FORM 10-K/A
                           AMENDMENT NO 1 TO FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

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

For the fiscal year ended December 31, 1997

                                       OR

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

For the transition period from ________ to ___________

Commission file number: 0-28370


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

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

California                                                   33-0596399


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

                                                            (714) 662-5565

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

Title of Securities                                Exchanges on which Registered

NONE                                                         NOT APPLICABLE



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

UNITS OF LIMITED PARTNERSHIP INTEREST



         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  Apartment  Complex is
subject to a fifteen-year compliance period (the "Compliance Period").

In general,  in order to avoid  recapture  of Low Income  Housing  Credits,  the
Partnership  does not  expect  that it will  dispose of its  interests  in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by a Local Limited  Partnership of any Apartment Complex prior to the end of the
applicable  Compliance  Period.  Because  of (i)  the  nature  of the  Apartment
Complexes,  (ii) the  difficulty of predicting  the resale market for low-income
housing  15 or  more  years  in the  future,  and  (iii)  the  inability  of the
Partnership  to directly  cause the sale of  Apartment  Complexes by the general
partners  of  the  respective   Local  Limited   Partnerships   ("Local  General
Partners"),  but generally  only to require such Local  General  Partners to use
their  respective best efforts to find a purchaser for the Apartment  Complexes,
it is  not  possible  at  this  time  to  predict  whether  the  liquidation  of
substantially  all  of the  Partnership's  assets  and  the  disposition  of the
proceeds, if any, in accordance with the Partnership's agreement,  ("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

                                       3
<PAGE>

addition,  circumstances  beyond the  control of the  General  Partner may occur
during the Compliance  Period which would require the Partnership to approve the
disposition of an Apartment Complex prior to the end thereof.

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

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

As of  December  31,  1997,  the  Partnership  had  invested in twenty one Local
Limited Partnerships. Each of these Local Limited Partnerships owns an Apartment
Complex that is or is expected to be eligible for the Low Income Housing Credit.
All of the Local  Limited  Partnerships  also benefit from  government  programs
promoting low or moderate  income housing.  All of the Apartment  Complexes have
completed  construction  or  rehabilitation  as  of  December  31,  1997  except
CROSSINGS which was partially complete.

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




                                       4
<PAGE>


<TABLE>
<CAPTION>

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

                                                 Number                                             Percentage
                                                   of            Units             Units             of Total
NAME & Location                                  Apts.         Completed         Occupied         Units Occupied
---------------                                  -----         ---------         --------         --------------
<S>                                                <C>             <C>              <C>                <C>
AUTUMN TRACE                                       58              58               50                 86%
  Silsbee (Hardin Co.) Texas
BROKEN BOW                                         18              18                6                 37%
  Broken Bow (Custer Co.), Nebraska
CHADWICK                                           48              48               47                 98%
  Eden, (Rockingham Co.) N.C.
COMANCHE                                           22              22               21                 95%
  Comanche (Comanche Co.) Texas
CROSSINGS                                         114             104               98                 94%
  Portage, Michigan
E.W.                                               16              16               15                 94%
  Evansville (Rock Co.) Wisconsin
GARLAND                                            18              18               18                 100%
  Malvern (Hot Spring Co.)Arkansas
HEREFORD                                           28              28               25                 89%
  Hereford, (Deaf Smith Co.) Texas
HICKORY LANE                                       23              23               19                 83%
  Newton (Newton Co.) Texas
HONEYSUCKLE                                        47              47               46                 98%
  Vidor (Orange Co.) Texas
KLIMPEL MANOR                                      59              59               59                 100%
  Fullerton (Orange Co.) CA
LA MESA                                            24              24               23                 96%
  Lamesa (Dawson Co.),
Texas
LAREDO HEIGHTS APTS                                48              48               47                 98%
  Navasto, Texas
</TABLE>

                                       5
<PAGE>
<TABLE>
<CAPTION>
                             SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                                    IN WHICH THE PARTNERSHIP HAS AN INVESTMENT
                                              AS OF DECEMBER 31, 1997

                                                 Number                                             Percentage
                                                   of            Units             Units             of Total
NAME & Location                                  Apts.         Completed         Occupied         Units Occupied
---------------                                  -----         ---------         --------         --------------
<S>                                                <C>             <C>              <C>                <C>
MOUNTAINVIEW                                       24              24               24                 100%
  North Wilkesboro (Wilkes Co.) N.C.
PALESTINE                                          42              42               42                 100%
  Palestine (Anderson Co.) Texas
PECAN                                              32              32               31                 97%
  Forrest City (St. Francis Co.) AR
PIONEER                                           112             112               109                 98%
  Bakersfield (Kern Co.) California
SIDNEY APARTMENTS I                                18              18               15                 83%
   Omaha, Nebraska
SOUTHCOVE                                          54              54               50                 93%
  Orange Cove (Fresno Co.) CA
WALNUT BEND                                        23              23               21                 92%
  Buna (Jasper Co.) Texas
WAUKEE II                                          23              23               23                100%
                                                  ---             ---              ---
  Waukee (Dallas Co.) Iowa
                                                  851             841               789                94%
                                                  ===             ===               ===
</TABLE>

