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

                                December 31, 2004

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

                                                                                                             Page No.
                                                                                                          ------------
Item 1   - Business                                                                                             3
Item 2   - Properties                                                                                           7
Item 3   - Legal Proceedings                                                                                    7
Item 4   - Submission of Matters to a Vote of Security Holders (Partners)                                       7

                                                       Part II


Item 5   - Market for the Registrant's "Limited Partnership Units" and Related Unitholder Matters               8
Item 6   - Selected Financial Data                                                                              8
Item 7   - Management's Discussion and Analysis of Financial Condition and Results of Operations               10
Item 7a  - Quantitative and Qualitative Disclosures About Market Risk                                          18
Item 8   - Financial Statements and Supplementary Data                                                         20
Item 9   - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                41
Item 9a  - Controls and Procedures                                                                             41
Item 9b  - Other Information                                                                                   41

                                                      Part III


Item 10  - Directors and Executive Officers of the Registrant                                                  41
Item 11  - Executive Compensation                                                                              42
Item 12  - Security Ownership of Certain Beneficial Owners and Management                                      43
Item 13  - Certain Relationships and Related Transactions                                                      43
Item 14  - Principal Accountant Fees and Services                                                              43

                                                       Part IV

Item 15  - Exhibits, Financial Statements and Schedules                                                        44

Signatures                                                                                                     45

Certifications                                                                                                 46
</TABLE>

                                       1
<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    Form 10-K

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

                      For the Year Ended December 31, 2004

                                       OR

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

         For the transition period from ______________ to ______________

                        Commission File Number: 33-12519

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

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

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

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

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

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

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

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

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

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

     As of June 30, 2004, the aggregate value of limited  partnership Units held
by  non-affiliates  was  $6,473,257.  This  calculation  is based on the capital
account balance of the limited partners and excludes limited  partnership  Units
held by the general partners.

Documents incorporated by reference:

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

                                       2
<PAGE>

                                     Part I


Item 1 - Business

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

     The  Partnership  was formed in September  1987,  with an approved  120,000
Units of $100 each  ($12,000,000).  The Units were  offered on a "best  efforts"
basis  through  broker/dealer  member  firms  of  the  National  Association  of
Securities Dealers,  Inc. It immediately began issuing Units and began investing
in loans in October 1987. The offering  terminated in September  1989, and as of
that date  97,725.94  limited  partner  Units were sold  realizing  proceeds  of
$9,772,594.  At  December  31,  2004,  the  Partnership  had a balance  of loans
totaling $5,225,128 with interest rates thereon ranging from 6.50% to 10.50%.

     Currently  first  mortgage  loans  comprise  80.63% of the total  amount of
secured loan  portfolio.  Second  mortgage loans comprise  19.37% of the secured
loan portfolio.  Owner-occupied  homes,  combined with non-owner occupied homes,
total 25.20% of the secured mortgage loans. Secured mortgage loans to apartments
make up 1.85% of the total secured  loans  portfolio.  Commercial  secured loans
increased from last year, now comprising 72.95% of the portfolio, an increase of
4.20% from 2003. The major concentration of secured loans,  comprising 88.67% of
the total secured loans, are in four counties of the San Francisco Bay Area. The
balance is  primarily  in Northern  California.  Currently  secured loan size is
averaging  $373,223  per loan.  Some of the  secured  loans  are  fractionalized
between  affiliated  partnerships  with  objectives  similar  to  those  of  the
Partnership to further reduce risk.  Average equity per loan transaction,  which
is our loan plus any senior loans,  divided by the property's  appraised  value,
subtracted  from 100%,  stood at  20.33%,  based on senior  loans and  appraised
values  at the  inception  of our loan.  Generally,  the more  equity,  the more
protection for the lender. The Partnership's loan portfolio had no properties in
foreclosure as of the end of December 2004.

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

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

     The Partnership also owns (through previous foreclosure in April, 1993) one
other  property;  undeveloped  land.  The land is located in East Palo Alto. The
land is owned with two other affiliated partnerships.  Currently the property is
on the market for sale. The Partnership's net investment of $128,902 is 2.00% of
Partnership  assets.  The general  partners  believe  that the property is worth
considerably more than its net investment, but it may take a considerable amount
of  additional  time to sell the  property and realize its full  potential.  The
property is unique in that it may only be utilized for  commercial or industrial
uses.  Until  recently,  land sales activity had been slow, but interest in land
sales for commercial sites has been increasing.

                                       3
<PAGE>

     The Partnership's  revenues  decreased from $574,171 in 2002 to $491,640 in
2003,  but increased to $538,737 in 2004.  The decline from 2002 to 2003 was due
largely to the decline in the average interest rate on loans, which was 8.16% in
2002 and 7.80% in 2003,  and an increase in the average  interest  rate in 2004,
which was 8.41%. Cash flow the Partnership  generated from mortgage interest and
loan pay-downs and pay-offs was used primarily to meet limited  partner  capital
and  earnings  liquidations.  For  the  three  years  ended  December  31,  2004
withdrawals  by limited  partners  were  $602,753 in 2002,  $506,503 in 2003 and
$510,115 in 2004.

     During the year 2004,  the  Partnership's  annualized  yield on compounding
accounts was 5.40% and on monthly distributing accounts it was 5.27%.

Competition and General Economic Conditions.

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

     Beginning in July of 2004,  the Federal  Reserve  changed its interest rate
policy from one of three years of continuously lowered interest rates, which hit
a 40 year historic  interest  rate low, to one of tempered but gradual  interest
rate  increases.  In keeping with this new policy  since July 2004,  the Federal
Reserve has  increased the Federal  Funds Rate by one quarter  percentage  point
(1/4 of one percent) at each of its last five  meetings to 2.25% as of March 22,
2005. This  deliberate  upward change in the Federal Funds Rate has caused short
term interest rates to rise, and to a lesser degree, pushed longer term rates up
as well.  Nationally and more specifically in Northern California,  the location
of the majority of our lending activities, the economies are recovering from the
economic  downturn from 2000 to 2003.  Employment  and job creation is improving
but is still lower than  desirable.  During 2004, the residential and commercial
real  estate  markets  in  Northern  California  enjoyed  a solid  year of price
appreciation. With the prospect of solid real estate values, low interest rates,
and an  improving  economy,  lenders  of all types are  anxious to lend money to
borrowers  secured  by their  real  estate.  Competition  for  loans is  fierce.
Additionally,  those  borrowers that had waited hoping to find the bottom of the
interest  rate cycle,  have decided  that the time has come to  refinance  their
existing higher rate loans. This has caused a significant  amount of loan runoff
to lower interest rate lenders than the partnership. These two factors have made
it  difficult,  particularly  in the final  quarter of the year 2004, to stay as
fully invested as is optimum. It is anticipated that significant competition for
loans will  continue.  Excess cash will be invested  in  short-term  alternative
investments,  such as money market  funds  yielding  considerably  less than the
current loan investment portfolio.

                                       4
<PAGE>

Secured Loan Portfolio

     As of  December  31,  2004,  a summary of the  Partnership's  secured  loan
portfolio is set forth below.

   Loans as a Percentage of Appraised Value

   First Trust Deed Loans                                        $   4,212,912
   Second Trust Deed Loans                                           1,012,216
                                                                ---------------
        Total loans                                              $   5,225,128

   Priority Positions due other Lenders at Time of Loan              3,026,354

        Total Debt                                               $   8,251,482
                                                                ===============

   Appraised Property Value at time of loan                      $  10,356,549

        Total Secured Loans as a % of Appraisal based on
         appraisals and prior liens at date of loan                     79.67%

   Number of Secured Loans Outstanding                                      14

   Average Secured Loan                                                373,223
   Average Secured Loan as a % of Net Assets                             5.80%
   Largest Secured Loan Outstanding                                  2,103,300
   Largest Secured Loan as a % of Net Assets                            32.71%
   Largest secured Loan as a % of Assets                                32.59%


   Secured Loans as a Percentage of Total Loans                     Percent
   -----------------------------------------------------        ---------------
   First Trust Deeds                                                    80.63%
   Second Trust Deeds                                                   19.37%
                                                                ---------------
        Total                                                          100.00%
                                                                ===============
<TABLE>
<S><C>                                                              <C>               <C>

   Secured Loans by Type of Property                                Amount            Percent
   -----------------------------------------------------        ---------------     -------------

   Owner Occupied Homes                                          $     627,579            12.01%
   Non-Owner Occupied Homes                                            689,017            13.19%
   Apartments                                                           96,716             1.85%
   Commercial                                                        3,811,816            72.95%
                                                                ---------------     -------------
        Total                                                    $   5,225,128           100.00%
                                                                ===============     =============
</TABLE>

                                       5
<PAGE>

     The following is a distribution of secured loans outstanding as of December
31, 2003 by Counties:

                                                         Total
                    California County                Secured Loans     Percent
  ----------------------------------------------    --------------   -----------

  San Francisco Bay Area Counties
      Santa Clara                                    $  2,209,045        42.28%
      Alameda                                           1,953,623        37.39%
      San Francisco                                       325,000         6.22%
      San Mateo                                           145,106         2.78%
                                                    --------------   -----------
                                                        4,632,774        88.67%

  San Francisco Bay Area Adjacent Counties
      Monterey                                            200,000         3.83%
      Stanislaus                                          175,865         3.36%
                                                    --------------   -----------
                                                          375,865         7.19%

  Other California Counties
      Colusa                                              119,773         2.29%
      Sacramento                                           96,716         1.85%
                                                    --------------   -----------
                                                          216,489         4.14%

  Total                                              $  5,225,128       100.00%
                                                    ==============   ===========

Statement of Condition of loans:
  Number of Loans in Foreclosure                     0

     Scheduled  maturity  dates of secured  loans as of December 31, 2004 are as
follows:

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

                             2005                   $   664,882
                             2006                       621,716
                             2007                     3,205,206
                             2008                             0
                             2009                       627,579
                          Thereafter                    105,745
                                                   -------------
                                                    $ 5,225,128
                                                   =============

     The  Partnership's  largest  loan in the  principal  amount  of  $2,103,300
represents 40.25% of outstanding secured loans and 32.59% of Partnership assets.
Larger  loans  sometimes  increase  above 10% of the secured  loan  portfolio or
Partnership assets as these amounts decrease due to limited partner  withdrawals
and loan payoffs and due to  restructuring  of existing  loans. In this instance
all of these factors  affected this loan.  Chief among them was a restructure of
two loans  with  outstanding  principal  plus  accrued  interest,  late fees and
advances into one new loan with an outstanding balance of $2,103,300.

     The  Partnership has a substantial  amount of its loan  receivable  balance
from one borrower at December  31, 2004 and 2003.  The  borrower  accounted  for
approximately  59% and 58% of the loan balances at such dates. This borrower has
two loans secured by separate  properties in the principal amounts of $2,103,000
and $956,800 as of December 31, 2004.

