REDWOOD MORTGAGE INVESTORS VI
                       (a California Limited Partnership)
                               Index to Form 10-K
                                December 31, 1999

                                     Part I

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

                                     Part II

Item 5 - Market for the Registrant's Partners' Capital
         and related matters.                                                 6
Item 6 - Selected Financial Data                                            7-8
Item 7 - Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                         9-12
Item 8 - Financial Statements and Supplementary Data                      13-33
Item 9 - Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure                                            34

                                    Part III

Item 10 - Directors and Executive Officers of the Registrant                 34
Item 11- Executive Compensation                                              35
Item 12 - Security Ownership of certain Beneficial Owners and Management     36
Item 13 - Certain Relationships and Related Transactions                     36

                                     Part IV

Item 14 - Exhibits, Financial Statement Schedules, and Reports
          of Form 8-K                                                     36-37

Signatures                                                                   38


<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    Form 10-K

                Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

           For the year ended December 31, 1999 Commission File number 33-12519
--------------------------------------------------------------------------------

                           REDWOOD MORTGAGE INVESTORS VI
--------------------------------------------------------------------------------
             (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)

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

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

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

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

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

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

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

YES       XX                                                 NO
     -------------                                              -------------

At the  close  of the  sale of units in  1989,  the  limited  partnership  units
purchased by  non-affiliates  was 97,725.94 units computed at $100.00 a unit for
$9,772,594, excluding General Partners' Contribution of $9,772.

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, incorporated in Parts
II, III, and IV.


<PAGE>


                                     Part I

Item 1 - Business

         Redwood Mortgage Investors VI is a California limited  partnership (the
"Partnership").  D. Russell Burwell, Michael R. Burwell and Gymno Corporation, a
California  corporation,  are the General  Partners.  The address of the General
Partners is 650 El Camino Real,  Suite G, Redwood City,  California  94063.  The
Partnership's  primary purpose is to invest its capital in Mortgage  Investments
secured by Northern California properties. Mortgage Investments 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 Mortgage Investments in October,  1987. The offering terminated in September,
1989,  and as of that date  97,725.94  Units  were sold  realizing  proceeds  of
$9,772,594.  At December 31,  1999,  the  Partnership  had a balance of Mortgage
Investments  totalling $5,282,773 with interest rates thereon ranging from 4.00%
to 16.25%.

         Currently  First Trust  Deeds  comprise  72.13% of the total  amount of
Mortgage  Investment  portfolio.  Second Mortgage Trust Deeds comprise 24.11% of
Mortgage  Investment  portfolio and Third Mortgage Trust Deeds have 3.76% of the
Mortgage Investment  portfolio.  Owner-occupied  homes,  combined with non-owner
occupied homes, total 12.65% of the Mortgage  Investments.  Mortgage Investments
to  apartments  make up  13.84%  of the total  Mortgage  Investments  portfolio.
Commercial  Mortgage  Investment  origination  increased  from  last  year,  now
comprising  73.51% of the  portfolio,  an increase of 0.32% from 1998.  The past
year brought many  outstanding  low loan to value lending  opportunities  in the
commercial  segment  of  the  market.   The  major   concentration  of  Mortgage
Investments,  comprising  74.13% of the total loans, are in four counties of the
San Francisco Bay Area. The County of Sacramento makes up 11.23% of the Mortgage
Investment  portfolio.  The balance,  as stated on page five of this report, are
primarily  in  Northern  California.   Currently  Mortgage  Investment  size  is
averaging $128,848 per Mortgage Investment. Some of the Mortgage Investments are
fractionalized between affiliated  Partnerships with objectives similar to those
of the Partnership to further reduce risk.  Average equity per loan  transaction
stood  at  33.50%.  A 40%  equity  average  on  loan  origination  is  generally
considered very  conservative.  Generally,  the more equity, the more protection
for the lender.  The Partnership's  Mortgage  Investment  portfolio had only one
property in foreclosure as of the end of December, 1999.


<PAGE>


Item 2 - Properties

         As of  December  31,  1999,  a summary  of the  Partnership's  Mortgage
Investment portfolio is set forth below.

Mortgage Investments as a Percentage of Total Mortgage Investments

First Trust Deeds                                    $3,810,669.95
Appraised Value of Properties                         5,944,647.00
   Total Investment as a % of Appraisal                     64.10%
First Trust Deeds                                     3,810,669.95
Second Trust Deed Mortgage Investments                1,273,692.98
Third Trust Deed Mortgage Investments                   198,410.28
                                                      ------------
                                                      5,282,773.21

First Trust Deeds due other Lenders                   6,349,308.00
Second Trust Deeds due other Lenders                    356,678.00

Total Debt                                          $11,988,759.21

   Appraised Property Value                         $18,027,960.00
   Total Investments as a % of Appraisal                    66.50%


Number of Mortgage Investments Outstanding                      41


Average Investment                                      128,848.13
Average Investment as a % of Net Assets                      1.60%
Largest Investment Outstanding                        1,376,117.03
Largest Investment as a % of Net Assets                     17.14%


Mortgage Investments  as a Percentage of Total Mortgage Investments

First Trust Deeds                                           72.13%
Second Trust Deeds                                          24.11%
Third Trust Deeds                                            3.76%
                                               --------------------
Total                                                      100.00%

Mortgage Investments by Type of        Amount              Percent
Property

Owner Occupied Homes                   $264,673.54           5.01%
Non-Owner Occupied Homes                403,808.56           7.64%
Apartments                              730,934.15          13.84%
Commercial                            3,883,356.96          73.51%
                                  -----------------     -----------
Total                                $5,282,773.21         100.00%




<PAGE>


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

Santa Clara                $1,834,750.61            34.73%
Alameda                     1,149,547.81            21.76%
Sacramento                    593,364.14            11.23%
San Mateo                     578,325.40            10.95%
San Francisco                 353,616.11             6.69%
Placer                        246,661.14             4.67%
Stanislaus                    197,333.47             3.74%
Sonoma                        179,809.09             3.40%
Shasta                         80,248.34             1.52%
Santa Cruz                     69,117.10             1.31%
                      -------------------      ------------
Total                      $5,282,773.21           100.00%

Statement of Condition of Mortgage Investments:

         Number of Mortgage Investments in Foreclosure               1

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

                         Year Ending
                         December 31,

                             2000                           $3,498,114
                             2001                              453,996
                             2002                              456,011
                             2003                              371,008
                             2004                              203,747
                          Thereafter                           299,897
                                                        ---------------
                                                            $5,282,773


The scheduled  maturities  for 2000 include  $3,301,156 in Mortgage  Investments
which are past  maturity at December  31,  1999.  $2,242,215  of those  Mortgage
Investments were categorized as delinquent over 90 days.

Nine Mortgage Investments with principal  outstanding of $2,420,052 had interest
payments overdue in excess of 90 days.


<PAGE>


Item 3 - Legal Proceedings

         In the normal course of business,  the  Partnership may become involved
in various types of legal  proceedings such as assignments of rents,  bankruptcy
proceedings,   appointments   of   receivers,   unlawful   detainers,   judicial
foreclosures,   etc.,  to  enforce  the  provisions  of  the  deeds.  Management
anticipates  that the  ultimate  outcome of these legal  matters will not have a
material  adverse  effect on the net assets of the  Partnership  in light of the
Partnership's  allowance for doubtful  accounts.  The Partnership is a defendant
along with numerous  defendants,  including a developer,  contractor,  and other
lenders,  in a lawsuit  involving  the  Partnership's  attempt to  recover  it's
investment in real estate acquired through foreclosure.

