminated in September  1989, and as of
that date  97,725.94  limited  partner  Units were sold  realizing  proceeds  of
$9,772,594.  At  December  31,  2005,  the  Partnership  had a balance  of loans
totaling $2,021,973 with interest rates thereon ranging from 8.50% to 10.50%.

     Currently  first  mortgage  loans  comprise  40.08% of the total  amount of
secured loan  portfolio.  Second  mortgage loans comprise  59.92% of the secured
loan  portfolio.  Single Family (1-4 units)  homes,  total 84.25% of the secured
mortgage  loans.   Commercial  secured  loans  decreased  from  last  year,  now
comprising  15.75% of the  portfolio,  a decrease of 57.20% from 2004. The major
concentration of secured loans, comprising 73.13% of the total secured loans, is
in three of the six counties  that  comprise  the San  Francisco  Bay Area.  The
balance is  primarily  in Northern  California.  Currently  secured loan size is
averaging  $224,664  per loan.  Some of the  secured  loans  are  fractionalized
between  affiliated  partnerships  with  objectives  similar  to  those  of  the
Partnership to further reduce risk.  Average equity per loan transaction,  which
is our loan plus any senior loans,  divided by the property's  appraised  value,
subtracted  from 100%,  stood at  34.05%,  based on senior  loans and  appraised
values  at the  inception  of our loan.  Generally,  the more  equity,  the more
protection for the lender. The Partnership's loan portfolio had no properties in
foreclosure as of the end of December 2005.

     Delinquencies  are discussed  under Item 7 -  Management's  Discussion  and
Analysis of Financial Condition and Results of Operations.

     For the year ended December 31, 2005 and 2004 the  Partnership did not take
back  any  collateral  from  defaulted  borrowers.  During  the year  2002,  the
Partnership acquired a piece of real estate property through  foreclosure.  This
property consisted of four townhouses.  The Partnership commenced  refurbishment
of the units and concluded a sale of the units in March 2004. A second property,
acquired in 2000, was a commercial property located in Walnut Creek, California.
The  property  was sold  during the  fourth  quarter  of 2004.  The  Partnership
realized a loss upon the sale of both of these properties totaling approximately
$783,000, which had previously been reserved for.

     The Partnership also owns (through previous foreclosure in April, 1993) one
other  property;  undeveloped  land.  The land is located in East Palo Alto. The
land is owned with two other  affiliated  partnerships.  The  Partnership's  net
investment  of $130,215 is 2.05% of  Partnership  assets.  The general  partners
believe that the property is worth  considerably  more than its net  investment,
but it may take a  considerable  amount of additional  time to sell the property
and realize its full  potential.  The  property is unique in that it may only be
utilized for commercial or industrial uses. Until recently,  land sales activity
had been  slow,  but  interest  in land  sales  for  commercial  sites  has been
increasing.

                                       4
<PAGE>

     The Partnership's  revenues  increased from $491,640 in 2003 to $538,737 in
2004 and decreased  slightly to $522,282 in 2005. The increase from 2003 to 2004
was due primarily to the increase in the average  interest rate on loans,  which
was 7.80% in 2003,  8.41% in 2004, and 9.12% in 2005. In addition,  the increase
in revenue in 2004 was due primarily to the receipt of a non-refundable  deposit
on the sale of a real estate held for sale property  totaling  $28,929.  In 2005
the  decrease  from 2004 was  primarily  due to the  collection  of  $44,318  in
interest and $5,912 in late charges on a loan that was previously categorized as
impaired;  offset  by a  lower  average  outstanding  loan  balance,  which  was
substantially  affected  by the  pay off of two  loans  totaling  $3,060,100  in
November,  2005.  As a result of this  payoff the  Partnership's  loan  balances
declined from $5,599,663 to $2,172,419.  The Partnership was unable to place the
payoff proceeds of $3,060,100 on new notes  immediately.  Instead,  the proceeds
were  deposited  into the  Partnership's  money  market  account.  Cash flow the
Partnership generated from mortgage interest and loan pay-downs and pay-offs was
used to meet limited partner capital and earnings  liquidations.  Withdrawals by
limited partners were $506,503,  $510,115 and $457,826 for the three years ended
December 31, 2003, 2004 and 2005, respectively.

     During the year 2005,  the  Partnership's  annualized  yield on compounding
accounts was 6.15% and on monthly distributing accounts it was 5.99%.

     Competition and General Economic Conditions.

     The Partnership's  major competitors in providing mortgage loans are banks,
savings and loan associates,  thrifts,  conduit lenders,  mortgage brokers,  and
other entities both larger and smaller than the Partnership.  The Partnership is
competitive  in large part  because the general  partners  generate all of their
loans.  The general partners have been in the business of making or investing in
mortgage  loans in Northern  California  since 1978 and have developed a quality
reputation and recognition within the field.

     Beginning in July of 2004,  the Federal  Reserve  changed its interest rate
policy from one of three years of continuously lowered interest rates, which hit
a 40 year historic  interest  rate low, to one of tempered but gradual  interest
rate  increases.  In keeping with this new policy  since July 2004,  the Federal
Reserve has  increased the Federal  Funds Rate by one quarter  percentage  point
(1/4 of one  percent) at each of its  meetings to 5.25% as of December 31, 2005.
This  deliberate  upward  change in the Federal Funds Rate has caused short term
interest rates to rise,  and to a lesser degree,  pushed longer term rates up as
well.  Nationally and more specifically in Northern California,  the location of
the  majority  of our  lending  activities,  the  economies  have  substantially
recovered from the economic downturn lasting from 2000 through 2003.  Employment
and job  creation  has  improved.  During  2004 and 2005,  the  residential  and
commercial  real  estate  markets in  Northern  California  enjoyed  solid price
appreciation.  During the latter  half of 2005,  long-term  interest  rates have
begun to inch upward.  Residential  sales  volumes have declined yet median home
sales  prices  have  remained at or near their  record  2005  highs.  While some
concern  exists as to whether  real estate  values will soften,  interest  rates
continue to remain attractive by historical standards,  unemployment remains low
and the economy is strong.  Management believes these factors will contribute to
a real estate  marketplace with lower  appreciation in 2006 compared to 2004 and
2005. With less real estate  transactions  likely to exist competition for loans
will be fierce.  Since it appears that the bottom of the interest rate cycle was
reached in 2004, we believe loan runoff to lower  interest rates will be reduced
allowing the  partnership  to retain its loans for longer  periods.  Excess cash
will be invested in  short-term  alternative  investments,  such as money market
funds yielding considerably less than the current loan investment portfolio.

                                       5
<PAGE>

     Secured Loan Portfolio

     As of  December  31,  2005,  a summary of the  Partnership's  secured  loan
portfolio is set forth below.

   Loans as a Percentage of Appraised Value

   First Trust Deed Loans                                         $    810,359
   Second Trust Deed Loans                                           1,211,614
                                                                ---------------
        Total loans                                               $  2,021,973

   Priority Positions due other Lenders at Time of Loan              2,367,593

        Total Debt                                                $  4,389,566
                                                                ===============

   Appraised Property Value at time of loan                       $  6,655,409

        Total Secured Loans as a % of Appraisal based on
         appraisals and prior liens at date of loan                     65.95%

   Number of Secured Loans Outstanding                                       9

   Average Secured Loan                                                224,664
   Average Secured Loan as a % of Net Assets                             3.53%
   Largest Secured Loan Outstanding                                    532,131
   Largest Secured Loan as a % of Net Assets                             8.37%
   Largest secured Loan as a % of Total Assets                           8.36%


   Secured Loans as a Percentage of Total Loans                     Percent
   -----------------------------------------------------        ---------------
   First Trust Deeds                                                    40.08%
   Second Trust Deeds                                                   59.92%
                                                                ---------------
        Total                                                          100.00%
                                                                ===============
<TABLE>
<S>                                                                 <C>               <C>
   Secured Loans by Type of Property                                Amount            Percent
   -----------------------------------------------------        ---------------     ------------
   Single Family (1-4 units)                                      $  1,703,472           84.25%
   Commercial                                                          318,501           15.75%
                                                                ---------------     ------------

        Total                                                     $  2,021,973          100.00%
                                                                ===============     ============
</TABLE>


                                       6
<PAGE>

     The following is a distribution of secured loans outstanding as of December
31, 2005 by California Counties:
<TABLE>
<S>                 <C>                                             <C>               <C>
                                                                    Total
                    California County                            Secured Loans        Percent
  ------------------------------------------------------       ----------------     -------------

  San Francisco Bay Area Counties
      San Mateo                                                  $     544,069            26.91%
      Santa Clara                                                      532,131            26.32%
      Alameda                                                          402,432            19.90%
                                                               ----------------     -------------
                                                                     1,478,632            73.13%

  San Francisco Bay Area Adjacent Counties
      Monterey                                                         250,000            12.36%
      Stanislaus                                                       174,432             8.63%
                                                               ----------------     -------------
                                                                       424,432            20.99%

  Other California Counties
      Colusa                                                           118,909             5.88%
                                                               ----------------     -------------
                                                                       118,909             5.88%

  Total                                                          $   2,021,973           100.00%
                                                               ================     =============
</TABLE>


  Number of Loans in Foreclosure                                             0

     Scheduled  maturity  dates of secured  loans as of December 31, 2005 are as
follows:

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

                             2006                    $  424,432
                             2007                       144,069
                             2008                       400,000
                             2009                       272,394
                             2010                       781,078
                                                   --------------

                                                     $ 2,021,973
                                                   ==============

     The  Partnership's  largest  loan  in  the  principal  amount  of  $532,131
represents 26.32% of outstanding  secured loans and 8.36% of Partnership assets.
Larger  loans  sometimes  increase  above 10% of the secured  loan  portfolio or
Partnership assets as these amounts decrease due to limited partner  withdrawals
and loan payoffs and due to restructuring of existing loans.

     The  Partnership had a substantial  amount of its loan  receivable  balance
from one borrower at December  31, 2004 and 2003.  The  borrower  accounted  for
approximately  59% and 58% of the loan balances at such dates. This borrower had
two loans secured by separate  properties in the principal amounts of $2,103,000
and  $956,800.  These loans were paid off in November,  2005.  In  addition,  an
impaired loan with a principal balance of $96,716 paid off in November, 2005.

     The  scheduled   maturities  for  2006  include  two  loans  for  $174,432,
representing 8.63% of the secured loan portfolio,  past maturity at December 31,
2005.  The  Partnership  occasionally  allows  borrowers to continue to make the
regular  interest  payments on debt past  maturity for periods of time.  In many
instances  the  interest  rate on  these  past  maturity  loans is  higher  than
currently  existing  interest  rates.  Interest  payments  on these  loans  were
current.

                                       7
<PAGE>

     Item 2 - Properties

     The Partnership did not take back any collateral security from borrowers in
2005 or 2004.  During 2002, the  Partnership  took back one piece of real estate
collateral   through   foreclosure.   The   Partnership,   together  with  other
partnerships,  all affiliates of the general partners,  owned the property.  The
property was a 4 unit condominium complex. During the year 2003, renovation work
was  completed  and the  property  was placed on the market for sale. A purchase
offer was  accepted  and the escrow  closed in March,  2004.  As of December 31,
2003,  the carrying  value of this  property was  $454,862.  A second  property,
acquired in 2000, was a commercial property located in Walnut Creek, California.
The property was sold in October, 2004. The Partnership realized a loss upon the
sale of both of these properties totaling approximately $783,000, which had been
anticipated  and the loss was offset against  reserves  previously set aside for
these properties.

     The  Partnership  also  owns,  through  previous  foreclosures,  one  other
property;  undeveloped  land. The land is located in East Palo Alto. The land is
owned with two other affiliated  partnerships.  The Partnership's net investment
in the land at December 31, 2005 is $130,215.  The general partners believe that
the property is worth considerably more than its net investment, but it may take
a  considerable  amount of additional  time to sell the property and realize its
full  potential.  The  property  is unique in that it may only be  utilized  for
commercial or industrial  uses.  Until  recently,  land sales  activity had been
slow, but interest in land sales for commercial sites has been increasing.


     Item 3 - Legal Proceedings

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


     Item 4 - Submission of Matters to a Vote of Security Holders (Partners)

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


                                     Part II


     Item 5 -  Market  for the  Registrant's  "Limited  Partnership  Units"  and
Related Unitholder Matters

     120,000  Units  at $100  each  (minimum  20  Units)  were  offered  through
broker-dealer  member firms of the National Association of Securities Dealers on
a "best  efforts"  basis (as indicated in Part I item 1). All Units were sold to
California  residents.  Investors have the option of  withdrawing  earnings on a
monthly,  quarterly  or annual basis or having  their  earnings  retained in the
Partnership.  Limited  partners may withdraw from the  Partnership in accordance
with  the  terms  of the  partnership  agreement  subject  to  early  withdrawal
penalties.  There is no established  public trading market for the Units.  As of
December 31, 2005, 368 limited partners had a capital balance of $6,346,746.