                                       6
<PAGE>

     The  scheduled   maturities  for  2005  include  two  loans  for  $175,865,
representing 3.37% of the secured loan portfolio,  past maturity at December 31,
2004.  Additionally,  one loan for $96,716 (1.85% of the secured loan portfolio)
was  categorized  as impaired.  A loan is  categorized  as impaired  when events
and/or  changes in  circumstances  cause the  management to have serious  doubts
about the collectibility of the contractual payments,  and interest is no longer
accrued.  The Partnership  occasionally allows borrowers to continue to make the
regular  interest  payments on debt past  maturity for periods of time.  In many
instances  the  interest  rate on  these  past  maturity  loans is  higher  than
currently  existing  interest  rates.  Interest  payments  on these  loans  were
current, except for the one impaired loan where repayment was delinquent over 90
days.  The borrowers on this impaired loan made a number of payments in 2004 and
have  reduced the  advances on loans  balance by $1,041 to $2,287 as of December
31, 2004.


Item 2 - Properties

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

     The  Partnership  also  owns,  through  previous  foreclosures,  one  other
property;  undeveloped  land. The land is located in East Palo Alto. The land is
owned with two other affiliated  partnerships.  The Partnership's net investment
in the land at December 31, 2004 is $128,902.  Currently  the property is on the
market  for sale.  The  general  partners  believe  that the  property  is worth
considerably more than its net investment, but it may take a considerable amount
of  additional  time to sell the  property and realize its full  potential.  The
property is unique in that it may only be utilized for  commercial or industrial
uses.  Until  recently,  land sales activity had been slow, but interest in land
sales for commercial sites has been increasing.


Item 3 - Legal Proceedings

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


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

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


                                       7
<PAGE>

                                     Part II


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

     120,000  Units  at $100  each  (minimum  20  Units)  were  offered  through
broker-dealer  member firms of the National Association of Securities Dealers on
a "best  efforts"  basis (as indicated in Part I item 1). All Units were sold to
California  residents.  Investors have the option of  withdrawing  earnings on a
monthly,  quarterly  or annual basis or having  their  earnings  retained in the
Partnership.  Limited  partners may withdraw from the  Partnership in accordance
with  the  terms  of the  partnership  agreement  subject  to  early  withdrawal
penalties.  There is no established  public trading market for the Units.  As of
December 31, 2004, 389 limited partners had a capital balance of $6,420,047.

     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.


Item 6 - Selected Financial Data

     Redwood  Mortgage  Investors  VI began  operations  in October,  1987.  Its
financial  condition and results of operation as of and for the five years ended
December 31, 2004 were:

                                 Balance Sheets
<TABLE>
<S>                                                 <C>              <C>             <C>             <C>              <C>

                                                                                December 31,
                                                ------------------------------------------------------------------------------

                                                    2004             2003            2002            2001             2000
                                                -------------    ------------    ------------    ------------    ------------
Cash                                             $ 1,090,027      $   32,160      $  341,127      $  190,414      $  354,860

Loans
   Loans, secured by deeds of trust                5,225,128       5,255,620       5,183,100       4,970,433       5,570,576
   Loans, unsecured                                  261,276         242,462         223,697          82,362          82,362

Interest and other receivables
   Accrued interest and late fees                     61,364          54,562          61,384         797,105         664,292

   Advances on loans                                   2,890           4,091          31,007         197,946         133,647

Less allowances for loan losses                    (315,751)       (279,865)       (275,294)       (370,612)       (261,452)
Note receivable - Redwood Mortgage Corp.                   -               -               -         178,200         125,000
Real estate held for sale, net                       128,902       1,312,773       1,234,541       1,093,503         767,583
                                                -------------    ------------    ------------    ------------    ------------

      Total assets                               $ 6,453,836      $6,621,803      $6,799,562      $7,139,351      $7,436,868
      ------------
                                                =============    ============    ============    ============    ============
</TABLE>


                                       8
<PAGE>

                        Liabilities and Partners' Capital
<TABLE>
<S>                                                <C>               <C>              <C>               <C>              <C>

                                                                                 December 31,
                                               ----------------------------------------------------------------------------------

                                                   2004              2003             2002              2001             2000
                                               -------------     -------------    -------------     -------------    ------------
Liabilities
  Accounts payable                              $    11,487       $    13,064      $    11,953       $    20,261      $   13,068
  Deferred interest on loans                              -                 -                -            74,022               -
  Payable to affiliates                              12,541            12,496           14,643            35,632               -
                                               -------------     -------------    -------------     -------------    ------------
      Total liabilities                              24,028            25,560           26,596           129,915          13,068
                                               -------------     -------------    -------------     -------------    ------------

Partners' capital
  Limited partners' capital, subject to
    Redemption                                    6,420,047         6,586,482        6,763,200         6,999,670       7,414,034
  General partners' capital                           9,761             9,761            9,766             9,766           9,766
                                               -------------     -------------    -------------     -------------    ------------

      Total partners' capital                     6,429,808         6,596,243        6,772,966         7,009,436       7,423,800
                                               -------------     -------------    -------------     -------------    ------------

      Total liabilities and partners' capital   $ 6,453,836       $ 6,621,803      $ 6,799,562       $ 7,139,351      $7,436,868
                                               =============     =============    =============     =============    ============

                              Statements of Income

                                                   2004             2003             2002              2001             2000
                                               -------------     -------------    -------------     -------------    ------------
Gross revenue                                   $   538,737       $   491,640      $   574,171       $   735,900      $  785,209
Expenses                                            191,585           158,524          204,188           309,249         307,280
                                               -------------     -------------    -------------     -------------    ------------
Net income                                      $   347,152       $   333,116      $   369,983       $   426,651      $  477,929
                                               =============     =============    =============     =============    ============

Net income:   to general partners (1%)          $     3,472       $     3,331      $     3,700       $     4,266      $    4,779
              to limited partners (99%)             343,680           329,785          366,283           422,385         473,150
                                               -------------     -------------    -------------     -------------    ------------

                                                $   347,152       $   333,116      $   369,983       $   426,651      $  477,929
                                               =============     =============    =============     =============    ============
Net income per $1,000 invested by
  limited partners for entire period:
     - where income is  compounded              $        54       $        50      $        54       $        59      $       62
                                               =============     =============    =============     =============    ============

     - where partner receives income in
         monthly distributions                  $        53       $        49      $        53       $        58      $       61
                                               =============     =============    =============     =============    ============
</TABLE>

     Annualized yields when income is compounded or distributed  monthly for the
years 2000 through 2004 are outlined in the table below:

                                        Compounded         Distributed
                                      ---------------    ---------------

                    2000                  6.22%               6.05%
                    2001                  5.95%               5.79%
                    2002                  5.40%               5.27%
                    2003                  5.00%               4.89%
                    2004                  5.40%               5.27%

     The average  annualized  yield,  when income is compounded  from  inception
through December 31, 2004 was 6.84%. The average  annualized  yield, when income
is distributed monthly, from inception through December 31, 2004 was 6.63%.

                                       9
<PAGE>

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

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

Critical Accounting Policies.

     In  preparing  the  financial  statements,  management  is required to make
estimates based on the information available that affect the reported amounts of
assets and  liabilities  as of the balance sheet dates and revenues and expenses
during  the  reporting  periods.   Such  estimates  relate  principally  to  the
determination of (1) the allowance for loan losses (i.e. the amount of allowance
established  against loans  receivable as an estimate of potential  loan losses)
including   the  accrued   interest  and  advances  that  are  estimated  to  be
unrecoverable  based on estimates of amounts to be collected  plus  estimates of
the value of the  property as  collateral  and (2) the  valuation of real estate
acquired through  foreclosure.  At December 31, 2004, we owned one real property
that we had acquired through foreclosure in a prior year.

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

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

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

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

Forward Looking Statements.

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

                                       10
<PAGE>

Related Parties.

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

     o Mortgage  Brokerage  Commissions  For fees in connection with the review,
selection,  evaluation,  negotiation and extension of loans, an affiliate of the
general  partners may collect an amount  equivalent  to 12% of the loaned amount
until 6 months after the termination date of the offering.  Thereafter, the loan
brokerage  commissions (points) will be limited to an amount not to exceed 4% of
the total Partnership  assets per year. The loan brokerage  commissions are paid
by the borrowers, and thus, are not an expense of the Partnership. For the years
ended December 31, 2004, 2003 and 2002, loan brokerage  commissions  paid by the
borrowers were $24,156, $42,407 and $22,611, respectively.

     o Mortgage  Servicing Fees Monthly mortgage  servicing fees of up to 1/8 of
1% (1.5% on an annual basis) of the unpaid principal of the Partnership's  loans
are paid to Redwood  Mortgage  Corp., or such lesser amount as is reasonable and
customary in the  geographic  area where the  property  securing the mortgage is
located.  Mortgage servicing fees of $50,160, $48,759 and $138,851 were incurred
for the years ended December 31, 2004, 2003 and 2002, respectively.

     These  servicing  fees  were  charged  at 1%, on an  annual  basis,  of the
outstanding  principal balances.  If the maximum mortgage servicing fee of 1.5%,
on an annual basis, had been charged to the  Partnership,  then net income would
have been reduced by approximately  $25,000 in 2004. Reducing net income reduces
the annualized yields. An increase or decrease in this fee within the limits set
by the  Partnership's  agreement  directly  impacts  the  yield  to the  limited
partners.

     o Asset  Management  Fees The general  partners  receive  monthly  fees for
managing the Partnership's portfolio and operations up to 1/32 of 1% of the `net
asset  value'  (3/8 of 1% on an annual  basis).  Management  fees to the general
partners of $8,160,  $8,427 and $8,677, were incurred by the Partnership for the
years ended December 31, 2004, 2003 and 2002, respectively.

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

     o Income and Losses  All  income  and  losses  are  credited  or charged to
partners in relation to their respective Partnership  interests.  The allocation
to the general partners (combined) shall be a total of 1%.

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

     o Contributed  Capital The general  partners  jointly and severally were to
contribute 1/10 of 1% in cash  contributions  as proceeds from the offerings are
received from the limited partners.  As of December 31, 2003 and 2004, a general
partner, Gymno Corporation, had contributed $9,772 as capital in accordance with
Section 4.02(a) of the partnership agreement.