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

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

                                     Part II

Item 5 - Market for the Registrant's Partners' Capital and Related 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  reinvesting  and  compounding  earnings.
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.

         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.

As of December 31, 1999,  there were 565 holders of record of the  Partnership's
Units. A decrease of 150 from 1998.


<PAGE>


Item 6 - Selected Financial Data

         Redwood  Mortgage  Investors VI began  operations in October 1987.  Its
financial  condition  and results of  operation  for three years to December 31,
1999 were:

                                 Balance Sheets
                                     Assets
<TABLE>

<S>                                                                                 <C>
                                                                           December 31,
                                                       ------------------------------------------------------
                                                                 1999                1998               1997
                                                       ---------------     ---------------     --------------
Cash                                                       $1,120,295            $299,775           $331,143
                                                       ---------------     ---------------     --------------
Accounts Receivable:
  Mortgage Investments, secured by Deeds of Trust           5,282,773           7,969,735          8,104,984
  Accrued Interest on Mortgage Investments                    706,841             717,719            617,456
  Advances on Mortgage Investments                            137,930             162,083            127,519
  Accounts receivables, unsecured                                   0              23,775            161,414
                                                       ---------------     ---------------     --------------
                                                           $6,127,544          $8,873,312         $9,011,373

Less allowance for doubtful accounts                          303,249             202,344             28,614
                                                       ---------------     ---------------     --------------
                                                           $5,824,295          $8,670,968         $8,982,759
                                                       ---------------     ---------------     --------------

Note Receivable Redwood Mortgage Corp.                       $300,000                   0                  0
Real estate owned, held for sale, acquired through
    Foreclosure                                               133,300             169,922            309,319
    REO in process                                            668,132                   0                  0
Investment in Partnership                                           0                   0            708,141
                                                       ---------------     ---------------     --------------
                                                           $8,046,022          $9,140,665        $10,331,362
                                                       ===============     ===============     ==============

                        Liabilities and Partners' Capital

Liabilities:
  Notes Payable - Bank Line of Credit                              $0            $390,000           $899,011
 Accounts Payable                                                   0              22,668                  0
  Deferred interest on Mortgage Investments                    15,676              20,463                898
                                                       ---------------     ---------------     --------------
          Total Liabilities                                    15,676             433,131            899,909
                                                       ---------------     ---------------     --------------

Partners' Capital:
     Limited Partners' capital, subject to redemption       8,020,580           8,697,768          9,421,687
     General Partners' capital                                  9,766               9,766              9,766
                                                       ---------------     ---------------     --------------

          Total Partners' Capital                           8,030,346           8,707,534          9,431,453
                                                       ---------------     ---------------     --------------

          Total Liabilities and Partners' Capital          $8,046,022          $9,140,665        $10,331,362
                                                       ===============     ===============     ==============
</TABLE>
<PAGE>




                              Statements of Income
<TABLE>

<S>                                                              <C>                 <C>                <C>
                                                                 1999                1998               1997
                                                       ---------------     ---------------     --------------

Gross Revenue                                              $1,086,317            $871,861         $1,036,596
Expenses                                                      565,408             359,356            507,409
                                                       ---------------     ---------------     --------------
Net Income                                                    520,909             512,505            529,187
                                                       ===============     ===============     ==============

Net Income: to General Partners (1%)                           $5,209              $5,125             $5,292
                     to Limited Partners (99%)                515,700             507,380            523,895
                                                       ---------------     ---------------     --------------

                                                             $520,909            $512,505           $529,187
                                                       ===============     ===============     ==============

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

  - where income is reinvested and compounded                     $62                 $56                $53
                                                       ===============     ===============     ==============
  -where partner receives income in monthly
     distributions                                                $61                 $55                $52
                                                       ===============     ===============     ==============
</TABLE>

In 1997 the annualized  yield was 5.29%, in 1998 the annualized yield was 5.63%,
and in 1999 the annualized yield was 6.24%. The annualized yield since inception
through December 31, 1999, was 7.40%.


<PAGE>

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

         On September 2, 1989, the  Partnership had sold 97,725.94 Units and its
contributed  capital totalled  $9,772,594 of the approved  $12,000,000 issue, in
Units of $100  each.  As of that  date the  offering  was  formally  closed.  On
December 31, 1999, the Partnership's net capital totalled $8,030,346.

         The Partnership began funding Mortgage Investments in October 1987. The
Partnership's Mortgage Investments  outstanding for the years ended December 31,
1997, 1998, and 1999 were $8,104,984, $7,969,735, and $5,282,773,  respectively.
The  decrease in Mortgage  Investments  outstanding  from  December  31, 1996 to
December  31, 1999,  was due  primarily to the  Partnership  utilizing  Mortgage
Investment payoffs to meet Limited Partner capital liquidations,  line of credit
pay-down, uninvested cash in Mortgage Investments and an increase in Real Estate
Owned or in process.  During the years 1997,  1998 and 1999 Mortgage  Investment
principal collections exceeded Limited Partner liquidations.

         Since the Fall of 1999,  mortgage  interest  rates have been rising due
primarily  to  economic  forces  and by the  Federal  Reserve  raising  its core
interest  rates.  New Mortgage  Investments  will be originated at high interest
rates  which  could  increase  the  average  return  across the entire  Mortgage
Investment  portfolio  held by the  Partnership.  In the future,  interest rates
likely will change from their current  levels.  The General  Partners  cannot at
this time predict at what levels interest rates will be in the future.  Although
the rates  charged by the  Partnership  are  influenced by the level of interest
rates in the market,  the General  Partners do not anticipate that rates charged
by the Partnership to its borrowers will change significantly from the beginning
of 2000 over the next 12 months. As of December 31, 1999 the Partnership's  Real
Estate Owned account and the  Investment in  Partnership  account was a combined
$801,432  balance.  These  accounts  had  combined  balances of  $1,017,460  and
$169,922 as of December 31, 1997 and 1998,  respectively.  The General  Partners
anticipate  that the annualized  yield for the  forthcoming  year 2000,  will be
similar to the current year's performance level.

         Each  year,  the  Partnership  negotiates  a  line  of  credit  with  a
commercial  bank which is  secured by its  Mortgage  Investment  portfolio.  The
outstanding balance of the bank line of credit was $899,011, $390,000 and $0 for
the years ended December 1997, 1998 and 1999, respectively. The interest rate on
the bank line of credit has remained at Prime plus one percent for the preceding
three years. For the years ended December 31, 1999, 1998, and 1997,  interest on
Note Payable-Bank was $14,714, $43,170, and $133,577,  respectively. The primary
reason for this decrease was that the  Partnership  had a lower  overall  credit
facility   utilization  from  1997  to  December  31,  1999.   During  1999  the
Partnership's  borrowing ranged between $0 and $410,000,  at an interest rate of
Prime plus one  percent.  This added source of funds  helped in  maximizing  the
Partnership yield by allowing the Partnership to minimize the amount of funds in
lower yield investment  accounts when appropriate  Mortgage  Investments are not
currently available and because the Mortgage Investments made by the Partnership
usually bear  interest at a rate in excess of the rate payable to the bank which
extended the line of credit, the amount to be retained by the Partnership, after
payment of the line of credit cost,  will be greater than without the use of the
line of credit.  On December 31, 1999 the Partnership  closed its line of credit
with the  existing  bank.  The General  Partners may seek a  replacement  lender
during the year 2000. As of December 31, 1999, all accrued interest and the line
of credit balances were paid in full.

