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, 1996

                                       OR

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

For the transition period from ________ to ___________

Commission file number: 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

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

<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 15-year  compliance  period (the  "Compliance
Period").

                                       2
<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 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.

As of December 31, 1996,  the  Partnership  had invested in twenty 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.

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.

                                       3
<PAGE>

As of  December  31,  1996,  19 of the 20  Apartment  Complexes  acquired by the
Partnership were completed and in operation and one was under construction.  The
Apartment  Complexes  owned by the  Local  Limited  Partnerships  in  which  the
Partnership  has  invested  were or are being  developed  by the  Local  General
Partners  who  acquired  the sites and  applied  for  applicable  mortgages  and
subsidies.  The Partnership  became 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 each Local Limited Partnership is limited to its investment.  The
Local General Partner of the Local Limited Partnership retain responsibility for
developing,  constructing,  maintaining,  operating  and managing the  Apartment
Complex.


Following is recap of the status of the twenty Apartment  Complexes owned by the
twenty Limited Partnerships invested in or identified by the Partnership:

<TABLE>

<S>                                       <C>                  <C>                  <C>
                                               Construction                Under
                                          or Rehabilitation         Construction    Construction
                                                  Completed    or Rehabilitation     Not Started
                                                  ---------    -----------------     -----------
Properties acquired by 12/31/96                          19                    1               0

</TABLE>
                                       4
<PAGE>


The  following  is a schedule  of the status as of  December  31,  1996,  of the
Apartment  Complexes owned by Local  Partnerships in which the Partnership was a
limited partner as of December 31, 1996:

<TABLE>

<CAPTION>
                  SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS                   
                         IN WHICH THE PARTNERSHIP HAS AN INVESTMENT
                                    AS OF DECEMBER 31, 1996

                                         Number                                  Percentage
                                           of         Units         Units         of Total
NAME & Location                           Apts.     Completed     Occupied     Units Occupied
---------------                           -----     ---------     --------     --------------
<S>                                      <C>        <C>           <C>          <C>
AUTUMN TRACE                               58           58           52              90%
  Silsbee (Hardin Co.) Texas
BROKEN BOW                                 16            0            0               0
  Broken Bow (Custer Co.), Nebraska
CHADWICK                                   48           48           47              98
  Eden, (Rockingham Co.) N.C.
COMANCHE                                   22           22           20              91
  Comanche (Comanche Co.) Texas
E. W.                                      16           16           15              94
  Evansville (Rock Co.) Wisconsin
GARLAND                                    18           18           18             100
  Malvern (Hot Spring Co.)Arkansas
HEREFORD                                   28           28           27              96
  Hereford, (Deaf Smith Co.) Texas
HICKORY LANE                               24           24           23              96
  Newton (Newton Co.) Texas
HONEYSUCKLE                                48           48           47              98
  Vidor (Orange Co.) Texas
KLIMPEL MANOR                              59           59           59             100
  Fullerton (Orange Co.) CA
LA MESA                                    24           24           24             100
  Lamesa (Dawson Co.), Texas
LAREDO HEIGHTS APTS                        48           48           45              93
  Navasto, Texas
MOUNTAINVIEW                               24           24           22              92
  North Wilkesboro (Wilkes Co.) N.C.
PALESTINE                                  42           42           41              98
  Palestine (Anderson Co.) Texas
PECAN                                      32           32           32             100
  Forrest City (St. Francis Co.) AR
PIONEER                                   112          112          111             99
  Bakersfield (Kern Co.) California
SIDNEY APARTMENTS I                        18           18           12              66
   Omaha, Nebraska
SOUTHCOVE                                  54           54           53              98
  Orange Cove (Fresno Co.) CA
WALNUT BEND                                23           23           22              96
  Buna (Jasper Co.) Texas
WAUKEE II                                  23           23           23             100
  Waukee (Dallas Co.) Iowa                 --           --           --             ---

                                          737          721          693             96%
                                          ===          ===          ===             == 
</TABLE>
                                       5
<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");  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; 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.

The  following   tables  contain   information   concerning  the  Local  Limited
Partnerships acquired by the Partnership.


                                       6
<PAGE>

<TABLE>

========================================================================================================================
<CAPTION>

Local             Project Name     Estimated      Estimated      Number of        Basic     Permanent     Local
Limited                            Construction   Development    Apartment        Monthly   Mortgage      Limited
Partnership                        Completion     Cost With      Units            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       $1,417,102      6 2BR units     $301      $500,000      $1,127,220
                  Apartments       1996                          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)
------------------------------------------------------------------------------------------------------------------------
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                                      
                  (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)
------------------------------------------------------------------------------------------------------------------------
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)
------------------------------------------------------------------------------------------------------------------------
                                   7 
<PAGE>

<CAPTION>

Local             Project Name     Estimated      Estimated      Number of        Basic     Permanent     Local
Limited                            Construction   Development    Apartment        Monthly   Mortgage      Limited
Partnership                        Completion     Cost With      Units            Rents     Loan Amount   Partnership's
                                                  Land                                                    Anticipated
                                                                                                          Tax Credits (1)
<S>               <C>              <C>            <C>            <C>              <C>       <C>           <C>       
-----------------------------------------------------------------------------------------------------------------------
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                          40 2BR 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       23 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>
                                       8
<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. 

(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
<PAGE>

(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)     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.

                                       10
<PAGE>

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.

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.

                                       11
<PAGE>

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).

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).

                                       12
<PAGE>

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.