     A  description  of the  Partnership's  Units,  transfer  restrictions,  and
withdrawal  provisions  is more  fully  described  under  the  section  entitled
"Description of Units" and "Summary of the Limited Partnership Agreement", pages
38-42 of the Prospectus, a part of the above-referenced  Registration Statement,
which is incorporated by reference.


                                       8
<PAGE>

     Item 6 - Selected Financial Data

     Redwood  Mortgage  Investors  VI began  operations  in October,  1987.  Its
financial  condition and results of operation as of and for the five years ended
December 31, 2005 were:

                                 Balance Sheets
<TABLE>
<S>                                               <C>               <C>               <C>               <C>              <C>
                                                                                   December 31,
                                             -------------------------------------------------------------------------------------
                                                  2005              2004              2003              2002             2001
                                             --------------    --------------    --------------    --------------   --------------
Cash                                           $ 4,361,983       $ 1,090,027       $    32,160       $   341,127      $   190,414

Loans
   Loans, secured by deeds of trust              2,021,973         5,225,128         5,255,620         5,183,100        4,970,433
   Loans, unsecured, net                           144,098           261,276           242,462           223,697           82,362

Interest and other receivables
   Accrued interest and late fees                   22,138            61,364            54,562            61,384          797,105
   Advances on loans                                    51             2,890             4,091            31,007          197,946

Less allowances for loan losses                  (315,379)         (315,751)         (279,865)         (275,294)        (370,612)
Note receivable - Redwood Mortgage Corp.                 -                 -                 -                 -          178,200
Real estate held for sale, net                     130,215           128,902         1,312,773         1,234,541        1,093,503
                                             --------------    --------------    --------------    --------------   --------------

    Total assets                               $ 6,365,079       $ 6,453,836       $ 6,621,803       $ 6,799,562      $ 7,139,351
                                             ==============    ==============    ==============    ==============   ==============
</TABLE>

                        Liabilities and Partners' Capital
<TABLE>
<S>                                               <C>               <C>               <C>               <C>              <C>
                                                                                December 31,
                                             -------------------------------------------------------------------------------------
                                                  2005              2004              2003              2002             2001
                                             --------------    --------------    --------------    --------------   --------------
Liabilities
  Accounts payable                             $         -       $    11,487       $    13,064       $    11,953      $    20,261
  Deferred interest on loans                             -                 -             -                     -           74,022
  Payable to affiliates                              8,572            12,541            12,496            14,643           35,632
                                             --------------    --------------    --------------    --------------   --------------
    Total liabilities                                8,572            24,028            25,560            26,596          129,915
                                             --------------    --------------    --------------    --------------   --------------

Partners' capital
  Limited partners' capital, subject to
     redemption                                  6,346,746         6,420,047         6,586,482         6,763,200        6,999,670
  General partners' capital                          9,761             9,761             9,761             9,766            9,766
                                             --------------    --------------    --------------    --------------   --------------

    Total partners' capital                      6,356,507         6,429,808         6,596,243         6,772,966        7,009,436
                                             --------------    --------------    --------------    --------------   --------------

    Total liabilities and partners' capital    $ 6,365,079       $ 6,453,836       $ 6,621,803       $ 6,799,562      $ 7,139,351
                                             ==============    ==============    ==============    ==============   ==============
</TABLE>

                                       9
<PAGE>

                              Statements of Income
<TABLE>
<S>                                               <C>               <C>               <C>               <C>              <C>
                                                  2005              2004              2003              2002             2001
                                             --------------    --------------    --------------    --------------   --------------
Gross revenue                                  $   522,282       $   538,737       $   491,640       $   574,171      $   735,900
Expenses                                           133,874           191,585           158,524           204,188          309,249
                                             --------------    --------------    --------------    --------------   --------------
Net income                                     $   388,408       $   347,152       $   333,116       $   369,983      $   426,651
                                             ==============    ==============    ==============    ==============   ==============

Net income:   to general partners (1%)         $     3,884       $     3,472       $     3,331       $     3,700      $     4,266
              to limited partners (99%)            384,524           343,680           329,785           366,283          422,385
                                             --------------    --------------    --------------    --------------   --------------

                                               $   388,408       $   347,152       $   333,116       $   369,983      $   426,651
                                             ==============    ==============    ==============    ==============   ==============
Net income per $1,000 invested by
 limited partners for entire period:
     - where income is  compounded             $        62       $        54       $        50       $        54      $        59
                                             ==============    ==============    ==============    ==============   ==============

     - where partner receives income in
         monthly distributions                 $        60       $        53       $        49       $        53      $        58
                                             ==============    ==============    ==============    ==============   ==============
</TABLE>

     Annualized yields when income is compounded or distributed  monthly for the
years 2001 through 2005 are outlined in the table below:

                                        Compounded         Distributed
                                      ---------------    ---------------
                    2001                  5.95%               5.79%
                    2002                  5.40%               5.27%
                    2003                  5.00%               4.89%
                    2004                  5.40%               5.27%
                    2005                  6.15%               5.99%

     The average  annualized  yield,  when income is compounded  from  inception
through December 31, 2005 was 6.84%. The average  annualized  yield, when income
is distributed monthly, from inception through December 31, 2005 was 6.60%.


     Item 7 - Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations

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

     Critical Accounting Policies.

     In  preparing  the  financial  statements,  management  is required to make
estimates based on the information available that affect the reported amounts of
assets and  liabilities  as of the balance sheet dates and revenues and expenses
during  the  reporting  periods.   Such  estimates  relate  principally  to  the
determination of (1) the allowance for loan losses (i.e. the amount of allowance
established  against loans  receivable as an estimate of potential  loan losses)
including   the  accrued   interest  and  advances  that  are  estimated  to  be
unrecoverable  based on estimates of amounts to be collected  plus  estimates of
the value of the  property as  collateral  and (2) the  valuation of real estate
acquired through  foreclosure.  At December 31, 2005, we owned one real property
that we had acquired through foreclosure in a prior year.

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

                                       10
<PAGE>

     If the probable  ultimate  recovery of the carrying  amount of a loan, with
due  consideration  for the fair value of  collateral,  is less than amounts due
according to the  contractual  terms of the loan  agreement and the shortfall in
the amounts due are not  insignificant,  the carrying  amount of the  investment
shall be reduced to the  present  value of future cash flows  discounted  at the
loan's effective interest rate. If a loan is collateral dependent,  it is valued
at the estimated fair value of the related collateral.

     If events and or changes in circumstances  cause management to have serious
doubts  about the  collectibility  of the  contractual  payments,  a loan may be
categorized  as impaired  and  interest  is no longer  accrued.  Any  subsequent
payments on impaired loans are applied to reduce the outstanding  loan balances,
including accrued interest and advances.

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

     Forward-Looking Statements.

     Certain  statements  in this  Report on Form 10-K which are not  historical
facts may be considered forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
and  Exchange  Act of 1934,  as  amended,  including  statements  regarding  the
Company's expectations,  hopes, intentions, beliefs and strategies regarding the
future.  Forward-looking statements include statements regarding future interest
rates and  economic  conditions  and their  effect  on the  Partnership  and its
assets,  trends  in the  California  real  estate  market,  estimates  as to the
allowance for loan losses, estimates of future limited partner withdrawals, 2006
annualized yield  estimates,  the intention not to sell the  Partnership's  loan
portfolio and the expectation that  foreclosures will not have a material effect
on liquidity.  Actual results may be materially different from what is projected
by such forward-looking  statements.  Factors that might cause such a difference
include unexpected changes in economic conditions and interest rates, the impact
of competition and competitive  pricing and downturns in the real estate markets
in which the Company has made loans. All forward-looking  statements and reasons
why  results  may  differ  included  in this  Form  10-K are made as of the date
hereof, and we assume no obligation to update any such forward-looking statement
or reason why actual results may differ.

     Related Parties.

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

     o Mortgage  Brokerage  Commissions  For fees in connection with the review,
selection,  evaluation,  negotiation and extension of loans, an affiliate of the
general  partners may collect an amount  equivalent  to 12% of the loaned amount
until 6 months after the termination date of the offering.  Thereafter, the loan
brokerage  commissions (points) will be limited to an amount not to exceed 4% of
the total Partnership  assets per year. The loan brokerage  commissions are paid
by the borrowers, and thus, are not an expense of the Partnership. For the years
ended December 31, 2005, 2004 and 2003, loan brokerage  commissions  paid by the
borrowers were $52,248, $24,156 and $42,407, respectively.

     o Mortgage  Servicing Fees Monthly mortgage  servicing fees of up to 1/8 of
1% (1.5% on an annual basis) of the unpaid principal of the Partnership's  loans
are paid to Redwood  Mortgage  Corp., or such lesser amount as is reasonable and
customary in the  geographic  area where the  property  securing the mortgage is
located.  Mortgage servicing fees of $56,508,  $50,160 and $48,759 were incurred
for the years ended December 31, 2005, 2004 and 2003, respectively.

     These  servicing  fees  were  charged  at 1%, on an  annual  basis,  of the
outstanding  principal balances.  If the maximum mortgage servicing fee of 1.5%,
on an annual basis, had been charged to the  Partnership,  then net income would
have been reduced by  approximately  $28,254,  $25,080 and $24,380 in 2005, 2004
and 2003,  respectively.  Reducing net income reduces the annualized  yields. An
increase  or  decrease  in this fee within  the limits set by the  Partnership's
agreement directly impacts the yield to the limited partners.

                                       11
<PAGE>

     o Asset  Management  Fees The general  partners  receive  monthly  fees for
managing the Partnership's portfolio and operations up to 1/32 of 1% of the `net
asset value' (3/8 of 1% on an annual  basis).  For the years ended  December 31,
2005,  2004 and 2003  management  fees  totaled  $24,092,  $24,481 and  $25,281,
respectively.  Of these fees the Partnership waived $12,061, $16,321 and $16,854
and paid $12,031, $8,160 and $8,427, respectively, to the general partners.

     o Other Fees The Partnership  agreement  provides that the general partners
may receive other fees such as  reconveyance,  mortgage  assumption and mortgage
extension  fees.  Such fees are  incurred by the  borrowers  and are paid to the
general partners.

     o Income and Losses  All  income  and  losses  are  credited  or charged to
partners in relation to their respective Partnership  interests.  The allocation
to the general partners (combined) shall not exceed 1%.

     o Operating  Expenses An affiliate  of the  Partnership,  Redwood  Mortgage
Corp.,  is reimbursed by the  Partnership  for all operating  expenses  actually
incurred  by it on  behalf of the  Partnership,  including  without  limitation,
out-of-pocket general and administration expenses of the Partnership, accounting
and audit fees,  legal fees and expenses,  postage and preparation of reports to
limited partners.

     o Contributed  Capital The general  partners  jointly and severally were to
contribute 1/10 of 1% in cash  contributions  as proceeds from the offerings are
received from the limited partners.  As of December 31, 2004 and 2005, a general
partner, Gymno Corporation, had contributed $9,772 as capital in accordance with
Section 4.02(a) of the partnership agreement.

     Results of  Operations - For the years ended  December  31, 2005,  2004 and
2003

     Changes in the Partnership's operating results for the years ended December
31, 2005 and 2004 are discussed below.

                   Changes during the year ended December 31,

                                                      2005             2004
                                                  -------------    ------------
Net income increase/(decrease)                      $   41,256       $  14,036
                                                  =============    ============
   Revenue
      Interest on loans                                  (878)          34,936
      Interest-interest bearing accounts                11,235           2,435
      Late charges and other fees                     (26,812)           9,726
                                                  -------------    ------------
                                                    $ (16,455)       $  47,097
                                                  -------------    ------------

   Expenses
      Mortgage servicing fees                       $    6,348       $   1,401
      Asset management fees                              3,871           (267)
      Clerical costs from Redwood Mortgage Corp.       (3,587)         (4,226)
      Provision for losses on loans and real
        estate held for sale                          (37,571)          31,301
      Professional services                            (3,050)           7,153
      Other                                           (23,722)         (2,301)
                                                  -------------    ------------
                                                    $ (57,711)       $  33,061
                                                  -------------    ------------

            Net income increase                     $   41,256       $  14,036
                                                  =============    ============

                                       12
<PAGE>

     The  decrease in interest on loans of $878 for the year ended  December 31,
2005 was primarily due to the decline in the average loan  portfolio  balance to
$4,876,596 in 2005 from an average loan portfolio balance of $5,240,374 in 2004.
The  average  interest  rate on notes  also  decreased  to 9.13% in 2005 from an
average  interest  rate of 9.37% in 2004.  The  reduction  in loan  balances  to
$2,021,973  as of December 31, 2005 from  $5,225,128 as of December 31, 2004 was
primarily due to substantial  pay-offs of loans and the Partnership's  inability
to fund new  loans  from  the  pay-off  proceeds  in 2005.  Two  loans  totaling
$3,060,100  that were major  contributors  of interest income to the Partnership
were paid off in November,  2005.  Contributing to 2005 income, an impaired loan
totaling  $96,716 paid-off in 2005 deriving  interest of $43,021,  which was not
previously  accrued.  The receipt of interest from the previously  impaired loan
helped the Partnership  minimize  reduced interest income due to a lower average
loan  portfolio  balance  and a decreased  average  interest  rate in 2005.  The
increase in interest  on loans of $34,936 for the year ended  December  31, 2004
was primarily due to an interest rate increase on two loans totaling  $3,060,100
in 2004. This increase alone generated  additional interest income of $32,514 to
the  Partnership.  Interest  income was $489,908,  $490,786 and $455,850 for the
years ended December 31, 2005, 2004 and 2003, respectively. The average interest
rate in 2005 was 9.13% as compared to 9.37% for 2004 and 8.73% for 2003.

