FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

x ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
OF 1934

For the fiscal year ended December 31, 1997

                                       OR

o 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: 0-28370


                 WNC HOUSING TAX CREDIT FUND IV, L.P. - Series 2

State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization                                Identification No.)

California                                                   33-0596399


              3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626

                                                            (714) 662-5565

                                      Securities  registered pursuant to Section
12(b) of the Act:

Title of Securities                               Exchanges on which Registered

NONE                                                         NOT APPLICABLE



                                      Securities  registered pursuant to section
12(g) of the Act:

UNITS OF LIMITED PARTNERSHIP INTEREST


<PAGE>

         Indicate by check mark whether the registrant (1) has filed all reports
required 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 X No ____
         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. x



State the aggregate market value of the voting stock held by  non-affiliates  of
the registrant. Inapplicable.

                       DOCUMENTS INCORPORATED BY REFERENCE

         List hereunder the following documents if incorporated by reference and
the Part of the Form 10-K (e.g.,  Part I, Part II, etc.) into which the document
is  incorporated:  (1) Any annual report to security  holders;  (2) Any proxy or
information  statement;  and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the  Securities Act of 1933.  The listed  documents  should be clearly
described for identification  purposes (e.g.,  annual report to security holders
for fiscal year ended December 24, 1980).

NONE



                                       2
<PAGE>


Item 1.  Business

Organization

WNC  Housing  Tax  Credit  Fund  IV,  L.P.,  Series 2 (the  "Partnership")  is a
California limited  partnership formed under the laws of the State of California
on September 27, 1993 to acquire limited partnership  interests in local limited
partnerships  ("Local Limited  Partnerships")  which own  multifamily  apartment
complexes  that are eligible for low-income  housing  federal income tax credits
(the "Low Income Housing Credit")

The general partner of the Partnership is WNC Tax Credits Partner IV, L.P. ("The
General  Partner").  The  general  partner  of  the  General  Partner  is  WNC &
Associates,  Inc. ("Associates").  The business of the Partnerships is conducted
primarily through  Associates as neither the General Partner nor the Partnership
have employees of their own.

The  Partnership  conducted its public offering  ("Offering")  from July 1994 to
July 1995. 20,000 Units of Limited Partnership  Interests ("Units"),  at a price
of $1,000  per Unit  were  offered.  Since  inception  a total of  15,600  Units
representing  approximately $15,241,000 were sold throughout the offering. Enova
Financial,  Inc. a  California  corporation,  which is not an  affiliate  of the
Partnership or General  Partner,  has purchased  4,000 Units,  which  represents
25.6% of the  Units  outstanding  for the  Partnership.  Enova  Financial,  Inc.
invested  $3,641,000.  A  discounts  of  $359,000  was  allowed  due to a volume
discount. See Item 12(a) in this 10-K.

Holders of Limited  Partnership  Interests  are  referred  to herein as "Limited
Partners."

The  Partnership  has  applied and will apply  funds  raised  through its public
offerings,   including  the  installment   payments  of  the  Limited  Partners'
promissory  notes as received,  to the purchase price and  acquisition  fees and
costs of Local Limited  Partnership  Interests,  reserves,  and expenses of this
Offering.


Description of Business
-----------------------

The Partnership's principal business is to provide its Limited Partners with Low
Income Housing Credits. The Partnership's  principal business therefore consists
of investing as a limited  partner in Local Limited  Partnerships  each of which
will own and  operate an  apartment  complex  ("Apartment  Complex")  which will
qualify for the federal Low Income Housing Credit. In general, under Section 42,
an owner of a low-income  housing  project is entitled to receive the Low Income
Housing  Credit in each year of a ten-year  period (the  "Credit  Period").  The
Apartment   Complex  is  subject  to  a  fifteen-year   compliance  period  (the
"Compliance Period").

                                       3
<PAGE>

In general,  in order to avoid  recapture  of Low Income  Housing  Credits,  the
Partnership  does not  expect  that it will  dispose of its  interests  in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by a Local Limited  Partnership of any Apartment Complex prior to the end of the
applicable  Compliance  Period.  Because  of (i)  the  nature  of the  Apartment
Complexes,  (ii) the  difficulty of predicting  the resale market for low-income
housing  15 or  more  years  in the  future,  and  (iii)  the  inability  of the
Partnership  to directly  cause the sale of  Apartment  Complexes by the general
partners  of  the  respective   Local  Limited   Partnerships   ("Local  General
Partners"),  but generally  only to require such Local  General  Partners to use
their  respective best efforts to find a purchaser for the Apartment  Complexes,
it is  not  possible  at  this  time  to  predict  whether  the  liquidation  of
substantially  all  of the  Partnership's  assets  and  the  disposition  of the
proceeds,  if any, in  accordance  with the  Partnership's  Agreement of Limited
Partnership  ("Partnership  Agreement") will be able to be accomplished promptly
at the end of the 15-year  period.  If a Local Limited  Partnership is unable to
sell an Apartment Complex, it is anticipated that the Local General Partner will
either continue to operate such Apartment  Complex or take such other actions as
the Local  General  Partner  believes  to be in the best  interest  of the Local
Limited  Partnership.  In  addition,  circumstances  beyond  the  control of the
General  Partner may occur during the Compliance  Period which would require the
Partnership to approve the disposition of an Apartment  Complex prior to the end
thereof.

 The Partnership's  investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income  housing and to the
management  and ownership  multifamily  residential  real estate.  Some of these
risks are that the Low Income Housing Credit could be recaptured and neither the
Partnership's  investments  nor the Apartment  Complexes  owned by Local Limited
Partnerships will be readily marketable. Additionally, there can be no assurance
that the  Partnership  will be able to  dispose  of its  interest  in the  Local
Limited  Partnerships  at the end of the  Compliance  Period.  The  value of the
Partnership's  investments  could be subject to  changes in  national  and local
economic conditions,  including unemployment  conditions,  which could adversely
impact vacancy levels, rental payment defaults and operating expenses.  This, in
turn,  could  substantially  increase  the  risk  of  operating  losses  for the
Apartment Complexes and the Partnership. The Apartment Complexes will be subject
to loss through  foreclosure.  In addition,  each Local Limited  Partnership  is
subject to risks relating to  environmental  hazards which might be uninsurable.
Because the Partnership's ability to control its operations will depend on these
and other  factors  beyond the  control  of the  General  Partner  and the Local
General Partners,  there can be no assurance that Partnership operations will be
profitable or that the  anticipated Low Income Housing Credits will be available
to Limited Partners.

                                       4
<PAGE>

The Apartment  Complexes  owned by the Local Limited  Partnerships  in which the
Partnership has invested or is expected to invest were or are being developed by
the Local  General  Partners who  acquired the sites and applied for  applicable
mortgages and  subsidies.  The  Partnership  became or will become the principal
limited  partner in these Local Limited  Partnerships  pursuant to  arm's-length
negotiations  with  the  Local  General  Partners.  As a  limited  partner,  the
Partnership's  liability for  obligations  of the Local Limited  Partnership  is
limited  to its  investment.  The Local  General  Partner  of the Local  Limited
Partnership retains  responsibility for developing,  constructing,  maintaining,
operating and managing the Apartment Complex.

As of  December  31,  1997,  the  Partnership  had  invested in twenty one Local
Limited Partnerships. Each of these Local Limited Partnerships owns an Apartment
Complex that is or is expected to be eligible for the Low Income Housing Credit.
All of the Local  Limited  Partnerships  also benefit from  government  programs
promoting low or moderate income housing.

