I am pleased to update you on the performance of RF-Boston Fund IV as we close in on a full year of operation and a track record of consistent quarterly returns. During the second quarter of 2023 we achieved an annualized 10.9% rate of return, bringing investor return since inception to 10.84% annualized.
We continue to focus on high underwriting standards, relying on great borrowers and well collateralized loans. With a conservative portfolio wide loan-to-value ratio (LTV) of 55.7% we remain confident in the security of your funds. Interest rates have rapidly changed since our inception on August 11, 2022, and banks have become more stringent since the fallout of Silicon Valley Bank. It is a more challenging environment for our borrowers to secure permanent financing, and debt coverage ratios are critically important to their success. We aim to work with borrowers who have a high percentage of equity in their purchase. A high level of equity helps their transition into permanent financing as our loan matures.
During the second quarter we underwrote 17 new loans for approximately $12.5 million, growing the portfolio to a total of 63 loans and a principal balance of $38,500,588. Of that loan balance, $23,757,658 utilizes bank funding from Needham Bank and Fidelis, resulting in a leverage ratio of approximately 61.7%.
As we have mentioned, defaults are a part of this business, and we are well equipped to work through them. As of the end of June, we had our first loan go delinquent, and it has since entered default. The loan is for a three-family in Dorchester with an attractive LTV of only 45%. The loan is approximately 1.22% of our entire portfolio. Foreclosure notices have been sent; however, we do not expect this property will foreclose. In the meantime, it is accruing default interest.
As of today, securing another source of bank capital is our top priority. Moody’s downgraded several mid-market banks last week, and several more are still under review or have a negative outlook. Needham Bank was not on either list, and while we are confident in our existing partners, insulating our fund from the foot-faults of any individual bank is imperative. We remain dedicated to consistent and systematic growth through the remainder of 2023, and our banking relationships play a significant role in that growth. Investor capital goes hand in hand with a new banking relationship, and the fund is currently open to new and additional investments.
We remain optimistic about the future as lenders in Greater Boston and maintain that success will be created through loan integrity and, above all else, protecting your capital.