UNITED STATES
                                SECURITIES AND EXCHANGE COMMISSION
                                      Washington, D.C. 20549


                                            FORM 10-Q

(Mark One)
[ X ]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
        EXCHANGE ACT OF 1934
                  

For the quarterly period ended September 29, 1997

                                                OR

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

For the transition period from                   to ____________
                               -----------------                

                                 Commission file number: 0-19217


                             American Tax Credit Properties III L.P.
                      (Exact name of Registrant as specified in its charter)

                 Delaware
                                                             13-3545006
(State or other jurisdiction of                              (I.R.S.Employer
incorporation or organization)                             Identification No.)

Richman Tax Credit Properties III L.P.
599 West Putnam Avenue, 3rd Floor
Greenwich, Connecticut                                          06830
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code:  (203) 869-0900

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 filing requirements
for the past 90 days.

Yes X No ___.








<PAGE>



                             AMERICAN TAX CREDIT PROPERTIES III L.P.

                                  PART I - FINANCIAL INFORMATION


Item 1. Financial Statements


                                       Table of Contents         

Balance Sheets as of September 29, 1997 (Unaudited)
 and March 30, 1997 (Unaudited).......3

Statements of Operations for the three and six month periods ended 
September 29, 1997 (Unaudited)    and September 29, 1996 (Unaudited)........

Statements of Cash Flows for the six months ended September 29, 1997(Unaudited)
    and September 29, 1996 (Unaudited).....................................

Notes to Financial Statements as of September 29, 1997 (Unaudited)...........






<PAGE>
<TABLE>
<CAPTION>

                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                                          BALANCE SHEETS
                                           (UNAUDITED)



                                                                  September 29,      March 30,
                                                           Notes          1997             1997
                                                           -----  -----------------------------
<S>                                                        <C>    <C>              <C>
ASSETS

Cash and cash equivalents                                             439,888  $       409,413
Restricted cash                                              3         84,433        1,309,208
Investments in bonds available-for-sale                      2      2,969,464        2,854,771
Investment in local partnerships                             3      9,822,210       10,905,064
Interest receivable                                                    21,487           25,173
                                                                  ---------------- ----------------

                                                                  $ 13,337,482     $ 15,503,629
                                                                  ============     ============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                               901,025   $      862,114
  Payable to general partner                                          865,328          800,043
  Capital contributions payable                              3         84,433        1,309,208
  Other                                                                16,450           21,200
                                                                  ---------------- ----------------

                                                                    1,867,236        2,992,565

Commitments and contingencies                                4

Partners' equity (deficit)

  General partner                                                    (200,083)        (188,365)
  Limited partners (35,883 units of limited partnership
    interest outstanding)                                          11,721,455       12,881,544
  Unrealized loss on investments in bonds                    2        (51,126)       (182,115)
                                                                  ---------------  -------------- 
    available-for-sale, net

                                                                    11,470,246       12,511,064

                                                                  $ 13,337,482     $ 15,503,629
                                                                  ============     ============


                                See Notes to Financial Statements.
</TABLE>





<PAGE>
<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)



                                             Three Months     Six Months     Three Months     Six Months
                                                 Ended          Ended           Ended           Ended
                                               September    September 29,   September 29,   September 29,
                                                  29,
                                     Notes         1997           1997            1996            1996
                                     -----   -----------------------------------------------------------
<S>                                  <C>     <C>            <C>             <C>             <C>
REVENUE

Interest                                     $    85,664        151,393      $   78,986       $  157,422
Other income from local                                           4,172
partnerships
                                                  -------       ---------        --------        -------
TOTAL REVENUE                                     85,664        155,565          78,986          157,422
                                             ---------------------------------------------------------------

EXPENSES

Administration fees                              57,642         115,285          57,642         115,285
Management fees                                  57,642         115,285          57,642         115,285
Professional fees                                 7,349          18,099           5,647          13,849
Printing, postage and other                       4,336          10,236           3,237          11,166
                                             ----------------------------------------------------------------

TOTAL EXPENSES                                   126,969        258,905         124,168          255,585
                                             ------------------------------ --------------- ----------------

Loss from operations                            (41,305)       (103,340)        (45,182)        (98,163)

Equity in loss of investment in
  local partnerships                           (552,778)     (1,068,467)       (571,331)     (1,210,336)
                                             ------------------------------ --------------- -------------- 

NET LOSS                                     $ (594,083)    $(1,171,807)    $  (616,513)    $(1,308,499)
                                             ============== ==============  ==============  ============== 