<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.
--------------------------------------------------------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------------------------------------------------------
                                       13
<PAGE>
<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>

HEREFORD           Winston                     MJS Management,      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%
--------------------------------------------------------------------------------------------------------------------------------
MOUNTAIN           John C. Loving              MBG                  Partnership: 1st        99/1              $195,000
VIEW                                           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%
--------------------------------------------------------------------------------------------------------------------------------

                                       14
<PAGE>
<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>
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>

(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.

                                       15
<PAGE>

(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.

     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.

                                       16
<PAGE>

     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


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

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 Partnership's Agreement are satisfied.


At  December  31,  1996,  there  were  830  registered  holders  of  Units.  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 Low Income Housing  Credits for 1996, 1995 and
1994 were $105, $70 and $23, respectively, per Unit.

                                       17
<PAGE>

Item 6.  Selected Financial Data


<TABLE>
<CAPTION>
                                                                    July 18, 1994
                                                                   (Date Operations
                                                                  Commenced) through
                                        1996            1995       December 31,1994
                                     ----------      ----------    ----------------

<S>                               <C>              <C>              <C>         
Revenue                           $    161,610     $    179,927     $      3,475

Partnership operating expenses        (106,236)        (123,321)         (28,907)

Equity in loss of
Local Partnerships                    (628,631)        (623,521)        (239,118)
                                      --------         --------         --------

Net loss                          $   (573,257)    $   (571,915)    $   (264,550)
                                      ========         ========          =======

Net loss per Limited
Partnership Interest              $        (36)    $        (47)    $        (93)
                                        ======          =======           ======

Total assets                      $ 12,531,645     $ 14,733,042     $  8,435,704
                                    ==========       ==========        =========

Net investment in
Local Partnerships                $ 10,096,100     $  9,417,744     $  6,234,006
                                    ==========        =========        =========

Capital contributions payable
to Local Partnerships             $    666,716     $  2,134,797     $  3,276,750
                                       =======        =========        =========

Accrued fees and expenses due
to affiliates                     $      9,339     $    146,685     $    414,501
                                         =====          =======          =======
</TABLE>

                                       18
<PAGE>

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

Overall,  as reflected in its Statement of Cash Flows, the Partnership had a net
decrease in cash and cash equivalents of approximately $2,914,300 for the period
ended  December 31, 1996.  This  decrease in cash consists of cash (used in) and
provided by the  Partnership's  operating,  investing  activities  and financing
activities of approximately $60,900, $(2,837,900) and $(137,300),  respectively.
Cash used by investing activities  consisted primarily of capital  contributions
to Local  Limited  Partnerships  of  approximately  $2,793,700,  and  payment of
capitalized   costs  and  offering   expenses   totaling   $25,300  and  22,700,
respectively. Cash used by financing activities consisted of advances to General
Partner and  affiliates.  Cash  provided by  operating  activities  consisted of
interest  earned on cash balances.  Cash used in operating  activites  consisted
primarily of payments for operating fees and expenses.  The major  components of
all these activities are discussed in greater detail below.

Overall,  as reflected in its Statement of Cash Flows, the Partnership had a net
increase in cash and cash equivalents of approximately $4,565,600 for the period
ended  December  31,  1995.  Cash from  financing  activities  of  approximately
$9,826,200 was sufficient to fund the investing activities of the Partnership in
the aggregate amount of approximately  $5,315,600,  which consisted primarily of
capital  contributions to Local Limited  Partnerships  and offering  expenses of
approximately $4,241,400 and $1,217,500,  respectively. In addition, acquisition
costs and fees of $737,500  were paid during 1995.  Cash provided by and used in
the operating  activities of the Partnership  was minimal  compared to its other
activities.  Cash  provided  by  operating  activities  consisted  primarily  of
interest  received  on cash  deposits,  and cash  used in  operating  activities
consisted  primarily  of payments for  operating  fees and  expenses.  The major
components of all these activities are discussed in greater detail below.

The Partnership is indebted to WNC & Associates,  Inc., at December 31, 1996 and
December  31,  1995  in  the  amount  of  approximately   $9,300  and  $146,700,
respectively. The component items of such indebtedness are as follows:

                                    December 31, 1996         December 31, 1995
                                    -----------------         -----------------

Advances to make loans and
capital contributions to 
Local Limited Partnerships                                                  

Advances to pay front end fees          $9,300                   $(2,500)

Asset management fees payable             --                      58,900

Accrued acquisition fees                  --                      90,300
                                        ------                    ------
                                        $9,300                  $146,700
                                        ======                  ========


                                       19
<PAGE>

As of December 31, 1996, the Partnership has received approximately  $15,241,000
from the  sale of  Units.  Approximately  $11,655,200  (76%)  of which  has been
committed to the purchase price and acquisition fees and costs of investments in
20 Local Limited Partnership Interests.

The Partnership had made capital  contributions to Local Limited Partnerships in
the amount of approximately $9,778,000 as of December 31, 1996.

Prior to sale of the  Apartment  Complexes,  it is not expected  that any of the
Local Limited  Partnerships in which the Partnership has invested or will invest
will generate cash sufficient to provide distributions to the Partnership of any
material amount.  Distributions  to the Partnership  would first by used to meet
operating  expenses  of the  Partnership,  including  the  payment  of the asset
management fee to the General Partner.  See Item 11 hereof.  As a result,  it is
not anticipated that the Partnership  will provide  distributions to the Limited
Partners prior to the sale of the Apartment Complexes, if ever.