Following is recap of the status of the twenty one Apartment  Complexes owned by
the  twenty  one  Limited   Partnerships   invested  in  or  identified  by  the
Partnership:
<TABLE>
<CAPTION>

                                                                                    Under
                                                        Construction         Construction
                                                   or Rehabilitation    or Rehabilitation       Construction
                                                           Completed                             Not Started
<S>                                                              <C>                  <C>                 <C>    

Properties acquired by 12/31/97                                   20                    1                  0

</TABLE>

The  following  is a schedule  of the status as of  December  31,  1997,  of the
Apartment  Complexes owned by Local  Partnerships in which the Partnership was a
limited partner as of December 31, 1997:

                                       5
<PAGE>


<TABLE>
<CAPTION>

                             SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                                    IN WHICH THE PARTNERSHIP HAS AN INVESTMENT
                                              AS OF DECEMBER 31, 1997

                                                 Number                                             Percentage
                                                   of            Units             Units             of Total
NAME & Location                                  Apts.         Completed         Occupied         Units Occupied
---------------                                  -----         ---------         --------         --------------
<S>                                               <C>             <C>              <C>                <C>    

AUTUMN TRACE                                       58              58               50                 86%
  Silsbee (Hardin Co.) Texas
BROKEN BOW                                         18              18                6                 37%
  Broken Bow (Custer Co.), Nebraska
CHADWICK                                           48              48               47                 98%
  Eden, (Rockingham Co.) N.C.
COMANCHE                                           22              22               21                 95%
  Comanche (Comanche Co.) Texas
CROSSINGS                                         114              0                 0                  0%
  Portage, Michigan
E.W.                                               16              16               15                 94%
  Evansville (Rock Co.) Wisconsin
GARLAND                                            18              18               18                 100%
  Malvern (Hot Spring Co.)Arkansas
HEREFORD                                           28              28               25                 89%
  Hereford, (Deaf Smith Co.) Texas
HICKORY LANE                                       23              23               19                 83%
  Newton (Newton Co.) Texas
HONEYSUCKLE                                        47              47               46                 98%
  Vidor (Orange Co.) Texas
KLIMPEL MANOR                                      59              59               59                 100%
  Fullerton (Orange Co.) CA
LA MESA                                            24              24               23                 96%
  Lamesa (Dawson Co.),
Texas
LAREDO HEIGHTS APTS                                48              48               47                 98%
  Navasto, Texas
MOUNTAINVIEW                                       24              24               24                 100%
  North Wilkesboro (Wilkes Co.) N.C.
PALESTINE                                          42              42               42                 100%
  Palestine (Anderson Co.) Texas
PECAN                                              32              32               31                 97%
  Forrest City (St. Francis Co.) AR
PIONEER                                           112             112               109                 98%
  Bakersfield (Kern Co.) California
SIDNEY APARTMENTS I                                18              18               15                 83%
   Omaha, Nebraska
SOUTHCOVE                                          54              54               50                 93%
  Orange Cove (Fresno Co.) CA
WALNUT BEND                                        23              23               21                 92%
  Buna (Jasper Co.) Texas
WAUKEE II                                          23              23               23                 100%
  Waukee (Dallas Co.) Iowa
                                              =============  ===============   ==============
                                                  228             114               98                 86%
                                              =============  ===============   ==============
</TABLE>
                                       6
<PAGE>

Description of Local Partnerships
---------------------------------

The Partnership has become a limited partner in AUTUMN TRACE ASSOCIATES, LTD., a
Texas limited partnership ("AUTUMN"); in BROKEN BOW APARTMENTS,  L.P. a Nebraska
limited  partnership  ("BROKEN BOW"), in CHADWICK LIMITED  PARTNERSHIP,  a North
Carolina limited partnership ("CHADWICK");  COMANCHE RETIREMENT VILLAGE, LTD., a
Texas limited  partnership  ("COMANCHE");  CROSSINGS II LIMITED DIVIDEND HOUSING
ASSOCIATION LIMITED PARTNERSHIP,  a Michigan limited partnership  ("CROSSINGS"),
EW, a Wisconsin limited partnership ("EW");  GARLAND STREET LIMITED PARTNERSHIP,
an Arkansas limited partnership ("GARLAND"); HEREFORD SENIORS COMMUNITY, LTD., a
Texas limited  partnership  ("HEREFORD");  HICKORY LANE ASSOCIATES,  LIMITED,  a
Texas limited partnership ("HICKORY");  HONEYSUCKLE COURT ASSOCIATES, LIMITED, a
Texas limited  partnership  ("HONEYSUCKLE");  KLIMPEL MANOR,  LTD., a California
limited partnership ("KLIMPEL"), LAMESA SENIORS COMMUNITY, LTD., a Texas limited
partnership  ("LAMESA");  LAREDO  HEIGHTS  APARTMENTS,  LTD.,  a  Texas  limited
partnership  ("LAREDO"),  MOUNTAINVIEW  APARTMENTS LIMITED PARTNERSHIP,  a North
Carolina limited  partnership  ("MOUNTAINVIEW");  PALESTINE  SENIORS  COMMUNITY,
LTD.,  a  Texas   limited   partnership   ("PALESTINE");   PECAN  GROVE  LIMITED
PARTNERSHIP,   an  Arkansas  limited  partnership   ("PECAN"),   PIONEER  STREET
ASSOCIATES,   L.P.,  a  California  limited  partnership   ("PIONEER");   SIDNEY
APARTMENTS I LIMITED PARTNERSHIP,  a Nebraska limited  partnership,  ("SIDNEY"),
SOUTHCOVE  ASSOCIATES,  a California limited partnership  ("SOUTHCOVE"),  WALNUT
TURN  ASSOCIATES,   LIMITED,  a  Texas  limited  partnership   ("WALNUT"),   and
CANDLERIDGE   APARTMENTS  OF  WAUKEE  L.P.  II,  an  Iowa  limited   partnership
("WAUKEE-II").

AUTUMN owns the Autumn  Trace  Apartments  in Silsbee,  Texas;  CHADWICK own the
Chadwick  Apartments  in  Eden,  North  Carolina;  COMANCHE  owns  the  Comanche
Retirement   Village   Apartments  in  Comanche,   Texas;   CROSSINGS  owns  the
----------------------in Portage, Michigan. EW owns the Evansville Town Homes in
Evansville,  Wisconsin,  GARLAND owns the Garland Street  Apartments in Malvern,
Arkansas;  HEREFORD  owns the Hereford  Seniors  Community  in Hereford,  Texas;
HICKORY owns the Hickory Lane Apartments in Newton, Texas;  HONEYSUCKLE owns the
Honeysuckle  Court  Apartments in Vidor,  Texas;  KLIMPEL owns the Klimpel Manor
Apartments in Fullerton, California, LAMESA owns the Lamesa Seniors Community in
Lamesa,   Texas;   MOUNTAINVIEW  owns  the  Mountainview   Apartments  in  North
Wilkesboro,  North Carolina;  PALESTINE owns the Palestine  Seniors Community in
Palestine,  Texas;  and PECAN owns the Pecan Grove  Apartments  in Forrest City,
Arkansas, PIONEER owns the Pioneer Street Apartments in Bakersfield, California;
SOUTHCOVE own the Southcove Apartments in Orange Cove,  California,  WALNUT owns
the Walnut Turn  Apartments in Buna,  Texas.  WAUKEE-II owns the  Candleridge of
Waukee Apartments II in Waukee, Iowa.

                                       7
<PAGE>

The  following   tables  contain   information   concerning  the  Local  Limited
Partnerships acquired by the Partnership.
<TABLE>
<CAPTION>

----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
Local             Project Name     Estimated      Estimated      Number of        Basic        Permanent      Local
Limited                            Construction   Development    Apartment Units  Monthly      Mortgage       Limited
Partnership                        Completion     Cost With                       Rents        Loan Amount    Partnership's
                                                  Land                                                        Anticipated
                                                                                                              Tax
                                                                                                              Credits (1)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
<S>               <C>             <C>             <C>            <C>             <C>          <C>            <C>

AUTUMN            Autumn           May 1994       $2,030,727     26 1BR units     $210         $1,256,680     $768,000
                  Trace                                          32 2BR units     $265         RECDS (3)
                  Apartments (2)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
BROKEN BOW        Broken Bow       December 1996  $1,417,102     6 2BR units      $301         $500,000       $1,127,220
                  Apartments                                     10 3BR units     $352         FNBO (11)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
CHADWICK          Chadwick         October        $2,024,524      8 1BR units     $285         $898,311       $735,000
                  Apartments (2)   1994                          36 2BR units     $307         RECDS (3)
                                                                  4 3BR units     $333
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
COMANCHE          Comanche         January        $616,000       20 1BR units     $235         $597,520       $290,000
                  Retirement       1995                          2 2BR units      $275         RECDS (3)
                  Village
                  Apartments
                  (4)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
CROSSINGS         The              February       $7,375,000     32 1BR units     $203-501     $6,133,000     $721,000
                  Crossings II     1998                          79 2BR units     $327-674     Michigan
                                                                 3 3BR units      $279-786     State
                                                                                               Housing
                                                                                               Development
                                                                                               Authority
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
EW                Evansville       September      $868,552        4 2BR units     $493         $660,000       $306,000
                  Town Homes       1994                          12 3BR units     $599         WHEDA (5)