NET LOSS ATTRIBUTABLE TO

  General partner                            $   (5,941)        (11,718)   $     (6,165)    $    (13,085)
  Limited partners                             (588,142)     (1,160,089)       (610,348)      (1,295,414)
                                             -------------- --------------- --------------- --------------- 

                                             $  594,083)    $(1,171,807)    $  (616,513)    $ (1,308,499)
                                             ============== ==============  ==============  ============== 

NET LOSS per unit of limited
  partnership interest (35,883
  units of limited partnership               $  (16.39)         (32.33)         (17.01)         (36.10)
                                             =============================================================== 
  interest)


                                See Notes to Financial Statements.
</TABLE>





<PAGE>
<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF CASH FLOWS
                  SIX MONTHS ENDED SEPTEMBER 29, 1997 AND 1996
                                   (UNAUDITED)



                                                                       1997            1996
                                                                ---------------------------
<S>                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Interest received                                               $    96,375    $    127,104
Other income from local partnerships                                  4,172
Cash used for local partnerships for deferred expenses               (4,750)         (4,750)
Cash paid for
  administration fees                                               (50,000)        (50,000)
  management fees                                                   (50,000)        (50,000)
  professional fees                                                 (39,599)        (40,999)
  printing, postage and other expenses                              (15,110)         (4,348)
                                                                -------------   -------------- 

Net cash used in operating activities                               (58,912)        (22,993)
                                                                -------------   ------------- 

CASH FLOWS FROM INVESTING ACTIVITIES

Cash distributions from local partnerships                           14,387          23,509
Maturity/redemption of bonds                                         75,000         200,000
Transfer from restricted cash                                     1,224,775
Investment in a local partnership                                (1,224,775)
                                                                -----------      ------------

Net cash provided by investing activities                            89,387         223,509
                                                                --------------  --------------

Net increase in cash and cash equivalents                            30,475         200,516

Cash and cash equivalents at beginning of period                    409,413         389,931
                                                                -------------   -------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                      $   439,888    $    590,447
                                                                ============    ============

SIGNIFICANT NON-CASH INVESTING ACTIVITIES

Unrealized gain (loss) on investments in bonds                  $   130,989    $    (58,253)
                                                                ============    ============ 
  available-for-sale, net


------------------------------------------------------------------------------------------------------------
See reconciliation of net loss to net cash used in operating  activities on page
6.


                                See Notes to Financial Statements.
</TABLE>





<PAGE>
<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (Continued)
                  SIX MONTHS ENDED SEPTEMBER 29, 1997 AND 1996
                                   (UNAUDITED)



                                                                        1997            1996
                                                                ----------------------------
<S>                                                             <C>             <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
  ACTIVITIES

Net loss                                                      $ (1,171,807)   $ (1,308,499)

Adjustments to reconcile net loss to net cash used in
  operating activities

  Equity in loss of investment in local partnerships             1,068,467        1,210,336
  Amortization of net premium on investments in bonds                7,453            8,427
  Accretion of zero coupon bonds                                   (66,157)         (44,128)
  Decrease in interest receivable                                    3,686            5,383
  Increase in payable to general partner                            65,285           65,285
  Increase in accounts payable and accrued expenses                 38,911           44,953
  Decrease in other liabilities                                     (4,750          (4,750)
                                                                -------------------------------- 

NET CASH USED IN OPERATING ACTIVITIES                           $  (58,912) $      (22,993)
                                                                ==============  ============== 


                                See Notes to Financial Statements.
</TABLE>





<PAGE>
<TABLE>
<CAPTION>

                                AMERICAN TAX CREDIT PROPERTIES III L.P.
                                     NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 29, 1997
                                              (UNAUDITED)


1.  Basis of Presentation

    The  accompanying  unaudited  financial  statements  have been  prepared  in
    accordance  with  generally  accepted  accounting   principles  for  interim
    financial  information.  They do not include all  information  and footnotes
    required by generally accepted accounting  principles for complete financial
    statements.  The results of  operations  are impacted  significantly  by the
    combined results of operations of the Local Partnerships, which are provided
    by the Local  Partnerships  on an unaudited  basis during  interim  periods.
    Accordingly,  the  accompanying  financial  statements are dependent on such
    unaudited information.  In the opinion of the General Partner, the financial
    statements include all adjustments necessary to present fairly the financial
    position as of  September  29, 1997 and the results of  operations  and cash
    flows for the interim  periods  presented.  All  adjustments are of a normal
    recurring  nature.  The  results of  operations  for the three and six month
    periods  ended  September  29, 1997 are not  necessarily  indicative  of the
    results that may be expected for the entire year.