                                       11
<PAGE>

     Results of  Operations - For the years ended  December  31, 2004,  2003 and
2002

     Changes in the Partnership's operating results for the years ended December
31, 2004 and 2003 are discussed below.
<TABLE>
<S>                                                    <C>                 <C>
                                              Changes during the year ended December 31,

                                                       2004                2003
                                                   ------------        ------------
Net income increase/(decrease)                      $   14,036          $ (36,867)
                                                   ============        ============
 Revenue
  Interest on loans                                     34,936            (97,048)
  Interest-interest bearing accounts                     2,435             (2,067)
  Late charges and other fees                            9,726              23,712
  Interest on promissory note                                -             (7,128)
  Mortgage servicer subsidy                                  -                   -
                                                   ------------        ------------
                                                    $   47,096          $ (82,531)
                                                   ------------        ------------

 Expenses
  Mortgage servicing fees                             $  1,401          $ (90,092)
  Asset management fees                                  (267)               (250)
  Clerical costs from Redwood Mortgage Corp.           (4,232)             (5,833)
  Provision for losses on loans and real estate         31,301              10,449
  Professional services                                  7,153               6,143
  Other                                                (2,295)              33,919
                                                   ------------        ------------
                                                    $   33,061          $  (45,664)
                                                   ------------        ------------

      Net income increase/(decrease)                $    14,036         $  (36,867)
                                                   ============        =============
</TABLE>

     The  increase in  interest on loans of $34,936 for the year ended  December
31, 2004 versus December 31, 2003 was due primarily to an interest rate increase
on two  loans  totaling  $3,060,100  in  2004.  This  increase  alone  generated
additional  interest  income of  $32,514 to the  Partnership.  The  decrease  in
interest  on loans of  $97,048  for the year  ended  December  31,  2003  versus
December 31, 2002 was due primarily to the  collection of interest of $58,051 on
two past due, impaired loans in 2002. Interest income was $490,786, $455,850 and
$552,898 for the years ended December 31, 2004, 2003 and 2002, respectively. The
average  interest  rate in 2004 was 9.37%  versus  8.73% for 2003 and 10.89% for
2002.  The higher  average  interest  rate in 2004 helped  increase  interest on
loans.

     The  increase in late charge  revenue and other fees of $9,726 for the year
ended  December  31,  2004  versus  December  31, 2003 was due to the receipt of
non-refundable option payments, on real estate held for sale of $28,929;  offset
by a decrease in late fees and miscellaneous  income of $19,203. The increase in
late charge  revenue and other fees of $23,712 for the year ended  December  31,
2003 versus  December 31, 2002,  represents an increase of $5,436 in late charge
revenue and $18,280 in other income.

     The increase in  interest-interest  bearing accounts of $2,435 for the year
ended  December  31, 2004 versus  December 31, 2003 and a decrease of $2,067 for
the year ended December 31, 2003 versus December 31, 2002,  represents  interest
earned on an average balance  deposit of $561,094,  $186,644 and $452,414 in the
interest  bearing accounts for the years ended December 31, 2004, 2003 and 2002,
respectively.

     The increase in loan  servicing  fees of $1,401 for the year ended December
31, 2004 versus  December  31, 2003 was due to an overall  higher  average  loan
portfolio balance of $5,240,374 in 2004 versus $5,219,360 in 2003; offset by the
collection  of  delinquent  interest  from a loan  that  paid off in  2003.  The
decrease in loan  servicing fees of $90,092 for the year ended December 31, 2003
versus  December  31,  2002 was due to the  collection  of  interest on past due
impaired  loans in 2002 and hence  the  related  receipt  of  servicing  fees as
discussed above.

     The decrease in asset  management fees of $267 and $250 for the years ended
December  31,  2004  and  2003,  respectively,  was  primarily  attributable  to
declining  balances  of  limited  partners'  capital,   which  were  $6,763,200,
$6,586,482, and $6,420,047 at December 31, 2002, 2003 and 2004, respectively.

                                       12
<PAGE>

     The increase in the  provision for losses on loans and real estate held for
sale of $31,301  and $10,449  for the years  ended  December  31, 2004 and 2003,
respectively,  was a result  of  increased  reserves  for a  slightly  increased
average loan portfolio  balance to a level deemed  appropriate by  Partnership's
management.

     The  increase in  professional  services of $7,153 and $6,143 for the years
ended December 31, 2004 and 2003,  respectively,  was primarily  attributable to
general accounting cost increases.

     The  decrease in other  expenses of $2,295 for the year ended  December 31,
2004 versus  December 31, 2003 was  primarily  attributable  to the reduction in
costs  associated  with the upkeep of existing real estate  properties  held for
sale.  The  increase  of $33,919  for the year ended  December  31,  2003 versus
December 31, 2002 was primarily a result of the  Partnership's  commencement  in
2003 of the  expensing  of the  upkeep  costs  of real  estate  held for sale as
refurbishment of properties had been completed.

     The  reduction  in clerical  costs of $4,232 and $5,833 for the years ended
December 31, 2004 and 2003, respectively,  was primarily attributable to reduced
clerical costs in servicing this Partnership.

     As of September 2, 1989, the date the offering of the Partnership's limited
partner Units was formally  closed,  the Partnership had sold 97,725.94  limited
partner Units and its  contributed  capital  totaled  $9,772,594 of the approved
$12,000,000 issue, in Units of $100 each. On December 31, 2004 the Partnership's
net capital totaled $6,429,808.

     The  Partnership  began funding loans in October  1987.  The  Partnership's
secured  loans  outstanding  as  of  December  31,  2004,  2003  and  2002  were
$5,225,128,  $5,255,620 and $5,183,100,  respectively. The average loan balances
over  this time  period  have  remained  relatively  stable  as the  Partnership
utilized  income,  loan pay offs and proceeds  from the sale of real estate held
for sale  properties  to meet  limited  partner  capital  liquidations  and make
additional  loans.  During the years ended December 31, 2004, 2003 and 2002 loan
principal  collections  and sale  proceeds of the  properties  exceeded  limited
partner liquidations.

     In 2004 the  Partnership  funded  $869,415 in new loans versus  pay-offs of
$899,907. This lower loan activity in 2004 was largely due to lack of attractive
loans.  Loan  balances  decreased by $30,492  (0.58%) in 2004,  but increased by
$72,520 (1.40%) in 2003 and by $212,667  (4.28%) in 2002. The increases were due
to the availability of loans in the market and the Partnership's ability to fund
during 2003 and 2002.  The  Partnership  funded  $1,637,342  and $900,418 in new
loans as against loan  pay-offs of $1,564,808  and  $1,265,798 in 2003 and 2002,
respectively.

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

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

Allowance for Losses.

     The general  partners  regularly  review the loan portfolio,  examining the
status of delinquencies,  the underlying  collateral  securing these loans, real
estate held for sale expenses, sales activities,  and borrower's payment records
and other data  relating  to the loan  portfolio.  Data on the local real estate
market and on the  national and local  economy are studied.  Based upon this and
other  information,  the  allowance  for loan losses is increased or  decreased.
Borrower  foreclosures  are a  normal  aspect  of  Partnership  operations.  The
Partnership  is not a credit  based lender and hence while it reviews the credit
history  and income of  borrowers,  and if  applicable,  the income  from income
producing properties,  the general partners expect that we will on occasion take
back real estate  security.  During 2001,  the Northern  California  real estate
market  slowed and the national  and local  economies  slipped  into  recession.
During  2002 and 2003 the  California  economy has  stabilized.  During 2004 the
economy and the Northern  California  real estate  market has  strengthened.  At
December  31,  2004 the  Partnership  had one  loan  past due 90 days or more in
interest payments totaling $96,718.  As of December 31, 2004 the Partnership has
two loans which are making current monthly payments but are past maturity. These
past  maturity  loans have a  principal  balance of  $175,865.  The  Partnership
considers one loan in the principal amount of $96,718, which is past due 90 days

                                       13
<PAGE>

or more in interest  payments,  to be impaired,  which means that interest is no
longer being  accrued and that  payments  received will be applied to reduce the
outstanding  loan  balances,   including  accrued  interest  and  advances.  The
Partnership  does not have any filed  notices of default,  which would begin the
foreclosure process at December 31, 2004. The Partnership may enter into workout
agreements  with  borrowers who are past maturity or delinquent in their regular
payments.  The  Partnership  had  workout  agreements  on three  loans  totaling
$272,581  (5.22% of the secured loan  portfolio) as of December 31, 2004.  These
borrowers  in workout  agreements  are  included in the  delinquent  and/or past
matured loans.  Typically, a workout agreement allows the borrower to extend the
maturity date of the balloon  payment and/or allows the borrower to make current
monthly  payments  while  deferring for periods of time,  past due payments,  or
allows time to pay the loan in full.  These workout  agreements and foreclosures
generally  exist  within  our loan  portfolio  to  greater  or  lesser  degrees,
depending primarily on the health of the economy. The number of foreclosures and
workout  agreements will rise during  difficult times and conversely fall during
good economic times. The delinquency and workout agreements existing at December
31, 2004, in management's  opinion, do not have a material effect on our results
of  operations  or  liquidity.   These  workouts  and  delinquencies  have  been
considered when management  arrived at an appropriate  allowance for loan losses
and based on our  experience,  are reflective of our loan  marketplace  segment.
Because of the number of variables  involved,  the magnitude of possible  swings
and the general  partners'  inability to control many of these  factors,  actual
results may and do sometimes  differ  significantly  from  estimates made by the
general partners.

     As of December 31, 2004, 2003 and 2002, the Partnership's  real estate held
for sale balance was $128,902,  $1,312,773  and  $1,234,541,  respectively.  The
decrease in the real estate held for sale balance of  $1,183,871  from  December
31,  2003 to  December  31,  2004 was due to the sale of two of the  properties.
During  2002,  the  Partnership  took back one piece of real  estate  collateral
through  foreclosure.  The Partnership,  together with other  partnerships,  all
affiliates of the general  partners,  owned the  property.  The property was a 4
unit condominium  complex.  During the year 2003,  renovation work was completed
and the  property  was  placed on the  market  for sale.  A  purchase  offer was
accepted and the escrow closed in March, 2004. The Partnership  sustained a loss
of approximately $5,800, which had been anticipated and reserved for. In October
2004, the Partnership  sold another real estate held for sale property at a loss
of  approximately   $778,500  which  was  previously  fully  reserved  for.  The
Partnership  has not taken back any collateral  security from borrowers in 2004.
The  Partnership's  real  estate  held for sale  inventory  was  reduced  to one
property.  This remaining  property is an undeveloped piece of land. The land is
located in East Palo Alto, California.  The Partnership has held its interest in
this  land  since  April,  1993.  The land is owned  with two  other  affiliated
partnerships.  Currently, the Partnership is not in contract or negotiating with
any  interested  parties for the sale of this  property.  The  general  partners
believe that the property is worth  considerably  more than its net  investment,
but it may take a  considerable  amount of additional  time to sell the property
and realize its full  potential.  The  property is unique in that it may only be
utilized for commercial or industrial uses. Until recently,  land sales activity
had been  slow,  but  interest  in land  sales  for  commercial  sites  has been
increasing.

     Management provided $35,886 and $4,585 as provision for loan losses for the
years  ended  December  31,  2004 and  2003,  respectively.  The  amount  of the
provision for loan losses is to build up the  allowance for potential  losses as
the  Partnership's  average  loan  portfolio  increases.   The  Partnership  may
restructure  loans. This is done through the modification of an existing loan or
by  re-writing  a whole new loan.  It could  involve,  among other  changes,  an
extension in maturity  date, a reduction  in  repayment  amount,  a reduction in
interest  rate,  or  granting  an  additional  loan.  In 2002,  the  Partnership
restructured  four  previously  impaired  loans  into two new loans with a lower
interest rate. The amount restructured was $3,060,100.  As of December 31, 2004,
there  was a  collateral  shortfall  on the  restructured  loans,  ranging  from
approximately $194,000 to $337,000, that has not been reserved for. During 2002,
Redwood Mortgage Corp.  provided an indemnity to the Partnership  whereby it has
agreed to indemnify  and hold  harmless,  the  Partnership  from any expenses or
losses incurred by the Partnership by reason of the  Partnership's  inability to
collect  all  principal  due  under  certain  loans  after the  Partnership  has
exhausted  all reserves set aside for these loans and all remedies  available to
it including foreclosure of the underlying  collateral.  Therefore,  these loans
are not considered  impaired solely because the value of the collateral securing
the loans is less than the principal due to the Partnership.