The Partnership's  investments are not readily marketable and may be affected by
adverse general economic conditions which, in turn, could substantially increase
the risk of operating  losses for the  Apartment  Complexes,  the Local  Limited
Partnerships  and the  Partnership.  These  problems may result from a number of
factors,   many  of  which  cannot  be  controlled   by  the  General   Partner.
Nevertheless,  the General Partner anticipates that capital raised from the sale
of the Units is sufficient to fund the Partnership's operations.

The  Partnership  has  established  working  capital  reserves of at least 3% of
capital  contributions,  an amount  which is  anticipated  to be  sufficient  to
satisfy general working capital and administrative  expense  requirements of the
Partnership  excluding  payment of the asset  management fee as well as expenses
attendant to the preparation of tax returns and reports to the Limited  Partners
and other investor  servicing  obligations of the Partnership.  Liquidity would,
however,  be adversely  affected by  unanticipated  or greater than  anticipated
operating costs. To the extent that working capital reserves are insufficient to
satisfy  the  cash  requirements  of the  Partnership,  it is  anticipated  that
additional  funds  would be sought  through  bank  loans or other  institutional
financing.  The General Partner may also apply any cash  distributions  received
from the  Local  Limited  Partnerships  for such  purposes  or to  replenish  or
increase working capital reserves.

                                       20
<PAGE>

Under its  Partnership  Agreement the  Partnership  does not have the ability to
assess its partners for additional  capital  contributions to provide capital if
needed  by the  Partnership  or  Local  Limited  Partnerships.  Accordingly,  if
circumstances arise that cause the Local Limited Partnerships to require capital
in addition to that  contributed by the  Partnership and any equity of the Local
General Partners, the only sources from which such capital needs will be able to
be  satisfied  (other than the limited  reserves  available  at the  Partnership
level) will be (i) third-party debt financing  (which may not be available,  if,
as expected, the Apartment Complexes owned by the Local Limited Partnerships are
already  substantially  leveraged),  (ii)  additional  equity  contributions  or
advances of the Local General Partners,  (iii) other equity sources (which could
adversely affect the Partnership's  interest in Low Income Housing Credits, cash
flow and/or  proceeds of sale or  refinancing  of the  Apartment  Complexes  and
result in adverse tax consequences to the Limited Partners), or (iv) the sale or
disposition  of the  Apartment  Complexes  (which  could  have the same  adverse
effects as discussed in (iii) above).  There can be no assurance that funds from
any of such sources would be readily available in sufficient amounts to fund the
capital requirement of the Local Limited Partnerships in question. If such funds
are not  available,  the Local Limited  Partnerships  would risk  foreclosure on
their Apartment  Complexes if they were unable to renegotiate the terms of their
first  mortgages  and any other debt secured by the  Apartment  Complexes to the
extent the capital requirements of the Local Limited Partnerships relate to such
debt.


The  Partnership's  capital  needs and  resources  are expected to undergo major
changes  during  their  first  several  years of  operations  as a result of the
completion of their  offerings of Units and their  acquisition  of  investments.
Thereafter,  the  Partnership's  capital  needs and resources are expected to be
relatively  stable over the  holding  periods of the  investments  except to the
extent of proceeds received in payment of Promissory Notes and disbursed to fund
the deferred obligations of the Partnerships.

Results of Operations

As reflected on its  Statements of  Operations,  the  Partnership  had losses of
approximately  $573,300  $572,000,  and $264,500 for the year ended December 31,
1996,  1995 and 1994,  respectively.  The component items of revenue and expense
are discussed below.

                                       21
<PAGE>

Revenue.  The Partnership's  revenues  consisted  entirely of interest earned on
Promissory  Notes  and  cash  deposits  held in  financial  institutions  (i) as
Reserves,  or (ii) pending  investment in Local Limited  Partnerships.  Interest
revenue in future years will be a function of prevailing  interest rates and the
amount of cash balances.  It is anticipated  that the Partnership  will maintain
cash  Reserves  in an amount  not  materially  in excess of the  minimum  amount
required by its Partnership Agreement, which is 3% of Capital Contributions.

Expenses. The most significant component of operating expenses is expected to be
the Asset  Management Fee. The Asset  Management Fees is equal to the greater of
(i) $2,000 for each Apartment Complex or (ii) 0.275% of gross proceeds, and will
be decreased or increased annually based on changes to the Consumer Price Index.
The annual management fee incurred was $42,900, $42,900 and $16,000 for the year
ended  December  31,  1996,  1995 and  period  July 18,  1994  (date  operations
commenced) to December 31, 1994, respectively.

Amortization  expense consist of the  amortization  over a period of 30 years of
the Acquisition Fee and other expenses  attributable to the acquisition of Local
Limited Partnership Interests.

Interest Expense  consisted of payments on a loan from a bank paid at the bank's
prime rate plus 1% (10.25% at December 31, 1995 and 9.75% at June 17, 1996.)

Office expense consist of the  Partnership's  administrative  expenses,  such as
accounting and legal fees, bank charges and investor reporting expenses.


Equity in losses from Limited  Partnerships.  The Partnership's equity in losses
from Limited  Partnerships  is equal to  approximately  99% of the aggregate net
loss of the Limited  Partnerships.  After rent-up,  the Limited Partnerships are
expected to generate losses during each year of operations;  this is so because,
although   rental  income  is  expected  to  exceed  cash  operating   expenses,
depreciation and amortization deductions claimed by the Limited Partnerships are
expected to exceed net rental income.