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

The Partnership has become a limited partner in AUTUMN TRACE ASSOCIATES, LTD., a
Texas limited partnership ("AUTUMN"); in BROKEN BOW APARTMENTS,  L.P. a Nebraska
limited  partnership  ("BROKEN BOW"), in CHADWICK LIMITED  PARTNERSHIP,  a North
Carolina limited partnership ("CHADWICK");  COMANCHE RETIREMENT VILLAGE, LTD., a
Texas limited  partnership  ("COMANCHE");  CROSSINGS II LIMITED DIVIDEND HOUSING
ASSOCIATION LIMITED PARTNERSHIP,  a Michigan limited partnership  ("CROSSINGS"),
EW, a Wisconsin limited partnership ("EW");  GARLAND STREET LIMITED PARTNERSHIP,
an Arkansas limited partnership ("GARLAND"); HEREFORD SENIORS COMMUNITY, LTD., a
Texas limited  partnership  ("HEREFORD");  HICKORY LANE ASSOCIATES,  LIMITED,  a
Texas limited partnership ("HICKORY");  HONEYSUCKLE COURT ASSOCIATES, LIMITED, a
Texas limited  partnership  ("HONEYSUCKLE");  KLIMPEL MANOR,  LTD., a California
limited partnership ("KLIMPEL"), LAMESA SENIORS COMMUNITY, LTD., a Texas limited
partnership  ("LAMESA");  LAREDO  HEIGHTS  APARTMENTS,  LTD.,  a  Texas  limited
partnership  ("LAREDO"),  MOUNTAINVIEW  APARTMENTS LIMITED PARTNERSHIP,  a North
Carolina limited  partnership  ("MOUNTAINVIEW");  PALESTINE  SENIORS  COMMUNITY,
LTD.,  a  Texas   limited   partnership   ("PALESTINE");   PECAN  GROVE  LIMITED
 
                                      6
<PAGE>

PARTNERSHIP,   an  Arkansas  limited  partnership   ("PECAN"),   PIONEER  STREET
ASSOCIATES,   L.P.,  a  California  limited  partnership   ("PIONEER");   SIDNEY
APARTMENTS I LIMITED PARTNERSHIP,  a Nebraska limited  partnership,  ("SIDNEY"),
SOUTHCOVE  ASSOCIATES,  a California limited partnership  ("SOUTHCOVE"),  WALNUT
TURN  ASSOCIATES,   LIMITED,  a  Texas  limited  partnership   ("WALNUT"),   and
CANDLERIDGE   APARTMENTS  OF  WAUKEE  L.P.  II,  an  Iowa  limited   partnership
("WAUKEE-II").

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

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

----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
Local             Project Name     Estimated      Estimated      Number of        Basic        Permanent      Local
Limited                            Construction   Development    Apartment Units  Monthly      Mortgage       Limited
Partnership                        Completion     Cost With                       Rents        Loan Amount    Partnership's
                                                  Land                                                        Anticipated
                                                                                                              Tax
                                                                                                              Credits (1)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
<S>               <C>              <C>            <C>            <C>              <C>          <C>            <C>     
AUTUMN            Autumn           May 1994       $2,030,727     26 1BR units     $210         $1,256,680     $768,000
                  Trace                                          32 2BR units     $265         RECDS (3)
                  Apartments (2)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
BROKEN BOW        Broken Bow       December 1996  $1,417,102     6 2BR units      $301         $500,000       $1,127,220
                  Apartments                                     10 3BR units     $352         FNBO (11)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
CHADWICK          Chadwick         October        $2,024,524      8 1BR units     $285         $898,311       $735,000
                  Apartments (2)   1994                          36 2BR units     $307         RECDS (3)
                                                                  4 3BR units     $333
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
COMANCHE          Comanche         January        $616,000       20 1BR units     $235         $597,520       $290,000
                  Retirement       1995                          2 2BR units      $275         RECDS (3)
                  Village
                  Apartments
                  (4)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
CROSSINGS         The              February       $7,375,000     32 1BR units     $203-501     $6,133,000     $721,000
                  Crossings II     1998                          79 2BR units     $327-674     Michigan
                                                                 3 3BR units      $279-786     State
                                                                                               Housing
                                                                                               Development
                                                                                               Authority
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
EW                Evansville       September      $868,552        4 2BR units     $493         $660,000       $306,000
                  Town Homes       1994                          12 3BR units     $599         WHEDA (5)

----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
GARLAND           Garland          September      $898,780       18 2BR units     $270         $702,332       $319,000
                  Street           1994                                                        RECDS (3)
                  Apartments                                     1 3BR unit       Mgr.'s unit
                  (2)
                                       7
<PAGE>
<CAPTION>