     The increase in  interest-interest  bearing  accounts of $11,235 and $2,435
for the  years  ended  December  31,  2005 and  2004,  respectively,  represents
interest  earned  on a  larger  average  balance  deposit,  which  increased  to
$1,220,447  for the year ended  December  31,  2005 from an  average  balance of
$561,094 that existed in 2004 and from an average balance of $186,644 in 2003

     The decrease in late charge  revenue and other fees of $26,812 for the year
ended  December 31, 2005 was primarily  due to  non-refundable  option  payments
received on a property held for sale. These payments totaled $28,929 in 2004 and
the related  real estate  property was sold in December  2004.  The decrease was
also due to a decline in miscellaneous  income to $8,440 in 2005 from $11,498 in
2004,  due to reduced  collection of  prepayment  penalties of $2,256 in 2005 as
compared to $10,801 in 2004.  However,  these were offset by the  collection  of
other  fees  totaling  $6,184  in 2005  as  compared  to  $697  in 2004  and the
collection  of late  charges  totaling  $7,184 in 2005 as  compared to $2,009 in
2004.  The increase in late charge revenue and other fees of $9,726 for the year
ended  December  31,  2004  was  due to the  receipt  of  non-refundable  option
payments, on real estate held for sale of $28,929;  offset by a decrease in late
fees and miscellaneous income of $19,203.

     The  increase  in  mortgage  servicing  fees of $6,348  for the year  ended
December 31, 2005 was primarily  due to the payment of servicing  fees of $9,439
on an impaired  loan,  which was  collected  in 2005.  The  increase in mortgage
servicing  fees of $1,401 for the year  ended  December  31,  2004 was due to an
overall higher average loan portfolio  balance of $5,240,374 in 2004 as compared
to $5,219,360 in 2003;  offset by the  collection of delinquent  interest from a
loan that paid off in 2003.

     The increase in asset management fees of $3,871 for the year ended December
31,  2005 was  primarily  due to the  Partnership  paying  the full  3/8%  asset
management fee during the final three months of 2005 instead of a reduced fee of
1/8% as agreed upon by the general  partners.  The decrease in asset  management
fees of $267 for the year ended December 31, 2004 was primarily due to declining
balances of limited partners' capital, which were $6,420,047 and $6,586,482,  at
December 31, 2004 and 2003, respectively.

     The  decrease  in  clerical  costs of $3,587 and $4,226 for the years ended
December 31, 2005 and 2004, respectively,  was primarily attributable to reduced
clerical costs in servicing this Partnership.

     The decrease in the  provision for losses on loans and real estate held for
sale of $37,571 for the year ended December 31, 2005 was due to the  Partnership
not allocating  any  additional  provision and recording a recovery of $1,685 in
2005.  There were two loans  matured 90 days or more totaling  $174,432,  but no
delinquent  loans past due 90 days or more in  interest  payments as of December
31, 2005 and the  Partnership  felt that no further  provision for loan loss was
required. The increase in the provision for losses on loans and real estate held
for sale of $31,301 for the year ended December 31, 2004 was deemed  appropriate
by Partnership's  management due to the higher average loan portfolio balance of
$5,240,374  and  three  delinquent  loans  past due 90 days or more in  interest
payments.  Loan  portfolio  balances  decreased to  $2,021,973  in 2005 from the
portfolio  balance of  $5,225,128  that  existed in 2004 and a reserve  for loan
losses of $315,379 and $315,751 as of December 31, 2005 and 2004,  respectively,
was considered to be adequate.

     The decrease in professional services of $3,050 for the year ended December
31,  2005 was due to reduced  fees and the timing of  professional  services  in
2005.  The  increase  in  professional  services  of $7,153  for the year  ended
December 31, 2004 was primarily due to general accounting cost increases.

                                       13
<PAGE>

     The  decrease  in other  expenses of $23,722 and $2,295 for the years ended
December  31,  2005  and  2004  was  primarily  due to the  reduction  in  costs
associated with the upkeep of existing real estate  properties held for sale. In
2005 the upkeep cost was $8,507 as compared to $32,077 in 2004.

     As of September 2, 1989, the date the offering of the Partnership's limited
partner Units was formally  closed,  the Partnership had sold 97,725.94  limited
partner Units and its  contributed  capital  totaled  $9,772,594 of the approved
$12,000,000  issue,  in Units of $100 each. On December 31, 2005 the net capital
of limited and general partners totaled $6,356,507.

     The  Partnership  began funding loans in October  1987.  The  Partnership's
secured  loans  outstanding  as  of  December  31,  2005,  2004  and  2003  were
$2,021,973,  $5,225,128 and $5,255,620,  respectively. The average loan balances
over this time period have remained relatively stable until November,  2005 when
two  loans  totaling  $3,060,100  were paid off and the loan  portfolio  balance
reduced to $2,021,973.  The cash from these loan pay-offs will primarily be used
to make investments in new loan opportunities. It may take a number of months to
find and select appropriate loan investments.  The Partnership  utilized income,
loan pay offs and proceeds from the sale of real estate held for sale properties
to meet limited partner capital  liquidations and make additional loans.  During
the years ended December 31, 2005, 2004 and 2003 loan principal  collections and
sale proceeds of the properties exceeded limited partner liquidations.

     In 2005 the Partnership  funded  $1,858,250 in new loans versus pay-offs of
$5,061,405.  The  Partnership  was  unable  to  immediately  invest in excess of
$3,000,000  in loan proceeds  received  from two loans in late 2005.  Therefore,
loans  funded  in 2005  appear  substantially  less than  loan  pay-offs.  It is
anticipated the cash held by the Partnership  generated from these loan pay-offs
will be invested in 2006.  Loan balances  decreased by  $3,203,155  (61.30%) and
$30,492 (0.58%) in 2005 and 2004, respectively.

     The Partnership's operating results and delinquencies are within the normal
range of the general  partners'  expectations,  based upon their  experience  in
managing  similar  partnerships  over the last twenty years.  Foreclosures are a
normal aspect of Partnership operations and the general partners anticipate that
they will not have a material effect on liquidity.

     Cash is continually being generated from interest  earnings,  late charges,
prepayment  penalties,  amortization  of  principal,  proceeds from sale of real
estate  held and loan  pay-offs.  Currently,  this  amount  exceeds  Partnership
expenses   and   earnings  and  partner   liquidation   requirements.   As  loan
opportunities become available,  excess cash and available funds are invested in
new loans.

     Allowance for Losses.

     The general partners periodically review the loan portfolio,  examining the
status of delinquencies,  the underlying  collateral  securing these loans, real
estate held for sale expenses, sales activities,  and borrower's payment records
and other data  relating  to the loan  portfolio.  Data on the local real estate
market and on the  national and local  economy are studied.  Based upon this and
other  information,  the  allowance  for loan losses is increased or  decreased.
Borrower  foreclosures  are a  normal  aspect  of  Partnership  operations.  The
Partnership  is not a credit  based lender and hence while it reviews the credit
history  and income of  borrowers,  and if  applicable,  the income  from income
producing properties,  the general partners expect that we will on occasion take
back real estate  security.  During  2004 and 2005 the economy and the  Northern
California  real  estate  market has  strengthened.  At  December  31,  2005 the
Partnership  had no loans past due 90 days or more in interest  payments.  As of
December 31, 2005 the Partnership has two loans which are making current monthly
payments but are 90 days or more past maturity. These past maturity loans have a
principal  balance of $174,432.  The Partnership does not have any filed notices
of default,  which would begin the foreclosure process at December 31, 2005. The
Partnership  occasionally  enters into workout agreements with borrowers who are
past maturity or delinquent in their regular  payments.  The  Partnership had no
workout  agreements  as of December 31,  2005.  Typically,  a workout  agreement
allows the borrower to extend the maturity  date of the balloon  payment  and/or
allows the borrower to make current monthly payments while deferring for periods
of time,  past  due  payments,  or  allows  time to pay the loan in full.  These
workout agreements and foreclosures generally exist within our loan portfolio to
greater or lesser  degrees,  depending  primarily  on the health of the economy.
Management  expects the number of foreclosures and workout  agreements will rise
during  difficult times and conversely  fall during good economic  times.  These
workouts and  delinquencies  have been considered when management  arrived at an
appropriate  allowance  for  loan  losses  and  based  on  our  experience,  are
reflective of our loan marketplace  segment.  Because of the number of variables
involved,  the magnitude of possible swings and the general partners'  inability
to control many of these  factors,  actual  results may and do sometimes  differ
significantly from estimates made by the general partners.

                                       14
<PAGE>

     As of December 31, 2005, 2004 and 2003 the  Partnership's  real estate held
for sale  balance was  $130,215,  $128,902  and  $1,312,773,  respectively.  The
decrease in the real estate held for sale balance of  $1,183,871  from  December
31,  2003 to  December  31,  2004 was due to the sale of two of the  properties.
During  2002,  the  Partnership  took back one piece of real  estate  collateral
through  foreclosure.  The Partnership,  together with other  partnerships,  all
affiliates of the general  partners,  owned the  property.  The property was a 4
unit condominium  complex.  During the year 2003,  renovation work was completed
and the  property  was  placed on the  market  for sale.  A  purchase  offer was
accepted and the escrow closed in March, 2004. The Partnership  sustained a loss
of approximately $5,800, which had been anticipated and reserved for. In October
2004, the Partnership  sold another real estate held for sale property at a loss
of  approximately   $778,500  which  was  previously  fully  reserved  for.  The
Partnership has not taken back any collateral security from borrowers in 2004 or
2005. The  Partnership's  real estate held for sale inventory was reduced to one
property.  This remaining  property is an undeveloped piece of land. The land is
located in East Palo Alto, California.  The Partnership has held its interest in
this  land  since  April,  1993.  The land is owned  with two  other  affiliated
partnerships.   The  general   partners  believe  that  the  property  is  worth
considerably more than its net investment, but it may take a considerable amount
of  additional  time to sell the  property and realize its full  potential.  The
property is unique in that it may only be utilized for  commercial or industrial
uses.  Until  recently,  land sales activity had been slow, but interest in land
sales for commercial sites has been increasing.

     Management recorded ($1,685) and $35,886 as  (recovery)/provision  for loan
losses  for the year  ended  December  31,  2005 and 2004,  respectively.  As of
December 31, 2005, the allowance for loan losses totaling $315,379 is considered
to be adequate.  The Partnership may restructure loans. This is done through the
modification  of an existing  loan or by  re-writing a whole new loan.  It could
involve,  among other  changes,  an extension  in maturity  date, a reduction in
repayment  amount, a reduction in interest rate, or granting an additional loan.
In 2002, the Partnership  restructured  four previously  impaired loans into two
new loans with a lower interest rate. The amount  restructured  was  $3,060,100.
These two  restructured  loans were paid off in  November,  2005.  During  2002,
Redwood Mortgage Corp.  provided an indemnity to the Partnership  whereby it has
agreed to indemnify  and hold  harmless,  the  Partnership  from any expenses or
losses (in excess of the then established  reserves) incurred by the Partnership
with respect to these four restructured loans. Two of these four loans have been
paid off and a partial paydown has also been received against the other two. The
balance remaining is fully reserved for in the Partnership's  allowance for loan
losses.

     Borrower Liquidity and Capital Resources.