2.  Investments in Bonds Available-For-Sale

    As of September 29, 1997,  certain  information  concerning  investments  in
    bonds available-for-sale is as follows:

      <S>                               <C>             <C>            <C>            <C>
                                                            Gross          Gross
                                          Amortized      unrealized     unrealized      Estimated
      Description and maturity                 cost         gains           losses         fair
                                                                                        value

      Corporate debt securities
        After one year through five     $   483,328  $       5,444  $        (865) $    487,907
          years
        After five years through ten        454,285          5,204         (8,022)      451,467
        years
        After ten years                     957,300         15,526        (12,138)        960,688
                                        -------------   ------------   ------------   -------------

                                          1,894,913          26,174        (21,025)     1,900,062
                                        ------------    ------------   ------------   ------------

      U.S. Treasury debt securities
        After ten years                     999,895              --       (47,895)        952,000
                                        -------------   --------------  -----------   -------------

      U.S. government and agency
      securities
        After ten years                     125,782               --       (8,380)       117,402
                                        ------------    ----------------------------  -------------

                                        $ 3,020,590     $    26,174    $  (77,300)   $ 2,969,464
                                        ===========     ===========    ===========    ===========

     </TABLE>

3.  Investment in Local Partnerships

    The Partnership  owns a limited  partnership  interest in forty-three  Local
    Partnerships  representing capital  contributions in the aggregate amount of
    $29,264,476,  of which the Partnership has paid  $29,180,043 and $84,433 are
    outstanding as of September 29, 1997.  Restricted  cash in the  accompanying
    balance sheet as of September 29, 1997 represents such  outstanding  capital
    contribution,   which  is  payable  upon  one  Local  Partnership  providing
    information that it has satisfied specific conditions related to operations.
    As of June 30, 1997, the Local Partnerships have outstanding  mortgage loans
    payable totaling  approximately  $87,182,000 and accrued interest payable on
    such loans totaling approximately $1,928,000,  which are secured by security
    interests and liens common to mortgage loans on the Local Partnerships' real
    property and other assets.





<PAGE>
<TABLE>
<CAPTION>

                                AMERICAN TAX CREDIT PROPERTIES III L.P.
                              NOTES TO FINANCIAL STATEMENTS - (Continued)
                               SEPTEMBER 29, 1997
                                              (UNAUDITED)


3.  Investment in Local Partnerships (continued)

    For the six  months  ended  September  29,  1997,  the  investment  in Local
    Partnerships activity consists of the following:

          <S>                                                           <C>
          Investment in Local Partnerships as of March 30,              $   10,905,064
          1997

          Equity in loss of investment in Local
            Partnerships                                                    (1,068,467)  (A)
            for the six months ended June 30, 1997

          Cash distributions received from Local
            Partnerships                                                       (14,387)
                                                                        ------------------ 
            during the six months ended September 29, 1997

          Investment in Local Partnerships as of September              $    9,822,210
                                                                        ================
          29, 1997

         </TABLE>

    (A)  Equity in loss of  investment in Local  Partnerships  is limited to the
         Partnership's investment balance in each Local Partnership;  any excess
         is applied to other  partners'  capital in any such Local  Partnership.
         The amount of such excess losses applied to other partners' capital was
         $464,675  for the six months  ended June 30, 1997 as  reflected  in the
         combined  statements of operations of the Local Partnerships  reflected
         herein Note 3.

    The combined  unaudited balance sheets of the Local  Partnerships as of June
    30, 1997 and  December  31, 1996 and the combined  unaudited  statements  of
    operations  of the Local  Partnerships  for the three and six month  periods
    ended June 30, 1997 and 1996 are reflected on pages 9 and 10, respectively.