                                       22


<PAGE>


Item 8.  Financial Statements and Supplementary Data






















                 WNC HOUSING TAX CREDIT FUND, IV, L.P., SERIES 2
                       (A California Limited Partnership)

                              FINANCIAL STATEMENTS

               For The Years Ended December 31, 1996 and 1995 and
                  For The Period July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994

                                      with

                      INDEPENDENT AUDITORS' REPORT THEREON



<PAGE>










                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------



To the Partners
WNC Housing Tax Credit Fund IV, L.P., Series 2


We have audited the  accompanying  balance sheets of WNC Housing Tax Credit Fund
IV, L.P.,  Series 2 (a California  Limited  Partnership) (the Partnership) as of
December 31, 1996 and 1995, and the related statements of operations,  partners'
equity and cash flows for the years ended December 31, 1996 and 1995 and for the
period July 18, 1994 (date  operations  commenced)  to December 31, 1994.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our  audits.  We  did  not  audit  the  financial   statements  of  the  limited
partnerships  in which WNC  Housing  Tax  Credit  Fund IV,  L.P.,  Series 2 is a
limited  partner.  These  investments,  as discussed in Note 2 to the  financial
statements,  are accounted for by the equity  method.  The  investments in these
limited partnerships  represented 81% and 64% of the total assets of WNC Housing
Tax Credit Fund IV, L.P., Series 2 at December 31, 1996 and 1995,  respectively.
Substantially all of the financial  statements of the limited  partnerships were
audited by other  auditors  whose  reports  have been  furnished  to us, and our
opinion,  insofar  as it  relates  to the  amounts  included  for those  limited
partnerships, is based solely on the reports of the other auditors.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that our audits and the  reports  of the other  auditors  provide a
reasonable basis for our opinion.

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position of WNC Housing  Tax Credit Fund IV,  L.P.,  Series 2 (a
California  Limited  Partnership)  as of  December  31,  1996 and 1995,  and the
results of its  operations  and its cash flows for the years ended  December 31,
1996 and 1995 and for the period July 18, 1994 (date  operations  commenced)  to
December 31, 1994, in conformity with generally accepted accounting principles.





                                                      /s/  Corbin & Wertz 
                                                     ______________________
                                                     CORBIN & WERTZ


Irvine, California
April 5, 1997



<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)

                                 BALANCE SHEETS

                           December 31, 1996 and 1995





ASSETS                                                  1996            1995
                                                     ----------      ----------

Cash and cash equivalents                          $  2,371,389    $  5,285,730
Investments in limited partnerships (Note 2)         10,096,100       9,417,744
Due from affiliate (Note 3)                              53,200            --
Other assets                                             10,956          29,568
                                                     ----------      ----------

                                                   $ 12,531,645    $ 14,733,042
                                                     ==========      ==========

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
  Payables to limited partnerships (Note 4)        $    666,716       2,134,797
  Accrued fees and advances due to
   General Partner and affiliate (Note 3)                 9,339         146,685
                                                     ----------      ----------

     Total liabilities                                  676,055       2,281,482
                                                     ----------      ----------

Partners' equity (deficit) (Note 6):
  General partner                                       (33,756)        (27,796)
  Limited partners (20,000 units authorized,
   15,600 units outstanding at December 31,
   1996 and 1995, respectively)                      11,889,346      12,479,356
                                                     ----------      ----------

     Total partners' equity                          11,855,590      12,451,560
                                                     ----------      ----------

                                                   $ 12,531,645    $ 14,733,042
                                                     ==========      ==========




                 See accompanying notes to financial statements
                                      FS-2

<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)

                            STATEMENTS OF OPERATIONS

               For The Years Ended December 31, 1996 and 1995 and
               For The Period From July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994



                                           1996           1995          1994
                                       ------------   ------------  ------------


Interest income                           $ 161,610     $ 179,927     $   3,475
                                          ---------     ---------     ---------
Operating expenses:
  Amortization                               40,109        26,208         1,638
  Asset management fees (Note 3)             42,900        42,900        16,000
  Interest expense (Note 3)                   5,350        39,148        11,173
  Other                                      17,877        15,065            96
                                          ---------     ---------     ---------

     Total operating expenses               106,236       123,321        28,907
                                          ---------     ---------     ---------

Income (loss) from operations                55,374        56,606       (25,432)

Equity in losses from limited
 partnerships (Note 2)                     (628,631)     (628,521)     (239,118)
                                          ---------     ---------     ---------

Net loss                                  $(573,257)    $(571,915)    $(264,550)
                                          =========     =========     =========
Net loss allocated to:
  General partner                         $  (5,733)    $  (5,719)    $  (2,646)
                                          =========     =========     =========
  Limited partners                        $(567,524)    $(566,196)    $(261,904)
                                          =========     =========     =========
Net loss per weighted limited
 partners units                           $  (36.38)    $  (46.90)    $  (92.74)
                                          =========     =========     =========
Outstanding weighted limited
 partner units                               15,600        12,073         2,824
                                          =========     =========     =========


                 See accompanying notes to financial statements
                                      FS-3

<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

                For The Year Ended December 31, 1996 and 1995 and
               For The Period From July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994




                                      General         Limited
                                      Partner         Partners           Total
                                      -------         --------           -----

Capital contributions             $       100      $ 5,648,000      $ 5,648,100

Offering expenses                      (7,356)        (728,214)        (735,570)

Partnership units issued for
 notes receivable (Note 6)             ---            (184,500)        (184,500)

Net loss                               (2,646)        (261,904)        (264,550)
                                   ----------       ----------       ----------
Equity (deficit)
 December 31, 1994                     (9,902)       4,473,382        4,463,480

Capital contributions, net
 of discount of $359,000               ---           9,593,000        9,593,000

Offering expenses                     (12,175)      (1,205,330)      (1,217,505)