     The Partnership  relies upon loan payoffs and borrowers'  mortgage payments
for the  source  of funds  for  loans.  Over the past  several  years,  mortgage
interest rates have decreased  somewhat from those available at the inception of
the Partnership. If interest rates were to increase substantially,  the yield of
the  Partnership's   loans  may  provide  lower  yields  than  other  comparable
debt-related investments.  Additionally,  since the Partnership has historically
made  primarily  fixed rate loans,  if interest  rates were to rise,  the likely
result would be a slower prepayment rate for the Partnership. This could cause a
lower  degree  of  liquidity  as  well  as a  slowdown  in  the  ability  of the
Partnership to invest in loans at the then current  interest rates.  Conversely,
in the  event  interest  rates  were  to  decline,  the  Partnership  could  see
significant borrower prepayments,  which, if the Partnership can only obtain the
then existing lower rates of interest may cause a dilution of the  Partnership's
yield on loans, thereby lowering the Partnership's  overall yield to the limited
partners. Cash is constantly being generated from borrower payments of interest,
principal and loan payoffs.  Currently,  cash flow exceeds Partnership  expenses
and earnings distribution requirements.

     At the time of subscription to the Partnership, limited partners must elect
either to receive  monthly,  quarterly  or annual  cash  distributions  from the
Partnership,  or to compound earnings in their capital account. If one initially
elects to receive  monthly,  quarterly or annual  distributions,  such election,
once made, is irrevocable.  Earnings  allocable to limited partners who elect to
compound earnings in their capital account,  will be retained by the Partnership
for making  further  loans or for other proper  Partnership  purposes,  and such
amounts will be added to such limited partners' capital accounts.

     For the years ended December 31, 2005, 2004 and 2003 the  Partnership  made
distributions  of  earnings  to  limited  partners  of  $146,271,  $120,015  and
$115,254,  respectively.  Distribution  of earnings to limited  partners for the
years  ended  December  31,  2005,  2004 and 2003 to limited  partners'  capital
accounts and not withdrawn was $238,253, $223,665 and $214,531, respectively. As
of  December  31,  2005,  2004 and 2003  limited  partners  electing to withdraw
earnings  represented 40%, 34% and 35%,  respectively,  of the limited partners'
outstanding  capital  accounts.  This percentage  range has remained  relatively
stable.

                                       15
<PAGE>

     The Partnership  also allows the limited partners to withdraw their capital
account subject to certain limitations and penalties (see liquidation provisions
of Partnership Agreement).  For the years ended December 31, 2005, 2004 and 2003
$30,322, $142,997 and $93,770, respectively,  were liquidated subject to the 10%
and/or 8%  penalty  for early  withdrawal.  These  withdrawals  are  within  the
normally  anticipated  range that the  general  partners  would  expect in their
experience in this and other  partnerships.  The general  partners expect that a
small  percentage  of limited  partners  will elect to liquidate  their  capital
accounts  over one  year  with a 10%  and/or  8% early  withdrawal  penalty.  In
originally  conceiving the  Partnership,  the general partners wanted to provide
limited   partners  needing  their  capital  returned  a  degree  of  liquidity.
Generally, limited partners electing to withdraw over one year need to liquidate
investments  to raise  cash.  The  demand the  Partnership  is  experiencing  in
withdrawals  by  limited  partners  electing  a  one  year  liquidation  program
represents  a small  percentage  of limited  partner  capital as of December 31,
2005, 2004 and 2003,  respectively,  and is expected by the general  partners to
commonly occur at these levels.

     Additionally,  for the  years  ended  December  31,  2005,  2004  and  2003
$281,232,  $247,103  and  $297,479,  respectively,  were  liquidated  by limited
partners who have elected a  liquidation  program over a period of five years or
longer.  Once the initial five-year hold period has passed, the general partners
expect to see an increase in liquidations due to the ability of limited partners
to  withdraw  without  penalty.  This  ability to  withdraw  after five years by
limited  partners has the effect of providing  limited  partner  liquidity.  The
general  partners expect a portion of the limited  partners to take advantage of
this  provision.  This has the anticipated  effect of the  Partnership  growing,
primarily  through  reinvestment  of  earnings in years one  through  five.  The
general partners expect to see increasing numbers of limited partner withdrawals
in years five through eleven,  at which time the bulk of those limited  partners
who have  sought  withdrawal  will  have been  liquidated.  After  year  eleven,
liquidation generally subsides.

     Actual  liquidation  of both capital and earnings for the three years ended
December 31, 2005 was:

                                           Years ended December 31,
                            ---------------------------------------------------

                                 2005               2004              2003
                            --------------    ---------------    --------------
         Earnings             $   146,271       $    120,015       $   115,254
         Capital*                 311,554            390,100           391,249
                            --------------    ---------------    --------------

         Total                $   457,825       $    510,115       $   506,503
                            ==============    ===============    ==============

     *These amounts represent gross of early withdrawal penalties.

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

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

                                       16
<PAGE>

     Current Economic Conditions.

     During 2005, the United States  economy as a whole  performed  well.  Gross
Domestic Product estimates for 2005 of 3.5% show a slight slowdown from the 4.2%
Gross Domestic  Product of 2004.  The United States average annual  unemployment
rate for 2005 was 4.9% and has trended downward throughout 2005. Regionally, the
San Francisco Bay Area  demonstrated  a very similar  unemployment  rate with an
average annual  unemployment rate of 5.1% for 2005 down 0.9% from 2004. The rate
of inflation concerns many with energy costs having risen significantly over the
last year. The consumer price index rose 3.4% in 2005 compared to 3.3% for 2004.
These  statistics  indicate an economy that is continuing to grow, which is good
for both mortgage  lenders and the real estate industry as a whole.  The 10 year
treasury rate is hovering around 4.5% at year end but is expected to increase in
the future.  Should this occur,  real estate  markets may slow due to the higher
costs of money.

     The Partnership makes loans primarily in Northern  California.  As such the
regional  real estate  market is of primary  concern to the  Partnership.  As of
December 31, 2005,  approximately  73.13%  ($1,478,632) of the loans held by the
Partnership were in three San Francisco Bay Area Counties.  The remainder of the
loans held was secured  primarily by Northern  California real estate outside of
the San Francisco Bay Area.

     In general,  California  residential real estate continued to appreciate in
value during 2005.  In  California  the median price of a single  family home in
December,  2005 was $548,430  which was 15.6% higher than in December,  2004. In
the nine county San Francisco Bay Area, the median price of a single-family home
in  December,   2005  was  $633,000  14.3%  above  the  December,   2004  median
single-family home sales price of $554,000.  The total sales volumes, the number
of homes sold,  has  recently  been  declining.  This slow down in the number of
homes sold has not significantly  impacted  residential  sales prices.  Mortgage
interest  rates for both  fixed and  adjustable  rate  loans  have been  rising,
decreasing  housing  affordability.  Rising interest rates and decreasing  sales
volumes will likely slow down the rate of housing appreciation we have seen over
the last two years.  Nonetheless,  a strong  residential real estate marketplace
exists and as such  increases  lending  opportunities  and assists in  providing
adequate equity to help repay mortgage debt should borrowers  become  delinquent
in their payments.

     Commercial real estate in the San Francisco Bay Area continued its rebound.
Occupancy rates and rents increased  during 2005 in most markets  throughout the
San Francisco  Bay Area.  CB Richard  Ellis  reports that San Francisco  Class A
office rents averaged $34.54,  up from $32.52 in 2004 and that vacancy decreased
from  15.4% in 2004 to  approximately  12% in 2005.  The San  Francisco  leasing
market  absorbed an estimated 1.5 million  square feet net during 2005 according
to Grubb and Ellis. Sales of San Francisco commercial office buildings are brisk
with record per square foot prices being attained and 2005 being a record volume
sales year (Grubb & Ellis Research  Fourth  Quarter 2005). A healthy  commercial
real estate  market  increases  lending  opportunities  and assists in providing
adequate  equity to repay mortgage debt should  borrowers  become  delinquent in
their payments.

     For Partnership  loans outstanding as of December 31, 2005, the Partnership
had an average loan to value ratio of 65.95%, computed based on appraised values
and  senior  liens as of the date the loan was made.  This  percentage  does not
account for any  increases or  decreases  in property  values since the date the
loan was  made,  nor does it  include  any  reductions  in  principal  on senior
indebtedness   through  amortization  of  payments  after  the  loan  was  made.
Management  expects  this loan to value  ratio will  assist the  Partnership  in
weathering loan delinquencies and foreclosures should they eventuate.

     Contractual Obligations Table. - None

                                       17
<PAGE>

     Item 7a - Quantitative and Qualitative Disclosures About Market Risk

     The  following  table  contains  information  about  the cash held in money
market accounts,  and loans held in the  Partnership's  portfolio as of December
31, 2005. The  presentation,  for each category of  information,  aggregates the
assets and liabilities by their maturity dates for maturities  occurring in each
of the years 2006 through 2010 and separately aggregates the information for all
maturities  arising  after  2010.  The  carrying  values  of  these  assets  and
liabilities approximate their fair values as of December 31, 2005:
<TABLE>
<S>                                  <C>         <C>         <C>         <C>         <C>       <C>              <C>
                                     2006        2007        2008        2009        2010      Thereafter       Total
                               ------------------------------------------------------------------------------------------
Interest earning assets:
Money market accounts            $4,348,435                                                                   $4,348,435
Average interest rate                 1.50%                                                                        1.50%
Loans secured by deeds
   of trust                      $  424,432     144,069     400,000     272,394     781,078         -         $2,021,973
Average interest rate                 9.12%      10.50%       8.50%       9.25%       9.25%         -              9.16%
</TABLE>

     Market Risk.

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

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

     PORTFOLIO  REVIEW - For the years ended  December 31,  2005,  2004 and 2003

     Loan Portfolio

     The Partnership's  loan portfolio  consists primarily of short-term (one to
five years),  fixed rate loans secured by real estate.  As of December 31, 2005,
2004 and 2003 the  Partnership's  loans secured by real  property  collateral in
four of the six San Francisco Bay Area counties (San Francisco, San Mateo, Santa
Clara and Alameda) represented $1,478,632 (73%), $4,632,774 (89%) and $4,905,347
(93%), respectively, of the outstanding secured loan portfolio. The remainder of
the  portfolio  represented  loans secured by real estate  located  primarily in
Northern California.

                                       18
<PAGE>

     As of December 31, 2005,  2004 and 2003 the  Partnership  held 9, 14 and 16
secured loans, respectively, in the following categories:
<TABLE>
<S>                              <C>                <C>         <C>                <C>          <C>                <C>
                                                                      December 31,
                                ------------------------------------------------------------------------------------------
                                           2005                           2004                           2003
                                ---------------------------    ---------------------------     ---------------------------

   Single family (1-4 units)     $1,703,472         84.25%      $1,316,596         25.20%       $1,505,710         28.65%
   Apartments (5+ units)                  -              -          96,716          1.85%          136,841          2.60%
   Commercial                       318,501         15.75%       3,811,816         72.95%        3,613,069         68.75%
                                ------------    -----------    ------------    -----------     ------------     ----------

   Total                         $2,021,973        100.00%      $5,225,128        100.00%       $5,255,620        100.00%
                                ============    ===========    ============    ===========     ============     ==========
</TABLE>


     As of December 31, 2005, the  Partnership  held 9 loans secured by deeds of
trust. The following table sets forth the priorities,  asset  concentrations and
maturities of the loans held by the Partnership as of December 31, 2005:


            PRIORITIES, ASSET CONCENTRATIONS AND MATURITIES OF LOANS
                             As of December 31, 2005
<TABLE>
<S>    <C>                                            <C>                 <C>              <C>
                                                      # of Loans          Amount           Percent
                                                     ------------     --------------    -------------

       1st Mortgages                                           5       $    810,359              40%
       2nd Mortgages                                           4          1,211,614              60%
                                                     ============     ==============    =============
               Total                                           9         $2,021,973             100%

       Maturing 12/31/06 and prior                             3       $    424,432              21%
       Maturing prior to 12/31/07                              1            144,069               7%
       Maturing prior to 12/31/08                              1            400,000              20%
       Maturing after 12/31/08                                 4          1,053,472              52%
                                                     ============     ==============    =============
                Total                                          9       $  2,021,973             100%

       Average Loan                                                    $    224,664           11.11%
       Largest Loan                                                         532,131           26.32%
       Smallest Loan                                                         30,536            1.51%
       Average Loan-to-Value, based upon appraisals
        and senior liens at date of inception of loan                                         65.95%
</TABLE>

     The  Partnership's  largest  loan  in  the  principal  amount  of  $532,131
represents 26.32% of outstanding  secured loans and 8.36% of Partnership assets.
Larger loans can sometimes  represent  over 10% of the secured loan portfolio or
Partnership assets as these amounts decrease due to limited partner  withdrawals
and loan payoffs and also as a result of the  restructuring  several  loans into
one loan.