------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                AMERICAN TAX CREDIT PROPERTIES III L.P.
                              NOTES TO FINANCIAL STATEMENTS - (Continued)
                               SEPTEMBER 29, 1997
                                              (UNAUDITED)


3.  Investment in Local Partnerships (continued)

    The combined  balance sheets of the Local  Partnerships  as of June 30, 1997
    and December 31, 1996 are as follows:

                                                                       June 30,      December 31,
                                                                            1997            1996
                                                                    ----------------------------
     <S>                                                            <C>             <C>
     ASSETS
     Cash and other investments                                     $  1,337,287  $     1,340,942
     Rental receivable                                                   311,265          354,108
     Capital contributions receivable                                     84,433        1,309,208
     Escrow deposits and reserves                                      4,031,589        3,763,306
     Land                                                              3,964,692        3,964,692
     Buildings and improvements (net of accumulated depreciation
       of $25,267,550 and $23,212,364)                                90,426,698       92,443,378
     Intangible assets (net of accumulated amortization of
       $637,849 and $1,039,889)                                          784,733          748,879
     Other                                                              1,186,25          772,465
                                                                    ---------------------------------

                                                                    $ 102,126,949   $ 104,696,978
                                                                    =============   =============

     LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
     Liabilities

       Accounts payable and accrued expenses                    $       578,405 $        512,801
       Due to related parties                                         5,027,120        5,127,931
       Mortgage and construction loans                               87,181,575       87,351,443
       Notes payable                                                     66,150           70,804
       Accrued interest                                               1,927,608        1,782,695
       Other                                                            579,165          557,856
                                                                    ---------------------------------

                                                                     95,360,023       95,403,530
     Partners' equity (deficit)

       American Tax Credit Properties III L.P.
         Capital contributions, net of distributions (includes
           receivable of $84,433 and $1,309,208)                     29,055,122       29,079,605
         Cumulative loss                                            (19,232,912)     (18,164,445)
                                                                    --------------  -------------- 

                                                                      9,822,210       10,915,160
       General partners and other limited partners, including
         ATCP II
         Capital contributions, net of distributions                    (64,402)         764,757
         Cumulative loss                                             (2,990,882)      (2,386,469)
                                                                    --------------- --------------- 

                                                                     (3,055,284)      (1,621,712)

                                                                      6,766,926        9,293,448

                                                                    $ 102,126,949   $ 104,696,978
                                                                    =============   =============
    </TABLE>




-----------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                AMERICAN TAX CREDIT PROPERTIES III L.P.
                              NOTES TO FINANCIAL STATEMENTS - (Continued)
                               SEPTEMBER 29, 1997
                                              (UNAUDITED)



3.  Investment in Local Partnerships (continued)

    The combined  statements  of operations  of the Local  Partnerships  for the
    three and six month periods ended June 30, 1997 and 1996 are as follows:

                                        Three Months    Six Months     Three Months    Six Months
                                            Ended          Ended          Ended           Ended
                                          June 30,       June 30,        June 30,       June 30,
                                              1997            1997          1996             1996
                                        --------------------------------------------- -----------
     <S>                                <C>            <C>            <C>             <C>
     REVENUE

     Rental                             $ 2,584,104    $  5,205,060   $ 2,630,886     $  5,130,715
     Interest and other                      87,181         168,790       101,376          179,841
                                        -------------- -------------- -------------   --------------

     TOTAL REVENUE                        2,671,285       5,373,850     2,732,262        5,310,556
                                        ------------   -------------  ------------    -------------

     EXPENSES

     Administrative                        526,913      1,036,508         491,384      1,028,898
     Utilities                             241,748        530,441         255,879        586,566
     Operating, maintenance and other      562,896      1,038,125         553,114      1,015,675
     Taxes and insurance                   326,146        652,464         313,085        630,207
     Interest (including amortization
       of $14,284, $25,938, $31,708
       and $70,293)                        850,088      1,734,006         935,532      1,789,380
     Depreciation                        1,038,254      2,055,186       1,030,753      2,063,937
                                        ------------   -------------  ------------    -------------

     TOTAL EXPENSES                      3,546,045      7,046,730       3,579,747      7,114,663
                                        ------------   -------------  ------------    -------------

     NET LOSS                             (874,760)  $ (1,672,880)   $   (847,485)  $ (1,804,107)
                                        ============   ============   ============    ============ 

     NET LOSS ATTRIBUTABLE TO

     American Tax Credit Properties     $ (552,778)  $ (1,068,467)   $   (571,331)   $(1,210,336)
     III L.P.
     General partners and other
       limited partners, including
       ATCP II, which includes
       $250,285, $464,675, $204,724
       and $457,846 of American Tax
       Credit Properties III L.P.         (321,982)      (604,413)       (276,154)      (593,771)
                                        ------------   -------------- ------------    -------------- 
       loss in excess of investment

                                        $ (874,760)  $ (1,672,880)  $    (847,485)   $(1,804,107)
                                        ============   ============   ============    ============ 

    </TABLE>

    The combined  results of operations of the Local  Partnerships for the three
    and six month periods ended June 30, 1997 are not necessarily  indicative of
    the results that may be expected for an entire operating period.