Collection of notes receivable
 (Note 6)                              ---             184,500          184,500

Net loss                               (5,719)        (566,196)        (571,915)
                                   ----------       ----------       ----------
Equity (deficit)
 December 31, 1995                    (27,796)      12,479,356       12,451,560

Offering expenses                        (227)         (22,486)         (22,713)

Net loss                               (5,733)        (567,524)        (573,257)
                                   ----------       ----------       ----------
Equity (deficit)
 December 31, 1996                $   (33,756)     $11,889,346      $11,855,590
                                   ==========       ==========       ==========



                 See accompanying notes to financial statements
                                      FS-4

<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)

                             STATEMENT OF CASH FLOWS

                For The Year Ended December 31, 1996 and 1995 and
               For The Period From July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994

<TABLE>
<CAPTION>
                                                 1996           1995           1994
                                             ------------   ------------   ------------
<S>                                          <C>            <C>            <C>

Cash flows from operating activities:
  Net loss                                   $  (573,257)   $  (571,915)   $  (264,550)
  Adjustments to reconcile net loss to
   net cash provided by (used in)
   operating activities:
    Amortization                                  40,109         26,208          1,638
    Equity in loss of limited partnerships       628,631        628,521        239,118
    Change in other assets                        18,612        (27,440)        (2,128)
    Change in accrued interest payable              --             (404)           404
    Change in due from affiliates                (53,200)          --             --
                                              ----------     ----------        -------
  Net cash provided by (used in)
   operating activities                           60,895         54,970        (25,518)
                                              ----------     ----------     ----------
Cash flows from investing activities:
  Investments in limited partnerships, net    (2,793,730)    (4,241,376)    (2,743,092)
  Distributions from limited partnerships          3,900           --             --
  Loans receivable                                  --          880,760       (880,760)
  Capitalized acquisition costs and fees         (25,347)      (737,464)      (295,833)
  Offering expenses                              (22,713)    (1,217,505)      (735,570)
                                              ----------     ----------     ----------
  Net cash used in investing activities       (2,837,890)    (5,315,585)    (4,655,255)
                                              ----------     ----------     ----------
Cash flows from financing activities:
  Capital contributions                             --        9,777,500      4,866,500
  Subscriptions receivable collected                --          597,100           --
  Advances from general partner and
   affiliates                                   (137,346)      (267,816)       253,834
  Issuance of loan payable                          --             --          870,000
  Repayment of loan payable                         --         (280,569)      (589,431)
                                              ----------     ----------     ----------
  Net cash (used in) provided by financing
   activities                                   (137,346)     9,826,215      5,400,903
                                              ----------     ----------     ----------
Net change in cash and cash equivalents       (2,914,341)     4,565,600        720,130

Cash and cash equivalents, beginning
 of period                                     5,285,730        720,130           --
                                              ----------     ----------        -------
Cash and cash equivalents, end of period     $ 2,371,389    $ 5,285,730    $   720,130
                                              ==========     ==========     ==========
SUPPLEMENTAL  DISCLOSURE  OF CASH FLOW INFORMATION -
  Cash paid during the period for:
    Interest                                 $     5,350    $    39,552    $    10,769
                                              ==========     ==========     ==========
    Income taxes                             $       800    $       800    $      --
                                              ==========     ==========     ==========
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:

During the period ended December 31, 1994, the Partnership incurred, but did not
pay,  $3,276,750 of payables to limited  partnerships  (in  connection  with its
investments in limited partnerships).

During the period ended December 31, 1994, the Partnership incurred, but did not
pay, $160,667 of payables to an affiliate for offering and acquisition expenses.

                 See accompanying notes to financial statements
                                      FS-5

<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                For The Year Ended December 31, 1996 and 1995 and
               For The Period From July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
Organization
------------
WNC Housing Tax Credit Fund IV, L.P.,  Series 2 (the  "Partnership")  was formed
under the California Revised Limited  Partnership Act on September 27, 1993, and
commenced operations on July 18, 1994. Prior to October 1, 1994, the Partnership
was considered a  development-stage  enterprise.  The  Partnership was formed to
invest  primarily  in other  limited  partnerships  which  will own and  operate
multi-family housing complexes that will qualify for low income housing credits.

The general partner is WNC Tax Credit Partners, IV, L.P.(the "General Partner"),
a California limited partnership.  WNC & Associates, Inc. is the general partner
of the General  Partner.  Wilfred N. Cooper,  Sr.,  through the Cooper Revocable
Trust,  owns 70% of the  outstanding  stock of WNC &  Associates,  Inc.  John B.
Lester, Jr. is the original limited partner of the Partnership and owns, through
the Lester Family Trust, 30% of the outstanding stock of WNC & Associates, Inc.

The Partnership agreement authorized the sale of 20,000 Units at $1,000 per Unit
("Units"). The offering of units concluded July 1995 at which time 15,600 units,
representing  subscriptions,  net of discounts for volume purchases of more than
100 units, of $15,241,000 had been accepted.

The General Partner has a 1% interest in operating  profits and losses,  taxable
income and loss and in cash available for distribution from the Partnership. The
limited  partners  will  be  allocated  the  remaining  99% of  these  items  in
proportion to their respective investments.

After the limited  partners  have received  proceeds from a sale or  refinancing
equal to their capital  contributions and their return on investment (as defined
in  the   Partnership   Agreement)  and  the  General  Partner  has  received  a
subordinated  disposition  fee (as described in Note 4), any additional  sale or
refinancing  proceeds  will  be  distributed  90% to the  limited  partners  (in
proportion to their respective investments) and 10% to the General Partner.