----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
Local             Project Name     Estimated      Estimated      Number of        Basic        Permanent      Local
Limited                            Construction   Development    Apartment Units  Monthly      Mortgage       Limited
Partnership                        Completion     Cost With                       Rents        Loan Amount    Partnership's
                                                  Land                                                        Anticipated
                                                                                                              Tax
                                                                                                              Credits (1)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
                  ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
<S>               <C>              <C>            <C>            <C>              <C>          <C>            <C>     
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)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
LAMESA            Lamesa           June           $826,426       24 1BR units     $265         $679,000       $302,000
                  Seniors          1994                                                        RECDS (3)
                  Community
                  Apartments
                  (4)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
LAREDO            Laredo Heights   July           $1,302,003     8 1BR units      $326         $1,009,500     $419,320
                  Apartments (2)   1996                          12 3BR units     $349         RECDS (12)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
MOUNTAIN-VIEW     Mountain-view    December       $1,206,604     22 1BR units     $292         $1,025,482     $387,000
                  Apartments       1993                           2 2BR units     $340         RECDS (3)
                  (4)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- -------------
PALESTINE         Palestine        June           $1,180,000     40 1BR units     $264         $1,144,600     $446,000
                  Seniors          1995                          2 2BR units      $318         RECDS (3)
                  Community
                  Apartments
                  (4)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- -------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
PECAN             Pecan            July           $1,454,000     32 2BR units     $245         $1,194,732     $464,000
                  Grove            1994                                                        RECDS (3)
                  Apartments
                  (2)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
PIONEER           Pioneer          October        $3,903,000     78 2BR units     $341-4222    $1,960,000     $4,156,000
                  Street           1995                          32 3BR units     $488         CCRC (8)
                  Apartments                                      2 4BR units     $437-542
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
SIDNEY             Sidney          August         $1,134,574     6 2BR units      $326         $450,000       $993,320
                   Apartments I    1996                          12 3BR units     $349         FNBO (13)
------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
SOUTHCOVE          Southcove       July           $3,750,000     20 2BR units     $226-407     $1,051,050     $3,783,000
                   Apartments      1995                          34 3BR units     $249-471     RHCP (9)

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

----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
                                       8
<PAGE>
<CAPTION>

----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
Local             Project Name     Estimated      Estimated      Number of        Basic        Permanent      Local
Limited                            Construction   Development    Apartment Units  Monthly      Mortgage       Limited
Partnership                        Completion     Cost With                       Rents        Loan Amount    Partnership's
                                                  Land                                                        Anticipated
                                                                                                              Tax
                                                                                                              Credits (1)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
<S>               <C>              <C>            <C>            <C>              <C>          <C>            <C>     
WAUKEE-II         Candleridge      December       $736,000       23 1BR units     $285         $694,148       $230,000
(12)              Apartments       1994                                                        RECDS (3)
                  of Waukee II
                  (3)
----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
</TABLE>

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

(2)      Rehabilitation property.

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

(4)      Senior citizen housing.

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

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

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

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

(9)      California  has  established  the Rental Housing  Construction  Program
         ("RHCP") to provide low interest loans directly to project sponsors for
         the construction of new rental housing for occupancy by very low-income
         households,  lower-income households and other households. RHCP funding
         is provided through a combination of interim construction and permanent
         loans or through permanent loans only. The standard interest rate is 3%
         per annum,  calculated on a simple  (non-compounded) basis. The minimum
         term to maturity is 40 years,  with longer  original  terms and 10-year
         extensions  available.  The  repayment  schedule  is based on a formula
         generally  related to the project's ability to pay. During the first 30
         years of the loan term, no principal payments are required. Interest is

                                       9
<PAGE>

         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.

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.

                                       10
<PAGE>

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.

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

                                       11
<PAGE>

agricultural  county in the country.  The largest  employers in Bakersfield  are
Giumarra Vineyards, Sun World/Superior Farms, and Grimmway Farms.

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

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

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


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

<TABLE>
<CAPTION>

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

                                                                                            Allocations(4)     Approximate
Local              Local                                                                    and Sale or        Partnership's
Limited            General                     Property                                     Refinancing        Capital
Partnership        Partners                    Manager (1)          Cash Flow (2)           Proceeds(5)        Contributions
                                                                                                               (3)
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
<S>                <C>                         <C>                  <C>                    <C>                 <C> 
AUTUMN             Clifford E. Olsen (5)       Management &         Partnership: 10%        99/1               $412,000
                                               Systems              LGP: 90%                51/49
                                               Corporation (7)
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
BROKEN BOW         Retro Development, Inc (7)  Retro Management     WNC: 1st $2,500         99/./1             $608,000
                                               Group, Inc.          LGP: 2nd $2,500         25/75
                   Most Worshipful Prince                           The balance:
                   Hall Grand Lodge                                 WNC: 25%
                                                                    LGP: 75%
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
CHADWICK           MBG Investment              MBG                  Partnership: 1st        99/1               $378,000
                   Corpora-tion                Management, Inc.     $2,950                  51/49
                                                                    LGP: 2nd $5,980
                   Gordon L.                                        Balance: 99/1
                   Blackwell
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
COMANCHE           Max L.                      M-DC Group,          Partnership: 1st $490   99/1               $149,000
                   Rightmer                    Inc. dba Alpha       LGP: 2nd $985           51/49
                                               Management           Balance: 99/1
                                               Co., Inc.
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
CROSSINGS           Raymond T.                  Cato                 Det. Mgmnt Fee          98.99%/.01%/1%    $451,000
                    Cato , Jr.                  Management           Reporting Fee
                                                Ltd.                 Development Fee         30%/70%
                                                                     Operating Loans
                                                                     Incentive Mgmt Fee      40%
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------