------------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------------------------


                                AMERICAN TAX CREDIT PROPERTIES III L.P.
                              NOTES TO FINANCIAL STATEMENTS - (Continued)
                               SEPTEMBER 29, 1997
                                              (UNAUDITED)

4.  Commitments and Contingencies

    On July 16, 1997, the Partnership  received a demand for certain information
    with  respect to the  holders of Units,  the stated  purpose of which was to
    assist such party in making an offer to Unit holders to purchase their Units
    and  otherwise  to  communicate   with  them   concerning   such  an  offer.
    Subsequently,  the Partnership requested certain information from such party
    in order to assess the  appropriateness  of the demand.  On July 28, 1997, a
    complaint was filed  against the  Partnership,  the General  Partner and its
    general  partner  seeking,  among  other  things,  an  order  directing  the
    defendants to immediately furnish the requested information and awarding the
    plaintiff any resulting  damages. A trial was held on September 29, 1997 and
    the parties have  submitted  post-trial  briefs to the Court.  A hearing for
    post-trial oral argument is scheduled for November 17, 1997.

5.  Additional Information

    Additional  information,  including  the audited  March 30,  1997  Financial
    Statements  and  the  Organization,   Purpose  and  Summary  of  Significant
    Accounting Policies,  is included in the Partnership's Annual Report on Form
    10-K for the fiscal year ended  March 30,  1997 on file with the  Securities
    and Exchange Commission.





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<PAGE>
------------------------------------------------------------------------------


                             AMERICAN TAX CREDIT PROPERTIES III L.P.


Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

Material Changes in Financial Condition

As of September 29, 1997, Registrant has not experienced a significant change in
financial  condition as compared to March 30, 1997.  Principal changes in assets
are comprised of periodic transactions and adjustments and anticipated equity in
loss  from  operations  of the  Local  Partnerships  and  payment  of a  capital
contribution to a Local  Partnership.  During the six months ended September 29,
1997,  Registrant  received cash from interest earnings,  maturity of a bond and
distributions  from Local  Partnerships and utilized cash for operating expenses
and for a capital contribution to a Local Partnership. Cash and cash equivalents
and  investments in bonds  available-for-sale  increased,  in the aggregate,  by
approximately  $145,000  during the six months ended  September 29, 1997,  which
increase  includes a net  unrealized  gain recorded on  investments  in bonds of
approximately  $131,000, the amortization of net premium on investments in bonds
of approximately  $7,000 and the accretion of zero coupon bonds of approximately
$66,000. During the six months ended September 29, 1997, the investment in Local
Partnerships  decreased  as  a  result  of  Registrant's  equity  in  the  Local
Partnerships'  net loss for the six months ended June 30, 1997 of $1,068,467 and
cash distributions received from Local Partnerships of $14,387. Accounts payable
and accrued  expenses and payable to general partner are comprised  primarily of
accrued administration fees and management fees, respectively.

The Properties are principally  comprised of subsidized and leveraged low-income
multifamily  residential  complexes  located  throughout  the United  States and
Puerto Rico. The rents of the  Properties,  many of which receive rental subsidy
payments,  including  payments  under  Section 8 of Title II of the  Housing and
Community  Development  Act of 1974 ("Section 8"), are subject to specific laws,
regulations  and  agreements  with  federal  and  state  agencies.  The  subsidy
agreements  expire at various times during and after the  Compliance  Periods of
the Local  Partnerships.  The United  States  Department  of  Housing  and Urban
Development  ("HUD") has issued  notices  which  implement  provisions  to renew
certain  project  based  Section 8 contracts  expiring  during HUD's fiscal year
1997,  where requested by an owner, for an additional one year term generally at
or  below  current  rent  levels,  subject  to  certain  guidelines.  HUD has an
additional  program which, in general,  provides for restructuring  rents and/or
mortgages where rents may be adjusted to market levels and mortgage terms may be
adjusted  based on the  reduction in rents,  although  there may be instances in
which  only  rents,  but not  mortgages,  are  restructured.  Registrant  cannot
reasonably predict legislative initiatives and governmental budget negotiations,
the outcome of which  could  result in a reduction  in funds  available  for the
various federal and state administered  housing programs including the Section 8
program. Such changes could adversely affect the future net operating income and
debt structure of any or all Local Partnerships currently receiving such subsidy
or similar subsidies.  One Local Partnership's Section 8 contract,  which covers
certain rental units, is scheduled to expire in 1998 after being renewed in 1997
for a one  year  period.  In  addition,  the  Local  Partnerships  have  various
financing   structures   which  include  (i)  required  debt  service   payments
("Mandatory Debt Service") and (ii) debt service payments which are payable only
from available cash flow subject to the terms and conditions of the notes, which
may be subject to specific laws,  regulations  and agreements  with  appropriate
federal and state agencies  ("Non-Mandatory  Debt Service or Interest").  In the
event rents are not  sufficient  to cover  operating  expenses,  Mandatory  Debt
Service  requirements  and other  charges,  certain Local  General  Partners are
obligated to provide  advances to cover deficits for a certain period of time up
to certain amounts (the "Deficit Guarantee").  A Local General Partner's funding
of such Deficit Guarantee is dependent on its liquidity or ability to borrow the
required  funds.  During  the six  months  ended  June 30,  1997,  revenue  from
operations,   Local  General   Partner   advances  and  reserves  of  the  Local
Partnerships have generally been sufficient to cover the operating  expenses and
Mandatory  Debt  Service.  Substantially  all  of  the  Local  Partnerships  are
effectively  operating  at or near break even  levels,  although  certain  Local
Partnerships'  accounting  information  reflects  operating deficits that do not
represent  cash deficits due to their  mortgage and financing  structure and the
required  deferral of property  management  fees.  However,  as discussed below,
certain Local  Partnerships'  operating  information  indicates below break even
operations after taking into account their mortgage and financing  structure and
the required deferral of property management fees.