The Partnership's  investments in limited  partnerships are subject to the risks
incident to the management and ownership of multifamily residential real estate,
and  include  the risks  that  neither  the  Partnership's  investments  nor the
apartment   complexes  owned  by  the  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 limited  partnerships.  The value of the
Partnership's  investments  will 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  could be
subject to loss through  foreclosure.  In addition,  each 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 general
partners of the limited partnerships, there can be no assurance that Partnership
operations will be profitable or that the  anticipated  housing tax credits will
be available to limited partners.

Continued

                                      FS-6

<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                For The Year Ended December 31, 1996 and 1995 and
               For The Period From July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
--------------------------------------------------------------
Method of Accounting For Investments in Limited Partnerships
------------------------------------------------------------
The Partnership  accounts for its investments in limited  partnerships using the
equity method of  accounting,  whereby the  Partnership  adjusts its  investment
balance for its share of the limited partnership's results of operations and for
any distributions  received.  The accounting policies of the limited partnership
are  consistent  with the  Partnership.  Costs  incurred by the  Partnership  in
acquiring the investments in limited partnerships are capitalized as part of the
investment and amortized over 30 years (see Note 3).

Losses  from  limited  partnerships  allocated  to the  Partnership  will not be
recognized to the extent that the  investment  balance  would be adjusted  below
zero.

Offering Expenses
-----------------
Offering  expenses consist of underwriting  commissions,  legal fees,  printing,
filing and  recordation  fees, and other costs  incurred in connection  with the
selling of limited partnership interests in the Partnership. The General Partner
is  obligated  to pay all  offering  and  organization  costs in  excess  of 15%
(including sales commissions) of the total offering proceeds.  Offering expenses
are reflected as a reduction of limited partners' capital.  Through December 31,
1996,  the  Partnership  incurred  offering  expenses  and  selling  expenses of
$975,333 and $1,000,455, respectively.

Use of Estimates
----------------
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could materially differ from those estimates.

Cash and Cash Equivalents  
-------------------------  
The  partnership  considers all  investments  with maturities of three months or
less when purchased to be cash equivalents.  Cash equivalents totaled $2,134,000
at December 31, 1996 and represented investments in U.S. Treasury Bills.

Concentration of Credit Risk
----------------------------
As of December 31, 1996,  the  Partnership  maintained  cash balances at certain
financial institutions in excess of the federally insured maximum.

Net Loss Per Limited Partner Unit
---------------------------------
Net loss per limited partner unit is computed by dividing the limited  partners'
share of net loss by the weighted  number of limited  partner units  outstanding
during the period.



Continued

                                      FS-7

<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                For The Year Ended December 31, 1996 and 1995 and
               For The Period From July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994



NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
--------------------------------------------
As of December 31,  1996,  the  Partnership  had  acquired  limited  partnership
interests  in  twenty  limited  partnerships  each of which  owns one  apartment
complex  consisting of an aggregate of 737 apartment  units.  As of December 31,
1996,  construction or rehabilitation of all of the apartment complexes had been
completed.  The respective general partners of the limited  partnerships  manage
the day to day  operations  of the  limited  partnerships.  Significant  limited
partnership  business  decisions  require  approval  from the  Partnership.  The
Partnership,  as a limited  partner,  is entitled to 96% to 99%, as specified in
the partnership  agreements,  of the operating profits and losses of the limited
partnerships upon its acquisition of its limited partnership interests.

The  Partnership's   investments  in  limited   partnerships  as  shown  in  the
accompanying  balance  sheet as of December 31, 1996 and 1995 are  approximately
$1,446,000 and $2,589,000 greater than the Partnership's  equity as shown in the
limited partnerships' financial statements.  This difference is primarily due to
acquisition  costs related to the acquisition of the investments  that have been
capitalized in the Partnership's investment account and are being amortized over
30 years (see Note 3) and  certain  capital  contributions  accrued but not paid
(see Note 4).

Following  is a summary of the equity  method  activity  of the  investments  in
limited partnerships for the years ended December 31:

                                                       1996             1995
                                                    ----------       ----------

Investments, beginning of period                  $  9,417,744     $  6,235,586

Capital contributions to limited
 partnerships, net                                   1,325,649        3,099,423

Capitalized acquisition fees and costs                  25,347          737,464

Distributions                                           (3,900)            --

Equity in losses of limited partnerships              (628,631)        (628,521)

Amortization of acquisition fees and costs             (40,109)         (26,208)
                                                    ----------       ----------

Investments, end of period                        $ 10,096,100     $  9,417,744
                                                    ==========       ==========


Continued

                                      FS-8

<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                For The Year Ended December 31, 1996 and 1995 and
               For The Period From July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994



NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
-------------------------------------------------------
Approximate  combined  condensed  financial   information  from  the  individual
financial  statements  of the  limited  partnerships  at December 31 and for the
periods then ended is as follows:

                        COMBINED CONDENSED BALANCE SHEETS

ASSETS                                                   1996            1995
                                                      ----------      ----------
Cash (including restricted cash of $685,000
 and $475,000 as of December 31, 1996 and
 1995, respectively)                                 $ 1,120,000     $   961,000
Land                                                   1,333,000       1,166,000
Construction in progress                                 121,000            --
Buildings, net of accumulated amortization
 of $1,961,000 and $245,000 as of December
 31, 1996 and 1995, respectively                      28,154,000      25,966,000
Due from affiliates                                      891,000         701,000
Other assets                                             254,000         296,000
                                                      ----------      ----------

                                                     $31,873,000     $29,090,000
                                                      ==========      ==========
LIABILITIES AND PARTNERS' EQUITY