         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- two years.  Foreclosures
are  a  normal  aspect  of  partnership  operations  and  the  General  Partners
anticipate  that  they  will not have a  material  effect  on  liquidity.  As of
December 31, 1999,  there was one property in  foreclosure.  Cash is continually
being  generated from interest  earnings,  late charges,  prepayment  penalties,
amortization  of notes and  pay-off of notes.  Currently,  this  amount  exceeds
Partnership expenses and earnings and principal payout requirements. As Mortgage
Investment  opportunities become available,  excess cash and available funds are
invested in new Mortgage Investments.


<PAGE>

The  General  Partners  regularly  review  the  Mortgage  Investment  portfolio,
examining the status of delinquencies,  the underlying collateral securing these
Mortgage  Investments,  REO expenses,  sales activities,  and borrower's payment
records and other data relating to the Mortgage  Investment  portfolio.  Data on
the local real estate market, and on the national and local economy are studied.
Based upon this  information  and more,  Mortgage  Investment  loss reserves and
allowance  for doubtful  accounts are  increased  or  decreased.  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.
Management  provided  $268,101,  $180,054 and $437,558 as provision for doubtful
accounts for the years ended  December 31, 1997,  December 31, 1998 and December
31, 1999, respectively.  The decrease in the provision in 1997 and 1998 reflects
the  decrease in the amount of REO,  unsecured  receivables  and the  decreasing
levels of delinquency  within the portfolio.  The increase in allowance for 1999
is to build up reserve for any  potential  loss in the future.  The  Partnership
anticipates it will acquire a piece of Real Estate through  foreclosure in 2000.
In  anticipation  of this event,  the  Partnership  is carrying  $668,132 in its
balance  sheet as Real Estate Owned in Process.  As of December  31,  1999,  the
Partnership  reduced the REO balance from $309,319,  as of December 31, 1997, to
$133,300 through  December 31, 1999. This reduction  assisted the Partnership in
increasing yields in 1998, as assets previously lying idle, now produced current
income.

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

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

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

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

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

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

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

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

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

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

The  Partnership's  interest in land located in East Palo Alto, Ca, was acquired
through foreclosure.  The investment was previously  classified as Investment in
Partnership  in the Financial  Statements  and has been  reclassified  into Real
Estate  Owned.  The  Partnership's  basis of $20,377,  $ 0, and $708,141 for the
years ended December 31, 1999,  1998 and 1997,  respectively,  has been invested
with that of two other  Partnerships.  The  Partnership  had been  attempting to
develop property into an approximately 63 units  residential  subdivision,  (the
"Development"). The proposed Development had gained significant public awareness
as a result of certain  environmental,  fish and  wildlife,  density,  and other
concerns.  Incorporated  into the proposed  Development were various  mitigation
measures  which  included  remediation  of  hazardous  material  existing on the
property, and protection of potentially affected species due to the proximity of
the property to the San  Francisco  Baylands.  These  issues and others  sparked
significant public controversy.  Opposition against and support for the proposed
Development existed. Among those in opposition to the project was Rhone Poulanc,
Inc. which is responsible for a nearby hazardous waste site. Rhone Poulanc, Inc.
has been identified as the Responsible Party for the Arsenic Contamination which
affected a portion of the property. On May 8, 1998, the Partnership, in order to
resolve  disputes  which  arose  during  the  course of the  attempts  to obtain
entitlements for this Development,  entered into agreements with  Rhone-Poulanc,
Inc which among other things,  restricted the property to non residential  uses,
provided  for  appropriate  indemnification  and included  other  considerations
including  a cash  payment to the  Partnership.  The  Partnership  has  retained
ownership  of the  property,  which is  subject to  various  deed  restrictions,
options and or first  rights of refusal.  The General  Partners are pleased with
this outcome to the residential  development  attempt.  The General Partners may
now explore other  available  options with respect to  alternative  uses for the
property. In order to pursue these options,  rezoning of the property's existing
residential  zoning   classification  will  be  required.   The  Partnership  is
continuing to explore  remediation  options  available to mitigate the pesticide
contamination, which affects the property.

This pesticide contamination appears to be the result of agricultural operations
by prior  owners,  and is  unrelated  to the  Arsenic  Contamination  for  which
Rhone-Poulanc,  Inc. remains responsible. The General Partners do not believe at
this time that  remediation of the pesticide  contaminants  will have a material
adverse effect on the financial condition of the Partnership.

At the  time  of  subscription  to the  Partnership,  Limited  Partners  made an
irrevocable decision to either take distributions of earnings monthly, quarterly
or annually or to compound  earnings  in their  capital  account.  For the years
ended December 31, 1997, 1998 and 1999, the Partnership  made  distributions  of
earnings to Limited Partners after allocation of syndication  costs of $257,670,
$235,837,  and  $217,526,  respectively.  Distribution  of  Earnings  to Limited
Partners after allocation of syndication  costs for the years ended December 31,
1997,  December  31, 1998 and  December  31, 1999 to Limited  Partners'  capital
accounts and not withdrawn was $266,225,  $271,543, and $298,174,  respectively.
As of December  31, 1997,  December  31, 1998 and  December  31,  1999,  Limited
Partners electing to withdraw earnings represented 46%, 43% and 42% respectively
of the Limited Partners outstanding capital accounts.

The  Partnership  also allows the Limited  Partners  to withdraw  their  capital
account  subject  to  certain   limitations  (see   liquidation   provisions  of
Partnership Agreement). For the years ended December 31, 1997, December 31, 1998
and December 31, 1999,  $159,732,  $122,069  and  $128,295,  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 trend the  Partnership is
experiencing in withdrawals by Limited Partners  electing a one year liquidation
program represents a small percentage of Limited Partner capital as
<PAGE>

of December 31, 1997, December 31, 1998 and December 31, 1999, respectively, and
is expected by the General Partners to commonly occur at these levels.

Additionally,  for the years ended  December  31,  1997,  December  31, 1998 and
December  31,  1999,  $1,137,677,  $938,040  and  $847,067,  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  which the General  Partners then expect a portion of
the Limited Partners to avail themselves of. This has the anticipated  effect of
the partnership growing, primarily through reinvestment of earnings in years one
through five. The General  Partners expect to see increasing  numbers of Limited
Partner  withdrawals  in years five  through  eleven,  at which time the bulk of
those Limited  Partners who have sought  withdrawal  will have been  liquidated.
After year eleven,  liquidation  generally subsides and the Partnership  capital
again tends to increase.

Actual                     liquidation  of both capital and  earnings  from year
                           five  (1992)  through  year  twelve  (1999)  is shown
                           hereunder: Years ended December 31,
<TABLE>

<S>                            <C>            <C>            <C>             <C>
                               1992           1993           1994            1995
                         -----------    -----------    -----------     -----------
Earnings                   $323,037        377,712        303,014         303,098
Capital                   *$232,370       *528,737       *729,449        *892,953
                         -----------    -----------    -----------     -----------
Total                      $555,407       $906,449     $1,032,463      $1,196,051
                         ===========    ===========    ===========     ===========


                               1996           1997           1998            1999
                        ------------    -----------    -----------     -----------

Earnings                    294,678        257,670        235,837         217,526
Capital                  *1,183,099     *1,297,410     *1,060,109        *975,362
                        ------------    -----------
                        ------------    -----------    -----------     -----------
Total                    $1,477,777     $1,555,080     $1,295,946      $1,192,888
                        ============    ===========    ===========     ===========
</TABLE>

*These amounts represent gross of early withdrawal penalties.