                                       12
<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> 
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
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
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
HEREFORD            Winston                    MJS Manage- ment,     50/50                   99/1                 $179,000
                    Sullivan                   Inc.                                          51/49
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
HICKORY             Olsen                       Olsen                Partnership: 10%        99/1                 $172,000
                   Securities                   Securities          LGP: 90%                49/51
                   Corporation                  Corporation

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

------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
KLIMPEL             Douglas B.                  National             Partnership: 1/3        96/4                $1,774,000
                    Chaffee                     Housing              LGP: 2/3                50/50
                                                Ministries
                    Margaret N.
                    Chaffee
------------------
                   --------------------------- -------------------- ----------------------- ------------------ -----------------
LAMESA              Winston                     MJS                  50/50                   99/1                 $153,000
                    Sullivan                    Management,                                  51/49
                                                Inc.
------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
LAREDO              Donald W. Sowell            Wilmic Venture,     WNC: 1st $1,053          99/1                $1,133,000
                                                Inc.                LGP: 2nd $2,107          50/50
                                                                    The balance:
                                                                    WNC: 99%
                                                                    LGP: 1%

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

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

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


(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.

                                       14
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       15
<PAGE>

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

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

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


                                       16
<PAGE>


Item 6.  Selected Financial Data

<TABLE>
<CAPTION>
                                                                                                      July 18, 1994
                                                                                                     (Date Operations
                                                                                                    Commenced) through
                                                        1997         1996              1995          December 31,1994
                                                        ----         --------         --------      ----------------

<S>                                                  <C>             <C>               <C>                    <C>   
Revenue                                              $74,570         $161,610          $179,927               $3,475

Partnership operating expenses                     (106,539)        (106,236)         (123,321)             (28,907)

Equity in loss of
Local Partnerships                                 (737,115)        (628,631)         (623,521)            (239,118)
                                                   ---------  -     ---------         --------             --------

Net loss                                          $(769,084)       $(573,257)        $(571,915)           $(264,550)
                                                   ========         ========          ========              =======

Net loss per Limited
Partnership Interest                                $(48.81)         $(36.38)          $(47.90)             $(92.74)
                                                     ======           ======            ======               ======

Total assets                                     $11,499,186      $12,531,645       $14,733,042           $8,435,704
                                                  ==========       ==========        ==========            =========

Net investment in
Local Partnerships                                $9,738,583      $10,096,100        $9,417,744           $6,235,586
                                                   =========       ==========         =========            =========

Capital contributions payable to
Local Partnerships                                  $411,543         $666,716        $2,134,797           $3,276,750
                                                     =======          =======         =========            =========

Accrued fees and expenses due to
affiliates                                            $1,137           $9,339          $146,685             $414,501
                                                       =====            =====           =======              =======

</TABLE>

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

Liquidity and Capital Resources
-------------------------------

Since  inception,  the  Partnership  has received  $15,241,000  in cash,  net of
discount  of  $359,000,  from  the  sale  of  Units.  Substantially  all  of the
$15,241,000  has been committed to the purchase price and  acquisition  fees and
costs of investments in Local Limited Partnerships, reserves and expenses of the
offering.  Although not  presently  the case,  the  Partnership  previously  had
identified its  investments in advance of receipt of sufficient  cash capital to
fund the investments.  As of December 31, 1997, the Partnership had made capital
contributions  to Local  Limited  Partnerships  in the  amount of  approximately
$10,453,000,  and  had  commitments  for  additional  capital  contributions  of
approximately $411,500.

The   Partnership  was  indebted  to  the  General  Partner  in  the  amount  of
approximately $1,100 and $9,300 at December 31, 1997 and 1996, respectively. The
component items of such  indebtedness  are advances made for acquisition  costs,
organizational, offering and selling expenses.

Overall,  as reflected in its Statement of Cash Flows, the Partnership had a net
decrease in cash and cash equivalents of approximately  $890,500. for the period
ended  December  31,  1997.  This  decrease  in cash  consisted  of cash used in
investing  activities  of  approximately  $935,100 and  financing  activities of
approximately  $8,200  offset  by  cash  provided  by  operating  activities  of
approximately   $52,800.   Cash  used  in  investing   activities  consisted  of

                                       17
<PAGE>

contributions  to  limited  partnerships  of  approximately  $674,900,  loans to
limited partnerships of approximately $259,500 and acquisition costs paid to the
general  partner  of  approximately  $8,300  offset by cash  distributions  from
limited partnerships of approximately  $7,600. Cash used by financing activities
consisted  of advances to general  partners  and  affiliates.  Cash  provided by
operating  activities consisted of interest income on cash and cash equivalents.
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.

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  consisted  of cash used in
investing  activities  of  approximately  $2,837,900  and cash used in financing
activities of the Partnership of approximately $137,300, offset by cash provided
by  operating  activities  of  approximately  $60,900.  Cash  used in  investing
activities  consisted of contributions to limited  partnerships of approximately
$2,793,700,  acquisition  costs paid to the  general  partner  of  approximately
$25,300 and  offering  expenses  paid to  affiliates  of the general  partner of
approximately  22,700, offset by cash distributions from limited partnerships of
approximately $3,900. Cash used by financing activities consisted of advances to
general partners and affiliates. Cash provided by operating activities consisted
of  interest  income  on cash  and  cash  equivalents.  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.

