At September 30, 2019, the partnership held a payable to RMC of approximately $318,000. This payable consisted of certain asset management fees and cost reimbursements owed to the manager for certain specific costs associated with a recovery of loan losses, as well as computer and data processing expenses related to recordkeeping and reporting for the accounts of individual investors.

The Partnership Agreement provides for compensation of the manager, as detailed below, and for the general partners. The general partners are entitled to 1% of the profits and losses of the partnership.

The manager acting as servicing agent with respect to all loans is entitled to receive a servicing fees of up to 1.5% annually of the unpaid principal balance of the loan portfolio. The mortgage servicing fees are accrued monthly on all loans. Remittance to RMC is made monthly unless the loan has been assigned a specific loss reserve, at which point remittance is deferred until the specific loss reserve is no longer required, or the property has been acquired by the partnership.

The general partners are entitled to 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).

The manager is entitled to reimbursement by the partnership for operating expenses incurred on behalf of the partnership, including without limitation, accounting and audit fees, legal fees and expenses, postage and preparation of reports to limited partners, and out-of-pocket general and administration expenses. Other costs are allocated pro-rata based on the percentage of total capital of all mortgage funds managed by RMC. Payroll and consulting fees are broken out first based on activity, and then allocated to the partnership on a pro-rata basis based on percentage of capital to the total capital of all mortgage funds. The decision to request reimbursement of any qualifying charges is made by RMC at its sole discretion.

- Brokerage commissions, loan originations - For fees in connection with the review, selection, evaluation, negotiation and extension of loans, the general partners may collect loan brokerage commissions (points) 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.

- Other fees – RMC receives fees for processing, notary, document preparation, credit investigation, reconveyance and other mortgage related services. The amounts received are customary for comparable services in the geographical area where the property securing the loan is located, payable solely by the borrower and not by the partnership.

During the nine months ended September 30, 2018, the partnership transferred two performing loans in-full to Redwood Mortgage Investors IX, LLC, an affiliated mortgage fund, at par value, which approximates fair value, of approximately $5,890,000. The partnership received cash for the transfer and has no continuing obligation or involvement with the assigned loans. No loans were transferred during the nine months ended September 30, 2019.

Commissions for sales of limited partnership units paid to broker-dealers (B/D sales commissions) were paid by RMC and were not paid directly by the partnership out of offering proceeds. Instead, the partnership advanced to RMC amounts sufficient to pay the B/D sales commissions and premiums paid to partners in connection with unsolicited orders up to 7% of offering proceeds. The receivable arising from the advances is unsecured, and non-interest bearing and is referred to as the “formation loan.”

The primary source of the repayments made by RMC on the formation loan is expected to be loan brokerage commissions. As of September 30, 2019, the partnership had made such advances of approximately $22,567,000, of which approximately $4,620,000 remain outstanding on the formation loan. If the general partners are removed and RMC is no longer receiving payments for services rendered, the formation loan is forgiven, per the terms of the partnership agreement.

The formation loan activity is summarized in the following table for the nine months ended September 30, 2019 ($ in thousands).

	2019
Balance, January 1	$	4,943
Early withdrawal penalties		(323	)
Repayments		—
Balance, September 30	$	4,620

The future minimum payments on the formation loan, net of early withdrawal penalties, as of September 30, 2019 are presented in the following table ($ in thousands).

2019	$	327
2020		650
2021		650
2022		650
2023		650
Thereafter		1,693
Total	$	4,620

RMC is required to make annual payments on the formation loan, net of early withdrawal penalties.

The table below sets forth withdrawals of limited partner capital for the three and nine months ended September 30, 2019 and 2018 ($ in thousands).

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
Capital liquidations-without penalty	$	4,863	$	5,109	$	15,624	$	14,897
Capital liquidations-subject to penalty		960		2,082		3,236		6,424
Total	$	5,823	$	7,191	$	18,860	$	21,321

Scheduled liquidations, at September 30	$	43,769	$	50,545	$	43,769	$	50,545

Scheduled limited partners’ capital liquidation requests are presented in the following table ($ in thousands).

2019	$	5,462
2020		15,354
2021		10,156
2022		7,102
2023		4,186
Thereafter		1,509
Total	$	43,769