----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
GARLAND           Garland          September      $898,780       18 2BR units     $270         $702,332       $319,000
                  Street           1994                                                        RECDS (3)
                  Apartments                                     1 3BR unit       Mgr.'s unit
                  (2)
                  ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
HEREFORD          Hereford         December       $854,000       28 1BR units     $260         $809,750       $355,000
                  Seniors          1995                                                        RECDS (3)
                  Community
                  Apartments
                  (4)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
                  ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
HICKORY           Hickory          December       $920,000       16 1BR units     $185         $598,900       $322,000
                  Lane             1995                           8 2BR units     $233         RECDS (3)
                  Apartments
                  (2)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
                                       8
<PAGE>

----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
HONEY-            Honeysuckle      December       $1,701,691     24 1BR units     $283         $1,172,600     $622,000
SUCKLE            Court            1995                          24 2BR units     $333         RECDS (3)
                  Apartments
                  (2)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
KLIMPEL           Klimpel          November       $3,618,242     58 1BR units     $340-445     $1,320,000     $3,360,000
                  Manor            1994                           1 2BR unit      $497         CHFA (6)
                  Apartments
                  (5)                                                                          $625,000
                                                                                               LGP (7)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
LAMESA            Lamesa           June           $826,426       24 1BR units     $265         $679,000       $302,000
                  Seniors          1994                                                        RECDS (3)
                  Community
                  Apartments
                  (4)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
LAREDO            Laredo Heights   July           $1,302,003     8 1BR units      $326         $1,009,500     $419,320
                  Apartments (2)   1996                          12 3BR units     $349         RECDS (12)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
MOUNTAIN-VIEW     Mountain-view    December       $1,206,604     22 1BR units     $292         $1,025,482     $387,000
                  Apartments       1993                           2 2BR units     $340         RECDS (3)
                  (4)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- -------------
PALESTINE         Palestine        June           $1,180,000     40 1BR units     $264         $1,144,600     $446,000
                  Seniors          1995                          2 2BR units      $318         RECDS (3)
                  Community
                  Apartments
                  (4)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- -------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
PECAN             Pecan            July           $1,454,000     32 2BR units     $245         $1,194,732     $464,000
                  Grove            1994                                                        RECDS (3)
                  Apartments
                  (2)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
PIONEER           Pioneer          October        $3,903,000     78 2BR units     $341-4222    $1,960,000     $4,156,000
                  Street           1995                          32 3BR units     $488         CCRC (8)
                  Apartments                                      2 4BR units     $437-542
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
SIDNEY             Sidney          August         $1,134,574     6 2BR units      $326         $450,000       $993,320
                   Apartments I    1996                          12 3BR units     $349         FNBO (13)
------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
SOUTHCOVE          Southcove       July           $3,750,000     20 2BR units     $226-407     $1,051,050     $3,783,000
                   Apartments      1995                          34 3BR units     $249-471     RHCP (9)

                                                                                               $525,000
                                                                                               CCRC (8)
------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
WALNUT            Walnut Turn      December       $981,000       24 2BR units     $218         $716,000       $347,000
                  Apartments       1995                                                        RECDS (3)
                  (2)

----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
WAUKEE-II         Candleridge      December       $736,000       23 1BR units     $285         $694,148       $230,000
(12)              Apartments       1994                                                        RECDS (3)
                  of Waukee II
                  (3)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
</TABLE>
                                       9
<PAGE>

(1)      Low Income Housing Credits are available over a 10-year period. For the
         year in which the credit  first  becomes  available  with respect to an
         Apartment Complex, The Partnership will receive only that percentage of
         the annual  credit  which  corresponds  to the number of months  during
         which The  Partnership  was a  limited  partner  of the  Local  Limited
         Partnership,  and during which the Apartment  Complex was completed and
         in service. See the discussion under "The Low Income Housing Credit" in
         the Prospectus.

(2)      Rehabilitation property.

(3)      The Rural  Economic and Community  Development  Services  (formerly the
         Farmers  Home  Administration)  of  the  United  States  Department  of
         Agriculture  ("RECDS")  provides mortgage loans under the RECDS Section
         515 Mortgage Loan Program. Each of these mortgage loans is or will be a
         50-year  loan and bears or will bear  annual  interest at a market rate
         prior to reduction of the interest rate by a mortgage  interest subsidy
         to an annual rate of 1%, with  principal and interest  payable  monthly
         based on a 50-year amortization schedule.

(4)      Senior citizen housing.

(5)      The Wisconsin Housing & Economic  Development  Authority ("WHEDA") will
         provide the mortgage loan for a term of 30 years at an interest rate of
         6.65% per annum, with principal and interest payable monthly based on a
         30-year amortization schedule.

(6)      The  California  Housing and Finance  Agency  ("CHFA") will provide the
         mortgage  loan  for a term of 40 years  at an  interest  rate of 9% per
         annum,  with principal and interest  payable monthly based on a 40-year
         amortization schedule.

(7)      Margaret N. Chaffee, one of the Local General Partners,  will provide a
         second  loan for a term of 40 years at an  interest  rate of 9.25%  per
         annum,  with principal and interest  payable monthly based on a 40-year
         amortization schedule.

(8)      The California Community Reinvestment Corporation ("CCRC") is providing
         the mortgage loan at an annual  interest rate of 8.75%,  with principal
         and interest payable monthly based on a 30-year amortization schedule.

(9)      California  has  established  the Rental Housing  Construction  Program
         ("RHCP") to provide low interest loans directly to project sponsors for
         the construction of new rental housing for occupancy by very low-income
         households,  lower-income households and other households. RHCP funding
         is provided through a combination of interim construction and permanent
         loans or through permanent loans only. The standard interest rate is 3%
         per annum,  calculated on a simple  (non-compounded) basis. The minimum
         term to maturity is 40 years,  with longer  original  terms and 10-year
         extensions  available.  The  repayment  schedule  is based on a formula
         generally  related to the project's ability to pay. During the first 30
         years of the loan term, no principal payments are required. Interest is
         payable  from,  and  only to the  extent  of,  net cash  flow.  Accrued
         interest for any year which cannot be paid is deferred  until such time
         as net cash flow is sufficient for payment thereof. Commencing with the
         30th year of the loan term,  principal  and interest are payable out of
         net cash flow. The amount of the required payments depends, in part, on
         the remaining  duration of the loan term. In each project,  30% or more
         of all units must be assisted  units,  and at least 2/3 of all assisted
         units must be very low-income units.

                                       10
<PAGE>

(10)     California Community  Reinvestment Corp. will provide the mortgage loan
         at a  fixed  interest  rate of 9% per  annum.  The  loan  will be for a
         30-year term,  with principal and interest  payable  monthly based on a
         30-year amortization schedule.

(11)     First  National Bank of Omaha  ("FNBO)") will provide the mortgage loan
         for a term of 22 years at a variable  interest  rate. The interest rate
         will be adjusted  every 36 months to an annual rate of 9% per annum and
         a maximum  rate of 11.5% per  annum.  Principal  and  interest  will be
         payable monthly based on a 22-year amortization schedule.

(12)     Rural  Economic  and  Community  Development  Services  (formerly,  the
         Farmers  Home  Administration)  of  the  United  States  Department  of
         Agriculture  ("RECDS")  provides mortgage loans under the RECDS Section
         515 Mortgage Loan Program.  The mortgage loan will bear annual interest
         at a market rate prior to reduction of the interest  rate by a mortgage
         interest  subsidy to an annual rate of 1%, with  principal and interest
         payable monthly. The term and amortization schedule will be 40 years.

(13)     First  National  Bank of Omaha  ("FNBO") will provide the mortgage loan
         for a term of 15 years at a variable  interest  rate. The interest rate
         will be adjusted  every 36 months to an annual rate of 25 basis  points
         over the three-year Treasury Constant Maturities.  The note will have a
         minimum rate of 9% and a maximum rate of 11.5%.  Principal and interest
         will be payable monthly based on a 22-year amortization schedule.

Silsbee (AUTUMN):  Silsbee is in Hardin County,  Texas near the intersections of
U.S. Highways 69 and 96, and State Highway 92. Houston lies 120 miles southwest.
The  population  of Silsbee is  approximately  6,400.  The major  employers  for
Silsbee  residents  are  Temple-Inland   Forest  Products  Corp.,  Kirby  Forest
Industries/Louisiana Pacific, and the Silsbee Independent School District.