     ASSET QUALITY

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

                                       19
<PAGE>

     The conclusion that a loan may become  uncollectible,  in whole or in part,
is  a  matter  of  judgment.  Although  institutional  lenders  are  subject  to
requirements and regulations  that, among other things,  require them to perform
ongoing analyses of their portfolios,  loan-to-value ratios, reserves, etc., and
to obtain and maintain  current  information  regarding  their borrowers and the
securing properties, the Partnership is not subject to these regulations and has
not  adopted  certain of these  practices.  Rather,  the  general  partners,  in
connection  with  the  periodic  closing  of  the  accounting   records  of  the
Partnership and the preparation of the financial  statements,  determine whether
the allowance for loan losses is adequate to cover  potential loan losses of the
Partnership.  As of December 31, 2005 the general  partners have determined that
the allowance  for loan losses of $315,379  (4.96% of net assets) is adequate in
amount. Because of the number of variables involved, the magnitude of the swings
possible and the general  partners'  inability to control many of these factors,
actual results may and do sometimes differ  significantly from estimates made by
the general  partners.  As of December 31, 2005, there were two loans matured 90
days or more  totaling  $174,432,  but no  loans  were  delinquent  in  interest
payments or principal over 90 days.

     The  Partnership may also make loans requiring  periodic  disbursements  of
funds.  These loans include  ground up  construction  of buildings and loans for
rehabilitation  of existing  structures.  Interest on these loans is computed at
simple interest method and only on the amounts disbursed on a daily basis. As of
December 31, 2005 there were no such loans.


     Item 8 - Financial Statements and Supplementary Data

     A - Financial Statements

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

     o Report of Independent Registered Public Accounting Firm
     o Balance Sheets - December 31, 2005 and 2004
     o Statements of Income for the years ended December 31, 2005, 2004 and 2003
     o Statements of Changes in Partners'  Capital for the years ended  December
       31, 2005, 2004 and 2003
     o Statements of Cash Flows for the years ended December 31, 2005,  2004 and
       2003
     o Notes to Financial Statements

     B - Financial Statement Schedules

     The following  financial  statement schedules of Redwood Mortgage Investors
VI are included in Item 8:

     o Schedule II - Valuation and Qualifying Accounts
     o Schedule IV - Mortgage Loans on Real Estate

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

                                       20
<PAGE>







                          REDWOOD MORTGAGE INVESTORS VI
                       (A CALIFORNIA LIMITED PARTNERSHIP)
                              FINANCIAL STATEMENTS
                          AND SUPPLEMENTAL INFORMATION
                        AS OF DECEMBER 31, 2005 AND 2004
                         AND FOR EACH OF THE THREE YEARS
                      IN THE PERIOD ENDED DECEMBER 31, 2005













                                       21
<PAGE>






                                TABLE OF CONTENTS

                                                                    Page No.
                                                                ---------------

Report of Independent Registered Public Accounting Firm                23

Balance Sheets                                                         24

Statements of Income                                                   25

Statements of Changes in Partners' Capital                             26

Statements of Cash Flows                                               27

Notes to Financial Statements                                          28

Supplemental Schedules

Schedule II -  Valuation and Qualifying Accounts                       39

Schedule IV - Mortgage Loans on Real Estate                            40
  Rule 12-29 Loans on Real Estate






                                       22
<PAGE>

                              ARMANINO McKENNA LLP
                          CERTIFIED PUBLIC ACCOUNTANTS
                         12667 Alcosta Blvd., Suite 500
                               San Ramon, CA 94583
                                 (925) 790-2600




             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Partners
Redwood Mortgage Investors VI
Redwood City, California


     We have  audited  the  accompanying  balance  sheets  of  Redwood  Mortgage
Investors VI (a California limited partnership) as of December 31, 2005 and 2004
and the related  statements  of income,  changes in  partners'  capital and cash
flows for each of the three years in the period ended  December 31, 2005.  These
financial  statements are the  responsibility of Redwood Mortgage Investors VI's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

     We  conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable  assurance about whether the
financial  statements  are  free  of  material  misstatement.  Redwood  Mortgage
Investors VI is not required to have,  nor were we engaged to perform,  an audit
of  its  internal  control  over  financial   reporting.   Our  audits  included
consideration  of  internal  control  over  financial  reporting  as a basis for
designing audit  procedures that are appropriate in the  circumstances,  but not
for the  purpose  of  expressing  an  opinion  on the  effectiveness  of Redwood
Mortgage Investors VI's internal control over financial reporting.  Accordingly,
we express no such opinion. An audit also includes  examining,  on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material  respects,  the financial position of Redwood Mortgage Investors
VI as of December  31, 2005 and 2004 and the results of its  operations  and its
cash flows for each of the three years in the period ended  December 31, 2005 in
conformity with accounting principles generally accepted in the United States of
America.

     Our  audits  were  conducted  for the  purpose of forming an opinion on the
basic financial  statements taken as a whole.  Schedules II and IV are presented
for purposes of  additional  analysis  and are not a required  part of the basic
financial  statements.  Such  information  has been  subjected  to the  auditing
procedures  applied in the audits of the basic financial  statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.


                                                     ARMANINO McKENNA  LLP
San Ramon, California
March 3, 2006


                                       23
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                 Balance Sheets
                           December 31, 2005 and 2004

                                     ASSETS
<TABLE>
<S>   <C>                                                                           <C>               <C>
                                                                                    2005              2004
                                                                               --------------    --------------

      Cash and cash equivalents                                                  $ 4,361,983       $ 1,090,027
                                                                               --------------    --------------

      Loans
        Loans, secured by deeds of trust                                           2,021,973         5,225,128
        Loans, unsecured, net of discount of $107,034 and $93,822 in 2005
          and 2004, respectively                                                     144,098           261,276
        Allowance for loan losses                                                  (315,379)         (315,751)
                                                                               --------------    --------------
            Net loans                                                              1,850,692         5,170,653
                                                                               --------------    --------------

      Interest and other receivables
        Accrued interest and late fees                                                22,138            61,364
        Advances on loans                                                                 51             2,890
                                                                               --------------    --------------
            Total interest and other receivables                                      22,189            64,254
                                                                               --------------    --------------

      Real estate held for sale, net                                                 130,215           128,902
                                                                               --------------    --------------

            Total assets                                                         $ 6,365,079       $ 6,453,836
                                                                               ==============    ==============
</TABLE>


                        LIABILITIES AND PARTNERS' CAPITAL
<TABLE>
<S>   <C>                                                                        <C>               <C>
      Liabilities
        Accounts payable                                                         $         -       $    11,487
        Payable to affiliate                                                           8,572            12,541
                                                                               --------------    --------------
            Total liabilities                                                          8,572            24,028
                                                                               --------------    --------------

      Partners' capital
        Limited partners' capital, subject to redemption                           6,346,746         6,420,047
        General partners' capital                                                      9,761             9,761
                                                                               --------------    --------------
            Total partners' capital                                                6,356,507         6,429,808
                                                                               --------------    --------------

            Total liabilities and  partners' capital                             $ 6,365,079       $ 6,453,836
                                                                               ==============    ==============
</TABLE>





    The accompanying notes are an integral part of these financial statements



                                       24
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                              Statements of Income
                           December 31, 2005 and 2004

<TABLE>
<S>                                                                         <C>            <C>             <C>
                                                                            2005           2004            2003
                                                                         -----------    ------------    -----------
Revenues
    Interest on loans                                                     $ 489,908       $ 490,786      $ 455,850
    Interest - interest bearing accounts                                     16,750           5,515          3,080
    Late fees, prepayment penalties and fees                                 15,624          42,436         32,710
                                                                         -----------    ------------    -----------
                                                                            522,282         538,737        491,640
                                                                         -----------    ------------    -----------

Expenses
    Mortgage servicing fees                                                  56,508          50,160         48,759
    Asset management fees                                                    12,031           8,160          8,427
    Clerical costs from Redwood Mortgage Corp.                                9,212          12,799         17,025
    Provisions for (recovery of) losses on loans
     and real estate held for sale                                          (1,685)          35,886          4,585
    Professional services                                                    41,706          44,756         37,603
    Other                                                                    16,102          39,824         42,125
                                                                         -----------    ------------    -----------
                                                                            133,874         191,585        158,524
                                                                         -----------    ------------    -----------

Net income                                                                $ 388,408       $ 347,152      $ 333,116
                                                                         ===========    ============    ===========

Net income
    General partners (1%)                                                 $   3,884       $   3,472      $   3,331
    Limited partners (99%)                                                  384,524         343,680        329,785
                                                                         -----------    ------------    -----------

                                                                          $ 388,408       $ 347,152      $ 333,116
                                                                         ===========    ============    ===========

Net income per $1,000 invested by limited partners for entire period
    Where income is reinvested                                            $      62       $      54      $      50
    Where partner receives income in monthly distributions                $      60       $      53      $      49
</TABLE>







    The accompanying notes are an integral part of these financial statements


                                       25
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                   Statements of Changes in Partners' Capital
              For the Years Ended December 31, 2005, 2004 and 2003

<TABLE>
<S>    <C>                                                        <C>              <C>                <C>
                                                                  Limited          General
                                                                  Partners         Partners           Total
                                                               --------------    -------------    --------------

       Balances at December 31, 2002                             $ 6,763,200       $    9,766       $ 6,772,966

       Net income                                                    329,785            3,331           333,116

       Early withdrawal penalties                                    (7,502)                -           (7,502)

       Partners' withdrawals                                       (499,001)          (3,336)         (502,337)
                                                               --------------    -------------    --------------

       Balances at December 31, 2003                               6,586,482            9,761         6,596,243

       Net income                                                    343,680            3,472           347,152

       Early withdrawal penalties                                   (10,801)                -          (10,801)

       Partners' withdrawals                                       (499,314)          (3,472)         (502,786)
                                                               --------------    -------------    --------------

       Balances at December 31, 2004                               6,420,047            9,761         6,429,808

       Net income                                                    384,524            3,884           388,408

       Early withdrawal penalties                                    (2,256)                -           (2,256)

       Partners' withdrawals                                       (455,569)          (3,884)         (459,453)
                                                               --------------    -------------    --------------

       Balances at December 31, 2005                             $ 6,346,746       $    9,761       $ 6,356,507
                                                               ==============    =============    ==============
</TABLE>








    The accompanying notes are an integral part of these financial statements



                                       26
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                            Statements of Cash Flows
              For the Years Ended December 31, 2005, 2004 and 2003

<TABLE>
<S>  <C>                                                                  <C>               <C>                <C>
                                                                          2005              2004               2003
                                                                      --------------    --------------    --------------
     Cash flows from operating activities
       Net income                                                       $   388,408       $   347,152       $   333,116
       Adjustments to reconcile net income to
         net cash provided by operating activities
          Provision (recovery) for loan losses
           and real estate                                                  (1,685)            35,886             4,585
          Early withdrawal penalties credited to income                     (2,256)          (10,801)           (7,502)
          Change in discount on unsecured loans                              13,212          (18,765)          (18,765)
          Change in operating assets and liabilities
             Loans, unsecured                                               103,966              (49)                 0
             Accrued interest and late fees                                  39,226           (6,802)             6,822
             Advances on loans                                                2,839             1,201            26,916
             Accounts payable                                              (11,487)           (1,577)             1,111
             Payable to affiliate                                           (3,969)                45           (2,147)
                                                                      --------------    --------------    --------------
     Net cash provided by operating activities                              528,254           346,290           344,136
                                                                      --------------    --------------    --------------

     Cash flows from investing activities
       Principal collected on loans                                       5,061,405           899,907         1,564,808
       Loans originated                                                 (1,858,250)         (869,415)       (1,637,342)
       Payments on real estate held for sale                                      -                 -          (78,232)
       Proceeds from disposition of real estate                                   -         1,183,871                 -
                                                                      --------------    --------------    --------------
     Net cash provided by (used in) investing activities                  3,203,155         1,214,363         (150,766)
                                                                      --------------    --------------    --------------

     Cash flows from financing activities
       Partners' withdrawals                                              (459,453)         (502,786)         (502,337)
                                                                      --------------    --------------    --------------

     Net increase (decrease) in cash and cash equivalents                 3,271,956         1,057,867         (308,967)

     Cash and cash equivalents at beginning of year                       1,090,027            32,160           341,127
                                                                      --------------    --------------    --------------

     Cash and cash equivalents at end of year                           $ 4,361,983       $ 1,090,027       $    32,160
                                                                      ==============    ==============    ==============
</TABLE>





    The accompanying notes are an integral part of these financial statements


                                       27
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     1. Organization and General

     Redwood Mortgage  Investors VI (the  "Partnership"),  a California  Limited
Partnership, was organized in 1987. The general partners are Michael R. Burwell,
an individual, and Gymno Corporation, a California corporation.  The Partnership
was organized to engage in business as a mortgage lender for the primary purpose
of making loans secured by deeds of trust on California  real estate.  Loans are
being  arranged  and  serviced by Redwood  Mortgage  Corp.,  an affiliate of the
general partners.

     The  Partnership  is scheduled  to  terminate on December 31, 2027,  unless
sooner terminated as provided in the Partnership Agreement.