 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 same of the Apartment Complexes.

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 Limited  Partnership  Interests 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.

Under the  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 tax credits,  cash flow and/or
proceeds of sale or refinancing of the apartment complexes and result in adverse

                                       18
<PAGE>

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.

Results of Operations
---------------------

As of December  31,  1997,  the  Partnership  had  acquired in 21 Local  Limited
Partnership Interests.  Each of the 21 Apartment Complexes owned by the 21 Local
Limited  Partnerships  receives  Government  Assistance  and  each of  them  has
received a reservation for Low Income Housing  Credits.  As of December 31, 1996
all 21 of the  Apartment  Complexes  had  commenced  operations.  One  Apartment
Complex,  CROSSINGS,  had not completed construction on all of its units and had
just started its operations.

As reflected on its  Statements of  Operations,  the  Partnership  had losses of
approximately  $769,000,  $573,300 and $571,900 for the years ended December 31,
1997, 1996, and 1995,  respectively.  The component items of revenue and expense
are discussed below.

Revenue.  Partnership  revenues consist of interest earned on 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, for each year ended December 31,
1997, 1996, and 1995, respectively.

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

Office expense consists 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 generally equal to 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.

                                       19

<PAGE>

Item 8.  

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

                              FINANCIAL STATEMENTS

              For The Years Ended December 31, 1997, 1996 and 1995

                                      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, 1997 and 1996, and the related statements of operations,  partners'
equity  (deficit) and cash flows for the years ended December 31, 1997, 1996 and
1995. 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 85% and 81% of the total assets of WNC Housing
Tax Credit Fund IV, L.P., Series 2 at December 31, 1997 and 1996,  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 audits 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,  1997 and 1996,  and the
results of its  operations  and its cash flows for the years ended  December 31,
1997,  1996  and  1995,  in  conformity  with  generally   accepted   accounting
principles.



                                                       /s/CORBIN & WERTZ
                                                       -----------------

                                                         CORBIN & WERTZ

Irvine, California
April 23, 1998


<PAGE>


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

                                 BALANCE SHEETS

                           December 31, 1997 and 1996


<TABLE>
<CAPTION>


                                                                                1997                1996
                                                                            --------------      --------------

ASSETS

<S>                                                                       <C>                 <C>           
Cash and cash equivalents                                                 $    1,480,862      $    2,371,389
Investments in limited partnerships (Note 3)                                   9,738,583          10,096,100
Loans receivable (Note 2)                                                        259,496                   -
Due from affiliate (Note 4)                                                       18,636              53,200
Interest receivable                                                                1,609              10,956
                                                                           -------------       -------------

                                                                          $   11,499,186      $   12,531,645
                                                                           =============       =============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
   Payables to limited partnerships (Note 4)                              $      411,543      $      666,716
   Accrued fees and advances due to General Partner
     and affiliate (Note 4)                                                        1,137               9,339
                                                                           -------------       -------------

         Total liabilities                                                       412,680             676,055
                                                                           -------------       -------------

Partners' equity (deficit):
   General partner                                                               (41,447)            (33,756)
   Limited partners (20,000 units authorized, 15,600
     units outstanding)                                                       11,127,953          11,889,346
                                                                           -------------       -------------

         Total partners' equity                                               11,086,506          11,855,590
                                                                           -------------       -------------

                                                                          $   11,499,186      $   12,531,645
                                                                           =============       =============
</TABLE>

                 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, 1997, 1996 and 1995


<TABLE>
<CAPTION>

                                                                  1997              1996                 1995
                                                             --------------    ----------------     ---------------

<S>                                                        <C>                 <C>                <C>           
Interest income                                            $       74,570      $      161,610     $      179,927
                                                            -------------       -------------      -------------

Operating expenses:
   Amortization                                                    40,823              40,109             26,208
   Asset management fees (Note 4)                                  42,900              42,900             42,900
   Interest expense                                                     -               5,350             39,148
   Other                                                           22,816              17,877             15,065
                                                            -------------       -------------      -------------

         Total operating expenses                                 106,539             106,236            123,321
                                                            -------------       -------------      -------------

Income (loss) from operations                                     (31,969)             55,374             56,606

Equity in losses from limited partnerships
  (Note 3)                                                       (737,115)           (628,631)          (628,521)
                                                            -------------       -------------      -------------

Net loss                                                   $     (769,084)     $     (573,257)    $     (571,915)
                                                            =============       =============      =============

Net loss allocated to:
   General partner                                         $       (7,691)     $       (5,733)    $       (5,719)
                                                            =============       =============      =============
   Limited partners                                        $     (761,393)     $     (567,524)    $     (566,196)
                                                            =============       =============      =============

Net loss per weighted limited partner units                $       (48.81)     $      (36.38)     $       (46.90)
                                                            =============       ============       =============

Outstanding weighted limited partner units                         15,600              15,600             12,073
                                                            =============       =============      =============
</TABLE>