Broken Bow (BROKEN BOW): Broken Bow is the county seat of Custer County,  and is
central  Nebraska at the  intersection of State Highways 2, 21 and 70. The major
employers  for Broken Bow  residents  are Becton  Dickinson  Vacutainer  Systems
(medical equipment), Sargent Pipe Company, and Arrow Seed Company, Inc.

Eden  (CHADWICK):   Eden  is  in  Rockingham  County,   North  Carolina  at  the
intersection  of State Highways 87 and 770.  Greensboro is 30 miles to the south
and  Winston-Salem  is 60  miles to the  southwest.  The  population  of Eden is
approximately  16,000.  The city's largest employers are Miller Brewing Company,
Billcrest Canon, and Sara Lee.

Comanche (COMANCHE):  Comanche is the county seat of Comanche County, located in
west-central  Texas  along  U.S.  Highway  377.  Fort  Worth is 108 miles to the
northeast.  The  population  of  Comanche  is  approximately  4,000.  It's major
employers  are  Gore  Bros.,   Inc.,   Western  Hills  Nursing  Home,   Comanche
Manufacturing, and the Comanche Independent School District.

Evansville (EW): Evansville is in Rock County,  Wisconsin at the intersection of
U.S.  Highway 14 and State Highway 213. The state capitol of Madison is 35 miles
northeast of Orange Cove. The population of Evansville is  approximately  3,300.
Three of the area's  largest  employers  are  Varco-Pruden,  a division  of AMCA
International, Baker Manufacturing, and the Harvard Corporation.

Malvern (GARLAND):  Malvern is the county seat of Hot Spring County,  located in
south-central  Arkansas near  Interstate  Highway 30. Little Rock is 45 miles to
the northeast and Hot Springs  National Park is 20 miles to the  northwest.  The
population of Malvern is approximately 9,200. The city's major employers include
Amoco Foam (meat packing trays), Acme Brick (brick  manufacturer) and Willamette
(fiberboard).

Hereford (HEREFORD):  Hereford is the county seat of Deaf Smith County,  located
in northwest Texas at the intersection of U.S.  Highways 60 and 385. Amarillo is
50  miles to the  northeast  and  Lubbock  is 90  miles  to the  southeast.  The
population of Hereford is approximately  14,700. Major employers in the Hereford
area are Holly Sugar, Hereford Bi-Products, and the Hereford School System.

                                       11
<PAGE>

Newton (HICKORY):  Newton (population 1900) is the county seat of Newton County,
and  is  located  in  east-central  Texas  near  the  Louisiana  border  at  the
intersection  of State Highways 63 and 87  approximately  125 miles northeast of
Houston  and 225 miles  southeast  of  Dallas.  The major  employers  for Newton
residents are Shady Acre Shelter (nursing home),  Brookshier  Brothers  (grocery
store) and Kirby Lumber Company.

Vidor   (HONEYSUCKLE):   Vidor  (population  11,000)  is  in  Orange  County  in
east-central  Texas near the Louisiana  border at the intersection of Interstate
Highway 10 and State Highway 12  approximately 90 miles northeast of Houston and
250 miles southeast of Dallas.  The largest  employers for the city's  residents
are Vidor School District,  North Store Steel, Trinity Industry (car repair) and
Wal-Mart.

Fullerton (KLIMPEL):  Fullerton is in Orange County, California, near Interstate
Highway 5 and  State  Highway  57,  approximately  25 miles  from  downtown  Los
Angeles.  The  economy  in the area is based  primarily  in  retail  sales,  and
secondarily in manufacturing.  The largest employers for Fullerton residents are
Hughes Aircraft, Beckman Instruments, and Hunt Wesson.

Lamesa  (LAMESA):  Lamesa  is the  county  seat of  Dawson  County,  located  in
west-central  Texas at the intersection of U.S.  Highways 180 and 87. Lubbock is
60 miles to the north and Odessa is 63 miles to the southwest. The population of
Lamesa  is  approximately   10,800.   The  city's  major  employers  are  Lamesa
Independent  School District,  Britt Oil Service Co. (oil drilling),  and Lamesa
Apparel, Inc. (clothing manufacturer).

Navasota  (LAREDO):  Navasota is in Grimes County, in east-central  Texas at the
intersection of State Highways 6, 90 and 105,  approximately 80 miles north east
of Houston.  The major employers for Navasota residents are the Texas Department
of Corrections, Hackney Steel and Tubular (drill pipes).

North Wilkesboro (MOUNTAINVIEW): North Wilkesboro is in Wilkes County in western
North Carolina,  at the  intersection of U.S.  Highway 421 and State Highway 18.
Charlotte  is 80 miles to the  southeast  and  Winston-Salem  is 45 miles to the
east. The population of North Wilkesboro is approximately 3,400. The city's main
employers are Tyson Foods, Lowes Company (hardware), and Thaca Co.
(textiles).

                                       12
<PAGE>

Palestine (PALESTINE):  Palestine is the county seat of Anderson County, located
in east-central Texas at the intersection of U.S. Highways 79 and 287. Dallas is
60 miles to the  northwest  and  Houston  is 125  miles  to the  southeast.  The
population of Palestine is approximately  18,000. The city's major employers are
the Texas Department of Criminal Justice (prison system),  Wal-Mart Distribution
Center, and Memorial Hospital.

Forrest City  (PECAN):  Forrest City is the county seat of St.  Francis  County,
located in eastern  Arkansas at the  intersection  of Interstate  Highway 40 and
State Highway 1. Little Rock is 90 miles to the west.  The population of Forrest
City is approximately 13,000. The city's major employers are Sanyo Manufacturing
Corp. (color  television  sets),  Yale Hoists (hoisting  equipment) and Airtherm
Products (heating/air conditioning equipment).

Bakersfield  (PIONEER):  Bakersfield  (population 202,000) is the county seat of
Kern County,  California,  and is located at the southern end of the San Joaquin
Valley on State  Highway 99,  approximately  110 miles north of Los Angeles.  In
1993, Kern County was the largest oil producing county and third most productive
agricultural  county in the country.  The largest  employers in Bakersfield  are
Giumarra Vineyards, Sun World/Superior Farms, and Grimmway Farms.

Sidney (SIDNEY): Sidney is the county seat of Cheyenne County, and is located at
the  south  edge of the  Nebraska  panhandle  near the  Colorado  border  at the
intersection   of  Interstate   Highway  80  and  U.S.   Highways  385  and  30,
approximately  170 miles  northeast of Denver.  The major  employers  for Sidney
residents are Cabel's (mail order sporting  goods),  Memorial  Health Center and
Prestolite Wire Corporation (specialty wiring and cable).

Orange Cove  (SOUTHCOVE):  Orange Cove is in Fresno County,  California on State
Highway 63. The county seat of Fresno is 35 miles  northeast of Orange Cove. The
population  of Orange Cove is  approximately  6,500.  A majority of the employed
persons in Orange Cove are employed in  agriculture,  particularly in the citrus
packing business.

Buna (WALNUT):  Buna  (population  2,100) is in Jasper County , in  east-central
Texas near the Louisiana border at the intersection of Interstate Highway 96 and
State  Highway 62  approximately  100 miles  northeast  of Houston and 225 miles
southeast of Dallas.  The largest  employers for the city's residents are Temple
Inland Sawmill, Buna School District and Buna Nursing Home.


Waukee (WAUKEE-II): Waukee (population 2,500) is in Dallas County, Iowa, on U.S.
Highway 6,  approximately 14 miles northwest of Des Moines. The largest category
of  employment  for Dallas  County is  wholesale  and retail  trade  (34%).  The
services category  accounts for 27% of employment.  Some of the larger employers
in  the  Waukee  area  are  Downey  Printing  (telephone   directory  printing),
Selectivend   (vending  machine   manufacturing)  and  Waukee  Community  School
District.