     2. Summary of Significant Accounting Policies

     Management estimates

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

     Loans, secured by deeds of trust

     Loans generally are stated at their  outstanding  unpaid principal  balance
with interest thereon being accrued as earned.

     If the probable  ultimate  recovery of the carrying  amount of a loan, with
due  consideration  for the fair value of  collateral,  is less than amounts due
according to the contractual  terms of the loan agreement,  and the shortfall in
the  amounts  due are not  insignificant,  the  carrying  amount  of the loan is
reduced  to the  present  value of future  cash flows  discounted  at the loan's
effective interest rate. If a loan is collateral dependent,  it is valued at the
estimated fair value of the related collateral.

     If events and or changes in circumstances  cause management to have serious
doubts  about the  collectibility  of the  contractual  payments,  a loan may be
categorized  as impaired  and  interest  is no longer  accrued.  Any  subsequent
payments on impaired loans are applied to reduce the outstanding  loan balances,
including  accrued  interest and advances.  At December 31, 2004,  there was one
loan  categorized as impaired by the Partnership for $96,716.  The impaired loan
had accrued interest,  late charges and advances totaling $6,936 at December 31,
2004.  There were no loans  categorized as impaired as of December 31, 2005. The
average  recorded  investment in impaired  loans was $48,358 and $96,716 for the
years ended December 31, 2005 and 2004, respectively.

     At December 31, 2005 and 2004, the Partnership had two and three loans past
maturity  or  past  due 90  days or more  in  interest  payments  or  principal,
including   one  impaired  loan  in  2004,   totaling   $174,432  and  $272,581,
respectively.  In addition, accrued interest, late charges and advances on these
loans  totaled $0 and $4,249 at December  31, 2005 and 2004,  respectively.  The
Partnership  does not  consider  any of the 2005 and two of the 2004 loans to be
impaired because there is sufficient  collateral to cover the amount outstanding
to the Partnership,  and is still accruing  interest on these loans. At December
31, 2005 and 2004,  as presented in Note 8, the average loan to appraised  value
of security based upon appraised  values and prior  indebtedness at the time the
loans  were  consummated  was 65.95%  and  79.67%  respectively.  When loans are
considered  impaired,  the  allowance  for loan losses is updated to reflect the
change in the valuation of  collateral  security.  However,  a low loan to value
ratio tends to minimize reductions for impairment.

                                       28
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     2. Summary of Significant Accounting Policies (continued)

     Allowance for loan losses

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

     The composition of the allowance for loan losses was as follows:
<TABLE>
<S>                                             <C>             <C>                <C>            <C>
                                                      December 31,                       December 31,
                                              ------------------------------    -------------------------------
                                                          2005                               2004
                                              ------------------------------    -------------------------------
                                                                Percent of                        Percent of
                                                                 loans in                          loans in
                                                                   each                              each
                                                                 category                          category
                                                                 to total                          to total
                                                Amount            loans            Amount           loans
                                             --------------    -------------    -------------    -------------
Balance at End of Year
Applicable to:
--------------------------------------------
Domestic
   Real estate - mortgage
     Single family (1-4 units)                 $   138,375           84.25%       $    9,875           25.20%
     Apartments                                          -                -            3,385            1.85%
     Commercial                                     32,906           15.75%           41,264           72.95%
     Land                                                -                -                -                -
                                             --------------    -------------    -------------    -------------
        Total real estate - mortgage           $   171,281             100%       $   54,524             100%
                                             ==============    =============    =============    =============

   Unsecured loans                             $   144,098             100%       $  261,227             100%
                                             --------------    -------------    -------------    -------------
        Total unsecured loans                  $   144,098             100%       $  261,227             100%
                                             ==============    =============    =============    =============

        Total allowance for losses             $   315,379             100%       $  315,751             100%
                                             ==============    =============    =============    =============
</TABLE>






                                       29
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     2. Summary of Significant Accounting Policies (continued)

     Allowance for loan losses (continued)

     Activity in the allowance for loan losses is as follows:
<TABLE>
<S>                                                         <C>               <C>                 <C>
                                                                     Years Ended December 31,
                                                        ---------------------------------------------------
                                                            2005              2004                2003
                                                        --------------    --------------     --------------
Balance at beginning of year                              $   315,751       $   279,865        $   275,294


Charge-offs
  Domestic
     Real estate - mortgage
        Single family (1-4 units)                                   -                 -                   -
        Apartments                                                  -                 -                (14)
        Commercial                                                  -                 -                   -
        Land                                                        -                 -                   -
                                                        --------------    --------------     ---------------
                                                                    -                 -                (14)
                                                        --------------    --------------     ---------------
Recoveries
  Domestic
     Real estate - mortgage
        Single family (1-4 units)                                   -                 -                   -
        Apartments                                                  -                 -                   -
        Commercial                                                  -                 -                   -
        Land                                                        -                 -                   -
                                                        --------------    --------------     ---------------
                                                                    -                 -                   -
                                                        --------------    --------------     ---------------
Net charge-offs                                                     -                 -                (14)
                                                        --------------    --------------     ---------------
Additions/(recovery) charge to operations                     (1,685)            35,886               4,585
                                                        --------------    --------------     ---------------
Transfer from real estate held for sale reserve                 1,313                 -                   -
                                                        --------------    --------------     ---------------

Balance at end of year                                    $   315,379       $   315,751        $    279,865
                                                        ==============    ==============     ===============

Ratio of net charge-offs during the period
  to average secured loans outstanding
  during the period                                                0%                0%                .01%
                                                        ==============    ==============     ===============
</TABLE>




                                       30
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     2. Summary of Significant Accounting Policies (continued)

     Cash and cash equivalents

     The  Partnership  considers all highly liquid  financial  instruments  with
maturities  of  three  months  or  less  at the  time  of  purchase  to be  cash
equivalents.

     Real estate held for sale

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

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

     Income taxes

     No provision for federal and state income taxes, except for a minimum state
tax of $800,  is made in the  financial  statements  since  income taxes are the
obligation of the partners if and when income taxes apply.

     Net income per $1,000 invested

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

     Late fee revenue

     Late fees are generally  charged at 6% of the monthly  installment  payment
past due. During 2005, 2004 and 2003,  late fee revenue of $7,184,  $2,009,  and
$7,379, respectively, was recorded. The Partnership has a late fee receivable at
December 31, 2005 and 2004 of $978 and $2,356, respectively.

     Recently issued accounting pronouncements

     In June 2005,  the FASB  issued FAS No. 154,  Accounting  Changes and Error
Corrections,  a replacement of APB Opinion No. 20, Accounting Changes,  and FASB
No. 3,  Reporting  Accounting  Changes  in  Interim  Financial  Statements.  The
Statement applies to all voluntary changes in accounting principle,  and changes
the  requirements  for  accounting  for and  reporting of a change in accounting
principle.  FAS  154  requires  retrospective   application  to  prior  periods'
financial  statements of a voluntary change in accounting principle unless it is
impracticable.  It is effective for accounting changes and corrections of errors
made in fiscal years beginning after December 15, 2005.  Earlier  application is
permitted for  accounting  changes and  corrections  of errors made occurring in
fiscal years beginning  after June 1, 2005. The Partnership  does not expect the
effect of FAS 154 will have material impact on its financial statements.

                                       31
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     3. Other Partnership Provisions

     The Partnership is a California limited partnership. The rights, duties and
powers of the general and limited  partners of the  Partnership  are governed by
the limited  partnership  agreement and Sections 15611 et seq. of the California
Corporations Code.

     The general partners are in complete  control of the Partnership  business,
subject to the voting rights of the limited partners on specified  matters.  Any
one of the general  partners acting alone has the power and authority to act for
and bind the Partnership.

     A majority of the outstanding  limited  partnership  interests may, without
the permission of the general partners,  vote to: (i) terminate the Partnership,
(ii) amend the limited  partnership  agreement,  (iii) approve or disapprove the
sale of all or  substantially  all of the  assets  of the  Partnership  and (iv)
remove or replace one or all of the general partners.

     The approval of the majority of limited partners is required to elect a new
general partner to continue the Partnership business where there is no remaining
general  partner after a general  partner  ceases to be a general  partner other
than by removal.

     Election to receive monthly, quarterly or annual distributions

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

     Profits and losses

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

     Liquidity, capital withdrawals and early withdrawals

     There are substantial  restrictions on transferability of Partnership units
and accordingly an investment in the Partnership is non-liquid. Limited partners
had no right to withdraw from the  Partnership  or to obtain the return of their
capital  account for at least one year from the date of purchase of  Partnership
units.

     In order to provide a certain  degree of liquidity to the limited  partners
after the one-year  period,  limited  partners may withdraw all or part of their
capital accounts from the Partnership in four quarterly  installments  beginning
on the last day of the  calendar  quarter  following  the  quarter  in which the
notice of withdrawal is given,  subject to a 10% early withdrawal  penalty.  The
10% penalty is  applicable  to the amount  withdrawn  as stated in the notice of
withdrawal and will be deducted from the capital account.

                                       32
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     3. Other Partnership Provisions (continued)

     Liquidity, capital withdrawals and early withdrawals (continued)

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

     The Partnership will not establish a reserve from which to fund withdrawals
and,  accordingly,  the  Partnership's  capacity  to return a limited  partner's
capital  account is restricted to the  availability  of  Partnership  cash flow.
Furthermore,  no more than 20% of the total limited  partners'  capital accounts
outstanding at the beginning of any year shall be liquidated during any calendar
year.


     4. General Partners and Related Parties

     The  following  are  commissions  and fees  that  are  paid to the  general
partners and affiliates:

     Mortgage brokerage commissions

     For fees in connection with the review, selection, evaluation,  negotiation
and  extension of loans,  an  affiliate  of the general  partners may collect an
amount  equivalent  to 12%  of the  loaned  amount  until  6  months  after  the
termination  date  of  the  offering.  Thereafter,  loan  brokerage  commissions
(points) will be limited to an amount not to exceed 4% of the total  Partnership
assets per year. The loan brokerage  commissions are paid by the borrowers,  and
thus,  are not an  expense  of the  Partnership.  In 2005,  2004 and 2003,  loan
brokerage commissions paid by the borrowers were $52,248,  $24,156, and $42,407,
respectively.

     Mortgage servicing fees

     Monthly  mortgage  servicing  fees of up to 1/8 of 1% (1.5%  annual) of the
unpaid principal are paid to Redwood Mortgage Corp., an affiliate of the general
partners,  based on the unpaid principal balance of the loan portfolio,  or such
lesser amount as is reasonable  and customary in the  geographic  area where the
property  securing  the  mortgage  is  located.  Once a loan is  categorized  as
impaired, mortgage servicing fees are no longer accrued. Additional service fees
are  recorded  upon the receipt of any  subsequent  payments on impaired  loans.
Mortgage  servicing  fees of $56,508,  $50,160,  and $48,759,  were incurred for
2005,  2004 and 2003,  respectively.  The  Partnership  has a payable to Redwood
Mortgage Corp. for servicing fees of $8,572 and $12,541 at December 31, 2005 and
2004, respectively.

     Asset management fee

     The general  partners  receive monthly fees for managing the  Partnership's
loan  portfolio and operations of up to 1/32 of 1% of the "net asset value" (3/8
of 1%  annually).  Asset  management  fees of $12,031,  $8,160,  and $8,427 were
incurred for 2005, 2004 and 2003, respectively.

     Other fees

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

                                       33
<PAGE>

                         REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     4. General Partners and Related Parties (continued)

     Operating expenses

     Redwood  Mortgage Corp. is reimbursed by the  Partnership for all operating
expenses  incurred  by  it on  behalf  of  the  Partnership,  including  without
limitation,   out-of-pocket   general   and   administration   expenses  of  the
Partnership,  accounting  and audit fees,  legal fees and expenses,  postage and
preparation  of  reports  to  limited  partners.  During  2005,  2004 and  2003,
operating  expenses  totaling $9,212,  $12,799 and $17,025,  respectively,  were
reimbursed to Redwood Mortgage Corp.


     5. Real Estate Held for Sale

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

                                                   2005               2004
                                             ---------------    --------------

   Costs of properties                         $    130,215       $   130,215
   Reduction in value                                     -           (1,313)
                                             ---------------    --------------

       Real estate held for sale, net           $   130,215       $   128,902
                                             ===============    ==============


     6. Income Taxes

     The following  reflects a reconciliation  of partners' capital reflected in
the financial statements to the tax basis of Partnership capital:

                                                     2005              2004
                                                --------------   --------------

   Partners' capital per financial statements     $ 6,356,507      $ 6,429,808
   Allowance for loan losses and real estate          315,379           317,064
                                                --------------   --------------

       Partners' capital tax basis                $ 6,671,886      $ 6,746,872
                                                ==============   ==============

     In 2005 and 2004,  approximately  72% of taxable  income was  allocated  to
tax-exempt organizations (e.g., retirement plans). -


                                       34
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     7. Fair Value of Financial Instruments

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

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

     (b) Secured loans  carrying value was $2,021,973 and $5,225,128 at December
31, 2005 and 2004, respectively. The fair value of these loans of $2,078,582 and
$5,209,821,   respectively,  was  estimated  based  upon  projected  cash  flows
discounted at the estimated  current interest rates at which similar loans would
be made.  The  applicable  amount of the  allowance  for loan losses  along with
accrued  interest and advances  related  thereto  should also be  considered  in
evaluating the fair value versus the carrying value.