                 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 Years Ended December 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>


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

<S>                                                        <C>                 <C>                <C>           
Equity (deficit) January 1, 1995                           $       (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                                          -             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

Net loss                                                           (7,691)           (761,393)          (769,084)
                                                            -------------       -------------      -------------

Equity (deficit) December 31, 1997                         $      (41,447)     $   11,127,953     $   11,086,506
                                                            =============       =============      =============
</TABLE>

                 See accompanying notes to financial statements
                                      FS-4
<PAGE>


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

                            STATEMENTS OF CASH FLOWS

              For The Years Ended December 31, 1997, 1996 and 1995


<TABLE>
<CAPTION>


                                                                  1997              1996                 1995
                                                             --------------    ----------------     ---------------

Cash flows from operating activities:
<S>                                                        <C>                 <C>                <C>            
   Net loss                                                $     (769,084)     $     (573,257)    $     (571,915)
   Adjustments to reconcile net loss to net
    cash provided by operating activities:
       Amortization                                                40,823              40,109             26,208
       Equity in loss of limited partnerships                     737,115             628,631            628,521
       Change in other assets                                       9,347              18,612            (27,440)
       Change in accrued interest payable                               -                   -               (404)
       Change in due from affiliates                               34,564             (53,200)                 -
                                                            -------------       -------------      -------------

Net cash provided by operating activities                          52,765              60,895             54,970
                                                            -------------       -------------      -------------

Cash flows from investing activities:
   Investments in limited partnerships, net                      (674,929)         (2,793,730)        (4,241,376)
   Distributions from limited partnerships                          7,613               3,900                  -
   Loans receivable                                              (259,496)                  -            880,760
   Capitalized acquisition costs and fees                          (8,278)            (25,347)          (737,464)
   Offering expenses                                                    -             (22,713)        (1,217,505)
                                                            -------------       -------------      -------------

Net cash used in investing activities                            (935,090)         (2,837,890)        (5,315,585)
                                                            -------------       -------------      -------------

Cash flows from financing activities:
   Capital contributions                                                -                   -          9,777,500
   Subscriptions receivable collected                                   -                   -            597,100
   Advances due to general partner and affiliates                  (8,202)           (137,346)          (267,816)
   Repayment of loan payable                                            -                   -           (280,569)
                                                            -------------       -------------      -------------

Net cash (used in) provided by financing
 activities                                                        (8,202)           (137,346)         9,826,215
                                                            -------------       -------------      -------------

Net change in cash and cash equivalents                          (890,527)         (2,914,341)         4,565,600

Cash and cash equivalents, beginning of year                    2,371,389           5,285,730            720,130
                                                            -------------       -------------      -------------

Cash and cash equivalents, end of year                     $    1,480,862      $    2,371,389     $    5,285,730
                                                            =============       =============      =============
</TABLE>

Continued
                                      FS-5
<PAGE>


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

                      STATEMENTS OF CASH FLOWS - CONTINUED

              For The Years Ended December 31, 1997, 1996 and 1995


<TABLE>
<CAPTION>

 
                                                                  1997              1996                 1995
                                                             --------------    ----------------     ---------------

SUPPLEMENTAL DISCLOSURE OF CASH
 FLOW INFORMATION -
   Cash paid during the year for:
<S>                                                        <C>                 <C>                <C>           
       Interest                                            $            -      $        5,350     $       39,552
                                                            =============       =============      =============
       Income taxes                                        $          800      $          800     $          800
                                                            =============       =============      =============

</TABLE>

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:

   During 1997, the  Partnership  recorded  investments  and payables to limited
partnerships of $225,720.




                See accompanying notes to financial statements
                                      FS-6
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

              For The Years Ended December 31, 1997, 1996 and 1995




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  multi-family  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 interests 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.

                                      FS-7
<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1997, 1996 and 1995



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 4).

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,
1997 and 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 $893,070 at
December 31, 1997 and represented investments in U.S. Treasury bills.

Concentration of Credit Risk
----------------------------

As of December 31, 1997,  the  Partnership  maintained  cash balances at certain
financial institutions in excess of the federally insured maximum.

                                      FS-8
<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1997, 1996 and 1995


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
--------------------------------------------------------------

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.

NOTE 2 - LOANS RECEIVABLE
-------------------------

Loans receivable  represent amounts loaned by the Partnership to certain limited
partnerships in which the Partnership may invest.  Loans receivable consisted of
one loan with a balance of $259,496 as of December 31, 1997 which is collectible
from a limited  partnership in which an interest to be acquired in 1998 is being
negotiated (see Note 6).

NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
--------------------------------------------

As of December 31,  1997,  the  Partnership  had  acquired  limited  partnership
interests in twenty-one  limited  partnerships  each of which owns one apartment
complex  consisting of an aggregate of 851 apartment  units.  As of December 31,
1997,  construction or rehabilitation of all but one 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 sheets as of December 31, 1997 and 1996 are  approximately
$1,555,000 and $1,446,000 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 and certain capital contributions accrued but not paid (see Note 4).