                                       13
<PAGE>

<TABLE>
<CAPTION>

------------------ --------------------------- -------------------- ------------------------------------------ -----------------
                                                                    Sharing Ratio:

                                                                                            Allocations(4)     Approximate
Local              Local                                                                    and Sale or        Partnership's
Limited            General                     Property                                     Refinancing        Capital
Partnership        Partners                    Manager (1)          Cash Flow (2)           Proceeds(5)        Contributions
                                                                                                               (3)
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
<S>                <C>                        <C>                   <C>                    <C>                 <C>    

AUTUMN             Clifford E. Olsen (5)       Management &         Partnership: 10%        99/1               $412,000
                                               Systems              LGP: 90%                51/49
                                               Corporation (7)
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
BROKEN BOW         Retro Development, Inc (7)  Retro Management     WNC: 1st $2,500         99/./1             $608,000
                                               Group, Inc.          LGP: 2nd $2,500         25/75
                   Most Worshipful Prince                           The balance:
                   Hall Grand Lodge                                 WNC: 25%
                                                                    LGP: 75%
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
CHADWICK           MBG Investment              MBG                  Partnership: 1st        99/1               $378,000
                   Corpora-tion                Management, Inc.     $2,950                  51/49
                                                                    LGP: 2nd $5,980
                   Gordon L.                                        Balance: 99/1
                   Blackwell
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
COMANCHE           Max L.                      M-DC Group,          Partnership: 1st $490   99/1               $149,000
                   Rightmer                    Inc. dba Alpha       LGP: 2nd $985           51/49
                                               Management           Balance: 99/1
                                               Co., Inc.
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
CROSSINGS           Raymond T.                  Cato                 Det. Mgmnt Fee          98.99%/.01%/1%    $451,440
                    Cato , Jr.                  Management           Reporting Fee
                                                Ltd.                 Development Fee         30%/70%
                                                                     Operating Loans
                                                                     Incentive Mgmt Fee      40%
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
EW                  Philip C.                   T & C Services       1995-2000:              99/1              $164,000
                    Wallis                                           Partnership: $1,500     50/50
                                                                     Balance to
                    James L.                                         payment of
                    Poehlman                                         development
                                                                     fee, LGP, and
                    Cynthia L.                                       replacement
                    Solfest-                                         reserve.
                    Wallis
                                                                     2001-there-after:
                    Anita B.                                         Partnership: $5,000
                    Poehlman                                         Balance to
                                                                     payment of
                                                                     development
                                                                     fee, LGP, and
                                                                     replacement
                                                                     reserve.
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------

                                       14
<PAGE>

------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
GARLAND             Conrad L.                   Sunbelt              99/1                    99/1                 $191,000
                    Beggs                       Property                                     60/40
                                                Managers
                    Audrey D.                   Corp.
                    Beggs

                    Russell J.
                    Altizer

                    Marjorie L.
                    Beggs
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
HEREFORD            Winston                    MJS Manage- ment,     50/50                   99/1                 $179,000
                    Sullivan                   Inc.                                          51/49
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
HICKORY             Olsen                       Olsen                Partnership: 10%        99/1                 $172,000
                   Securities                   Securities          LGP: 90%                49/51
                   Corporation                  Corporation

------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
HONEY-              Olsen                       Olsen                Partnership: 10%        99/1                  $333,000
SUCKLE             Securities                   Securities          LGP: 90%                49/51
                   Corporation                  Corporation

------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
KLIMPEL             Douglas B.                  National             Partnership: 1/3        96/4                $1,774,000
                    Chaffee                     Housing              LGP: 2/3                50/50
                                                Ministries
                    Margaret N.
                    Chaffee
------------------
                   --------------------------- -------------------- ----------------------- ------------------ -----------------
LAMESA              Winston                     MJS                  50/50                   99/1                 $153,000
                    Sullivan                    Management,                                  51/49


                                                Inc.
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
LAREDO              Donald W. Sowell            Wilmic Venture,     WNC: 1st $1,053          99/1                $1,133,000
                                                Inc.                LGP: 2nd $2,107          50/50
                                                                    The balance:
                                                                    WNC: 99%
                                                                    LGP: 1%
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
                                       15
<PAGE>

------------------
MOUNTAIN-VIEW       John C. Loving              MBG                  Partnership: 1st        99/1                 $195,000
                                                Management,          $850                    51/49
                    Gordon D. Brown, Jr.        Inc.                 LGP: 2nd
                                                                     1,650
                                                                     Balance: 99/1
------------------
                   --------------------------- -------------------- ----------------------- ------------------ -----------------
PALESTINE           Winston                     MJS                  50/50                   99/1                 $225,000
                    Sullivan                    Management,                                  51/49
                                                Inc.
                   --------------------------- -------------------- ----------------------- ------------------ -----------------
------------------
PECAN               Conrad L.                   Sunbelt              99/1                    99/1                 $239,000
                    Beggs                       Property                                     60/40
                                                Managers
                    Audrey D.                   Corp.
                    Beggs

                    Russell J.
                    Altizer
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
PIONEER             Philip R.                   The                  1st $4,000:             99/1                $2,222,000
                   Hammond, Jr.                 Management           WNC: $2,000             50/50
                                                Company             LGP: $2,000
                                                                     LGP: the
                   Walter Dwelle                                     balance

------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
SIDNEY              Retro Development, Inc      Retro Management    WNC: 1st $2,500          99/1                  536,000
                                                Group, Inc.         LGP: 2nd $2,500          25/75
                    Most Worshipful Prince                          The balance:
                    Hall Grand Lodge                                WNC: 25%
                                                                     LGP: 75%
                   --------------------------- -------------------- ----------------------- ------------------ -----------------
------------------
SOUTHCOVE           Philip R.                   Buckingham           1996-1998:              99/1                $2,022,000
                    Hammond, Jr.                Property             WNC & LGP:              51/49
                                                Management           $1,500 each
                    Diane M.                    Company              with balance
                    Hammond                                          to LGP
                                                                     1999-
                                                                     thereafter:
                                                                     WNC & LGP:
                                                                     $2,250 each
                                                                     with balance
                                                                     to LGP
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
WALNUT              Olsen                       Olsen                WNC: 10%                99/1                  $185,000
                   Securities                  Securities            LGP: 90%                49/51
                   Corporation                 Corporation
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
WAUKEE-II           Eric A.                     Sheldahl             WNC: 1st $100           99/1                 $125,000
                    Sheldahl                    Development          LGP: the                51/49
                                                Corporation          balance
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
</TABLE>
                                       15
<PAGE>


(1) The maximum annual  management fee payable to the property manager generally
is determined  pursuant to lender  regulations.  The Local General  Partners are
authorized to employ either  themselves or one of their  Affiliates,  or a third
party, as a property manager for leasing and management of the Apartment Complex
so long as the management fee does not exceed the amount authorized and approved
by the lender for the Apartment Complex.

(2)  Reflects  the amount of the net cash flow from  operations,  if any,  to be
distributed to the  Partnership  and the Local General  Partners  ("LGP") of the
Local Limited  Partnership  for each year of operations.  To the extent that the
specific  dollar amounts which are to be paid are not paid  annually,  they will
accrue and be paid from sale or  refinancing  proceeds as an  obligation  of the
Local Limited Partnership.

(3) The  Partnership  will make its capital  contributions  to the Local Limited
Partnership  in  stages,  with each  contribution  due when  certain  conditions
regarding  construction  or  operations  of  the  Apartment  Complex  have  been
fulfilled.

(4) Subject to certain special allocations,  reflects the respective  percentage
interests of the Partnership and the Local General  Partners in profits,  losses
and Low Income Housing  Credits  commencing  with entry of the  Partnership as a
limited partner.

(5) Reflects the percentage  interests of the  Partnership and the Local General
Partners in any net cash  proceeds  from sale or  refinancing  of the  Apartment
Complex,  after payment of the mortgage loan and other Local Limited Partnership
obligations  (see, e.g., note 3), and the following,  in the order set forth. As
used herein,  the term "sales  preparation  fee" means a fee in the amount of 3%
(5% in the case of Garland and Pecan) of sale or refinancing proceeds.

     Austin:  The Local General Partners' sales preparation fee, $100,004 to the
     Local General Partner as a partial return of its capital contribution;  the
     Partnership's  capital  contribution  and the capital  contribution  of the
     Local General Partner (less previous distributions).

     Chadwick:  The  capital  contribution  of the  Partnership  (less  previous
     distributions) and the Local General Partners' sales preparation fee.

                                       16
<PAGE>

     Comanche:  The  capital  contribution  of the  Partnership  (less  previous
     distributions) and the Local General Partner's sales preparation fee.

     EW: The Partnership's  capital contribution and the Local General Partners'
     sales preparation fee.

     Garland:  An amount equal to 5% of remaining  proceeds to the Local General
     Partners,  the Local  General  Partners'  sales  preparation  fee,  and the
     capital contribution of the Partnership (less previous distributions).

     Hereford:  The  capital  contribution  of the  Partnership  (less  previous
     distributions) and the Local General Partner's sales preparation fee.