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

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

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

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

Item 8 - Financial Statements and Supplementary Data

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

A- Financial Statements

o       Independent Auditor's Report,
o Balance  Sheets - December  31, 1999,  and December 31, 1998, o Statements  of
Income for the three years ended December 31, 1999,

o Statements of Changes in Partners'  Capital for the three years ended December
31,  1999,  o  Statements  of Cash Flows for the three years ended  December 31,
1999, o Notes to Financial Statements - December 31, 1999.

B. - Financial Statement Schedules

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

o        Schedule II     Amounts receivable from related parties and
                         underwriters, promoters, and employees other than
                         related parties
o        Schedule VIII   Valuation of Qualifying Accounts
o        Schedule IX     Short Term Borrowings
o        Schedule XII    Mortgage Investments on real estate

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


<PAGE>



                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                              FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

                         (with Auditor's Report Thereon)


<PAGE>

                        Caporicci, Cropper & Larson, LLP
                          CERTIFIED PUBLIC ACCOUNTANTS
                            1575 Treat Blvd. Ste. 208
                             Walnut Creek, CA 94598
                                 (925) 932-3860

                          INDEPENDENT AUDITOR'S REPORT

THE PARTNERS
REDWOOD MORTGAGE INVESTORS VI

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

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

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

                              /s/ A. Bruce Cropper
                                  Caporicci, Cropper & Larson, LLP



Walnut Creek, California
March 15, 2000


<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                 BALANCE SHEETS
                         DECEMBER 31, 1999 AND 1998

                                     ASSETS

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

Cash                                                                      $1,120,295             $299,775
                                                                       --------------       --------------
Accounts receivable:
  Mortgage Investments, secured by deeds of trust                          5,282,773            7,969,735
  Accrued Interest on Mortgage Investments                                   706,841              717,719
  Advances on Mortgage Investments                                           137,930              162,083
  Accounts receivables, unsecured                                                  0               23,775
                                                                       --------------       --------------
                                                                           6,127,544            8,873,312
  Less allowance for doubtful accounts                                       303,249              202,344
                                                                       --------------       --------------
                                                                           5,824,295            8,670,968
                                                                       --------------       --------------

Note receivable - Redwood Mortgage Corp.                                     300,000                    0
Real estate owned, held for sale, acquired through foreclosure               133,300              169,922
Real estate in process of acquisition, to be sold                            668,132                    0
                                                                       --------------       --------------
          Total Assets                                                    $8,046,022           $9,140,665
                                                                       ==============       ==============


                        LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
  Accounts Payable                                                                $0              $22,668
  Deferred Interest                                                           15,676               20,463
  Note payable - bank line of credit                                               0              390,000
                                                                       --------------       --------------
          Total Liabilities                                                   15,676              433,131
                                                                       --------------       --------------
Partners' Capital:
  Limited Partners' capital, subject to redemption, (note 4D):             8,020,580            8,697,768

  General Partners' Capital:                                                   9,766                9,766
                                                                       --------------       --------------
    Total Partners' capital                                                8,030,346            8,707,534
                                                                       --------------       --------------
          Total Liabilities and Partners' capital                         $8,046,022           $9,140,665
                                                                       ==============       ==============







See accompanying notes to financial statements.

</TABLE>
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                              STATEMENTS OF INCOME
                  FOR THE THREE YEARS ENDED DECEMBER 31, 1999

<TABLE>
<S>                                                                                             <C>
                                                                           YEARS ENDED DECEMBER 31,
                                                              ----------------------------------------------------
                                                                  1999                1998              1997
                                                              -------------       -------------     --------------
Revenues:
  Interest on Mortgage Investments                                $743,319            $847,960         $1,011,621
  Interest on bank deposits                                         14,086               8,487              6,563
  Late charges, prepayment penalties, and fees                      28,912              15,414             18,412
  Mortgage Servicer subsidy                                        300,000                   0                  0
                                                              -------------       -------------     --------------
                                                              -------------       -------------     --------------
                                                                 1,086,317             871,861          1,036,596
                                                              -------------       -------------     --------------
Expenses:
  Mortgage servicing fees                                           50,150              70,630             39,918
  Asset management fee                                              10,626               6,640                  0
  Clerical costs through Redwood Mortgage                           21,748              24,440             27,786
  Interest and line of credit costs                                 14,714              43,170            133,577
  Provision for doubtful accounts and losses
      on real estate acquired through foreclosure                  437,558             180,054            268,101
  Professional services                                             18,068              18,831             23,517
  Other                                                             12,544              15,591             14,510
                                                              -------------       -------------     --------------
                                                                   565,408             359,356            507,409
                                                              -------------       -------------     --------------
Net Income                                                        $520,909            $512,505           $529,187
                                                              =============       =============     ==============
Net income:  To General Partners(1%)                                $5,209              $5,125             $5,292
                      To Limited Partners (99%)                   $515,700            $507,380           $523,895
                                                              -------------       -------------     --------------
                                                                  $520,909            $512,505           $529,187
                                                              =============       =============     ==============

Net income per $1,000 invested by Limited Partners for entire period:
  -where income is reinvested and compounded                           $62                 $53                $53
                                                              =============       =============     ==============
  -where partner receives income in monthly distributions              $61                 $52                $52
                                                              =============       =============     ==============















</TABLE>
See accompanying notes to financial statements.

<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                  FOR THE THREE YEARS ENDED DECEMBER 31, 1999

<TABLE>
                                                                   PARTNERS' CAPITAL
                                     -----------------------------------------------------------------------------------
                                                LIMITED PARTNERS' CAPITAL
                                     -------------------------------------------------
                                       Capital
                                       Account          Formation                           General
                                       Limited            Loan                              Partners
                                       Partners        Receivable           Total           Capital           Total
                                     -------------    --------------    --------------    -------------    -------------
<S>                                    <C>                <C>              <C>                  <C>          <C>
Balances at December 31, 1996          10,507,101         (121,849)        10,385,252           $9,766       10,395,018

Formation Loan collections                      0            53,833            53,833                0           53,833
Net income                                523,895                 0           523,895            5,292          529,187
Early withdrawal penalties               (13,409)             8,495           (4,914)                0          (4,914)
Partners' withdrawals                 (1,536,379)                 0       (1,536,379)          (5,292)      (1,541,671)
                                     -------------    --------------    --------------    -------------    -------------

Balances at December 31, 1997          $9,481,208         ($59,521)        $9,421,687            9,766       $9,431,453

Formation Loan collections                      0            53,291            53,291                0            53,291
Net Income                                507,380                 0           507,380            5,125           512,505
Early withdrawal penalties                (9,834)             6,230           (3,604)                0           (3,604)
Partners' withdrawals                 (1,280,986)                 0       (1,280,986)          (5,125)       (1,286,111)
                                     -------------    --------------    --------------    -------------    --------------

Balances at December 31, 1998          $8,697,768                 0        $8,697,768           $9,766        $8,707,534

Net Income                                515,700                 0           515,700            5,209           520,909
Early withdrawal penalties               (10,028)                 0          (10,028)                0          (10,028)
Partners' withdrawals                 (1,182,860)                 0       (1,182,860)          (5,209)       (1,188,069)
                                     -------------    --------------    --------------    -------------    --------------