                                      FS-9
<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1997, 1996 and 1995


NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
-------------------------------------------------------

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

<TABLE>
<CAPTION>
                                                                                1997                1996
                                                                            --------------      --------------

<S>                                                                       <C>                 <C>           
Investments, beginning of year                                            $   10,096,100      $    9,417,744
Capital contributions to limited partnerships, net                               194,036           1,325,649
Capital contributions to be paid                                                 225,720                   -
Capitalized acquisition fees and costs                                             8,278              25,347
Distributions                                                                     (7,613)             (3,900)
Equity in losses of limited partnerships                                        (737,115)           (628,631)
Amortization of acquisition fees and costs                                       (40,823)            (40,109)
                                                                           -------------       -------------

                                                                          $    9,738,583      $   10,096,100
                                                                           =============       =============
</TABLE>

The  financial  information  from the  individual  financial  statements  of the
limited partnerships include rental and interest subsidies. Rental subsidies are
included in total  revenues  and  interest  subsidies  are  generally  netted in
interest expense.  Approximate combined condensed financial information from the
individual  financial  statements of the limited  partnerships as of December 31
and for the years then ended is as follows:
<TABLE>
<CAPTION>

                        COMBINED CONDENSED BALANCE SHEETS

                                                                                1997                1996
                                                                            --------------      --------------
ASSETS

<S>                                                                       <C>                 <C>        
Cash (including restricted cash of $850,000 and $685,000 as
   of December 31, 1997 and 1996, respectively)                           $    1,215,000      $    1,120,000
Land                                                                           1,565,000           1,333,000
Construction in progress                                                               -             121,000
Buildings, net of accumulated amortization of $3,095,000
   and $1,961,000 as of December 31, 1997 and 1996,
   respectively                                                               34,598,000          28,154,000
Due from affiliates                                                              669,000             891,000
Other assets                                                                     273,000             254,000
                                                                           -------------       -------------

                                                                          $   38,320,000      $   31,873,000
                                                                           =============       =============
</TABLE>
                                      FS-10
<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1997, 1996 and 1995


NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

<TABLE>
<CAPTION>

                  COMBINED CONDENSED BALANCE SHEETS - CONTINUED

                                                                                1997                1996
                                                                            --------------      --------------
LIABILITIES AND PARTNERS' EQUITY

Liabilities:
<S>                                                                       <C>                 <C>           
   Construction and mortgage loans payable                                $   26,605,000      $   20,699,000
   Due to related parties                                                      1,307,000           1,090,000
   Other liabilities                                                             754,000             458,000
                                                                           -------------       -------------
         Total liabilities                                                    28,666,000          22,247,000
                                                                           -------------       -------------

Partners' equity:
   WNC Housing Tax Credit Fund IV, L.P., Series 2                              8,184,000           8,650,000
   Other partners                                                              1,470,000             976,000
                                                                           -------------       -------------
         Total partners' equity                                                9,654,000           9,626,000
                                                                           -------------       -------------

                                                                          $   38,320,000      $   31,873,000
                                                                           =============       =============
</TABLE>
<TABLE>
<CAPTION>

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

                                                                  1997              1996                 1995
                                                             --------------    ----------------     ---------------

<S>                                                        <C>                 <C>                <C>           
Total revenue                                              $    3,535,000      $    3,057,000     $    1,762,000
                                                            -------------       -------------      -------------

Expenses:
   Operating expenses                                           1,909,000           1,518,000            943,000
   Interest expense                                             1,245,000           1,137,000            778,000
   Depreciation                                                 1,134,000           1,040,000            683,000
                                                            -------------       -------------      -------------

         Total expenses                                         4,288,000           3,695,000          2,404,000
                                                            -------------       -------------      -------------

Net loss                                                   $     (753,000)     $     (638,000)    $     (642,000)
                                                            =============       =============      ============= 

Net loss allocable to Partnership                          $     (737,000)     $     (629,000)    $     (629,000)
                                                            =============       =============      ============= 
</TABLE>

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.

                                     FS-11
<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1997, 1996 and 1995


NOTE 4 - 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,
         1997,  the  Partnership   incurred   acquisition  fees  of  $1,058,950.
         Accumulated amortization amounted to $96,331 and $61,031 as of December
         31, 1997 and 1996, respectively.

         Reimbursement  of costs represent  amounts  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, 1997 and 1996, the  Partnership  incurred
         acquisition  costs of $168,638 and $160,360,  respectively,  which have
         been   included   in  limited   partnership   investment.   Accumulated
         amortization was $12,447 and $6,924 for 1997 and 1996, respectively.

         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
         for each of the years ended  December 31, 1997,  1996 and 1995.  During
         1997 and 1996, the Partnership paid $6,000 and $155,000,  respectively,
         of such fees to the General Partner.

         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
advances  made for  acquisition  costs,  organizational,  offering  and  selling
expenses

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).

                                      FS-12
<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1997, 1996 and 1995


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.

NOTE 6 - COMMITMENTS AND CONTINGENCIES
--------------------------------------

The Partnership is negotiating to acquire an interest in one limited partnership
which would commit the  Partnership to capital  contributions  of  approximately
$1,255,000,  of which $259,496 has been advanced as of December 31, 1997 and has
been reflected in loans receivable in the  accompanying  balance sheet (see Note
2).