     Hickory:  The Local General  Partner's sales  preparation  fee; the capital
     contribution of the Partnership;  and the capital contribution of the Local
     General Partner.

     Honeysuckle: The Local General Partner's sales preparation fee; the capital
     contribution of the Partnership;  and the capital contribution of the Local
     General Partner.

     Klimpel:   The   Partnership's   capital   contribution   and  the  capital
     contribution of the Local General Partners LAMESA: The capital contribution
     of the  Partnership  (less  previous  distributions)  and the Local General
     Partner's sales preparation fee.

     Mountainview:  The capital  contribution of the Partnership  (less previous
     distributions) and the Local General Partners' sales preparation fee.

     Palestine:  The capital  contribution  of the  Partnership  (less  previous
     distributions) and the Local General Partner's sales preparation fee.

     Pecan:  An amount  equal to 5% of remaining  proceeds to the Local  General
     Partners,  the Local  General  Partners'  sales  preparation  fee,  and the
     capital contribution of the Partnership (less previous distributions).

     Pioneer:  The  capital   contribution  of  the  Partnership;   the  capital
     contribution of the Local General Partners; and the Local General Partners'
     sales preparation fee.

     Southcove:  The Local General  Partners' sales preparation fee, the capital
     contribution of the  Partnership and the capital  contribution of the Local
     General Partners

     Walnut:  The Local General  Partner's  sales  preparation  fee; the capital
     contribution of the Partnership;  and the capital contribution of the Local
     General Partner.

     Waukee II: The capital  contribution of the Partnership;  the Local General
     Partner's sales preparation fee


                                       17

<PAGE>

Item 2.  Properties

         ITEM 2.  PROPERTIES:


Through its  investment  in Local Limited  Partnerships  the  Partnership  holds
interests in Apartment Complexes.  See Item 1 for information  pertaining to the
Apartment Complexes.


Item 3.  Legal Proceedings

NONE.

Item 4.  Submission of Matters to a Vote of Security Holders

NONE.


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

Item 5a.
(a) The Units are not traded on a public exchange but were sold through a public
offering.  It is not  anticipated  that any public  market will  develop for the
purchase  and  sale  of  any  Unit.  Units  can  be  assigned  only  if  certain
requirements in the Partnerships Agreement of Limited Partnership  ("Partnership
Agreement") are satisfied.

(b) At December 31, 1997, there were 837 Limited Partners.

(c) The  Partnership was not designed to provide cash  distributions  to Limited
Partners  in  circumstances   other  than  refinancing  or  disposition  of  its
investments in Local Limited  Partnerships.  The Limited Partners  received $113
and $105  federal  Low Income  Housing  Credits  per Unit for the years 1997 and
1996, respectively.


Item 6.  Selected Financial Data

OMITTED



Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operation

OMITTED


Item 8.  Financial Statements and Supplementary Data

OMITTED

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

         NONE

                                       18
<PAGE>

Item 10.  Directors and Executive Officers of the Registrant


The Partnership has no directors or executive officers of its own. The following
biographical  information is presented for the directors and executive  officers
of Associates which has principal responsibility for the Partnership's affairs.

Directors and Executive Officers of WNC & Associates, Inc.

The directors of Associates  are Wilfred N. Cooper,  Sr., who serves as Chairman
of the Board, John B. Lester,  Jr., David N. Shafer,  Wilfred N. Cooper, Jr. and
Kay L.  Cooper.  Substantially  all of the  shares  of  Associates  are owned by
Wilfred N. Cooper,  Sr., through the Cooper Revocable Trust, and John B. Lester,
Jr., through the Lester Family Trust.

WILFRED  N.  COOPER,  SR.,  age 67,  has been the  principal  shareholder  and a
Director of WNC & ASSOCIATES,  INC. since its  organization  in 1971, of SHELTER
RESOURCE  CORPORATION since its organization in 1981 and of WNC RESOURCES,  INC.
from its organization in 1988 through its acquisition by WNC & ASSOCIATES,  INC.
in 1991,  serving  as  President  of  those  companies  until  1992 and as Chief
Executive Officer since 1992, and has been a Director of WNC CAPITAL CORPORATION
since its organization. He is also a general partner with WNC & ASSOCIATES, INC.
in WNC FINANCIAL GROUP,  L.P. and WNC TAX CREDIT PARTNERS,  L.P. During 1970 and
1971  he  was  a  principal  of  Creative  Equity  Development  Corporation,   a
predecessor of WNC & ASSOCIATES,  INC., and of Creative  Equity  Corporation,  a
real estate investment firm. For 12 years prior to that, Mr. Cooper was employed
by Rockwell  International  Corporation,  last serving as its manager of housing
and urban  developments.  Previously,  he had  responsibility  for new  business
development including factory-built housing evaluation and project management in
urban  planning  and  development.  Mr.  Cooper is a Director  of the  Executive
Committee  of the  National  Association  of  Home  Builders  (NAHB)  and a past
Chairman of the NAHB's Rural Housing Council, a Director of the National Housing
Conference,  a Director of the Affordable  Housing Tax Credit Coalition,  a past
President of the California Council of Affordable Housing (CCAH) (formerly Rural
Builders  Council of  California),  and a past President of Southern  California
Chapter II of the Real Estate  Syndication and Securities  Institute  (RESSI) of
the National  Association of Realtors  (NAR).  Mr. Cooper  graduated from Pomona
College in 1956 with a Bachelor of Arts degree.

JOHN B. LESTER, JR., age 64, has been a shareholder, a Director and Secretary of
WNC & ASSOCIATES,  INC. since 1986,  Executive Vice President from 1986 to 1992,
and President and Chief Operating Officer since 1992, and has been a Director of
WNC CAPITAL CORPORATION since its organization. He was a shareholder,  Executive
Vice  President,  Secretary  and a Director  of WNC  RESOURCES,  INC.  from 1988
through its acquisition by WNC & ASSOCIATES,  INC. in 1991. From 1973 to 1986 he
was Chairman of the Board and Vice  President or President of E & L  Associates,
Inc., a provider of engineering  and  construction  services to the oil refinery
and petrochemical industries which he co-founded in 1973. Mr. Lester is a former
Director of the Los Angeles  Chapter of the  Associated  General  Contractors of
California.  His  responsibilities  at WNC & ASSOCIATES,  INC.  include property
acquisitions and company operations. Mr. Lester graduated from the University of
Southern  California  in 1956 with a Bachelor  of Science  degree in  Mechanical
Engineering.

                                       19
<PAGE>

DAVID N. SHAFER,  age 45, has been a Director of WNC &  ASSOCIATES,  INC.  since
1997, a Senior Vice President  since 1992,  and General  Counsel since 1990, and
served as Asset  Management  Director from 1990 to 1992, and has been a Director
and Secretary of WNC Management, Inc. since its organization.  Previously he was
employed as an associate attorney by the law firms of Morinello,  Barone, Holden
& Nardulli  from 1987 until  1990,  Frye,  Brandt & Lyster from 1986 to 1987 and
Simon and Sheridan from 1984 to 1986.  Mr. Shafer is a Director and President of
CCAH, a member of NAHB's Rural  Housing  Council,  a past  President of Southern
California Chapter II of RESSI, a past Director of the Council of Affordable and
Rural Housing and Development  and a member of the State Bar of California.  Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts  degree,  from the New  England  School of Law in 1983 with a
Juris Doctor  degree and from the  University of San Diego in 1986 with a Master
of Law degree in Taxation.

WILFRED N. COOPER,  JR.,  age 35, has been  employed by WNC &  ASSOCIATES,  INC.
since 1988 and has been a Director since 1997  Executive  Vice  President  since
1998, and a Senior Vice President  since 1992. Mr. Cooper heads the  Acquisition
Originations  department  at  WNC,  has  been  President  of,  and a  registered
principal with, WNC CAPITAL  CORPORATION,  a member firm of the NASD,  since its
organization,  and  has  been  a  Director  of WNC  Management  Inc.  since  its
organization.  Previously,  he was employed as a government affairs assistant by
Honda North America from 1987 to 1988, and as a legal  assistant with respect to
Federal  legislative and regulatory  matters by the law firm of Schwartz,  Woods
and Miller from 1986 to 1987. Mr. Cooper is an alternate  director and member of
NAHB's Rural Housing Council and serves as Chairman of its Membership Committee.
Mr.  Cooper  graduated  from The American  University in 1985 with a Bachelor of
Arts degree.

