Redwood Mortgage Investors IX, LLC

Company and management

• Legal form and formation: Delaware limited liability company formed in October 2008.
• Primary business: Mortgage lender and investor that makes and holds-for-investment mortgage loans secured by California real estate, primarily first and second deeds of trust.
• External management: Externally managed by Redwood Mortgage Corp. (RMC), which is solely responsible for managing RMI IX’s business and affairs and has the power to bind the company.
• Personnel: RMC provides personnel and services; RMI IX has no employees of its own.
• Servicing and loan operations: Mortgage loans funded by the company are arranged and generally serviced by RMC.
• Governance: Rights, duties, and powers of members and the manager are governed by the Ninth Amended and Restated Limited Liability Company Operating Agreement and the Delaware and California LLC acts. Members holding a majority of units may, without the manager’s concurrence, vote on dissolution, certain amendments to the Operating Agreement, approval or disapproval of the sale of substantially all assets, and removal or replacement of managers. If there is only one manager and that manager withdraws, a majority-in-interest of members elects a new manager to continue the business.

Investment focus and income generation

• Primary objective: Generate favorable returns from lending and investing in loans while preserving capital through secured investments in California real estate. Preference is given to income-producing properties in the San Francisco Bay Area and coastal metropolitan regions of Southern California.
• Income allocation: Net income (or loss) is allocated to members based on their capital accounts after allocating 1% of net income to the manager. Monthly results are adjusted quarterly and annually.
• Drivers of income and distributions: Net income, cash available for distribution, and net-distribution rates depend on loan origination volume, capital availability, interest rates, line-of-credit activity, loan sales or gains, RMC fees and cost reimbursements, operating expenses, and formation-loan payments from RMC.

Taxes

• Members are responsible for federal and state income taxes. California franchise tax and California LLC gross receipts tax apply.

Funding sources

• Ongoing sources for lending include proceeds from loan payoffs, borrowers’ monthly principal and interest payments, line-of-credit advances, loan sales to unaffiliated third parties, and payments from RMC under the formation loan.

Distributions and reinvestment

• Distribution split: Cash available for distribution is allocated 99% to members and 1% to the manager.
• Definition of cash available for distribution: Cash flow from operations (excluding loan principal repayments and other capital transactions) minus reserves for creation or restoration.
• Organization and offering (O&O) expenses: The manager may withhold from distributable cash to cover O&O expenses allocated to members’ accounts; distributions are net of these allocations.
• Allocation among members: Cash available for distribution is allocated among members in proportion to their percentage interests and the number of days owned in the applicable month.
• DRIP status: The dividend reinvestment plan (DRIP) closed in July 2024. Members who elected DRIP had distributions reinvested; closure notifications were provided with the June 2024 statements. After closure, members who did not participate in DRIP began receiving quarterly distributions to the extent cash was available. Gross proceeds from DRIP unit sales to members under the registration statement were approximately $10.0 million and were used for general corporate operations.

Liquidity, transferability, and the unit redemption program

• Transfer restrictions: Substantial restrictions on transferability exist. There is no established public trading market or secondary market for units.
• Redemption mechanism and price: A unit redemption program permits redemption of all or part of a member’s units, subject to limitations. The redemption price is the lesser of the member’s purchase price or the member’s capital account balance as of the redemption date.
• Redemption cadence and per-member limits:
  • Redemptions are processed quarterly.
  • Maximum redeemable per quarter per member: the greater of 100,000 units or 25% of the member’s total outstanding units.
  • Priority for redemption requests: (1) redemptions on a member’s death (capped at $100,000 per quarter per deceased member); (2) all other eligible redemptions processed pro rata.
  • Annual/quarterly caps: The company will not redeem more than 5% of outstanding units in any calendar year and not more than 1.25% in any calendar quarter, but the manager may waive these limits if doing so is in the company’s best interests. If redemption requests exceed the annual cap, redemptions proceed according to the priority rules and the company holds excess units.
  • Manager discretion: The manager may waive holding periods or penalties in cases of death, exigent circumstances, or when deemed in the company’s best interests. The manager may also reject redemption requests or suspend or terminate new requests without notice, and may terminate, suspend, or amend the redemption program with 30 days’ notice.
  • Redemption liquidity: The company does not maintain a dedicated cash reserve for redemptions; redemption capacity depends on available cash and cash flow.

Redemption activity (selected dates)

• As of December 31, 2025: Eligible redemption requests totaled approximately $25.8 million; $24.3 million was received on or before September 30, 2025; $1.5 million was received in the quarter ended December 31, 2025 and will be eligible for distribution on March 31, 2026.
• As of December 31, 2024: Eligible redemption requests totaled approximately $24.3 million; $22.2 million was received on or before September 30, 2024; $2.1 million was received in the quarter ended December 31, 2024 and became eligible for distribution on March 31, 2025.