Liabilities:
  Construction and mortgage loans payable            $20,699,000     $18,513,000
  Due to related parties                               1,090,000       1,326,000
  Other liabilities                                      458,000       1,478,000
                                                      ----------      ----------
     Total liabilities                                22,247,000      21,317,000
                                                      ----------      ----------
Partners' equity:
  WNC Housing Tax Credit Fund IV, L.P.,
   Series 2                                            8,650,000       6,829,000
  Other partners                                         976,000         944,000
                                                      ----------      ----------
     Total partners' equity                            9,626,000       7,773,000
                                                      ----------      ----------
                                                     $31,873,000     $29,090,000
                                                      ==========      ==========



Continued

                                      FS-9

<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                For The Year Ended December 31, 1996 and 1995 and
               For The Period From July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994



NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
-------------------------------------------------------
                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

                                          1996           1995           1994
                                       ----------     ----------     ----------

Total revenue                         $ 3,057,000    $ 1,762,000    $   532,000
                                       ----------     ----------     ----------
Expenses:
  Operating expenses                    1,518,000        943,000        356,000
  Interest expense                      1,137,000        778,000        203,000
  Depreciation                          1,040,000        683,000        217,000
                                       ----------     ----------     ----------

     Total expenses                     3,695,000      2,404,000        776,000
                                       ----------     ----------     ----------

Net loss                              $  (638,000)   $  (642,000)   $  (244,000)
                                       ==========     ==========     ========== 

Net loss allocable to Partnership     $  (629,000)   $  (629,000)   $  (239,000)
                                       ==========     ==========     ========== 

Certain limited  partnerships  have incurred  operating  losses and have working
capital deficiencies.  In the event these limited partnerships continue to incur
operating  losses,  additional  capital  contributions by the Partnership may be
required to sustain the operations of such limited  partnerships.  If additional
capital  contributions  are not made when they are required,  the  Partnership's
investment in certain of such limited partnerships could be impaired.

NOTE 3 - RELATED PARTY TRANSACTIONS
-----------------------------------
Under the terms of the  Partnership  Agreement,  the Partnership is obligated to
the General Partner or its affiliates for the following items:

         Acquisition  fees of up to 8% of the  gross  proceeds  from the sale of
         Partnership  units as compensation for services  rendered in connection
         with the  acquisition  of limited  partnerships.  Through  December 31,
         1996,  the  Partnership   incurred   acquisition  fees  of  $1,058,950.
         Accumulated amortization amounted to $61,031 and $25,748 as of December
         31, 1996 and 1995, respectively.

         Reimbursement  of costs incurred by an affiliate of the General Partner
         in  connection  with the  acquisition  of limited  partnerships.  These
         reimbursements  will  not  exceed  1.2% of the  gross  proceeds.  As of
         December 31, 1996 and 1995, the Partnership  incurred acquisition costs
         of $160,360 and  $135,898,  respectively,  which have been  included in
         limited   partnership   investment.    Accumulated   amortization   was
         insignificant for 1996 and 1995.


Continued

                                      FS-10

<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                For The Year Ended December 31, 1996 and 1995 and
               For The Period From July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994



NOTE 3 - RELATED PARTY TRANSACTIONS, continued
----------------------------------------------
         An  annual  asset  management  fee equal to the  greater  amount of (i)
         $2,000 for each apartment complex, or (ii) 0.275% of gross proceeds. In
         either case,  the fee will be decreased or increased  annually based on
         changes to the  Consumer  Price  Index.  However,  in no event will the
         maximum  amount  exceed  0.2% of the  invested  assets  (defined as the
         Partnership's  capital  contributions plus its allocable  percentage of
         the mortgage debt  encumbering the apartment  complexes) of the limited
         partnerships.   The  Partnership  incurred  asset  management  fees  of
         $42,900,  $42,900 and $16,000 for the periods ended  December 31, 1996,
         1995 and 1994, respectively. During 1996, the Partnership paid $155,000
         of such fees to the  General  Partner.  Such over  payment  resulted in
         amounts due from the General  Partner  totaling  $53,200 as of December
         31, 1996.

         A  subordinated  disposition  fee in an amount equal to 1% of the sales
         price of real estate sold.  Payment of this fee is  subordinated to the
         limited  partners  receiving a return on investment  (as defined in the
         Partnership  Agreement) and is payable only if services are rendered in
         the sales effort.

Accrued fees and advances due the General  Partner and affiliate  consist of the
following at December 31, 1996 and 1995:

                                                       1996              1995
                                                    ----------        ----------

Acquisition fees                                      $    --         $  90,344

Advances made for acquisition costs,
 organizational, offering and selling
 expenses                                                 9,339          (2,559)

Asset management fees                                      --            58,900
                                                     ----------      ----------
                                                      $   9,339       $ 146,685
                                                     ==========      ==========

Amounts  advanced  to acquire  limited  partnerships  bore  interest at the rate
incurred by the affiliate on its line of credit which ranged from 9.75% to 10.5%
per annum during the period of  acquisition.  Interest  expense  related to such
borrowings  totaled  $5,350,  $39,148 and $11,173 for the periods ended December
1996, 1995 and 1994, respectively.

NOTE 4 - PAYABLES TO LIMITED PARTNERSHIPS
-----------------------------------------
Payables  to limited  partnerships  represent  amounts  which are due at various
times based on conditions specified in the limited partnership agreements. These
contributions are non-interest  bearing, are payable in installments and are due
upon the  limited  partnerships  achieving  certain  development  and  operating
benchmarks (generally within two years of the Partnership's initial investment).