THEODORE M. PAUL, age 42, has been Vice President - Finance of WNC & ASSOCIATES,
INC. since 1992 and Chief Financial  Officer since 1990, and has been a Director
and Chief  Financial  Officer of WNC  Management  Inc.  since its  organization.
Previously,  he was a Vice  President  and Chief  Financial  Officer of National
Partnership  Investments  Corp.,  a sponsor  and general  partner of  syndicated
partnerships  investing in affordable  rental housing qualified for tax credits,
from 1986 until 1990, and was employed as an associate by the  accounting  firms
of Laventhol & Horwath,  during 1985, and Mann & Pollack Accountants,  from 1979
to 1984.  Mr. Paul is a member of the  California  Society of  Certified  Public
Accountants  and the American  Institute of Certified  Public  Accountants.  His
responsibilities  at WNC &  ASSOCIATES,  INC.  include  supervision  of investor
partnership  accounting  and tax reporting  matters and monitoring the financial
condition  of the  Local  Limited  Partnerships  in which the  Partnership  will
invest.  Mr.  Paul  graduated  from the  University  of  Illinois in 1978 with a
Bachelor of Science degree and is a Certified Public  Accountant in the State of
California.

THOMAS J. RIHA,  age 43, has been Vice  President  - Asset  Management  of WNC &
ASSOCIATES, INC. since 1994, and has been a Director and Chief Executive Officer
of WNC  Management  Inc.  since  its  organization.  He has more  than 17 years'
experience in commercial and multi-family real estate investment and management.
Previously,  Mr.  Riha was  employed  by Trust  Realty  Advisor,  a real  estate
acquisition  and  management  company,  from 1988 to 1994,  last serving as Vice
President - Operations.  His responsibilities at WNC & ASSOCIATES,  INC. include
monitoring  the  operations  and  financial   performance   of,  and  regulatory
compliance  by,  properties in the WNC  portfolio.  Mr. Riha  graduated from the
California  State  University,  Fullerton in 1977 with a Bachelor of Arts degree
(cum laude) in Business Administration with a concentration in Accounting and is
a Certified  Public  Accountant in the State of  California  and a member of the
American Institute of Certified Public Accountants.

                                       20
<PAGE>

SY P. GARBAN, age 52, has 20 years' experience in the real estate securities and
syndication industry. He has been associated with WNC & ASSOCIATES,  INC., since
1989,  serving as National Sales  Director  through 1992 and as Vice President -
National  Sales since  1992.  Previously,  he was  employed  as  Executive  Vice
President by MRW,  Inc.,  Newport  Beach,  California  from 1980 to 1989, a real
estate  development  and  management  firm.  Mr.  Garban  is  a  member  of  the
International  Association  of Financial  Planners.  He graduated  from Michigan
State  University  in  1967  with a  Bachelor  of  Science  degree  in  Business
Administration.

CARL FARRINGTON,  age 55, has been associated with WNC & ASSOCIATES,  INC. since
1993, and has served as Director - Originations  since 1994. Mr.  Farrington has
more  than 12  years'  experience  in  finance  and  real  estate  acquisitions.
Previously,  he served as Acquisitions Director for The Arcand Company from 1991
to 1993, and as Treasurer and Director of Finance and Administrator for Polytron
Corporation  from 1988 to 1991.  Mr.  Farrington is a member and Director of the
Council  of  Affordable  and  Rural  Housing  and  Development.  Mr.  Farrington
graduated from Yale  University  with a Bachelor of Arts degree in 1966 and from
Dartmouth College with a Master of Business Administration in 1970.

DAVID TUREK, age 43, has been Director - Originations of WNC & ASSOCIATES,  INC.
since 1996. He has 23 years' experience in real estate finance and acquisitions.
Previously,  from 1995 to 1996 Mr. Turek  served as a consultant  for a national
Low  Income  Housing  Credit  sponsor  where  he  was  responsible  for  on-site
feasibility  studies and due  diligence  analyses of Low Income  Housing  Credit
properties,  from 1992 to 1995 he served as Executive Vice President for Levcor,
Inc., a  multi-family  development  company,  and from 1990 to 1992 he served as
Vice  President  for the Paragon Group where he was  responsible  for Low Income
Housing  Credit  development  activities.  Mr.  Turek  graduated  from  Southern
Methodist University in 1976 with a Bachelor of Business Administration degree.

N. PAUL BUCKLAND, age 36, has been employed by WNC & ASSOCIATES, INC. since 1994
and currently serves as Vice President Acquisitions. He has 11 years' experience
in  analysis  pertaining  to the  development  of  multi-family  and  commercial
properties.  Previously,  from 1986 to 1994 he served on the development team of
the Bixby Ranch which  constructed  more than 700 apartment  units and more than
one million square feet of "Class A" office space in California and  neighboring
states,  and from 1984 to 1986 he served as a land acquisition  coordinator with
Lincoln  Property   Company  where  he  identified  and  analyzed   multi-family
developments. Mr. Buckland graduated from California State University, Fullerton
in 1992 with a Bachelor of Science degree in Business Finance.

MICHELE M. TAYLOR,  age 43, has been  employed by WNC & ASSOCIATES,  INC.  since
1986,  serving as a paralegal and office manager,  and currently is the Investor
Services  Director.  Previously she was  self-employed  between 1982 and 1985 in
non-financial  services  activities  and from 1978 to 1981 she was employed as a
paralegal by a law firm which  specialized  in real estate  limited  partnership
transactions.  Ms. Taylor graduated from the University of California, Irvine in
1976 with a Bachelor of Arts degree.

                                       21
<PAGE>

THERESA I. CHAMPANY,  age 40, has been employed by WNC & ASSOCIATES,  INC. since
1989 and currently is the Marketing Services Director and a registered principal
with WNC  CAPITAL  CORPORATION.  Previously,  she was  employed  as  Manager  of
Marketing  Services  by August  Financial  Corporation  from 1986 to 1989 and as
office manager and Assistant to the Vice  President of Real Estate  Syndications
by  McCombs  Securities  Co.,  Inc.  from 1979 to 1986.  Ms.  Champany  attended
Manchester (Conn.) Community College from 1976 to 1978.

KAY L.  COOPER,  age 61, has been an officer and  Director of WNC &  ASSOCIATES,
INC. since 1971 and of WNC RESOURCES,  INC. from 1988 through its acquisition by
WNC & ASSOCIATES, INC. in 1991. Mrs. Cooper has also been the sole proprietor of
Agate 108, a manufacturer and retailer of home accessory  products,  since 1975.
She is the wife of Wilfred N. Cooper,  Sr., the mother of Wilfred N. Cooper, Jr.
and the sister of John B. Lester,  Jr. Mrs. Cooper graduated from the University
of Southern California in 1958 with a Bachelor of Science degree.

                                       22
<PAGE>

Item 11.  Executive Compensation

The Partnership has no officers,  employees,  or directors.  However,  under the
terms of the  Partnership  Agreement the Partnership is obligated to the General
Partner or Associates for the following fees:

(a)  Selection  fees in an  amount  equal  to 8% of the  gross  proceeds  of the
Partnerships'   Offering   ("Gross   Proceeds").   Through  December  31,  1997,
approximately $1,059,000 of selection fees had been incurred by the Partnership,

(b) A  nonaccountable  expense  reimbursement  in an amount equal to 2% of Gross
Proceeds.  Through December 31, 1996,  approximately  $312,000 of nonaccountable
expense reimbursement has been incurred the Partnership.

(c) An annual  asset  management  fee in an amount  equal to the  greater of (i)
$2,000  for each  Apartment  Complex  or (ii)  0.275% of gross  proceeds.  Asset
management  fees  of$42,900  $42,900 and $42,900 were incurred  during the years
ended December 31, 1997, 1996 and 1995, respectively.

(d) A  subordinated  disposition  fee in an amount equal to 1% of the sale price
received in connection  with the sale or disposition of an Apartment  Complex or
interest in a Local Limited Partnership.  Subordinated  disposition fees will be
subordinated to the prior return of the Limited Partners' capital  contributions
and  payment  of the  return  on  investment  (as  defined  in  Article I of the
Partnership  Agreement),  which  includes  Low Income  Housing  Credits,  to the
Limited  Partners.  Through  December  31,  1997,  no  disposition  fee had been
incurred by the Partnerships.