The terms of the partnership  agreement of Christian  Street Commons  Associates
(the "Christian Street Local Partnership") require the Local General Partners of
the  Christian  Street Local  Partnership  to advance  funds to cover  operating
deficits




<PAGE>

                             AMERICAN TAX CREDIT PROPERTIES III L.P.


Item 2. Management's  Discussion  and  Analysis of  Financial  Condition 
 and Results of  Operations
        (continued)

up to $150,000  through 2008 and to cause the management agent to defer property
management  fees in order to avoid a default under the  mortgage.  The Christian
Street Local Partnership incurred an operating deficit of approximately  $15,000
for the six months ended June 30, 1997, which includes property  management fees
of   approximately   $2,000.   Accordingly,   the  net  operating   deficit  was
approximately  $13,000.  All  required  payments on the mortgage and real estate
taxes are  current.  As of June 30,  1997,  the Local  General  Partners  of the
Christian  Street Local  Partnership have advanced  approximately  $56,000 under
their Deficit Guarantee obligation.  Of Registrant's total annual Low-income Tax
Credits,   approximately  2%  is  allocated  from  the  Christian  Street  Local
Partnership.

The terms of the partnership agreement of Orange City Plaza, Limited Partnership
(the "Orange City Plaza Local Partnership") require the Local General Partner of
the Orange  City Plaza Local  Partnership  to advance  funds to cover  operating
deficits  through  2005  and to cause  the  management  agent to defer  property
management  fees in order to avoid a default under the mortgage.  During the six
months ended June 30, 1997, the Orange City Plaza Local Partnership  incurred an
operating deficit of approximately  $6,000,  which includes property  management
fees of  approximately  $3,000.  Accordingly,  the  net  operating  deficit  was
approximately  $3,000.  All  required  payments on the  mortgage and real estate
taxes  are  current.  Of  Registrant's  total  annual  Low-income  Tax  Credits,
approximately 2% is allocated from the Orange City Plaza Local Partnership.

The  terms  of the  partnership  agreement  of  Westminster  Apartments  Limited
Partnership  (the  "Westminster  Local  Partnership")  require the Local General
Partner of the Westminster  Local  Partnership to cause the management  agent to
defer property  management  fees in order to avoid a default under the mortgage.
During the six months ended June 30, 1997,  the  Westminster  Local  Partnership
incurred an operating deficit of approximately  $10,000, which includes property
management fees of approximately $5,000. Accordingly,  the net operating deficit
was  approximately  $5,000.  The Westminster Local Partnership was entitled to a
real estate tax  abatement  which  expired in 1996,  resulting in an increase of
approximately  $17,000 per annum in real estate tax expense.  The Local  General
Partner of the  Westminster  Local  Partnership  reports  that as of November 7,
1997,  the  Westminster  Local  Partnership  is three  months in  arrears on its
mortgage, but the lender has not declared the mortgage in default.  Although the
Local  General  Partner  intends  to appeal  the real  estate  tax,  there is no
assurance  that the Local General  Partner will be successful in its appeal.  Of
Registrant's total annual Low-income Tax Credits,  approximately 4% is allocated
from the Westminster Local Partnership.