                                       14
<PAGE>

Borrower Liquidity and Capital Resources.

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

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

     For the years ended December 31, 2004, 2003 and 2002, the Partnership  made
distributions  of  earnings  to  limited  partners  of  $120,015,  $115,254  and
$130,296,  respectively.  Distribution  of earnings to limited  partners for the
years ended  December  31, 2004,  2003 and 2002,  to limited  partners'  capital
accounts and not withdrawn, was $223,665,  $214,531 and $235,987,  respectively.
As of December 31, 2004, 2003 and 2002,  limited  partners  electing to withdraw
earnings  represented  34%, 35% and 35%,  respectively,  of the limited partners
outstanding  capital  accounts.  This percentage  range has remained  relatively
stable.

     The Partnership  also allows the limited partners to withdraw their capital
account subject to certain limitations and penalties (see liquidation provisions
of Partnership Agreement). For the years ended December 31, 2004, 2003 and 2002,
$142,997, $93,770 and $78,674, respectively,  were liquidated subject to the 10%
and/or 8%  penalty  for early  withdrawal.  These  withdrawals  are  within  the
normally  anticipated  range that the  general  partners  would  expect in their
experience in this and other  partnerships.  The general  partners expect that a
small  percentage  of limited  partners  will elect to liquidate  their  capital
accounts  over one  year  with a 10%  and/or  8% early  withdrawal  penalty.  In
originally  conceiving the  Partnership,  the general partners wanted to provide
limited   partners  needing  their  capital  returned  a  degree  of  liquidity.
Generally, limited partners electing to withdraw over one year need to liquidate
investments  to raise  cash.  The  demand the  Partnership  is  experiencing  in
withdrawals  by  limited  partners  electing  a  one  year  liquidation  program
represents  a small  percentage  of limited  partner  capital as of December 31,
2004, 2003 and 2002,  respectively,  and is expected by the general  partners to
commonly occur at these levels.

     Additionally,  for the  years  ended  December  31,  2004,  2003 and  2002,
$247,103,  $297,479  and  $393,784,  respectively,  were  liquidated  by limited
partners who have elected a  liquidation  program over a period of five years or
longer.  Once the initial five-year hold period has passed, the general partners
expect to see an increase in liquidations due to the ability of limited partners
to  withdraw  without  penalty.  This  ability to  withdraw  after five years by
limited  partners has the effect of providing  limited  partner  liquidity.  The
general  partners expect a portion of the limited  partners to take advantage of
this  provision.  This has the anticipated  effect of the  Partnership  growing,
primarily  through  reinvestment  of  earnings in years one  through  five.  The
general partners expect to see increasing numbers of limited partner withdrawals
in years five through eleven,  at which time the bulk of those limited  partners
who have  sought  withdrawal  will  have been  liquidated.  After  year  eleven,
liquidation generally subsides.

                                       15
<PAGE>

     Actual  liquidation  of both capital and earnings for the three years ended
December 31, 2004 was:

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

                             2004              2003              2002
                         ------------     ------------     ------------
  Earnings                $  120,015       $  115,254       $  130,296
  Capital                    390,100          391,249          472,457
                         ------------     ------------     ------------

  Total                   $  510,115       $  506,503       $  602,753
                         ============     ============     ============

*These amounts represent gross of early withdrawal penalties.

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

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

Current Economic Conditions.

     From July 1 through  December 31, 2004, the Federal  Reserve  increased the
Federal  Funds  Rate four  times by one  quarter  percentage  point  (1/4 of one
percent) each time to 2.00%. These were the first Federal Funds Rate increase in
more than three years and may indicate that the Federal  Reserve has changed its
interest  rate policy to increased  rates for the  foreseeable  future.  A 1.00%
upward shift in the Federal Funds Rate will not have a material  effect upon the
interest rates the Partnership charges borrowers.  If, however, there are future
interest  rate  increases or if they remain at their current  levels,  borrowers
will no longer be encouraged  through  continually  declining  interest rates to
prepay their debts through  refinancing  of their  obligations.  This could mean
that the Partnership may begin experiencing less prepayments by borrowers in its
portfolio.  This would  reduce  the need for the  Partnership  to replace  these
prepaid loans with new loans at lower interest rates. Additionally,  the overall
real estate  marketplace  has become much more active in the last twelve months,
particularly  in Northern  California.  The general  partners  believe  that the
average loan  portfolio  interest rate may decline as some  remaining  borrowers
that did not refinance their loans to lower interest rates take advantage of the
current low rates of interest  available.  Based upon existing note rates in the
portfolio and the  Partnership's  expectations  of stable  interest rates in the
near  future,  the  Partnership  anticipates  that the  average  loan  portfolio
interest rate will stabilize during 2005. From the general partners' experience,
we anticipate  that the  annualized  yield for 2005 will range between 5.75% and
6.50%.

                                       16
<PAGE>

     The  Partnership  makes  loans  primarily  in  Northern  California.  As of
December  31, 2004,  approximately  89%,  ($4,632,774)  of the loans held by the
Partnership  were in four San Francisco Bay Area Counties.  The remainder of the
loans held were secured primarily by Northern California real estate outside the
San Francisco Bay Area. Like the rest of the nation,  the San Francisco Bay Area
also felt the  recession  and  accompanying  slow down in  economic  growth  and
increasing unemployment. The technology companies of Silicon Valley, the airline
industry,  the tourism  industry and other industries are feeling the effects of
the overall United States  economy,  which includes lower  earnings,  losses and
layoffs.

     Recently  the  national  and  Northern  California  economies  seem  to  be
improving.  Job creation  remains a concern,  as little job creation seems to be
evident.  The partnership makes loans primarily in Northern  California and real
estate values of residential,  commercial,  multi-family properties and land are
of particular  interest to the partnership.  Real estate is the primary security
for the partnership's loans.

     The residential  real estate market in California  continues to appreciate.
The San  Francisco  Chronicle  dated  January 20, 2005  reported  that  "Despite
earlier forecasts of softer housing demand in 2004, low interest rates drove the
Bay Area real estate market to record levels last year. The median sale price of
a single-family home in 2004 was $532,000,  a 17% rise over $455,000 in 2003 and
the highest for any year since 1988,  real  estate  information  firm  DataQuick
reported  Wednesday.  A total of 134,848  houses and condos changed hands in the
nine  counties in 2004,  blowing past the previous  peak of 122,149 set in 2003.
December,  traditionally  a slow time for real estate sales,  closed out 2004 in
strong  -  although  not  record-setting  -  fashion.  The  median  price  for a
single-family  home hit $554,000,  a 17% jump over the December 2003 median. The
record median of $560,000 was set in November.  The housing boom wasn't expected
to last through  2004.  In the face of  anticipated  interest  rate hikes,  many
economists had predicted that local and national real estate markets would cool.
But after mortgage rates rose for several weeks in the spring, disappointing job
growth  reignited fears about the economy,  driving rates lower. The uncertainty
created  by both  rising  and  falling  rates  prompted  buyers to jump into the
housing market. John Karevoll, [a researcher at DataQuick in La Jolla (San Diego
County)]  expects  appreciation  rates to ease from the mid to high teens to the
single  digits once the benchmark  30-year fixed  mortgage rate climbs closer to
6.5 or 7.0% later in the year.  Last week,  mortgage  giant Freddie Mac said the
30-year fixed rate hit 5.74%."

     While the residential  market outlook remains strong overall the commercial
real estate market appears  equally as strong.  As reported in the San Francisco
Business  Times  for the week of  January  7-13,  2005 "The  numbers  are in and
they're looking pretty. San Francisco office market fundamentals improved during
the last quarter of 2004,  with overall  vacancy  shrinking to between 15.4% and
19%,  depending on which brokerage firm is crunching the numbers.  Main reasons?
Dwindling  supply  due to  stalemated  construction,  a handful  of  residential
conversions and a hopped-up tally of positive net absorption.  According to Tove
Nilsen,  Colliers  International's  director of market research,  the S.F office
market as a whole logged 699,843 square feet of positive  absorption  during the
last quarter of the year,  bringing the annual total to 1.2 million square feet.
Cushman & Wakefield  Senior Research  Associate Brad Van Blois (who counts 1.198
Million  square feet of overall net  absorption  for the year)  attributes a big
chunk  of that -  302,610  square  feet - to  fresh  companies  moving  to town.
Space-hungry/expanding  companies also made this the sixth  consecutive  quarter
for positive net absorption - a marked turnaround from the exodus of mid-2000 to
mid-2003.  And rents?  They stabilized.  For the year,  city-wide Class A direct
rent  decreased  1.9% to $28.80 per square foot,  Class B space  slipped 1.6% to
$22.80 and Class C declined  4.3% to $19.44,  according  to Cushman & Wakefield.
Class A rents in the commercial business district also dropped, to $30.48 in the
fourth  quarter  compared  to $30.60  during the same  period  last  year,  also
according  to Van Blois.  But prime Class A space in the  financial  district is
getting  harder to come by, with the  sweetest  sublease  space now soaked up by
other tenants and mostly  commodity  space left.  Class A space in the financial
district was $31.15, up from $30.36 the previous  quarter,  according to Nilsen.
As expected,  commercial  building sales - the hot ticket for all of last year -
beat all previous  records.  Low interest rates and pent up demand pushed dozens
of investors to buy a whopping $2.5 billion in commercial  buildings in the city
this year,  beating the $2.4  billion  record set in 2000,  according to Nilsen.
[Van Blois] added: "The market fundamentals have improved each quarter, and it's
encouraging,  but overall we still have a long way to go." Sales  stayed  steady
through the year end,  with 23  commercial  and  industrial  properties  closing
escrow during the month of November, according to Jennifer Raike of Old Republic
Title Co.'s monthly list of transactions."

     As of December 31, 2004, the Partnership had an average loan to value ratio
based on  appraised  values and prior  liens as of the date the loan was made of
79.67%.  This  percentage  does not account for any  increases  or  decreases in
property  values  since  the date the loan was  made,  nor does it  include  any
reductions in principal of prior liens through  amortization  of payments  after
the loan was made.  This loan to value  ratio  will  assist the  Partnership  in
weathering loan delinquencies and foreclosures should they eventuate.