Balances at December 31, 1999          $8,020,580                 0        $8,020,580           $9,766        $8,030,346
                                     =============    ==============    ==============    =============    ==============


</TABLE>



See accompanying notes to financial statements

<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                            STATEMENTS OF CASH FLOWS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999


<TABLE>

<S>                                                                                          <C>
                                                                        YEARS ENDED DECEMBER 31,
                                                           ---------------------------------------------------

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

  Net income                                                   $520,909            $512,505          $529,187
  Adjustments to reconcile net income to net
      cash provided by operating activities:
  Provision for doubtful accounts                               442,480             268,764           264,484
  Provision for Losses (recovery) on real estate held
  Early withdrawal penalty credited to income                  (10,028)             (3,604)           (4,914)
  (Increase) decrease in assets:
  Accrued interest & advances                                 (200,903)           (134,827)         (231,173)
  Increase (decrease) in liabilities:
  Accounts payable and accrued expenses                        (22,668)              22,668                 0
  Deferred Interest on Mortgage Investments                     (4,787)              19,565          (17,624)
                                                           -------------      --------------     -------------

      Net cash provided by operating activities                 720,081             596,361           543,577
                                                           -------------      --------------     -------------

Cash flows from investing activities:

  Principal collected on Mortgage Investments                 2,859,900           1,934,071         1,634,128
  Mortgage Investments made                                   (922,936)         (1,798,822)         (557,796)
  Additions to real estate held for sale                       (24,112)             (2,785)          (47,415)
  Dispositions of real estate held for sale                      65,656              85,449           909,491
  Investment in Partnership                                           0           (215,281)         (212,101)
  Proceeds from Partnership                                           0           1,068,865                 0
  Proceeds from unsecured accounts receivable                         0              42,605                 0
                                                           -------------      --------------     -------------
    Net cash provided by (used in) investing activities       1,978,508           1,114,102         1,726,307
                                                           -------------      --------------     -------------

Cash flows from financing activities:

 Net increase (decrease) in note payable-bank                 (390,000)           (509,011)         (631,500)
 Partners withdrawals                                       (1,188,069)         (1,286,111)       (1,541,671)
 Formation Loan collections                                           0              53,291            53,833
 Note receivable - Redwood Mortgage Corp.                     (300,000)                   0                 0
                                                           -------------      --------------     -------------

    Net cash provided by (used in) financing activities     (1,878,069)         (1,741,831)       (2,119,338)
                                                           -------------      --------------     -------------

Net increase (decrease) in cash                                 820,520            (31,368)           150,546

Cash - beginning of period                                      299,775             331,143           180,597
                                                           -------------      --------------     -------------

Cash - end of period                                         $1,120,295            $299,775          $331,143
                                                           =============      ==============     =============



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


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                              DECEMBER 31, 1999

NOTE 1 - ORGANIZATION AND GENERAL

Redwood  Mortgage  Investors  VI, (the  "Partnership")  is a California  Limited
Partnership,  of which the General Partners are D. Russell  Burwell,  Michael R.
Burwell and Gymno  Corporation,  a California  corporation owned and operated by
the individual  General  Partners.  The  partnership  was organized to engage in
business  as a  mortgage  lender  for the  primary  purpose  of making  Mortgage
Investments  secured  by  Deeds of Trust on  California  real  estate.  Mortgage
Investments are being arranged and serviced by Redwood Mortgage Corp.,  (Redwood
Mortgage),  an affiliate of the General  Partners.  The offering was closed with
contributed capital totaling $9,781,366.

Each month's income is  distributed  to partners based upon their  proportionate
share of partners'  capital.  Some partners have elected to withdraw income on a
monthly, quarterly or annual basis.

A. Sales Commissions - Formation Loan

Sales  commissions  ranging  from 0% (units sold by General  Partners) to 10% of
gross  proceeds were paid by Redwood  Mortgage Corp. an affiliate of the General
Partners  that  arranges and services the Mortgage  Investments.  To finance the
sales  commissions,  the Partnership  loaned to Redwood Mortgage Corp.  $623,255
(the  "Formation  Loan")  relating to  contributed  capital of  $9,781,366.  The
Formation Loan was unsecured,  and was repaid without  interest,  over 10 years,
commencing December 31, 1989. The last payment was made during 1998.

B. Other Organizational and Offering Expenses

Organizational and offering expenses,  other than sales commissions,  (including
printing  costs,  attorney and accountant  fees,  and other costs),  paid by the
Partnership  from the offering  proceeds  totaled $360,885 or 3.69% of the gross
proceeds  contributed by the Partners.  Such costs have been fully amortized and
allocated to the Partners.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Accrual Basis

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

B. Management Estimates

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


<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

C. Mortgage Investments, Secured by Deeds of Trust

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

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

At  December  31,  1999,  1998 and  1997,  reductions  in the  cost of  Mortgage
Investments  categorized  as  impaired  by the  Partnership  totalled  $283,249,
$84,736 and $0, respectively.  The reduction in stated value was accomplished by
increasing the allowances for doubtful accounts.

As presented in Note 10 to the financial statements as of December 31, 1999, the
average mortgage investment to appraised value of security at the time the loans
were consummated was 66.50%. When a loan is valued for impairment  purposes,  an
updating is made in the valuation of collateral security. However, a low loan to
value ratio tends to minimize reductions for impairment.

D. Cash and Cash Equivalents

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

E. Real Estate Owned, Held for Sale

Real  estate  owned,  held for  sale,  includes  real  estate  acquired  through
foreclosure  and is  stated  at the  lower  of the  recorded  investment  in the
property,  net of any senior  indebtedness,  or at the property's estimated fair
value,  less  estimated  costs to sell. At December 31, 1999 one property was in
the  process  of  becoming  Real  Estate  Owned.  It was valued at fair value of
$668,132 based on a current appraisal. The $668,132 is net of reduction in value
of $287,548.


<PAGE>
                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

The  following  schedule  reflects  the costs of real  estate  acquired  through
foreclosure and the recorded reductions to estimated fair values, less estimated
costs to sell as of December 31, 1999 and 1998 not including the  aforementioned
Real Estate in the process of acquisition:

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

Costs of properties                 $161,415                         $366,655
Reduction in value                    28,115                          196,733
                                ---------------                 ----------------

Fair value reflected
in financial statements             $133,300                         $169,922
                               ===============                 ================

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

F. Income Taxes

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

G. Organization and Syndication Costs

The Partnership  bears its own  organization  and syndication  costs (other than
certain  sales  commissions  and  fees  described  above)  including  legal  and
accounting expenses,  printing costs, selling expenses, a 1% wholesale brokerage
fee and filing fees.  Organizational  costs of $14,750 were capitalized and were
amortized  over a five year period.  Syndication  costs of $346,135 were charged
against partners' capital and were allocated to individual  partners  consistent
with the Partnership Agreement.

H. Allowance for Doubtful Accounts

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

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

Impaired Mortgage Investments          $283,249                          $84,736
Unspecified Mortgage Investments         20,000                           93,732
Accounts receivable, unsecured                0                           23,776
                                ---------------                 ----------------
                                       $303,249                         $202,244


<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 1999

I. Net Income Per $1,000 Invested

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

NOTE 3 - GENERAL PARTNERS AND RELATED PARTIES

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

A. Mortgage Brokerage Commissions

Mortgage  brokerage  commissions  for  services in  connection  with the review,
selection,  evaluation,  negotiation  and extension of the Mortgage  Investments
were limited up to 12% of the  principal  amount of the loans through the period
ending  6  months  after  the  termination  date  of the  offering.  Thereafter,
commissions  are limited to an amount not to exceed 4% of the total  Partnership
assets  per year.  Such  commissions  are paid by the  borrowers,  thus,  not an
expense of the Partnership.  Such  commissions  totalled $46,527 and $36,700 for
the years ended December 31, 1999 and 1998, respectively.