Results of Operations

Registrant's  operating  results are dependent upon the operating results of the
Local  Partnerships and are  significantly  impacted by the Local  Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting.  Registrant accounts for its investment in Local Partnerships
in accordance  with the equity method of accounting,  under which the investment
is carried at cost which includes capital contributions payable, and is adjusted
for Registrant's share of the Local  Partnership's  results of operations and by
any cash  distributions  received.  Equity in loss of each  investment  in Local
Partnership  allocated to Registrant is recognized to the extent of Registrant's
investment  balance in each Local  Partnership.  Any equity in loss in excess of
Registrant's  investment  balance in a Local  Partnership  is allocated to other
partners'  capital in each such Local  Partnership.  As a result,  the equity in
loss of investment in Local Partnerships is expected to decrease as Registrant's
investment  balances in the  respective  Local  Partnerships  become  zero.  The
combined statements of operations of the Local Partnerships  reflected in Note 3
to Registrant's  financial statements include the operating results of all Local
Partnerships, irrespective of Registrant's investment balances.

Cumulative  losses  and cash  distributions  in  excess of  investment  in Local
Partnerships  may result  from a variety  of  circumstances,  including  a Local
Partnership's  accounting  policies,   subsidy  structure,  debt  structure  and
operating deficits, among other things. Accordingly,  cumulative losses and cash
distributions  in excess of the  investment  are not  necessarily  indicative of
adverse  operating  results of a Local  Partnership.  See discussion above under
Material Changes in Financial  Condition  regarding  certain Local  Partnerships
currently operating below economic break even levels.







<PAGE>

                             AMERICAN TAX CREDIT PROPERTIES III L.P.


Item 2. Management's  Discussion  and  Analysis of  Financial  Condition 
 and Results of  Operations 
        (continued)

Three Months Ended September 29, 1997

For the three months ended  September  29,  1997,  Registrant  had a net loss of
approximately $594,000,  which included an equity in loss of investment in Local
Partnerships of approximately $553,000 for the three months ended June 30, 1997.
Registrant's  loss from operations for the three months ended September 29, 1997
of  approximately  $41,000 was attributable to interest revenue of approximately
$86,000,   exceeded   by   operating   expenses   of   approximately   $127,000.
Nonrecognition  of losses in excess of Registrant's  investment in certain Local
Partnerships during the period was approximately $250,000.

The Local Partnerships' net loss of approximately  $875,000 for the three months
ended  June  30,  1997  was   attributable   to  rental  and  other  revenue  of
approximately $2,671,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $2,493,000 and approximately $1,053,000
of depreciation and amortization expenses.

Three Months Ended September 29, 1996

For the three months ended  September  29,  1996,  Registrant  had a net loss of
approximately $616,000,  which included an equity in loss of investment in Local
Partnerships of approximately $571,000 for the three months ended June 30, 1996.
Registrant's  loss from operations for the three months ended September 29, 1996
of  approximately  $45,000 was attributable to interest revenue of approximately
$79,000,   exceeded   by   operating   expenses   of   approximately   $124,000.
Nonrecognition  of losses in excess of Registrant's  investment in certain Local
Partnerships during the period was approximately $205,000.

The Local Partnerships' net loss of approximately  $847,000 for the three months
ended  June  30,  1996  was   attributable   to  rental  and  other  revenue  of
approximately $2,732,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $2,517,000 and approximately $1,062,000
of depreciation and amortization expenses.

Six Months Ended September 29, 1997

For the six  months  ended  September  29,  1997,  Registrant  had a net loss of
approximately  $1,172,000,  which  included an equity in loss of  investment  in
Local Partnerships of approximately $1,069,000 for the six months ended June 30,
1997.  Registrant's  loss from operations for the six months ended September 29,
1997  of  approximately   $103,000  was  attributable  to  interest  revenue  of
approximately $152,000 and other income from Local Partnerships of approximately
$4,000, exceeded by operating expenses of approximately $259,000. Nonrecognition
of losses in excess of  Registrant's  investment in certain  Local  Partnerships
during the period was approximately $465,000.

The Local Partnerships' net loss of approximately  $1,673,000 for the six months
ended  June  30,  1997  was   attributable   to  rental  and  other  revenue  of
approximately $5,374,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $4,966,000 and approximately $2,081,000
of depreciation and amortization expenses.