(e) The General  Partner was allocated Low Income Housing Credits of $17,850 and
$16,604 for the years ended December 31, 1997
and 1996.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         Security Ownership of Certain Beneficial Owners(1)
<TABLE>
<CAPTION>


                               Name and Address              Amount and
Title of Class                 of Beneficial Owner           Nature of                      Percent
                                                             Beneficial Owner               of Class
------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                           <C>                            <C>    

Units of Limited Partnership     Enova Financial , Inc.        4,000 units                    25.6%
Interests                        P.O. Box 126943
                                 San Diego, CA  92113-6943
</TABLE>

                                       23
<PAGE>

(1)  a)  Security Ownership of Certain Beneficial Owners

The  above is only  person  known to own  beneficially  in  excess  of 5% of the
outstanding Limited Partnership Interests:


                                       23
<PAGE>



(b)      Security Ownership of Management

         Neither  the General  Partner,  Associates  nor any of the  officers or
directors of Associates  own directly or  beneficially  any limited  partnership
interests in the Partnership.

(c)      Changes in Control

         The  management  and control of the General  Partners may be changed at
any time in accordance with their respective organizational  documents,  without
the consent or approval of the Limited  Partners.  In addition,  the Partnership
Agreement  provides for the  admission of one or more  additional  and successor
General Partners in certain circumstances.

         First,   with  the  consent  of  any  other  General   Partners  and  a
majority-in-interest  of the Limited Partners, any General Partner may designate
one or more persons to be successor or additional General Partners. In addition,
any General Partner may, without the consent of any other General Partner or the
Limited  Partners,  (I)  substitute  in its stead as General  Partner any entity
which has, by merger, consolidation or otherwise,  acquired substantially all of
its  assets,  stock or other  evidence  of equity  interest  and  continued  its
business,  or (ii) cause to be admitted to the Partnership an additional General
Partner or Partners if it deems such  admission  to be necessary or desirable so
that the  Partnership  will be classified a partnership  for Federal  income tax
purposes. Finally, a majority-in-interest of the Limited Partners may at anytime
remove the General  Partner of the  Partnership  and elect a  successor  General
Partner

Item 13.  Certain Relationships and Related Transactions

         WNC & Associates,  Inc. All of the Partnership's affairs are managed by
the General  Partner,  through  Associates.  The  transactions  with the General
Partner and Associates are primarily in the form of fees paid by the Partnership
for  services  rendered to the  Partnership,  as discussed in Item 11 and in the
notes to the accompanying financial statements.

                                       24
<PAGE>

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

Financial Statements:  See Item 8 Omitted

Financial Statement Schedules:
N/A
Exhibits
(3): Articles of incorporation and by-laws:  The registrant is not incorporated.
The  Partnership  Agreement is included as Exhibit B to the Prospectus  which is
included in  Post-Effective  No 11 to Registration  Statement on Form S-11 dated
May 24,  1995  incorporated  herein by  reference  as Exhibit  3. (10)  Material
contracts:  10.1  Amended  and  Restated  Agreement  of Limited  Partnership  of
Chadwick  Limited  Partnership  filed as exhibit 10.1 to Form 8-K dated July 22,
1994 is hereby incorporated herein by reference as exhibit 10.1.

10.2 Second  Amended and Restated  Agreement of Limited  Partnership  of Garland
Street Limited Partnership filed as exhibit 10.2 to Form 8-K dated July 22, 1994
is hereby incorporated herein by reference as exhibit 10.2

10.3 Amended and Restated  Agreement of Limited  Partnership  of Lamesa  Seniors
Community,  Ltd. filed as exhibit 10.3 to Form 8-K dated July 22, 1994 is hereby
incorporated herein by reference as exhibit 10.3.

10.4 Amended and Restated Agreement of Limited  Partnership of Palestine Seniors
Community,  Ltd. filed as exhibit 10.4 to Form 8-K dated July 22, 1994 is hereby
incorporated herein by reference as exhibit 10.4.

10.5 Second Amended and Restated  Agreement of Limited  Partnership of Southcove
Associates  filed as  exhibit  10.1 to Form 8-K  dated  August 8, 1994 is hereby
incorporated herein by reference as exhibit 10.5.

10.6 Third Amended and Restated  Agreement of Limited  Partnership  of Southcove
Associates  d. filed as exhibit  10.2 to Form 8-K dated August 8, 1994 is hereby
incorporated herein by reference as exhibit 10.6.

10.7  Amended  and  Restated  Agreement  of  Limited   Partnership  of  Comanche
Retirement Village, Ltd. filed as exhibit 10.1 to Form 8-K dated August 31, 1994
is hereby incorporated herein by reference as exhibit 10.7.

10.8  Amended and  Restated  Agreement of Limited  Partnership  of  Mountainview
Apartments Limited Partnership filed as exhibit 10.1 to Form 8-K dated September
21, 1994 is hereby incorporated herein by reference as exhibit 10.8.

10.9 Second Amendment to Amended and Restated  Agreement of Limited  Partnership
of Mountainview Apartments Limited Partnership filed as exhibit 10.2 to Form 8-K
dated September 21, 1994 is hereby  incorporated  herein by reference as exhibit
10.9.

10.10  Amended and  Restated  Agreement  of Limited  Partnership  of Pecan Grove
Limited  Partnership  filed as exhibit 10.3 to Form 8-K dated September 21, 1994
is hereby incorporated herein by reference as exhibit 10.10.

                                       25
<PAGE>

10.11 Second Amendment to Amended and Restated Agreement of Limited  Partnership
of Pecan  Grove  Limited  Partnership  filed as  exhibit  10.4 to Form 8-K dated
September 21, 1994 is hereby incorporated herein by reference as exhibit 10.11.

10.12 Second  Amendment to and Entire  Restatement  of the  Agreement of Limited
Partnership of Autumn Trace  Associates,  Ltd. filed as exhibit 10.1 to Form 8-K
dated  October 31, 1994 is hereby  incorporated  herein by  reference as exhibit
10.12.

10.13 Amended and Restated Agreement of Limited  Partnership of EW , a Wisconsin
Limited  Partnership filed as exhibit 10.2 to Form 8-K dated October 31, 1994 is
hereby incorporated herein by reference as exhibit 10.13.

10.14 Agreement of Limited  Partnership of Klimpel Manor,  Ltd. filed as exhibit
10.3 to Form 8-K  dated  September  21,  1994 is hereby  incorporated  herein by
reference as exhibit 10.14.

10.15  Amended and  Restated  Agreement of Limited  Partnership  of Hickory Lane
Associates  Limited filed as exhibit 10.15 to Form 10-K dated  December 31, 1995
is hereby incorporated herein by reference as exhibit 10.15.

10.16 Amended and Restated Agreement of Limited Partnership of Honeysuckle Court
Associates,  Ltd. filed as exhibit 10.16 to Form 10-K dated December 31, 1995 is
hereby incorporated herein by reference as exhibit 10.16.

10.17-  Amended and  Restated  Agreement of Limited  Partnership  of Walnut Turn
Associates,  Ltd. filed as exhibit 10.17 to Form 10-K dated December 31, 1995 is
hereby incorporated herein by reference as exhibit 10.17.


 Reports on Form 8-K

No reports of Form 8-K were filed during the fourth  quarter ended  December 31,
1997.


                                       26
<PAGE>


         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, thereunto duly authorized.

WNC HOUSING TAX CREDIT FUND IV, L.P., Series 2

By:  WNC Tax Credit Partners IV, L.P.          General Partner of the Registrant

Date: April 15, 1998

By:  WNC & Associates, Inc.  General Partner of WNC Tax Credit Partners IV, L.P.

Date: April 15, 1998

By:/s/ John B. Lester, Jr
-----------------------------------------------------
John B. Lester, Jr.        President of WNC & Associates, Inc.

Date: April 15, 1998

By: /s/ Theodore M. Paul
-----------------------------------------------------
Theodore M. Paul  Vice-President Finance of WNC & Associates, Inc.

Date: April 15, 1998




         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.

By:  /s/ Wilfred N. Cooper, Sr.
-----------------------------------------------------
Wilfred N. Cooper, Sr.     Director and Chairman of the Board    
                           WNC & Associates, Inc.

Date: April 15, 1998

By: /s/ John B. Lester, Jr.
-----------------------------------------------------
John B. Lester, Jr.        Director and Secretary of the Board       
                           WNC & Associates, Inc.

Date: April 15, 1998

By:   /s/ David N. Shafer
-----------------------------------------------------
David N. Shafer            Director       WNC & Associates, Inc.

Date: April 15, 1998


                                       27