B. Mortgage Servicing Fees

Monthly  mortgage  servicing  fees are paid to Redwood  Mortgage up to 1/8 of 1%
(1.5%  annual) of the unpaid  principal,  or such lesser amount as is reasonable
and customary in the  geographic  area where the property  securing the Mortgage
Investment is located. Mortgage servicing fees of $50,150, $70,630, and $39,918,
were incurred for years 1999, 1998 and 1997, respectively.

C. Asset Management Fee

The General  Partners are  authorized  to receive  monthly fees for managing the
Partnership's  Mortgage Investment  portfolio and operations of up to 1/32 of 1%
(3/8 of 1%  annually).  Management  fees incurred for 1999 and 1998 were $10,626
and $6,640, respectively. There were no Management fees in 1997.

D. Other Fees

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

E. Income and Losses

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

<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

F. Operating Expenses

The General Partners or their affiliate  (Redwood Mortgage Corp.) are reimbursed
by the  Partnership  for all  operating  expenses  actually  incurred by them on
behalf of the Partnership,  including without limitation,  out-of-pocket general
and administration expenses of the Partnership, accounting and audit fees, legal
fees and expenses,  postage and preparation of reports to Limited  Partners.  In
1999,  1998 and 1997,  clerical costs totaling  $21,748,  $24,440,  and $27,786,
respectively,  were  reimbursed to Redwood  Mortgage  Corp.  and are included in
expenses in the Statements of Income.

NOTE 4 OTHER PARTNERSHIP PROVISIONS

A. Term of the Partnership

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

B. Election to Receive Monthly, Quarterly or Annual Distributions

Upon  subscriptions,  investors elected either to receive monthly,  quarterly or
annual distributions of earnings  allocations,  or to allow earnings to compound
for at least a period of 5 years.

C. Profits and Losses

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

D. Withdrawal From Partnership

A Limited Partner had no right to withdraw from the Partnership or to obtain the
return of his  capital  account  for at least  five  years  after such units are
purchased  which in all instances had occurred by December 31, 1999.  After that
time,  at the election of the Partner,  capital  accounts can be returned over a
five year period in 20 equal quarterly  installments or such longer period as is
requested.

Notwithstanding  the above, in order to provide a certain degree of liquidity to
the Limited  Partners,  the General Partners will liquidate a Limited  Partner's
entire 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. Such liquidations shall, however, be subject to a 10% early withdrawal
penalty  applicable  to any sums  withdrawn  prior to the time  when  such  sums
otherwise could have been withdrawn  pursuant to the  liquidation  procedure set
forth  above.  The  10%  early  withdrawal  penalty  will  be  received  by  the
Partnership, and a portion of the sums collected as such penalty will be applied
toward the next installment(s) of principal under the Formation Loan owed to the
Partnership by Redwood  Mortgage  Corp.  Such portion shall be determined by the
ratio between the initial amount of Formation Loan and the total amount of other
organization and syndication costs incurred by the Partnership in this offering.
The  balance of any such early  withdrawal  penalties  shall be  retained by the
Partnership for its own account and applied against syndication costs. Since the
syndication  costs have been fully  amortized as of December  31, 1993,  and the
formation loan was paid in 1998, the early  withdrawal  penalties  gained in the
future will be credited to income for the period received.

<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

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.

NOTE  5 - NOTE RECEIVABLE - REDWOOD MORTGAGE CORP.

Redwood  Mortgage Corp., an affiliate of the General Partners which arranges and
services the Mortgage  Investments of the  Partnership,  has subsidized  certain
loan losses of the Partnership in the form of a note receivable.  The note bears
interest  at 8% and will be paid over a three  year  period to the  extent  that
Partnership  losses  occur  relative to certain  identified  properties.  If the
identified properties recover from their writedowns, Redwood Mortgage Corp. will
be credited or reimbursed up to the amount of the note receivable.

NOTE 6 - NOTE PAYABLE BANK - LINE OF CREDIT

The  Partnership  had a bank line of credit  secured by its Mortgage  Investment
portfolio up to $2,000,000  at 1% over prime.  The balances were $0 and $390,000
at December 31, 1999 and 1998,  respectively,  and the interest rate at December
31, 1999 was 9.25% (8.25% prime + 1%). The line of credit  expired  December 31,
1999.

NOTE 7 - LEGAL PROCEEDINGS

The  Partnership  is a defendant  along with  numerous  defendants,  including a
developer,   contractor,   and  other  lenders,   in  a  lawsuit  involving  the
Partnership's attempt to recover it's investment in real estate acquired through
foreclosure.

Management  anticipates  that the ultimate outcome of the legal matters will not
have a material  adverse effect on the net assets of the  Partnership,  with due
consideration  having  been given in  arriving  at the  allowance  for  doubtful
accounts.

NOTE 8 - INCOME TAXES

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

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

Net assets - Partners' Capital
             per financial statements          $8,030,346             $8,707,534

Allowance for doubtful accounts                   303,249                202,344
                                              ---------------   ----------------
Net assets tax basis                           $8,333,595             $8,909,878

In 1999 and 1998, approximately 72% and 71%, respectively, of taxable income was
allocated to tax exempt organizations i.e.,  retirement plans. Such plans do not
have to file income tax returns unless their "unrelated business income" exceeds
$1,000.   Applicable  amounts  become  taxable  when  distribution  is  made  to
participants.

<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

NOTE 9 - 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, are subject to immediate withdrawal.

(b) The Carrying Value of Mortgage Investments - (see note 2 (c)) was $5,282,773
at December 31, 1999.  The fair value of these  investments  of  $5,290,784  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 doubtful  accounts  along with accrued  interest and advances
related  thereto  should also be considered in evaluating  the fair value versus
the carrying value.

NOTE 10 - ASSET CONCENTRATIONS AND CHARACTERISTICS

The Mortgage Investments are secured by recorded deeds of trust. At December 31,
1999,  there  were  41  Mortgage  Investments  outstanding  with  the  following
characteristics:

Number of Mortgage Investments outstanding                                   41
Total Mortgage Investments outstanding                               $5,282,773

Average Mortgage Investment outstanding                                $128,848
Average Mortgage Investment as percent of total                            2.44%
Average Mortgage Investment as percent of Partners' Capital                1.60%

Largest Mortgage Investment outstanding                              $1,376,117
Largest Mortgage Investment as percent of total                           26.05%
Largest Mortgage Investment as percent of Partners' Capital               17.14%

Number of counties where security is located (all California)                10
Largest percentage of Mortgage Investments in one county                  34.73%
Average Mortgage Investment to appraised value of security at time
     Mortgage Investment was consummated                                  66.50%
Number of Mortgage Investments in foreclosure                                 1




<PAGE>



                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

The following  categories of mortgage  investments are pertinent at December 31,
1999 and 1998:
                                                       December 31,
                                           -------------------------------------
                                              1999                      1998
                                           -----------------       -------------
First Trust Deeds                            3,810,670                4,432,246
Second Trust Deeds                           1,273,693                2,892,870
Third Trust Deeds                              198,410                  394,620
Fourth Trust Deeds                                   0                  249,999
                                           -----------------       -------------
  Total mortgage investments                 5,282,773                7,969,735
Prior liens due other lenders                6,705,986               12,348,933
                                           -----------------       -------------
  Total debt                               $11,988,759              $20,318,668
                                           =================       =============