     8. Asset Concentrations and Characteristics

     Most loans are secured by recorded deeds of trust. At December 31, 2005 and
2004,  there  were 9 and 14 secured  loans  outstanding  respectively,  with the
following characteristics:
<TABLE>
<S>          <C>                                                               <C>                <C>
                                                                               2005               2004
                                                                          ---------------    --------------

             Number of secured loans outstanding                                       9                14
             Total secured loans outstanding                                $  2,021,973       $ 5,225,128

             Average secured loan outstanding                               $    224,664       $    373,223
             Average secured loan as percent of total secured loans               11.11%             7.14%
             Average secured loan as percent of partners' capital                  3.53%             5.80%

             Largest secured loan outstanding                               $    532,131       $ 2,103,300
             Largest secured loan as percent of total secured loans               26.32%            40.25%
             Largest secured loan as percent of partners' capital                  8.37%            32.71%
             Largest secured loan as percent of total assets                       8.36%            32.59%

             Number of counties where security
               is located (all California)                                             6                 8
             Largest percentage of secured loans in one county                    26.91%            42.28%
             Average secured loan to appraised value
               of security based on appraised values and prior
               liens at time loan was consummated                                 65.95%            79.67%

             Number of secured loans in foreclosure                                    -                 -
             Amounts of secured loans in foreclosure                        $          -       $         -
</TABLE>



                                       35
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     8. Asset Concentrations and Characteristics (continued)

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

             First trust deeds                                   $    810,359       $  4,212,912
             Second trust deeds                                     1,211,614          1,012,216
                                                               ---------------    ---------------
                  Total loans                                       2,021,973          5,225,128
             Prior liens due other lenders at time of loan          2,367,593          3,026,354
                                                               ---------------    ---------------

                  Total debt                                     $  4,389,566       $  8,251,482
                                                               ===============    ===============

             Appraised property value at time of loan            $  6,655,409       $ 10,356,549
                                                               ===============    ===============

                  Total loans as a percent of appraisals               65.95%             79.67%
                                                               ===============    ===============

             Loans by type of property
                Single family (1-4 units)                        $  1,703,472       $  1,316,596
                Apartments                                                  -             96,716
                Commercial                                            318,501          3,811,816
                                                               ---------------    ---------------

                                                                 $  2,021,973       $  5,225,128
                                                               ===============    ===============
</TABLE>


     Interest  rates on the loans  range  from 8.50% to 10.50% at  December  31,
2005, and 6.50% to 10.50% at December 31, 2004.

     Scheduled  maturity  dates of secured  loans as of December 31, 2005 are as
follows:

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

                           2006                   $    424,432
                           2007                        144,069
                           2008                        400,000
                           2009                        272,394
                           2010                        781,078
                                                ---------------
                                                  $  2,021,973
                                                ===============



                                       36
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     8. Asset Concentrations and Characteristics (continued)

     The remaining scheduled  maturities for 2006 include $174,432 in two loans,
which were 90 days past  maturity at December 31, 2005.  None of these loans had
interest  payments  categorized as delinquent  over 90 days.  Occasionally,  the
Partnership  allows  borrowers  to  continue  to make the  payments on debt past
maturity for periods of time.

     Cash deposits at December 31, 2005,  exceeded federal  insurance limits (up
to $100,000 per bank) by approximately $4,364,000.

     The Partnership has a substantial amount of its loan receivable balance due
from  one  borrower  at  December  31,  2004.   This   borrower   accounted  for
approximately  59%  of the  secured  loan  balance  at  December  31,  2004  and
approximately  57% and 47% of interest on loans for the years ended December 31,
2004 and 2003,  respectively.  During 2005,  these loans were repaid in full. At
December 31, 2004, the  collateral  value securing these loans was less than the
principal  balance due under the loans.  Redwood  Mortgage Corp. had provided an
indemnity  to the  Partnership  whereby  it has  agreed  to  indemnify  and hold
harmless the Partnership from any expenses or losses incurred by the Partnership
by reason of the Partnership's  inability to collect all principal due under the
loans after the Partnership has exhausted all reserves set aside for these loans
and  all  remedies  available  to it  including  foreclosure  of the  underlying
collateral.  Therefore,  these loans were not considered impaired solely because
the value of the  collateral  securing the loans was less than the principal due
to the Partnership.

     The  Partnership  also has 71% of its  receivable  balance  due  from  four
borrowers at December 31, 2005. These borrowers  accounted for approximately 15%
of interest revenue for the year ended December 31, 2005.


     9. Commitments and Contingencies

     Workout agreements

     The Partnership has negotiated various  contractual workout agreements with
borrowers.  The  Partnership  is not  obligated to fund  additional  money as of
December 31, 2005. There are no loans in a workout  agreement as of December 31,
2005.

     Legal proceedings

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



                                       37
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2005, 2004 and 2003


     10. Selected Financial Information (Unaudited)
<TABLE>
<S>  <C>                                       <C>            <C>             <C>            <C>             <C>
                                                                 Calendar Quarter
                                            -----------------------------------------------------------
                                               First          Second          Third          Fourth          Annual
                                            ------------    -----------     -----------    ------------    ------------
     Revenues
          2005                                $ 133,529      $ 131,659       $ 196,607      $   60,487      $  522,282
          2004                                $ 130,206      $ 140,121       $ 135,904      $  132,506      $  538,737

     Expenses
          2005                                $  34,574      $  36,084       $ 100,647      $ (37,431)      $  133,874
          2004                                $  48,590      $  59,237       $  50,429      $   33,329      $  191,585

     Net income allocated
       to general partners
          2005                                $     990      $     955       $     960      $      979      $    3,884
          2004                                $     816      $     809       $     855      $      992      $    3,472

     Net income allocated
       to limited partners
          2005                                $  97,965      $  94,620       $  95,000      $   96,939      $  384,524
          2004                                $  80,800      $  80,075       $  84,620      $   98,185      $  343,680

     Net income per $1,000 invested
       where income is
          Reinvested
          2005                                $      15      $      15       $      15      $       17      $       62
          2004                                $      12      $      12       $      13      $       17      $       54

          Withdrawn
          2005                                $      15      $      15       $      15      $       15      $       60
          2004                                $      12      $      12       $      13      $       16      $       53
</TABLE>



                                       38
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                   Schedule II
                        Valuation and Qualifying Accounts
           For the Three Years Ended December 31, 2003, 2004 and 2005


<TABLE>
<S>                                             <C>             <C>               <C>               <C>               <C>
                                                                    Col. C - Additions
                                                Col. B        -------------------------------                         Col. E
                                              Balance at        Charged to        Charged                            Balance
         Col. A                               Beginning         Costs and         to Other          Col. D           at End
       Description                            of Period         Expenses          Accounts        Deductions        of Period
----------------------------------------    --------------    -------------    --------------    -------------    --------------
Year Ended December 31, 2003

Deducted from asset accounts

Allowance for doubtful accounts               $   275,294       $    4,585       $         - (a)   $     (14) (a)   $   279,865

Cumulative write-down of
  real estate held for sale (REO)                 784,191                -                 -                -           784,191
                                            --------------    -------------    --------------    -------------    --------------
                                              $ 1,059,485       $    4,585       $         - (a)   $     (14) (a)   $ 1,064,056
                                            ==============    =============    ==============    =============    ==============
Year Ended December 31, 2004

Deducted from asset accounts

Allowance for doubtful accounts               $   279,865       $   35,886       $         -       $        -       $   315,751

Cumulative write-down of
  real estate held for sale (REO)                 784,191                -                 -        (782,878) (b)         1,313
                                            --------------    -------------    --------------    -------------    --------------
                                              $ 1,064,056       $   35,886       $         -       $(782,878)       $   317,064
                                            ==============    =============    ==============    =============    ==============

Year Ended December 31, 2005

Deducted from asset accounts

Allowance for doubtful accounts               $   315,751       $  (1,685)       $     1,313       $        -       $   315,379

Cumulative write-down of
  real estate held for sale (REO)                   1,313                -           (1,313)                -                 -
                                            --------------    -------------    --------------    -------------    --------------
                                              $   317,064       $  (1,685)       $         -       $        -       $   315,379
                                            ==============    =============    ==============    =============    ==============
</TABLE>


     Note (a) - Represents write-offs of loans.

     Note (b) - Represents sales of REO.

                                       39
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                   Schedule IV
                          Mortgage Loans on Real Estate
                         Rule 12-29 Loans on Real Estate
                                December 31, 2005

<TABLE>
<S>            <C>        <C>           <C>        <C>            <C>             <C>           <C>          <C>         <C>
                                                                                                Col. H
                                                                                               Principal
                                                                  Col. F                         Amount
                                                                   Face           Col. G         of Loans
                          Col. C        Col. D                  Amount of        Carrying       Subject to   Col. I      Col. J
               Col. B      Final       Periodic    Col. E        Mortgage        Amount of      Delinquent    Type    California
   Col. A     Interest   Maturity      Payment      Prior        Original        Mortgage       Principal      of      Geographic
  Descrip.      Rate       Date         Terms       Liens         Amount        Investment     or Interest    Lien      Location
-----------------------------------------------------------------------------------------------------------------------------------

Comm.           10.00%   12/1/2003    $  1,276    $        -    $  145,455     $  143,896      $ 143,896      1st     Stanislaus
Comm.           10.00%   12/1/2003         284       208,012        32,323         30,536         30,536      2nd     Stanislaus
Comm.           10.50%   10/01/07        1,345             -       147,000        144,069              -      1st     San Mateo
Res.             9.25%   08/01/09        1,275             -       155,000        153,485              -      1st     Alameda
Res.             8.50%   09/01/06        1,417             -       250,000        250,000              -      1st     Monterey
Res.             9.25%   09/01/09          987             -       120,000        118,909              -      1st     Colusa
Res.             9.25%   06/01/10        2,057       198,779       250,000        248,947              -      2nd     Alameda
Res.             8.50%   07/01/08        2,833       500,000       400,000        400,000              -      2nd     San Mateo
Res.             9.25%   08/01/10        4,387     1,460,802       533,250        532,131              -      2nd     Santa Clara
                                                 ---------------------------------------------------------
Total                                             $ 2,367,593   $2,033,028     $2,021,973      $ 174,432
                                                 =========================================================
</TABLE>









Note: Most loans have balloon payments due at maturity


                                       40
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                   Schedule IV
                          Mortgage Loans on Real Estate
                         Rule 12-29 Loans on Real Estate
                                December 31, 2005


     Reconciliation of carrying amount (cost) of loans at close of periods

<TABLE>
<S>   <C>                                                      <C>               <C>              <C>
                                                                        Year ended December 31,
                                                           -------------------------------------------------
                                                               2005              2004             2003
                                                           --------------    -------------    --------------

      Balance at beginning of year                           $ 5,225,128      $ 5,255,620       $ 5,183,100
                                                           --------------    -------------    --------------
      Additions during period
      New loans                                                1,858,250          869,415         1,637,342
      Other                                                            -                -                 -
                                                           --------------    -------------    --------------
      Total additions                                          1,858,250          869,415         1,637,342
                                                           --------------    -------------    --------------

      Deductions during period
      Collections of principal                                 5,061,405          899,907         1,564,808
      Foreclosures                                                     -                -                 -
      Cost of loans sold                                               -                -                 -
      Amortization of premium                                          -                -                 -
      Other                                                            -                -                14
                                                           --------------    -------------    --------------
      Total deductions                                         5,061,405          899,907         1,564,822
                                                           --------------    -------------    --------------

      Balance at close of year                               $ 2,021,973      $ 5,225,128       $ 5,255,620
                                                           ==============    =============    ==============
</TABLE>




                                       41
<PAGE>


     Item 9 - Changes in and  Disagreements  with  Accountants on Accounting and
Financial Disclosure

     There were no disagreements with the Partnership's  independent  registered
public accounting firm during the years ended December 31, 2005 and 2004.


     Item 9a. - Controls and Procedures

     The Partnership  carried out an evaluation,  under the supervision and with
the participation of the general partners of the effectiveness of the design and
operation of the Partnership's  disclosure controls and procedures as of the end
of the period  covered by this report  pursuant to Rule 13a-15 of the Securities
Exchange  Act of 1934,  as  amended.  Based upon that  evaluation,  the  general
partners  concluded that the  Partnership's  disclosure  controls and procedures
were effective in timely alerting the general  partners to material  information
related to the  Partnership  that is required  to be  included  in our  periodic
filings with the Securities and Exchange Commission.