                                       17
<PAGE>

Contractual Obligations Table. - None


Item 7a - Quantitative and Qualitative Disclosures About Market Risk

     The  following  table  contains  information  about  the cash held in money
market accounts,  and loans held in the  Partnership's  portfolio as of December
31, 2004. The  presentation,  for each category of  information,  aggregates the
assets and liabilities by their maturity dates for maturities  occurring in each
of the years 2005 through 2009 and separately aggregates the information for all
maturities  arising  after  2009.  The  carrying  values  of  these  assets  and
liabilities approximate their fair values as of December 31, 2004:

<TABLE>
<S>                                 <C>           <C>         <C>         <C>        <C>        <C>              <C>
                                    2005          2006        2007        2008       2009       Thereafter       Total
                               ------------------------------------------------------------------------------------------
Interest earning assets:
Money market accounts           $ 1,075,231                                                                   $1,075,231
Average interest rate                 1.20%                                                                        1.20%
Loans secured by deeds
   of trust                     $   664,882      621,716    3,205,206         -      627,579      105,745     $5,225,128
Average interest rate                10.00%        9.23%        9.07%         -        9.08%       10.00%          9.23%
</TABLE>

Market Risk.

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

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

                                       18
<PAGE>

PORTFOLIO REVIEW - For the years ended December 31, 2004, 2003 and 2002.

Loan Portfolio

     The Partnership's  loan portfolio  consists primarily of short-term (one to
five years),  fixed rate loans secured by real estate.  As of December 31, 2004,
2003 and 2002 the  Partnership's  loans secured by real  property  collateral in
four San Francisco Bay Area counties (San Francisco,  San Mateo, Santa Clara and
Alameda)  represented  $4,632,774 (89%),  $4,905,347 (93%) and $4,588,023 (89%),
respectively,  of the outstanding  secured loan portfolio.  The remainder of the
portfolio represented loans secured by real estate located primarily in Northern
California.

     As of December 31, 2004, 2003 and 2002 the  Partnership  held 14, 16 and 22
secured loans, respectively, in the following categories:

<TABLE>
<S>                                      <C>                <C>         <C>                <C>          <C>               <C>
                                               December 31,                   December 31,                   December 31,
                                                   2004                           2003                           2002
                                        ---------------------------    ---------------------------     --------------------------

Single family residence (1-4 units)      $1,316,596         25.20%      $1,505,710         28.65%       $  824,381        15.91%
Multiple family dwellings (5+ units)         96,716          1.85%         136,841          2.60%          566,600        10.93%
Commercial                                3,811,816         72.95%       3,613,069         68.75%        3,792,119        73.16%
                                        ------------    -----------    ------------    -----------     ------------    ----------

Total                                    $5,225,128        100.00%      $5,255,620        100.00%       $5,183,100       100.00%
                                        ============    ===========    ============    ===========     ============    ==========
</TABLE>

     As of December 31, 2004, the Partnership  held 14 loans secured by deeds of
trust. The following table sets forth the priorities,  asset  concentrations and
maturities of the loans held by the Partnership as of December 31, 2004:


            PRIORITIES, ASSET CONCENTRATIONS AND MATURITIES OF LOANS
                             As of December 31, 2004
<TABLE>
<S>     <C>                                                   <C>                 <C>              <C>

                                                              # of Loans          Amount           Percent
                                                              ------------     --------------    -------------

         1st Mortgages                                                  9       $  4,212,912              81%
         2nd Mortgages                                                  5          1,012,216              19%
                                                              ============     ==============    =============
                Total                                                  14       $  5,225,128             100%

         Maturing 12/31/05 and prior                                    3           $664,882              13%
         Maturing prior to 12/31/06                                     3            621,716              12%
         Maturing prior to 12/31/07                                     3          3,205,206              61%
         Maturing after 12/31/07                                        5            733,324              14%
                                                              ============     ==============    =============
                Total                                                  14       $  5,225,128             100%

         Average Loan                                                           $    373,223               7%
         Largest Loan                                                              2,103,300              40%
         Smallest Loan                                                                31,516            0.60%
         Average Loan-to-Value, based upon appraisals
           and senior liens at date of inception of loan                                               79.67%
</TABLE>

     The  Partnership's  largest  loan in the  principal  amount  of  $2,103,300
represents 40.25% of outstanding secured loans and 32.59% of Partnership assets.
Larger loans can sometimes  represent  over 10% of the secured loan portfolio or
Partnership assets as these amounts decrease due to limited partner  withdrawals
and loan payoffs and also as a result of the  restructuring  several  loans into
one loan. These factors were all present in this situation. Chief among them was
the restructuring of two loans with outstanding principal plus accrued interest,
late  fees and  advances  into  one new  loan  with an  outstanding  balance  of
$2,103,300.

                                       19
<PAGE>

     The  Partnership has a substantial  amount of its loan  receivable  balance
from one borrower at December 31, 2004,  2003 and 2002.  The borrower  accounted
for approximately 59%, 58% and 62%,  respectively,  of the loan balances at such
dates.  This  borrower  has two loans  secured  by  separate  properties  in the
principal amounts of $2,103,300 and $956,800 as of December 31, 2004. Neither of
these loans is considered past due 90 days or past maturity. Due to a collateral
shortfall on these loans Redwood Mortgage Corp. has provided an indemnity to the
Partnership.


ASSET QUALITY

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

     The conclusion that a loan may become  uncollectible,  in whole or in part,
is  a  matter  of  judgment.  Although  institutional  lenders  are  subject  to
requirements and regulations  that, among other things,  require them to perform
ongoing analyses of their portfolios,  loan-to-value ratios, reserves, etc., and
to obtain and maintain  current  information  regarding  their borrowers and the
securing properties, the Partnership is not subject to these regulations and has
not  adopted  certain of these  practices.  Rather,  the  general  partners,  in
connection  with  the  periodic  closing  of  the  accounting   records  of  the
Partnership and the preparation of the financial  statements,  determine whether
the allowance for loan losses is adequate to cover  potential loan losses of the
Partnership.  As of December 31, 2004 the general  partners have determined that
the  allowance  for loan  losses  of  $315,751  (4.91%  of net  assets)  and the
allowance for real estate held for sale of $1,313 is adequate in amount. Because
of the number of variables  involved,  the magnitude of the swings  possible and
the general partners' inability to control many of these factors, actual results
may and do sometimes  differ  significantly  from  estimates made by the general
partners.  As of December  31,  2004,  three loans were  delinquent  in interest
payments or principal over 90 days.

     The  Partnership may also make loans requiring  periodic  disbursements  of
funds.  These loans include  ground up  construction  of buildings and loans for
rehabilitation  of existing  structures.  Interest on these loans is computed at
simple interest method and only on the amounts disbursed on a daily basis. As of
December 31, 2004 there were no such loans.


Item 8 - Financial Statements and Supplementary Data

A - Financial Statements

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

o  Report of Independent Registered Public Accounting Firm
o  Balance Sheets - December 31, 2004, and December 31, 2003
o  Statements of Income for the years ended December 31, 2004, 2003 and 2002
o  Statements of Changes in Partners' Capital for the years ended December 31,
   2004, 2003 and 2002
o  Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002
o  Notes to Financial Statements

B - Financial Statement Schedules

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

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

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

                                       20
<PAGE>









                          REDWOOD MORTGAGE INVESTORS VI
                       (A CALIFORNIA LIMITED PARTNERSHIP)
                              FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003
                         AND FOR EACH OF THE THREE YEARS
                      IN THE PERIOD ENDED DECEMBER 31, 2004














                                       21
<PAGE>







                                TABLE OF CONTENTS

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

   Report of Independent Registered Public Accounting Firm          23

   Balance Sheets                                                   24

   Statements of Income                                             25

   Statements of Changes in Partners' Capital                       26

   Statements of Cash Flows                                         27

   Notes to Financial Statements                                    28

   Supplemental Schedules

      Schedule II -  Valuation and Qualifying Accounts              38

      Schedule IV - Mortgage Loans on Real Estate                   39
          Rule 12-29 Loans on Real Estate



                                       22
<PAGE>

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


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Partners
Redwood Mortgage Investors VI
Redwood City, California

     We have  audited  the  accompanying  balance  sheets  of  Redwood  Mortgage
Investors VI (a California limited partnership) as of December 31, 2004 and 2003
and the related  statements  of income,  changes in  partners'  capital and cash
flows for each of the three years in the period ended  December 31, 2004.  These
financial  statements are the  responsibility of Redwood Mortgage Investors VI's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

     In our opinion,  the financial statements referred to above present fairly,
in all material  respects,  the financial position of Redwood Mortgage Investors
VI as of December  31, 2004 and 2003 and the results of its  operations  and its
cash flows for each of the three years in the period ended  December 31, 2004 in
conformity with accounting principles generally accepted in the United States of
America.

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




                                       ARMANINO McKENNA LLP
San Ramon, California
February 14, 2005

                                       23
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                 Balance Sheets
                           December 31, 2004 and 2003


                                     ASSETS

                                                         2004           2003
                                                     -------------  ------------

 Cash and cash equivalents                            $ 1,090,027    $   32,160
                                                     -------------  ------------

 Loans
   Loans, secured by deeds of trust                     5,225,128     5,255,620
   Loans, unsecured, net of discount of $93,822
    and $112,587 in 2004 and 2003, respectively           261,276       242,462
   Allowance for loan losses                            (315,751)     (279,865)
                                                     -------------  ------------
         Net loans                                      5,170,653     5,218,217
                                                     -------------  ------------

 Interest and other receivables
   Accrued interest and late fees                          61,364        54,562
   Advances on loans                                        2,890         4,091
                                                     -------------  ------------
         Total interest and other receivables              64,254        58,653
                                                     -------------  ------------

 Real estate held for sale, net                           128,902     1,312,773
                                                     -------------  ------------

         Total assets                                 $ 6,453,836    $6,621,803
                                                     =============  ============

                        LIABILITIES AND PARTNERS' CAPITAL

 Liabilities
   Accounts payable                                     $  11,487    $   13,064
   Payable to affiliate                                    12,541        12,496
                                                     -------------  ------------
         Total liabilities                                 24,028        25,560
                                                     -------------  ------------

 Partners' capital
   Limited partners' capital, subject to redemption     6,420,047     6,586,482
   General partners' capital                                9,761         9,761
                                                     -------------  ------------
         Total partners' capital                        6,429,808     6,596,243
                                                     -------------  ------------

         Total liabilities and  partners' capital     $ 6,453,836    $6,621,803
                                                     =============  ============



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

                                       24
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                              Statements of Income
              For the Years Ended December 31, 2004, 2003 and 2002


<TABLE>
<S>  <C>                                                          <C>               <C>               <C>
                                                                  2004              2003              2002
                                                              --------------    --------------    --------------
     Revenues
        Interest on loans                                      $    490,786      $    455,850      $    552,898
        Interest - interest bearing accounts                          5,515             3,080             5,147
        Interest on promissory note                                       -                 -             7,128
        Late fees, prepayment penalties and fees                     42,436            32,710             8,998
                                                              --------------    --------------    --------------
                                                                    538,737           491,640           574,171
                                                              --------------    --------------    --------------