Appraised property value at time of loan   $18,027,960              $31,128,892
                                           =================       =============

Total investments as a percent of appraisals     66.50%                   65.27%
                                          ==================       =============

Investments by Type of Property

Owner occupied homes                            264,673                  944,491
Non-Owner occupied homes                        403,809                  374,408
Apartments                                      730,934                  817,819
Commercial                                    3,883,357                5,833,017
                                             -------------         -------------
                                             $5,282,773               $7,969,735
                                             =============         =============


<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

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

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

                             2000                                    $3,498,114
                             2001                                       453,996
                             2002                                       456,011
                             2003                                       371,008
                             2004                                       203,747
                          Thereafter                                    299,897
                                                               -----------------
                                                                     $5,282,773

The scheduled  maturities  for 2000 include  $3,301,156 in Mortgage  Investments
which are past  maturity at December  31,  1999.  $2,242,215  of those  Mortgage
Investments were categorized as delinquent over 90 days.

Nine Mortgage Investments with principal  outstanding of $2,420,052 had interest
payments overdue in excess of 90 days.

The cash  balance at  December  31,  1999 of  $1,120,295  were in two banks with
interest  bearing  balances  totalling  $1,105,464.  The balances  exceeded FDIC
insurance limits (up to $100,000 per bank) by $920,295.  As and when deposits in
the Partnership's bank accounts increase significantly beyond the insured limit,
the funds are generally either placed in new Mortgage Investments or used to pay
down on the line of credit balance, if any.

<PAGE>

SCHEDULE VIII

                        VALUATION AND QUALIFYING ACCOUNTS
                          REDWOOD MORTGAGE INVESTORS VI
<TABLE>

Col. A              Col. B                     Col. C                     Col. D         Col. E
Description         Balance                  Additions                  Deductions       Balance at
                                   -------------------------------
                    Beginning                                           Describe        End of Period
                    of Period           (1)             (2)
                                   Charged to      Charged     to
                                   & Expenses      Accounts -
                                                   Describe

Year Ended
12/31/99

Deducted from
Asset Accounts:

Allowance for
<S>                   <C>             <C>                <C>               <C>             <C>
Doubtful Accounts     $202,344        $442,480           $0                $(341,575)      $303,249

Cumulative
writedown of
Real Estate held
for sale (REO)       $196,733         ($4,922)           $0       ($163,696)                $28,115
                    ----------      -----------     ------------ ---------------    ------------------

Total                $399,077         $437,558           $0       $(505,271)               $331,364



</TABLE>

 .<PAGE>


SCHEDULE IX
<TABLE>

                              SHORT-TERM BORROWINGS
                 REDWOOD MORTGAGE INVESTORS VI - RULE 12-10

Col. A              Col. B            Col. C            Col. D            Col. E            Col. F
Category of         Balance at end    Weighted          Maximum Amount    Average Amount    Weighted
Aggregate           of Period         Average           Outstanding       Outstanding       Average
Short-Term                            Interest Rate     During the        During the        Interest Rate
Borrowings                                              Period            Period            During the
                                                                                            Period
=================== ================= ================= ================= ================= =================
<S>                 <C>               <C>               <C>               <C>               <C>
Year-Ended
12/31/99            $0                10.55%            $400,000          $139,453          10.55%



</TABLE>

<PAGE>
<TABLE>

SCHEDULE XII

                                MORTGAGE LOANS ON REAL ESTATE.
                        RULE 12-29 MORTGAGE INVESTMENTS ON REAL ESTATE

<S>      <C>       <C>       <C>         <C>          <C>          <C>           <C>         <C>         <C>
Col. A   Col. B    Col. C    Col. D      Col. E       Col. F       Col. G        Col. H      Col. I      Col. J
Descp.   Interest Final     Periodic   Prior Liens   Face Amt     Carrying     Prin. Amt    Type of    Geographic
          Rate    Maturity  Payment                     of        amount of        of         Lien       County
                    Date      Terms                  Mortgage     Mortgage     Mtg Invmts               Location
                                                    Investment   Investment    subject to
                                                     (original                   Delinq
                                                       amt)                     Prin. or
                                                                                Interest
-------- -------- --------- ---------- ------------ ------------ ------------ ------------- ---------- ------------
Comm      14.75%  09/01/95   2,241.96   250,000.00   185,000.00   179,044.28               2nd Mtg   San Mateo
Res       13.75%  10/01/96     275.00    55,374.00    24,000.00    24,000.00               2nd Mtg   San Mateo
Comm      13.75%  10/01/96     644.53         0.00    56,250.00    21,917.87               1st Mtg   San Mateo
Res       12.50%  02/01/07     554.63         0.00    45,000.00    31,501.47               1st Mtg   Santa Cruz
Res        6.00%  04/01/96     106.81    10,470.00    20,000.00    19,738.80    19,738.80  2nd Mtg   Sacramento
Res        4.00%  04/01/97     113.30         0.00    22,500.00    23,130.86    23,130.86  1st Mtg   Sacramento
Res        4.00%  04/01/97     120.00         0.00    24,000.00    22,103.04               1st Mtg   Sacramento
Comm      10.00%  08/06/02     709.38    30,802.00    82,873.25    75,763.37               2nd Mtg   Alameda
Apts      6.500%  05/01/06     540.83    89,904.00   100,000.00    96,716.11    13,520.75  2nd Mtg   Sacramento
Comm      10.00%  12/01/98   1,755.14         0.00   200,000.00   197,333.47   197,333.47  1st Mtg   Stanislaus
Comm      10.00%  12/01/98   5,046.04         0.00   575,000.00   566,694.43   566,694.43  1st Mtg   Alameda
Comm       7.00%  12/01/03   1,151.48   562,500.00    99,172.75    81,121.58    17,272.20  2nd Mtg   Alameda
Comm      12.00%  02/01/99  14,025.12         0.00 1,376,117.03 1,376,117.03 1,376,117.03  1st Mtg   Santa Clara
Land      12.00%  07/01/96   1,352.50   494,979.00   135,250.00   135,250.00               3rd Mtg   Sonoma
Res        8.00%  12/01/00     500.00   148,004.00    52,500.00    41,526.48               2nd Mtg   Santa Clara
Apts       7.00%  02/10/05     234.06    80,250.00    40,125.00    40,125.00               2nd Mtg   San Francisco
Res       12.00%  06/25/94     100.00         0.00    10,000.00    10,000.00    10,000.00  1st Mtg   Sacramento
Apts      11.50%  04/01/05     123.79         0.00   150,000.00    12,499.99               lst Mtg   San Francisco
Comm       9.00%  05/10/02     670.52         0.00    83,333.33    80,248.34               lst Mtg   Shasta
Comm      12.00%  02/01/11     756.11         0.00    63,000.00    56,376.37               1st Mtg   Alameda
Land      14.00%  02/01/97   3,822.50         0.00   382,250.00   235,381.46               1st Mtg   Santa Clara
Res        8.00%  09/18/03     166.58         0.00    22,701.51    21,992.54               lst Mtg   Sonoma
Res        8.00%  09/30/03     170.67         0.00    23,259.09    22,566.55               1st Mtg   Sonoma
Comm      12.00%  02/01/99     508.40 1,279,200.00    49,200.00    49,200.00    49,200.00  2nd Mtg   Santa Clara
Apts       7.00%  08/01/02   1,545.83         0.00   265,000.00   265,000.00               lst Mtg   Sacramento
Apts       7.00%  08/01/03   1,022.35         0.00   153,660.00   151,553.33               lst Mtg   Sacramento
Apts       9.00%  02/01/99      38.42   153,534.00     5,122.00     5,122.00               2nd Mtg   Sacramento
Res       12.00%  04/01/14     459.06    33,287.00    38,250.00    37,615.63               2nd Mtg   Santa Cruz
Comm      12.00%  06/01/01   1,000.00         0.00   100,000.00   100,000.00               lst Mtg   San Francisco
Apts      13.00%  11/01/03     759.15   341,094.00    60,000.00    27,392.08               2nd Mtg   San Francisco
Res       13.75%  11/01/03   2,202.61         0.00   167,500.00    66,381.46               lst Mtg   Alameda
Apts      14.00%  03/01/92   1,184.87   960,000.00   100,000.00    94,593.44               2nd Mtg   Santa Clara
Comm      14.50%  05/01/04   4,233.05   532,392.00   310,000.00   162,711.06               2nd Mtg   San Mateo
Comm      11.50%  05/01/99   3,113.39         0.00   314,000.00   303,210.60               lst Mtg   Alameda
Apts      14.00%  06/01/92     473.95 1,060,000.00    40,000.00    37,932.20               3rd Mtg   Santa Clara
Res       14.25%  07/01/04     984.46    78,672.00    73,000.00    41,036.05               2nd Mtg   San Francisco
Res       14.50%  04/01/05     546.20   150,804.00    40,000.00    25,228.08               3rd Mtg   San Francisco
Comm      10.00%  08/01/00   1,428.14    59,402.00   160,000.00   155,652.19               2nd Mtg   San Mateo
Comm      12.00%  06/01/01     993.53   100,000.00   120,952.39   107,334.91               2nd Mtg   San Francisco
Res       12.00%  05/01/01   2,086.91         0.00   600,000.00   246,661.14               1st Mtg   Placer
Res       11.00%  11/01/02     320.83   235,318.00    35,000.00    35,000.00               2nd Mtg   San Mateo