     There were no significant  changes in the  Partnership's  internal  control
over financial  reporting  during the  Partnership's  fourth fiscal quarter that
have materially affected,  or are likely to materially affect, the Partnership's
internal control over financial reporting.

     Item 9b. - Other Information

     None


                                    Part III


     Item 10 - Directors and Executive Officers of the Registrant

     The Partnership has no Officers or Directors. Rather, the activities of the
Partnership  are  managed  by  the  two  general  partners,  one of  whom  is an
individual, Michael R. Burwell. The second general partner is Gymno Corporation,
a  California  corporation,  formed  in  1986.  Mr.  Burwell  is one of the  two
shareholders  of Gymno  Corporation,  a  California  corporation,  and has a 50%
interest in the corporation.

     The General Partners.

     Michael R.  Burwell.  Michael R. Burwell,  age 49,  General  Partner,  past
member  of  Board  of  Trustees  and  Treasurer,   Mortgage  Brokers   Institute
(1984-1986);  President,  Director,  Chief Financial  Officer,  Redwood Mortgage
Corp.  (1979-present);  Director,  Secretary  and  Treasurer  A  &  B  Financial
Services, Inc. (1980-present);  President, Director, Chief Financial Officer and
Secretary (since 1986) of Gymno Corporation;  President, Director, Secretary and
Treasurer of The Redwood Group, Ltd. (1979-present).  Mr. Burwell is licensed as
a real estate sales person.

     Gymno  Corporation.  Gymno  Corporation,  General Partner,  is a California
corporation  formed in 1986 for the  purpose  of acting as a general  partner of
this  Partnership  and of other limited  partnerships  formed by the  individual
general partners. The shares in Gymno Corporation are held equally by Michael R.
Burwell and the Burwell  trusts.  Michael R.  Burwell is a director of Gymno and
the director position held by D. Russell Burwell is currently vacant. Michael R.
Burwell is its President,  Chief  Financial  Officer and  Secretary.  Michael R.
Burwell has a  controlling  interest in this  company  through his  ownership of
stock and as trustee of the Burwell trusts.

     Financial Oversight by General Partners.

     The partnership  does not have a board of directors or an audit  committee.
Accordingly,  the general  partners  serve the  equivalent  function of an audit
committee  for,  among  other  things,  the  following  purposes:   appointment,
compensation,  review  and  oversight  of the  work  of our  independent  public
accountants,  and  establishing  the  enforcing of the Code of Ethics.  However,
since the partnership  does not have an audit committee and the general partners
are not independent of the partnership,  the partnership does not have an "audit
committee financial expert."


                                       42
<PAGE>

     Code of Ethics.

     The  general  partners  have  adopted  a Code of Ethics  applicable  to the
general partners and to any agents, employees or independent contractors engaged
by the  general  partners  to perform the  functions  of a  principal  financial
officer, principal accounting officer or controller of the partnership,  if any.
You may obtain a copy of this Code of Ethics,  without  charge,  upon request by
calling our Investor Services Department at (650) 365-5341.


     Item 11 - Executive Compensation

       COMPENSATION OF THE GENERAL PARTNERS AND AFFILIATES BY PARTNERSHIP

     As  indicated  above  in  item  10,  the  Partnership  has no  officers  or
directors. The Partnership is managed by the general partners. There are certain
fees and other items paid to  management  and related  parties.  A more complete
description of management compensation is found in the Prospectus,  pages 11-12,
under the section  "Compensation  of the General  Partners and the  Affiliates",
which is incorporated by reference. Such compensation is summarized below.

     The  following  compensation  has been  paid to the  general  partners  and
affiliates  for services  rendered  during the year ended December 31, 2005. All
such compensation is in compliance with the guidelines and limitations set forth
in the partnership agreement.
<TABLE>
<S>                                       <C>                                                                 <C>
  Entity Receiving Compensation           Description of Compensation and Services Rendered                   Amount
  ----------------------------------------------------------------------------------------------------------------------
  I. Redwood Mortgage Corp.            Loan Servicing Fee for servicing loans...................................$56,508

  General Partners &/or Affiliates     Asset Management Fee for managing assets.................................$12,031

  General Partners                     1% interest in profits....................................................$3,884
</TABLE>


     II. FEES PAID BY BORROWERS ON MORTGAGE LOANS PLACED WITH THE PARTNERSHIP BY
COMPANIES  RELATED TO THE GENERAL  PARTNERS  (EXPENSES OF  BORROWERS  NOT OF THE
PARTNERSHIP)
<TABLE>
<S>                                  <C>                                                                        <C>
  Redwood Mortgage Corp.             Mortgage Brokerage Commissions for services in connection
                                     with the review, selection, evaluation, negotiation, and
                                     extension of the loans paid by the borrowers and not by the
                                     Partnership................................................................$52,248

  Redwood Mortgage Corp.             Processing and Escrow Fees for services in connection with
                                     notary, document preparation, credit investigation, and escrow
                                     fees payable by the borrowers and not by the Partnership....................$2,000

  Gymno Corporation                  Reconveyance Fee..............................................................$371
</TABLE>


     III. IN ADDITION, THE GENERAL PARTNERS AND/OR RELATED COMPANIES PAY CERTAIN
EXPENSES ON BEHALF OF THE PARTNERSHIP FOR WHICH IT IS REIMBURSED AS NOTED IN THE
STATEMENT  OF INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . .$9,212


                                       43
<PAGE>

     Item 12 - Security Ownership of Certain Beneficial Owners and Management

     The  general  partners  receive  a  combined  total  of  a 1%  interest  in
Partnership   income  and  losses  and   distributions  of  cash  available  for
distribution.


     Item 13 - Certain Relationships and Related Transactions

     Refer to footnotes 3 and 4 of the Notes to Financial  Statements in Part II
item 8, which describes related party fees and data.

     Also refer to sections of the Prospectus  "Compensation of General Partners
and Affiliates",  page 11, and "Conflicts of Interest",  page 13, as part of the
above-referenced Registration Statement, which is incorporated by reference.


     Item 14 - Principal Accountant Fees and Services

     Fees for services performed for the Partnership by the principal accountant
for 2005 and 2004 are as follows:

     Audit Fees The aggregate  fees billed  during the years ended  December 31,
2005  and  2004  for  professional  services  rendered  for  the  audit  of  the
Partnership's  annual financial  statements included in the Partnership's Annual
Report  on  Form  10-K  and  review  of  financial  statements  included  in the
Partnership's   Quarterly  Reports  on  Form  10-Q  were  $33,523  and  $37,136,
respectively.

     Audit  Related  Fees  There  were no fees  billed  during  the years  ended
December 31, 2005 and 2004 for audit-related services.

     Tax fees The  aggregate  fees billed for tax  services  for the years ended
December  31,  2005 and 2004 were $3,661 and  $3,478,  respectively.  These fees
relate to professional services rendered primarily for tax compliance.

     All Other  Fees  There were no other  fees  billed  during the years  ended
December 31, 2005 and 2004.

     All audit and non-audit  services are approved by the general partner prior
to the accountant being engaged by the Partnership.


                                       44
<PAGE>

                                     Part IV


     Item 15 - Exhibits and Financial Statements Schedules


     A. Documents filed as part of this report:

        1.  The Financial  Statements  are listed in Part II, Item 8 under
            A-Financial Statements.

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

        3.  Exhibits.


Exhibit No           Description of Exhibits
----------------    ------------------------------------------------------------

   3.1              Limited Partnership Agreement
   3.2              Form of Certificate of Limited Partnership Interest
   3.3              Certificate of Limited Partnership
   10.1             Escrow Agreement
   10.2             Servicing Agreement
   10.3        (a)  Form of Note secured by Deed of Trust which provides for
                    principal and interest payments
               (b)  Form of Note secured by Deed of Trust which provides
                    principal and interest payments and right of assumption
               (c) Form of Note secured by Deed of Trust which provides for
                    interest only payments (d) Form of Note
   10.4        (a)  Deed of Trust and Assignment of Rents to accompany Exhibits
                    10.3 (a) and (c)
               (b)  Deed of Trust and Assignment of Rents to accompany Exhibits
                    10.3 (b)
               (c)  Deed of Trust to accompany Exhibit 10.3 (d)
   10.5             Promissory Note for Formation Loan
   10.6             Agreement to Seek a Lender
   31.1             Certification of General Partner pursuant to Section 302 of
                    the Sarbanes-Oxley Act of 2002
   31.2             Certification of General Partner pursuant to Section 302 of
                    the Sarbanes-Oxley Act of 2002
   32.1             Certification of General Partner pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002
   32.2             Certification of General Partner pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002


     All of the above  exhibits  other  than  31.1,  31.2,  32.1 and 32.2,  were
previously  filed  as the  exhibits  to  Registrant's  Statement  on  Form  S-11
(Registration No. 33-12519) and incorporated by reference herein.


    B.   See (A) 3 above


    C.   See (A) 2 above. Additional reference is made to prospectus (S-11)
         dated September 3, 1987 to pages 56 through 59 and supplement #6 dated
         May 16, 1989 pages 16-18, for financial data related to Gymno
         Corporation, a general partner.


                                       45
<PAGE>

                                   Signatures

     Pursuant  to the  requirements  of Section  13 or 15 (d) of the  Securities
Exchange Act of 1934 the  registrant has duly caused this report to be signed on
its behalf by the undersigned, thereto duly authorized on the 30th day of March,
2006.

REDWOOD MORTGAGE INVESTORS VI


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


By:       Gymno Corporation, General Partner



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

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed below by the following person on behalf of the registrant
and in the capacity indicated on the 30th day of March, 2005.

        Signature                      Title                        Date



/S/ Michael R. Burwell
-----------------------
Michael R. Burwell                  General Partner           March 30, 2006





/S/ Michael R. Burwell
-----------------------
Michael R. Burwell            President, Secretary & Chief     March 30, 2006
                               Financial Officer of Gymno
                           Corporation (Principal Financial
                               and Accounting Officer);
                             Director of Gymno Corporation



                                       46
<PAGE>
                                                                   Exhibit 31.1

                          GENERAL PARTNER CERTIFICATION

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

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

     2. Based on my  knowledge,  this annual  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 annual
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included  in this annual  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 annual 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-15(e) and 15d-15(e)) for the Registrant and we have:

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

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

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

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

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

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




/s/ Michael R. Burwell
----------------------------
Michael R. Burwell, General Partner
March 30, 2006


                                       47
<PAGE>
                                                                   Exhibit 31.2

               PRESIDENT AND CHIEF FINANCIAL OFFICER CERTIFICATION

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

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

     2. Based on my  knowledge,  this annual  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 annual
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included  in this annual  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 annual 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-15(e) and 15d-15(e)) for the Registrant and we have:

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

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

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

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

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

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




/s/ Michael R. Burwell
---------------------------
Michael R. Burwell, President and
Chief Financial Officer of Gymno
Corporation, General Partner
March 30, 2006


                                       48
<PAGE>
                                                                  Exhibit 32.1

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


     In connection with the Annual Report of Redwood Mortgage  Investors VI (the
"Partnership") on Form 10-K for the period ended December 31, 2005 as filed with
the  Securities  and  Exchange  Commission  on the date hereof  (the  "Report"),
pursuant  to 18  U.S.C.  (S)  1350,  as  adopted  pursuant  to  (S)  906  of the
Sarbanes-Oxley  Act of 2002,  I,  Michael  R.  Burwell,  General  Partner of the
Partnership, certify that to the best of my knowledge:

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

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

     This Certification has not been, and shall not be deemed,  "filed" with the
Securities and Exchange Commission.





/s/ Michael R. Burwell
-----------------------------
Michael R. Burwell, General Partner
March 30, 2006


                                       49
<PAGE>
                                                                   Exhibit 32.2

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


     In connection with the Annual Report of Redwood Mortgage  Investors VI (the
"Partnership") on Form 10-K for the period ended December 31, 2005 as filed with
the  Securities  and  Exchange  Commission  on the date hereof  (the  "Report"),
pursuant  to 18  U.S.C.  (S)  1350,  as  adopted  pursuant  to  (S)  906  of the
Sarbanes-Oxley Act of 2002, I, Michael R. Burwell, President and Chief Financial
Officer of Gymno Corporation,  General Partner of the Partnership,  certify that
to the best of my knowledge:

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

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

     This Certification has not been, and shall not be deemed,  "filed" with the
Securities and Exchange Commission.





/s/ Michael R. Burwell
-----------------------------
Michael R. Burwell, President and
Chief Financial Officer of Gymno
Corporation, General Partner
March 30, 2006




                                       50