                                      FS-13




<PAGE>


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

         NONE

Item 10.  Directors and Executive Officers of the Registrant


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

Directors and Executive Officers of WNC & Associates, Inc.

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

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

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

DAVID N. SHAFER,  age 45, has been a Director of WNC &  ASSOCIATES,  INC.  since
1997, a Senior Vice President  since 1992,  and General  Counsel since 1990, and
served as Asset  Management  Director from 1990 to 1992, and has been a Director
and Secretary of WNC Management, Inc. since its organization.  Previously he was
employed as an associate attorney by the law firms of Morinello,  Barone, Holden
& Nardulli  from 1987 until  1990,  Frye,  Brandt & Lyster from 1986 to 1987 and

                                       20
<PAGE>

Simon and Sheridan from 1984 to 1986.  Mr. Shafer is a Director and President of
CCAH, a member of NAHB's Rural  Housing  Council,  a past  President of Southern
California Chapter II of RESSI, a past Director of the Council of Affordable and
Rural Housing and Development  and a member of the State Bar of California.  Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts  degree,  from the New  England  School of Law in 1983 with a
Juris Doctor  degree and from the  University of San Diego in 1986 with a Master
of Law degree in Taxation.

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

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

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

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

CARL FARRINGTON,  age 55, has been associated with WNC & ASSOCIATES,  INC. since
1993, and has served as Director - Originations  since 1994. Mr.  Farrington has
more  than 12  years'  experience  in  finance  and  real  estate  acquisitions.
Previously,  he served as Acquisitions Director for The Arcand Company from 1991
to 1993, and as Treasurer and Director of Finance and Administrator for Polytron

                                       21
<PAGE>

Corporation  from 1988 to 1991.  Mr.  Farrington is a member and Director of the
Council  of  Affordable  and  Rural  Housing  and  Development.  Mr.  Farrington
graduated from Yale  University  with a Bachelor of Arts degree in 1966 and from
Dartmouth College with a Master of Business Administration in 1970.

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

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

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

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

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


Item 11.  Executive Compensation

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

(a)  Selection  fees in an  amount  equal  to 8% of the  gross  proceeds  of the
Partnerships'  Offering  ("Gross  Proceeds").  Through  December 31,  1997,  the
aggregate amount of acquisition fees of approximately  $1,059,000 have been paid
to the General Partner or its affiliates.

                                       22
<PAGE>

(b)  Organizationa  and  Offering  Expenses.  The  Partnership  paid the General
Partner or its  affiliates  as of December 31, 1997  $1,975,788,  consisting  of
commissions and other fees and expenses of the  Partnership's  offering of Units
of  $1,000,455  and  $975,333,  respectively.  Of the total paid to the  General
Partner or its  affiliates,  the amount of $1,663,788  was paid  (reallowed)  to
unaffiliated  persons and a  nonaccountable  expense  reimbursement in an amount
equal to 2% of Gross  Proceeds,  approximately  $312,000,  was  retained  by the
General  Partner or its  affiliates.  Through  December 31, 1996,  approximately
$312,000 of nonaccountable  expense  reimbursement have been paid to the General
Partner or its affiliates.

(c) Acquisition expenses.  The Partnership  reimbursed the General Parner or its
affiliates as December 31, 1997 $168,638 for  acquisition  expenses  expended by
such  persons on behalf of the  Partnership.  Of the total  paid to the  General
Partner or its affiliates,  all of the amount of $168,638 was paid (reallowed to
unaffiliated  persons.  Reimbursement  of acquisition  costs incurred are not to
exceed 1.2% of capital contributions.

(d) 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 were incurred during each of the years ended December
31, 1997, 1996 and 1995, respectively.  The Partnership paid the General Partner
or its  affiliates  $6,000  and  $155,000  of  those  fees  in  1997  and  1996,
respectively. No fees were paid in 1995.

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

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

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         Security Ownership of Certain Beneficial Owners(1)

<TABLE>
<CAPTION>

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

(1)  a)  Security Ownership of Certain Beneficial Owners

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


(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

                                       23
<PAGE>

Partner or Partners if it deems such  admission  to be necessary or desirable so
that the  Partnership  will be classified a partnership  for Federal  income tax
purposes. Finally, a majority-in-interest of the Limited Partners may at anytime
remove the General  Partner of the  Partnership  and elect a  successor  General
Partner

Item 13.  Certain Relationships and Related Transactions

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


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

Financial Statements:

Report of independent public accountants.

Balance sheet as of December 31, 1997 and 1996

Statements of Operations for the years ended December 31, 1997, 1996, and 1995

Statements of Partners'  Equity (Deficit) for the years ended December 31, 1997,
1996, and 1995

Statements of Cash Flows for the years ended December 31, 1997, 1996, and 1995

Notes to Financial Statements.

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.

                                       24
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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


 Reports on Form 8-K

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

                                       25
<PAGE>


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

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

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

Date: May 20, 1998

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

Date: May 20, 1998

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

Date: May 20, 1998


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

Date: May 20, 1998




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

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

Date: May 20, 1998


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

Date: May 20, 1998


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

Date: May 20, 1998


                                       26