     Expenses
        Mortgage servicing fees                                      50,160            48,759           138,851
        Asset management fees                                         8,160             8,427             8,677
        Clerical costs from Redwood Mortgage Corp.                   12,807            17,039            22,872
        Provisions for (recovery of) losses on loans
           and real estate held for sale                             35,886             4,585           (5,864)
        Professional services                                        44,756            37,603            31,460
        Other                                                        39,816            42,111             8,192
                                                              --------------    --------------    --------------
                                                                    191,585           158,524           204,188
                                                              --------------    --------------    --------------

     Net income                                                $    347,152      $    333,116      $    369,983
                                                              ==============    ==============    ==============

     Net income
        General partners (1%)                                  $      3,472      $      3,331      $      3,700
        Limited partners (99%)                                      343,680           329,785           366,283
                                                              --------------    --------------    --------------

                                                               $    347,152      $    333,116      $    369,983
                                                              ==============    ==============    ==============

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





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

                                       25
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                   Statements of Changes in Partners' Capital
              For the Years Ended December 31, 2004, 2003 and 2002


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

         Balances at December 31, 2001                          $6,999,670       $    9,766     $7,009,436

            Net income                                             366,283            3,700        369,983

            Early withdrawal penalties                             (6,287)                -        (6,287)

            Partners' withdrawals                                (596,466)          (3,700)      (600,166)
                                                               ------------     ------------   ------------

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

            Net income                                             329,785            3,331        333,116

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

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

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

            Net income                                             343,680            3,472        347,152

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

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

         Balances at December 31, 2004                          $6,420,047       $    9,761     $6,429,808
                                                               ============     ============   ============
</TABLE>





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

                                       26
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                            Statements of Cash Flows
              For the Years Ended December 31, 2004, 2003 and 2002


<TABLE>
<S>                                                                    <C>               <C>              <C>
                                                                       2004              2003             2002
                                                                   --------------    -------------    --------------
  Cash flows from operating activities
     Net income                                                     $    347,152      $   333,116      $    369,983
     Adjustments to reconcile net income to
       net cash provided by operating activities
       Provision (recovery) for loan losses
         and real estate                                                  35,886            4,585           (5,864)
       Early withdrawal penalties credited to income                    (10,801)          (7,502)           (6,287)
       Amortization of discount on unsecured loans                      (18,765)         (18,765)                 -
       Change in operating assets and liabilities
          Loans, unsecured                                                  (49)                -            82,362
          Accrued interest and late fees                                 (6,802)            6,822         (162,674)
          Advances on loans                                                1,201           26,916            74,251
          Accounts payable                                               (1,577)            1,111           (8,308)
          Payable to affiliate                                                45          (2,147)          (20,989)
          Deferred interest                                                    -                -          (74,022)
                                                                   --------------    -------------    --------------
  Net cash provided by operating activities                              346,290          344,136           248,452
                                                                   --------------    -------------    --------------

  Cash flows from investing activities
     Principal collected on loans                                        899,907        1,564,808         1,265,798
     Loans originated                                                  (869,415)      (1,637,342)         (900,418)
     Note receivable payments                                                  -                -           178,200
     Payments on real estate held for sale                                     -         (78,232)          (41,153)
     Proceeds from disposition of real estate                          1,183,871                -                 -
                                                                   --------------    -------------    --------------
  Net cash provided by (used in) investing activities                  1,214,363        (150,766)           502,427
                                                                   --------------    -------------    --------------

  Cash flows from financing activities
     Partners' withdrawals                                             (502,786)        (502,337)         (600,166)
                                                                   --------------    -------------    --------------

  Net increase (decrease) in cash and cash equivalents                 1,057,867        (308,967)           150,713

  Cash and cash equivalents at beginning of year                          32,160          341,127           190,414
                                                                   --------------    -------------    --------------

  Cash and cash equivalents at end of year                          $  1,090,027      $    32,160      $    341,127
                                                                   ==============    =============    ==============
</TABLE>





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

                                       27
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2004, 2003 and 2002


1.     Organization and General

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

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


2.     Summary of Significant Accounting Policies

     Management estimates

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

     Loans, secured by deeds of trust

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

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

     If events and or changes in circumstances  cause management to have serious
doubts  about the  collectibility  of the  contractual  payments,  a loan may be
categorized  as impaired  and  interest  is no longer  accrued.  Any  subsequent
payments on impaired loans are applied to reduce the outstanding  loan balances,
including  accrued  interest and advances.  At December 31, 2004 and 2003, there
was one loan  categorized  as impaired by the  Partnership  for $96,716,  with a
reduction in the carrying  value of the impaired loan of $14,596 at December 31,
2003.  The reduction in the carrying value of the impaired loans was included in
the allowance for loan losses.  In 2004, it was  determined  that a reduction in
carrying  value was no longer  required  on this  loan.  The  impaired  loan had
accrued  interest,  late  charges  and  advances  totaling  $6,936 and $7,977 at
December 31, 2004 and 2003.  The average  recorded  investment in impaired loans
was $96,716,  $96,716 and  $1,282,304  for the three years ended 2004,  2003 and
2002, respectively.

                                       28
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2004, 2003 and 2002


2.     Summary of Significant Accounting Policies (continued)

     Loans, secured by deeds of trust (continued)

     At December 31, 2004 and 2003, the Partnership had three and two loans past
due 90 days or more in interest  payments or  principal,  including the impaired
loan,  totaling  $272,581  and  $241,070,  respectively.  In  addition,  accrued
interest, late charges and advances on these loans totaled $4,249 and $18,073 at
December 31, 2004 and 2003, respectively.  The Partnership does not consider two
of these loans to be impaired  because there is  sufficient  collateral to cover
the amount  outstanding to the  Partnership  and is still  accruing  interest on
these loans.  At December 31, 2004 and 2003, as presented in Note 9, the average
loan to  appraised  value of  security  based  upon  appraised  values and prior
indebtedness  at the time the loans were  consummated  was  79.67%  and  78.87%,
respectively.  When loans are considered impaired, the allowance for loan losses
is updated  to  reflect  the change in the  valuation  of  collateral  security.
However, a low loan to value ratio tends to minimize reductions for impairment.

     Allowance for loan losses

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

     The  composition  of the  allowance for loan losses as of December 31, 2004
and 2003 was as follows:

                                       2004            2003
                                   ------------    ------------

        Impaired loans              $        -      $   14,596
        Specified loans                  6,796          28,750
        General                         47,728               -
        Unsecured loans                261,227         236,519
                                   ------------    ------------

                                    $  315,751      $  279,865
                                   ============    ============

       Activity in the allowance for loan losses is as follows for the years
ended December 31:

                                       2004              2003            2002
                                   ------------    ------------    ------------

        Beginning balance           $   279,865     $   275,294     $  370,612
        Provision for loan losses        35,886           4,585          3,083
        Recoveries                            -               -        (8,947)
        Restructures/transfers                -               -       (48,009)
        Write-offs                            -            (14)       (41,445)
                                   ------------    ------------    ------------

                                    $  315,751      $   279,865     $  275,294
                                   ============    ============    ============

     Cash and cash equivalents

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

                                       29
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2004, 2003 and 2002


2.     Summary of Significant Accounting Policies (continued)

     Real estate held for sale

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

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

     Income taxes

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

     Net income per $1,000 invested

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

     Late fee revenue

     Late fees are generally  charged at 6% of the monthly  installment  payment
past due. During 2004, 2003 and 2002,  late fee revenue of $2,009,  $7,379,  and
$1,947, respectively, was recorded. The Partnership has a late fee receivable at
December 31, 2004 and 2003 of $2,356 and $1,608, respectively.

     Recently issued accounting pronouncements

     In December 2003, the American  Institute of Certified  Public  Accountants
(AICPA)  Accounting  Standards  Executive  Committee (AcSEC) issued Statement of
Position 03-03,  "Accounting for Certain Loans or Debt Securities  Acquired in a
Transfer"(SOP  03-3).  SOP 03-03 is effective for loans acquired in fiscal years
beginning  after December 15, 2004,  with early adoption  encouraged.  SOP 03-03
addresses  accounting for differences  between  contractual  cash flows and cash
flows expected to be collected from an investor's initial investment in loans or
debt securities acquired in a transfer if those differences are attributable, at
least in part,  to credit  quality.  It  includes  loans  acquired  in  business
combinations   and   applies   to  all   nongovernmental   entities,   including
not-for-profit organizations.  The SOP does not apply to loans originated by the
entity.  The  implementation  of  SOP  03-03  is not  anticipated  to  have  any
significant effect on the Partnership.

                                       30
<PAGE>



                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2004, 2003 and 2002


3.     Other Partnership Provisions

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

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

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

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

     Election to receive monthly, quarterly or annual distributions

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

     Profits and losses

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

     Liquidity, capital withdrawals and early withdrawals

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

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

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

                                       31
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2004, 2003 and 2002


3.     Other Partnership Provisions (continued)

     Liquidity, capital withdrawals and early withdrawals (continued)

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


4.     General Partners and Related Parties

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

     Mortgage brokerage commissions

     For fees in connection with the review, selection, evaluation,  negotiation
and extension of loans, affiliates of the general partners may collect an amount
equivalent to 12% of the loaned amount until 6 months after the termination date
of the offering. Thereafter, loan brokerage commissions (points) will be limited
to an amount not to exceed 4% of the total Partnership assets per year. The loan
brokerage commissions are paid by the borrowers, and thus, are not an expense of
the Partnership.  In 2004, 2003 and 2002, loan brokerage commissions paid by the
borrowers were $24,156, $42,407, and $22,611, respectively.

     Mortgage servicing fees

     Monthly  mortgage  servicing  fees of up to 1/8 of 1% (1.5%  annual) of the
unpaid principal are paid to Redwood Mortgage Corp., an affiliate of the general
partners,  based on the unpaid principal balance of the loan portfolio,  or such
lesser amount as is reasonable  and customary in the  geographic  area where the
property  securing  the  mortgage  is  located.  Once a loan is  categorized  as
impaired, mortgage servicing fees are no longer accrued. Additional service fees
are  recorded  upon the receipt of any  subsequent  payments on impaired  loans.
Mortgage  servicing fees of $50,160,  $48,759,  and $138,851,  were incurred for
2004,  2003 and 2002,  respectively.  The  Partnership  has a payable to Redwood
Mortgage  Corp.  for servicing  fees of $12,541 and $12,496 at December 31, 2004
and 2003, respectively.

     Asset management fee

     The general  partners  receive monthly fees for managing the  Partnership's
loan  portfolio and operations of up to 1/32 of 1% of the "net asset value" (3/8
of 1%  annually).  Asset  management  fees of $8,160,  $8,427,  and $8,677  were
incurred for 2004, 2003 and 2002, respectively.

     Other fees

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

     Operating expenses

     Redwood  Mortgage  Corp.is  reimbursed by the Partnership for all operating
expenses  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.  During  2004,  2003 and  2002,
operating  expenses totaling $12,807,  $17,039 and $22,872,  respectively,  were
reimbursed to Redwood Mortgage Corp.