Six Months Ended September 29, 1996

For the six  months  ended  September  29,  1996,  Registrant  had a net loss of
approximately  $1,308,000,  which  included an equity in loss of  investment  in
Local Partnerships of approximately $1,210,000 for the six months ended June 30,
1996.  Registrant's  loss from operations for the six months ended September 29,
1996  of   approximately   $98,000  was  attributable  to  interest  revenue  of
approximately   $157,000,   exceeded  by  operating  expenses  of  approximately
$255,000.  Nonrecognition  of losses in excess  of  Registrant's  investment  in
certain Local Partnerships during the period was approximately $458,000.






<PAGE>

                             AMERICAN TAX CREDIT PROPERTIES III L.P.


Item 2. Management's  Discussion  and  Analysis of  Financial  Condition 
 and Results of  Operations
        (continued)

The Local Partnerships' net loss of approximately  $1,804,000 for the six months
ended  June  30,  1996  was   attributable   to  rental  and  other  revenue  of
approximately 5,311,000,  exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $4,981,000 and approximately $2,134,000
of depreciation and amortization expenses.

Three and Six Month Periods Ended September 29, 1997 v.
Three and Six Month Periods Ended September 29, 1996

Registrant's  operations for the three months ended  September 29, 1997 resulted
in a  net  loss  of  approximately  $594,000  as  compared  to  a  net  loss  of
approximately  $616,000  for the three  months ended  September  29,  1996.  The
decrease in net loss is primarily attributed to a decrease in the equity in loss
of investment in Local Partnerships of approximately $19,000, which is primarily
the  result  of an  increase  in the  nonrecognition  of  losses  in  excess  of
Registrant's  investment  in Local  Partnerships  of  approximately  $46,000  in
accordance with the equity method of accounting, partially offset by an increase
in the net operating loss of the Local Partnerships.

Registrant's  operations for the six months ended September 29, 1997 resulted in
a  net  loss  of  approximately   $1,172,000  as  compared  to  a  net  loss  of
approximately  $1,308,000  for the six months  ended  September  29,  1996.  The
decrease in net loss is primarily attributed to a decrease in the equity in loss
of  investment  in  Local  Partnerships  of  approximately  $142,000,  which  is
primarily  the  result of (i) an  increase  in the  nonrecognition  of losses in
excess of Registrant's  investment in Local Partnerships of approximately $7,000
in accordance  with the equity  method of accounting  and (ii) a decrease in the
net operating loss of the Local Partnerships.






<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                           Part II - OTHER INFORMATION


Item 1.  Legal Proceedings

         On July 16, 1997, Everest Properties, Inc. ("Everest") demanded certain
         information  with respect to the holders of Units.  Everest stated that
         the  purpose of the demand was to assist  Everest in making an offer to
         Unit holders to purchase their Units and otherwise to communicate  with
         them concerning such an offer. On July 25, 1997,  Registrant  requested
         certain information from Everest in order to assess the appropriateness
         of the demand. To date, the information has not been provided.  On July
         28, 1997,  Everest filed a complaint  against  Registrant,  the General
         Partner,  and its general partner in the Court of Chancery of the State
         of Delaware in and for New Castle County  seeking,  among other things,
         an order directing the defendants to furnish  immediately the requested
         information  and  awarding the  plaintiff  any  resulting  damages (the
         "Delaware Action").  A trial in connection with the Delaware Action was
         held on September  29, 1997 and the parties have  submitted  post-trial
         briefs  to the  Court.  A  hearing  for  post-trial  oral  argument  is
         scheduled for November 17, 1997.

         Registrant is not aware of any other material legal proceedings.

Item 2.  Changes in Securities

         None

Item 3.  Defaults Upon Senior Securities

         None

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

         None

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

         None







<PAGE>

                                            SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.


                                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                        (a Delaware limited partnership)

                                By:   Richman Tax Credit Properties III L.P.,
                                                  General Partner

                                     by:   Richman Housing Credits Inc.,
                                                    general partner


Dated: November 13, 1997                /s/ Richard Paul Richman
       -----------------               ------------------------
                                       Richard Paul Richman
                                       President, Chief Executive
                                       Officer and Director of the
                                              general partner of the
                                                        General Partner


Dated: November 13, 1997                      /s/ Neal Ludeke
       -----------------                      --------------
                                               Neal Ludeke
                                               Vice President and
                                           Treasurer of the general partner
                                            of the General Partner
                                           (Principal Financial and Accounting
                                               Officer of Registrant)