                          $58,082.10 $6,705,986.00 $6,404,016.35 $5,282,773.21 $2,273,007.54

</TABLE>

<PAGE>

Notes:
         Mortgage  Investments  classified  as impaired had  principal  balances
         totalling  $2,880,778.  Impaired  Mortgage  Investments  are defined as
         Mortgage  Investments  where the costs of related  balances exceeds the
         anticipated  fair value less costs to  collect.  Interest  is no longer
         accrued thereon.

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


<PAGE>
Schedule XII

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

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

<S>                                              <C>                   <C>                   <C>
Balance at beginning of year                     $7,969,735            $8,104,984            $9,313,924
                                              --------------       ---------------      ----------------
Additions during period:
  New Mortgage Investments                          922,936             1,798,822               557,796
  Other                                                   0                     0                     0
                                              --------------       ---------------      ----------------
                  Total Additions                  $922,936            $1,798,822              $557,796
                                              --------------       ---------------      ----------------
Deductions during period:
  Collections of principal                        2,859,900             1,934,071             1,634,128
  Foreclosures                                      499,999                     0                     0
  Cost of Mortgage Investments sold                       0                     0                     0
  Amortization of Premium                                 0                     0                     0
  Other                                             249,999                     0               132,608
                                              --------------       ---------------      ----------------
                  Total Deductions                3,609,898             1,934,071             1,766,736
                                              --------------       ---------------      ----------------

Balance at close of year                         $5,282,773            $7,969,735            $8,104,984
                                              ==============       ===============      ================
</TABLE>
<PAGE>




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

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

                                    Part III

Item 10 - Directors and Executive  Officers of the Registrant.

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



<PAGE>


Item 11 - Executive Compensation

   COMPENSATION OF THE GENERAL PARTNERS AND AFFILIATES BY PARTNERSHIP

         As  indicated  above in item 10, the  Partnership  has no  officers  or
directors. The Partnership is managed by the General Partners. There are certain
fees and other items paid to  management  and related  parties.  A more complete
description of management compensation is found in the Prospectus,  pages 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, 1999. All
such compensation is in compliance with the guidelines and limitations set forth
in the Prospectus.
<TABLE>

Entity Receiving Compensation            Description of Compensation and Services Rendered          Amount
--------------------------------------- ----------------------------------------------------- -------------
I.
<S>                                                                                                <C>
Redwood Mortgage Corp.                  Mortgage Servicing Fee for servicing Mortgage              $50,150
                                        Investments
General Partners &/or Affiliates        Asset Management Fee for managing Assets                   $10,626

General Partners                        1% interest in profits                                      $5,209


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

Redwood Mortgage Corp.                  Mortgage Brokerage Commissions for services
                                        in connection with the review, selection,
                                        evaluation, negotiation, and extension of the
                                        Mortgage Investments paid by the borrowers
                                        and not by the Partnership                                 $46,527

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                    $1,704

Gymno Corporation, Inc.                 Reconveyance Fee                                            $7,075


III. IN ADDITION,  THE GENERAL  PARTNER  AND/OR RELATED  COMPANIES PAY CERTAIN
     EXPENSES ON BEHALF OF THE  PARTNERSHIP  FOR WHICH IT IS REIMBURSED
     AS NOTED IN THE STATEMENT OF INCOME                                                           $21,748


</TABLE>
<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  footnote 3 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.

                                     Part IV

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

(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.

<PAGE>


         3. Exhibits.

Exhibit No.                Description of Exhibits

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

     10.1         Escrow Agreement (1)
     10.2         Servicing Agreement (1)
     10.3        (a) Form of Note secured by Deed of Trust which provides for
                     principal and interest payments (1)
                 (b) Form of Note secured by Deed of Trust which provides for
                     principal and interest payments and right of assumption (1)
                 (c) Form of Note secured by Deed of Trust which provides for
                     interest only payments (1)
                 (d) Form of Note (1)
     10.4        (a) Deed of Trust and Assignment of Rents to accompany Exhibits
                     10.3 (a) and (c) (1)
                 (b) Deed of Trust and Assignment of Rents to accompany Exhibits
                     10.3 (b) (1)
                 (c) Deed of Trust to accompany Exhibit 10.3 (d) (1)
     10.5        Promissory Note for Formation Loan (1)
     10.6        Agreement to Seek a Lender (1)
     24.1        Consent of Caporicci, Cropper & Larson,  LLP
     24.3        Consent of  Landels, Ripley & Diamond

         All  of  these  exhibits  were  previously  filed  as the  exhibits  to
Registrant's Statement on Form S-11 (Registration No. 33-12519) and incorporated
by reference herein.

(B)      Reports on form 8-K

         No reports on Form 8-K have been filed  during the last  quarter of the
period covered by this report.

(C)      See (A) 3 above

(D) 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.


<PAGE>
                                   Signatures

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

REDWOOD MORTGAGE INVESTORS VI


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

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

By:       Gymno Corporation, General Partner

          By:     /S/ D. Russell Burwell

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

          By:     /S/ Michael R. Burwell

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

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

Signature                              Title                             Date


/S/ D. Russell Burwell

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


/S/ Michael R. Burwell

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



/S/ D. Russell Burwell

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


/S/ Michael R. Burwell

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