                                       32
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2004, 2003 and 2002


5.     Real Estate Held for Sale

     The following  schedule  reflects the costs of real estate acquired through
foreclosure  and the recorded  reductions  to estimated  fair values,  including
estimated costs to sell, as of December 31, 2004 and 2003:

                                                      2004            2003
                                                  ------------    ------------

       Costs of properties                         $  130,215      $2,096,964
       Reduction in value                             (1,313)       (784,191)
                                                  ------------    ------------

          Real estate held for sale, net           $  128,902      $1,312,773
                                                  ============    ============

     During 2004, the Partnership  sold real estate with an original  investment
of $1,966,748,  and a carrying value of $1,161,600, for $1,183,871. The original
investment  in this  property  had been  reduced in prior years by  management's
estimate of the ultimate realizable value of the property.


6.     Income Taxes

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

                                                      2004             2003
                                                  -------------   -------------

     Partners' capital per financial statements    $ 6,429,808     $ 6,596,243
     Allowance for loan losses and real estate         317,064       1,064,056
                                                  -------------   -------------

           Partners' capital tax basis             $ 6,746,872     $ 7,660,299
                                                  =============   =============

     In 2004 and  2003,  approximately  72% and 73%,  respectively,  of  taxable
income was allocated to tax-exempt organizations (e.g., retirement plans).


7.     Fair Value of Financial Instruments

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

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

     (b) Secured loans  carrying value was $5,225,128 and $5,255,620 at December
31, 2004 and 2003, respectively. The fair value of these loans of $5,209,821 and
$4,997,256,   respectively,  was  estimated  based  upon  projected  cash  flows
discounted at the estimated  current interest rates at which similar loans would
be made.  The  applicable  amount of the  allowance  for loan losses  along with
accrued  interest and advances  related  thereto  should also be  considered  in
evaluating the fair value versus the carrying value.

                                       33
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2004, 2003 and 2002


8.     Asset Concentrations and Characteristics

     Most loans are secured by recorded deeds of trust. At December 31, 2004 and
2003,  there were 14 and 16 secured  loans  outstanding  respectively,  with the
following characteristics:

<TABLE>
<S>                                                                         <C>              <C>
                                                                            2004             2003
                                                                        -------------    -------------

             Number of secured loans outstanding                                  14               16
             Total secured loans outstanding                             $ 5,225,128      $ 5,255,620

             Average secured loan outstanding                            $   373,223      $   328,476
             Average secured loan as percent of total secured loans            7.14%            6.25%
             Average secured loan as percent
                of partners' capital                                           5.80%            4.98%

             Largest secured loan outstanding                            $ 2,103,300      $ 2,103,300
             Largest secured loan as percent of total secured loans           40.25%           40.02%
             Largest secured loan as percent of partners' capital             32.71%           31.89%
             Largest secured loan as percent of total assets                  32.59%           31.73%

             Number of counties where security
                is located (all California)                                        8                8

             Largest percentage of loans in one county                        42.28%           42.06%

             Average secured loan to appraised value
                of security based on appraised values and prior
                liens at time loan was consummated                            79.67%           78.87%

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

                                       34
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2004, 2003 and 2002


8.     Asset Concentrations and Characteristics (continued)

     The  following  categories  of secured loans were held at December 31, 2004
and 2003:

<TABLE>
<S>                                                                     <C>               <C>
                                                                        2004              2003
                                                                    --------------    -------------

             First trust deeds                                       $  4,212,912      $ 3,983,032
             Second trust deeds                                         1,012,216        1,272,588
                                                                    --------------    -------------
                    Total loans                                         5,225,128        5,255,620
             Prior liens due other lenders at time of loan              3,026,354        2,377,041
                                                                    --------------    -------------

                    Total debt                                       $  8,251,482      $ 7,632,661
                                                                    ==============    =============

              Appraised property value at time of loan               $ 10,356,549      $ 9,677,215
                                                                    ==============    =============

                    Total loans as percent of appraisals                   79.67%           78.87%
                                                                    ==============    =============

              Loans by type of property
                Owner occupied homes                                 $    627,579      $   640,000
                Non-owner occupied homes                                  689,017          865,710
                Apartments                                                 96,716          136,841
                Commercial                                              3,811,816        3,613,069
                                                                    --------------    -------------

                                                                     $  5,225,128      $ 5,255,620
                                                                    ==============    =============
</TABLE>

     Interest  rates on the loans  range  from 6.50% to 10.50% at  December  31,
2004, and 6.50% to 10.75% at December 31, 2003.

     Scheduled  maturity  dates of secured  loans as of December 31, 2004 are as
follows:

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

                         2005                   $    664,882
                         2006                        621,716
                         2007                      3,205,206
                         2008                              -
                         2009                        627,579
                      Thereafter                     105,745
                                               --------------

                         Total                  $  5,225,128
                                               ==============

     The remaining scheduled  maturities for 2005 include $175,865 in two loans,
which were past  maturity at December  31, 2004 and are included in the total of
loans  90 days or  more  delinquent  presented  in  Note  2.  Occasionally,  the
Partnership  allows  borrowers  to  continue  to make the  payments on debt past
maturity for periods of time.

     Cash deposits at December 31, 2004,  exceeded federal  insurance limits (up
to $100,000 per bank) by approximately $1,087,000.

                                       35
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2004, 2003 and 2002


8.     Asset Concentrations and Characteristics (continued)

     The  Partnership has a substantial  amount of its loan  receivable  balance
from one borrower at December 31, 2004 and 2003.  This  borrower  accounted  for
approximately  59% and 58% of the secured  loan  balances  at such  dates.  This
borrower  accounted for approximately  57%, 47% and 31% of interest on loans for
the years ended December 31, 2004, 2003 and 2002, respectively.  At December 31,
2004 and December 31, 2003, the  collateral  value securing these loans was less
than the  principal  balance due under the loans.  Redwood  Mortgage  Corp.  has
provided an indemnity to the Partnership  whereby it has agreed to indemnify and
hold  harmless  the  Partnership  from any  expenses  or losses  incurred by the
Partnership  by reason of the  Partnership's  inability to collect all principal
due under the loans after the  Partnership  has exhausted all reserves set aside
for these loans and all remedies  available to it including  foreclosure  of the
underlying collateral. Therefore, these loans are not considered impaired solely
because  the  value  of the  collateral  securing  the  loans  is less  than the
principal due to the Partnership.  Neither of these loans is past due 90 days or
more on interest payments nor are they past maturity.


9.     Commitments and Contingencies

     Workout agreements

     The Partnership has negotiated various  contractual workout agreements with
borrowers.  The  Partnership  is not  obligated to fund  additional  money as of
December 31, 2004. There are three loans totaling $272,581 in workout agreements
as of December 31, 2004.

     Legal proceedings

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

                                       36
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 2004, 2003 and 2002


10.    Selected Financial Information (Unaudited)
<TABLE>
<S>  <C>                                               <C>             <C>             <C>             <C>             <C>
                                                                          Calendar Quarter
                                                    ------------------------------------------------------------

                                                       First           Second          Third           Fourth          Annual
                                                    -----------     ------------   -------------    ------------    ------------
     Revenues
        2004                                         $ 130,206       $  140,121     $   135,904      $  132,506      $  538,737
        2003                                         $ 110,453       $  149,615     $   107,613      $  123,959      $  491,640

     Expenses
        2004                                         $  48,590       $   59,237     $    50,429      $   33,329      $  191,585
        2003                                         $  35,041       $   57,724     $    24,466      $   41,293      $  158,524

     Net income allocated to general partners
        2004                                         $     816       $      809     $       855      $      992      $    3,472
        2003                                         $     754       $      919     $       832      $      826      $    3,331

     Net income allocated to limited partners
        2004                                         $  80,800       $   80,075     $    84,620      $   98,185      $  343,680
        2003                                         $  74,658       $   90,972     $    82,315      $   81,840      $  329,785

     Net income per $1,000 invested
        where income is
          Compounded
            2004                                     $      12       $         12   $        13      $       17      $       54
            2003                                     $      12       $         12   $        12      $       14      $       50

          Withdrawn
            2004                                     $      12       $         12   $        13      $       16      $       53
            2003                                     $      12       $         12   $        12      $       13      $       49
</TABLE>









                                       37
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                   Schedule II
                        Valuation and Qualifying Accounts
           For the Three Years Ended December 31, 2002, 2003 and 2004

<TABLE>
<S>             <C>                            <C>            <C>               <C>                <C>              <C>

                                               Col B.              Col. C - Additions                               Col E.
                                                             ------------------------------
                Col A.                       Balance at       Charged to        Charged                           Balance
                                             Beginning        Costs and         to Other           Col. D          at End
              Description                    of Period         Expenses         Accounts         Deductions       of Period
----------------------------------------    -------------    -------------    -------------     -------------    -------------

Year Ended December 31, 2002

  Deducted from asset accounts

     Allowance for loan losses               $   370,612      $   (5,864)      $   (48,009) (a)  $  (41,445) (b)  $   275,294

     Cumulative write-down of
      real estate held for sale (REO)            534,612                -           249,998                -          784,191
                                            -------------    -------------    --------------    -------------    -------------

                                             $   904,805      $   (5,864)      $    210,936 (a)  $  (41,445)      $ 1,059,485
                                            =============    =============    ==============    =============    =============

Year Ended December 31, 2003

  Deducted from asset accounts

     Allowance for loan losses               $   275,294      $     4,585      $          -      $      (14) (b)  $   279,865

     Cumulative write-down of
      real estate held for sale (REO)            784,191                -                 -                -          784,191
                                            -------------    -------------    --------------    -------------    -------------

                                             $ 1,059,485      $     4,585      $          -      $      (14) (b)  $ 1,064,056
                                            =============    =============    ==============    =============    =============

Year Ended December 31, 2004

  Deducted from asset accounts

     Allowance for loan losses               $   279,865      $    35,886      $          -      $         -      $   315,751

     Cumulative write-down of
      real estate held for sale (REO)            784,191                -                 -        (782,878) (c)        1,313
                                            -------------    -------------    --------------    -------------    -------------

                                             $ 1,064,056      $    35,886      $          -      $ (782,878) (c)  $   317,064
                                            =============    =============    ==============    =============    =============
</TABLE>

Note (a) - Represents restructuring of loans

Note (b) - Represents write-offs of loans

Note (c) - Represents sales of REO

                                       38
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                   Schedule IV
                          Mortgage Loans on Real Estate
                         Rule 12-29 Loans on Real Estate
                                December 31, 2004