NOTE 5 - INCOME TAXES
---------------------
No provision  for income taxes has been recorded in the  accompanying  financial
statements as any  liability for income taxes is the  obligation of the partners
of the Partnership.

Continued

                                      FS-11

<PAGE>


                 WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
                       (A California Limited Partnership)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                For The Year Ended December 31, 1996 and 1995 and
               For The Period From July 18, 1994 (Date Operations
                         Commenced) To December 31, 1994



NOTE 6 - SUBSCRIPTIONS AND NOTES RECEIVABLE
-------------------------------------------
As of  December  31,  1994,  the  Partnership  had  received  subscriptions  for
approximately  782 units which included  promissory  notes of $184,500.  Limited
partners who  subscribed for ten or more units of limited  partnership  interest
($10,000) could elect to pay 50% of the purchase price in cash upon subscription
and the  remaining 50% by the delivery of a promissory  note  payable,  together
with  interest at the rate of 11% per annum,  due no later than 13 months  after
the  subscription  date. Since the promissory notes had not been collected prior
to the issuance of the financial statements, the unpaid balance was reflected as
a reduction of partners' equity in the accompanying  financial  statements as of
December 31, 1994. All such amounts were collected during 1995.















































                                      FS-12


<PAGE>


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

None.


Item 10.  Directors and Executive Officers of the Registrant

Directors of 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.

WILFRED  N.  COOPER,  SR.,  age 65,  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 and a member of the
Executive  Committee of the National  Association of Home Builders  (NAHB) and a
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  Rural  Builders  Council  of  California  (RBCC)  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 62, 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.


<PAGE>


DAVID N. SHAFER,  age 44, has been a Senior Vice  President of WNC & ASSOCIATES,
INC. since 1992 and General  Counsel since 1990, and served as Asset  Management
Director from 1990 to 1992.  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 RBCC, 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 33, has been  employed by WNC &  ASSOCIATES,  INC.
since 1988 and has been a Senior Vice  President or Vice  President  since 1992.
Mr.  Cooper heads the  Acquisition  Origination  department  at WNC and has been
President of and a registered principal with WNC CAPITAL  CORPORATION,  a member
firm of the NASD,  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 a
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 40, has been Vice President - Finance of WNC & ASSOCIATES,
INC. since 1992 and Chief  Financial  Officer since 1990.  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 41, has been Vice  President  - Asset  Management  of WNC &
ASSOCIATES, INC. since 1994. 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  California  Society  of  Certified  Public
Accountants and the American Institute of Certified Public Accountants.


<PAGE>


SY GARBAN,  age 50, has 19 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 by MRW,  Inc.,  Newport
Beach, California from 1980 to 1989, a real estate acquisition,  development and
management  firm.  Mr. Garban is a member of the  International  Association  of
Financial Planners.  Mr. Garban graduated from Michigan State University in 1967
with a Bachelor of Science degree in Business Administration.

CARL FARRINGTON,  age 50, has been associated with WNC & ASSOCIATES,  INC. since
1993,  currently  serving 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.

MICHELE M. TAYLOR,  age 41, 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.

THERESA I. CHAMPANY, age 38, 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 59, 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.


<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,  1996,
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  per year were  incurred  during  the  years  ended
December 31, 1996 and December 31, 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
Local  Limited  Partnership  Interest.  Subordinated  disposition  fees  will be
subordinated to the prior return of the Limited Partners' capital  contributions
and  payment of the Return on  Investment  to the  Limited  Parners.  "Return on
Investment"  means an annual,  cumulative  but not  compounded,  "return" to the
Limited  Partners  (including  Low Income  Housing  Credits) as a class on their
adjusted capital  contributions  commencing for each Limited Partner on the last
day  of  the  calendar  quarter  during  which  the  Limited  Partner's  capital
contribution is received by the Partnership,  calculated at the following rates:
(i)  16%  through  December  31,  2003,  and  (ii)  6% for  the  balance  of the
Partnerships term. No disposition fees have been paid.

(e) The General  Partner was allocated Low Income Housing  Credits of $9,207 for
the year ended December 31, 1996.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

(a)      Security Ownership of Certain Beneficial Owners

The  following is only person known to own  beneficially  in excess of 5% of the
outstanding Units:

<TABLE>

<S>                            <C>                           <C>                            <C>
                               Name and Address              Amount and
Title of Class                 of Beneficial Owner           Nature of                      Percent
                                                             Beneficial Owner               of Class
------------------------------------------------------------------------------------------------------------------------
Units of Limited Partnership     Enova Financial , Inc.        4,000 units                    25.6%
Interests                        P.O. Box 126943
                                 San Diego, CA  92113-6943
</TABLE>
<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

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.  


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

Financial Statements:
Report of independent public accountants.

Balance sheets as of December 31, 1996 and 1995.

Statements of Operations for the years ended December 31, 1996, 1995, and 1994.

Statement of Partners'  Equity for the years ended December 31, 1996,  1995, and
1994.

Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994.

Notes to Financial Statements.

<PAGE>


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.


<PAGE>


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.

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,
1996.

<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


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


By:   /s/    John B. Lester,  Jr.
   _____________________________________________________
John B. Lester,  Jr. President and Chief Opertating Officer of WNC & Associates,
Inc.

Date: May 12, 1997

By:   /s/    Theodore M. Paul 
   _____________________________________________________
Theodore M. Paul  Vice-President  Finance and Chief  Financial  Officer of WNC &
Associates, Inc.

Date: May 12, 1997




         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: May 12, 1997

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

Date: May 12, 1997