<TABLE>
<S>         <C>        <C>          <C>          <C>           <C>           <C>        <C>         <C>          <C>
                                                                                        Col. H
                                                                                       Principal
                                                               Col. F                   Amount
                                                                Face         Col. G    of Loans
                       Col. C       Col. D                    Amount of    Carrying    Subject to   Col. I       Col. J
            Col. B     Final       Periodic      Col. E       Mortgage     Amount of   Delinquent    Type     California
 Col. A    Interest   Maturity     Payment       Prior        Original     Mortgage    Principal      of      Geographic
Descript.    Rate       Date         Terms       Liens         Amount     Investment  or Interest    Lien      Location
----------------------------------------------------------------------------------------------------------------------------
 Apts.       6.50%    05/01/06    $    541    $   89,904    $  100,000   $   96,716    $  96,716      2nd      Sacramento
 Comm.      10.00%    12/01/03       1,276             -       145,455      144,349      144,349      1st      Stanislaus
 Comm.      10.00%    12/01/03         284       208,012        32,323       31,516       31,516      2nd      Stanislaus
 Comm.      10.00%    07/01/11         997             -       109,769      105,745            -      1st      Santa Clara
 Comm.       9.00%    02/28/07      15,775             -     2,103,300    2,103,300            -      1st      Santa Clara
 Comm.       9.00%    02/28/07       7,176             -       956,800      956,800            -      1st      Alameda
 Comm.      10.50%    10/01/07       1,345             -       147,000      145,107            -      1st      San Mateo
 Comm.      10.50%    12/01/06       2,844     2,270,636       650,000      325,000            -      2nd      San Francisco
 Res.        8.75%    01/01/09       2,242             -       285,000      283,163            -      1st      Alameda
 Res.       10.00%    12/25/05       4,078       226,465       650,000      489,017            -      2nd      Alameda
 Res.        9.25%    08/01/09       1,275             -       155,000      154,675            -      1st      Alameda
 Res.        8.50%    09/01/06       1,417             -       200,000      200,000            -      1st      Monterey
 Res.        9.25%    09/01/09         987             -       120,000      119,773            -      1st      Colusa
 Res.        9.75%    10/01/09         601       231,337        70,000       69,967            -      2nd      Alameda
                                 ----------------------------------------------------------------
   Total                          $ 40,838    $3,026,354    $5,724,647   $5,225,128    $ 272,581
                                 ================================================================
</TABLE>





Note: Most loans have balloon payments due at maturity


                                       39
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                             Schedule IV (continued)
                          Mortgage Loans on Real Estate
                         Rule 12-29 Loans on Real Estate
                                December 31, 2004


     Reconciliation of carrying amount (cost) of loans at close of periods
<TABLE>
<S><C>                                                   <C>              <C>               <C>
                                                                Year ended December 31,
                                                     ------------------------------------------------

                                                         2004             2003              2002
                                                     -------------    -------------     -------------

   Balance at beginning of year                       $ 5,255,620      $ 5,183,100       $ 4,970,433
                                                     -------------    -------------     -------------
   Additions during period
      New loans                                           869,415        1,637,342           900,418
      Other                                                     -                -           920,346
                                                     -------------    -------------     -------------
        Total additions                                   869,415        1,637,342         1,820,764
                                                     -------------    -------------     -------------

   Deductions during period
      Collections of principal                            899,907        1,564,808         1,265,798
      Foreclosures                                              -                -           300,854
      Cost of loans sold                                        -                -                 -
      Amortization of premium                                   -                -                 -
      Other                                                     -               14            41,445
                                                     -------------    -------------     -------------
        Total deductions                                  899,907        1,564,822         1,608,097
                                                     -------------    -------------     -------------

      Balance at close of year                        $ 5,225,128      $ 5,255,620       $ 5,183,100
                                                     =============    =============     =============
</TABLE>







                                       40
<PAGE>

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

     There  were no  disagreements  with the  Partnership's  independent  public
accountants during the years ended December 31, 2004 and 2003.


Item 9a. - Controls and Procedures

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

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

Item 9b. - Other Information

     None


                                    Part III


Item 10 - Directors and Executive Officers of the Registrant

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

     The General Partners.

     Michael R.  Burwell.  Michael R. Burwell,  age 48,  General  Partner,  past
member  of  Board  of  Trustees  and  Treasurer,   Mortgage  Brokers   Institute
(1984-1986);  President,  Director,  Chief Financial  Officer,  Redwood Mortgage
Corp.  (1979-present);  Director,  Secretary  and  Treasurer  A  &  B  Financial
Services, Inc. (1980-present);  President, Director, Chief Financial Officer and
Secretary (since 1986) of Gymno Corporation;  President, Director, Secretary and
Treasurer of The Redwood Group, Ltd. (1979-present).  Mr. Burwell is licensed as
a real estate sales person.

     Gymno  Corporation.  Gymno  Corporation,  General Partner,  is a California
corporation  formed in 1986 for the  purpose  of acting as a general  partner of
this  partnership  and of other limited  partnerships  formed by the  individual
general partners. The shares in Gymno Corporation are held equally by Michael R.
Burwell  and the  estate  of D.  Russell  Burwell.  Upon the  completion  of the
administration of D. Russell  Burwell's  estate,  Michael R. Burwell will have a
controlling  interest in Gymno Corporation.  Michael R. Burwell is a director of
Gymno and the director  position held by D. Russell Burwell is currently vacant.
Michael R. Burwell is its President, Chief Financial Officer and Secretary.

     Financial Oversight by General Partners.

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

                                       41
<PAGE>

     Code of Ethics.

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


Item 11 - Executive Compensation

       COMPENSATION OF THE GENERAL PARTNERS AND AFFILIATES BY PARTNERSHIP

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

     The  following  compensation  has been  paid to the  general  partners  and
affiliates  for services  rendered  during the year ended December 31, 2004. All
such compensation is in compliance with the guidelines and limitations set forth
in the Prospectus.
<TABLE>
<S>                                      <C>                                                                <C>

  Entity Receiving Compensation          Description of Compensation and Services Rendered                  Amount
  --------------------------------------------------------------------------------------------------------------------
  I. Redwood Mortgage Corp.            Loan Servicing Fee for servicing loans.................................$50,160

  General Partners &/or Affiliates     Asset Management Fee for managing assets................................$8,160

  General Partners                     1% interest in profits..................................................$3,472
</TABLE>

     II. FEES PAID BY BORROWERS ON MORTGAGE LOANS PLACED WITH THE PARTNERSHIP BY
COMPANIES  RELATED TO THE GENERAL  PARTNERS  (EXPENSES OF  BORROWERS  NOT OF THE
PARTNERSHIP)
<TABLE>
<S>                                    <C>                                                                    <C>

  Redwood Mortgage Corp.               Mortgage Brokerage Commissions for services in connection
                                       with the review, selection, evaluation, negotiation, and
                                       extension
                                       extension of the loans paid by the borrowers and not by the
                                       Partnership............................................................$24,156

  Redwood Mortgage Corp.               Processing and Escrow Fees for services in connection with
                                       notary, document preparation, credit investigation, and escrow
                                       fees payable by the borrowers and not by the Partnership................$2,250

  Gymno Corporation                    Reconveyance Fee..........................................................$338
</TABLE>

     III. IN ADDITION, THE GENERAL PARTNERS AND/OR RELATED COMPANIES PAY CERTAIN
EXPENSES ON BEHALF OF THE PARTNERSHIP FOR WHICH IT IS REIMBURSED AS NOTED IN THE
STATEMENT OF INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . $12,807

                                       42
<PAGE>

Item 12 - Security Ownership of Certain Beneficial Owners and Management

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


Item 13 - Certain Relationships and Related Transactions

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

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


Item 14 - Principal Accountant Fees and Services

     Fees for services performed for the Partnership by the principal accountant
for 2004 and 2003 are as follows:

     Audit Fees The aggregate  fees billed  during the years ended  December 31,
2004  and  2003  for  professional  services  rendered  for  the  audit  of  the
Partnership's  annual financial  statements included in the Partnership's Annual
Report  on  Form  10-K  and  review  of  financial  statements  included  in the
Partnership's   Quarterly  Reports  on  Form  10-Q  were  $37,136  and  $32,090,
respectively.

     Audit  Related  Fees  There  were no fees  billed  during  the years  ended
December 31, 2004 and 2003 for audit-related services.

     Tax fees The  aggregate  fees billed for tax  services  for the years ended
December  31, 2004 and 2003,  were $3,478 and $2,675,  respectively.  These fees
relate to professional services rendered primarily for tax compliance.

     All Other  Fees  There were no other  fees  billed  during the years  ended
December 31, 2004 and 2003.

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

                                       43
<PAGE>

                                     Part IV


Item 15 - Exhibits and Financial Statements Schedules

A. Documents filed as part of this report:

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

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

   3. Exhibits.

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

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

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


B. See (A) 3 above

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


                                       44
<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 31st day of March,
2005.

REDWOOD MORTGAGE INVESTORS VI


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


By:       Gymno Corporation, General Partner



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

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed below by the following person on behalf of the registrant
and in the capacity indicated on the 31st day of March, 2005.

     Signature                     Title                          Date



/S/ Michael R. Burwell
-----------------------
Michael R. Burwell             General Partner                 March 31, 2005





/S/ Michael R. Burwell
-----------------------
Michael R. Burwell        President, Secretary & Chief         March 31, 2005
                            Financial Officer of Gymno
                         Corporation (Principal Financial
                             and Accounting Officer);
                          Director of Gymno Corporation


                                       45
<PAGE>

                                                                   Exhibit 31.1

                          GENERAL PARTNER CERTIFICATION

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

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

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

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

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

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

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

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

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

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

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



/s/ Michael R. Burwell
-----------------------------------
Michael R. Burwell, General Partner
March 31, 2005

                                       46
<PAGE>

                                                                   Exhibit 31.2

               PRESIDENT AND CHIEF FINANCIAL OFFICER CERTIFICATION

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

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

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

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

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

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

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

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

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

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

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



/s/ Michael R. Burwell
---------------------------------
Michael R. Burwell, President and
Chief Financial Officer of Gymno
Corporation, General Partner
March 31, 2005

                                       47
<PAGE>

                                                                   Exhibit 32.1

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


     In connection with the Annual Report of Redwood Mortgage  Investors VI (the
"Partnership") on Form 10-K for the period ended December 31, 2004 as filed with
the  Securities  and  Exchange  Commission  on the date hereof  (the  "Report"),
pursuant  to 18  U.S.C.  (S)  1350,  as  adopted  pursuant  to  (S)  906  of the
Sarbanes-Oxley  Act of 2002,  I,  Michael  R.  Burwell,  General  Partner of the
Partnership, certify that to the best of my knowledge:

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

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





/s/ Michael R. Burwell
-----------------------------
Michael R. Burwell, General Partner
March 31, 2005

                                       48
<PAGE>

                                                                   Exhibit 32.2


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


     In connection with the Annual Report of Redwood Mortgage  Investors VI (the
"Partnership") on Form 10-K for the period ended December 31, 2004 as filed with
the  Securities  and  Exchange  Commission  on the date hereof  (the  "Report"),
pursuant  to 18  U.S.C.  (S)  1350,  as  adopted  pursuant  to  (S)  906  of the
Sarbanes-Oxley Act of 2002, I, Michael R. Burwell, President and Chief Financial
Officer of Gymno Corporation,  General Partner of the Partnership,  certify that
to the best of my knowledge:

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

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




/s/ Michael R. Burwell
---------------------------------
Michael R. Burwell, President and
Chief Financial Officer of Gymno
Corporation, General Partner
March 31, 2005

                                       49
<PAGE>