FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   (Mark One)

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

                    For the fiscal year ended ______________

                                       OR

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

        For the transition period from January 1, 1999 to March 31, 1999

                         Commission file number: 0-20056

                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.

California                                                            33-0433017
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)


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

                                 (714) 662-5565

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

                                      NONE

           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


<PAGE>

State the  aggregate  market  value of the  voting and  non-voting
common equity held by non-affiliates of the registrant.

                                  INAPPLICABLE


                       DOCUMENTS INCORPORATED BY REFERENCE

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

                                      NONE

















                                       2

<PAGE>


PART I.

Item 1.  Business

Organization

WNC California  Housing Tax Credits II, L.P. ("CHTC" or the  "Partnership") is a
California Limited  Partnership formed under the laws of the State of California
on September 13, 1990. The Partnership was formed to acquire limited partnership
interests in other limited  partnerships or limited liability  companies ("Local
Limited Partnerships") which own multifamily housing complexes that are eligible
for  low-income  housing  federal and, in certain cases,  California  income tax
credits ("Low Income Housing Credit").

The general  partner of the  Partnership is WNC Tax Credit  Partners,  L.P. (the
"General Partner"). WNC & Associates, Inc. ("Associates") and Wilfred N. Cooper,
Sr. are the general partners of WNC Tax Credit Partners, L.P. Wilfred N. Cooper,
Sr., through the Cooper Revocable Trust,  owns 66.8% of the outstanding stock of
Associates.  John  B.  Lester,  Jr.  was the  original  limited  partner  of the
Partnership and owns,  through the Lester Family Trust, 28.6% of the outstanding
stock of  Associates.  The business of the  Partnership  is conducted  primarily
through Associates, as the Partnership has no employees of its own.

Pursuant to a  registration  statement  filed with the  Securities  and Exchange
Commission,  on January 22, 1991, the Partnership commenced a public offering of
20,000 units of limited partnership  interest ("Units") at a price of $1,000 per
Unit.  As of the close of the public  offering on January 21,  1993,  a total of
17,726  Units  representing  $17,726,000  had been  sold.  Holders  of Units are
referred to herein as "Limited Partners."

Description of Business

The  Partnership's  principal  business  objective  is to  provide  its  Limited
Partners with Low Income Housing Credits.  The Partnership's  principal business
therefore  consists of investing as a limited partner or non-managing  member in
Local  Limited  Partnerships  each of which will own and operate a  multi-family
housing  complex (the "Housing  Complex")  which will qualify for the Low Income
Housing Credit.  In general,  under Section 42 of the Internal  Revenue Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
to reduce  Federal  taxes  otherwise due in each year of a ten-year  period.  In
general,  under Section 17058 of the  California  Revenue and Taxation  Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
against  California taxes otherwise due in each year of a four-year period.  The
Housing Complex is subject to a fifteen-year  compliance period (the "Compliance
Period"),  and under state law may have to be maintained  as low income  housing
for 30 or more years.

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 any Local Limited  Partnership of its Housing Complex prior to the end of the
applicable  Compliance  Period.  Because  of  (i)  the  nature  of  the  Housing
Complexes,  (ii) the  difficulty of predicting  the resale market for low-income
housing  15 or more years in the  future,  and (iii) the  ability of  government
lenders to  disapprove  of transfer,  it is not possible at this time to predict
whether the liquidation of the  Partnership's  assets and the disposition of the
proceeds,  if any, in  accordance  with the  Partnership's  Agreement of Limited
Partnership,   as  amended  by  the   Supplements   thereto  (the   "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 its Housing Complex, it
is anticipated  that the local general partner  ("Local  General  Partner") will
either  continue to operate such Housing  Complex or take such other  actions as
the Local  General  Partner  believes  to be in the best  interest  of the Local
Limited  Partnership.  Notwithstanding the preceding,  circumstances  beyond the
control of the General  Partner or the Local  General  Partners may occur during
the  Compliance  Period,  which  would  require the  Partnership  to approve the
disposition of a Housing Complex prior to the end thereof, possibly resulting in
recapture of Low Income Housing Credits.

                                       3
<PAGE>


As of March 31, 1999,  the  Partnership  had invested in fifteen  Local  Limited
Partnerships.  Each of these Local Limited  Partnerships  owns a Housing Complex
that is eligible  for the federal Low Income  Housing  Credit and twelve of them
were  eligible for the  California  Low Income  Housing  Credit.  Certain  Local
Limited Partnerships may also benefit from government programs promoting low- or
moderate-income housing.

The Partnership's  investments in Local Limited  Partnerships are subject to the
risks incident to the management and ownership of low-income  housing and to the
management and ownership of multi-unit  residential  real estate.  Some of these
risks  are that the Low  Income  Housing  Credit  could be  recaptured  and that
neither the  Partnership's  investments  nor the Housing  Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes  receive  government  financing  or operating  subsidies,  they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests;  limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are subject to mortgage
indebtedness.  If a  Local  Limited  Partnership  does  not  make  its  mortgage
payments,  the lender could foreclose resulting in a loss of the Housing Complex
and Low Income Housing Credits.  As a limited partner or non-managing  member of
the Local Limited  Partnerships,  the Partnership  will have very limited rights
with respect to  management  of the Local  Limited  Partnerships,  and will rely
totally  on the  general  partners  or  managing  members  of the Local  Limited
Partnerships for management of the Local 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 Housing
Complexes and the Partnership.  In addition,  each Local Limited  Partnership is
subject to risks relating to environmental hazards and natural disasters,  which
might be uninsurable.  Because the Partnership's 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 the  anticipated  Low Income
Housing Credits will be available to Limited Partners.

In addition,  Limited  Partners are subject to risks in that the rules governing
the Low Income  Housing  Credit are  complicated,  and the use of credits can be
limited.  The only  material  benefit from an investment in Units may be the Low
Income Housing Credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will  develop.  All  Partnership  management
decisions are made by the General Partner.

As a limited partner or non-managing  member,  the  Partnership's  liability for
obligations of each Local Limited Partnership is limited to its investment.  The
Local General Partners of each Local Limited  Partnership retain  responsibility
for developing,  constructing,  maintaining,  operating and managing the Housing
Complexes.

Item 2.  Properties

Through its investments in Local Limited  Partnerships,  the  Partnership  holds
limited  partnership  interests in the Housing  Complexes.  The following  table
reflects the status of the fifteen Housing Complexes as of the dates indicated:

                                       4

<PAGE>

<TABLE>
<CAPTION>

                                                  --------------------------------  ------------------------------------------------
                                                       As of March 31, 1999                       As of December 31, 1998
                                                  --------------------------------  ------------------------------------------------

                                                       Partnership's                                       Estimated    Encumbrances
                                                     Total Investment  Amount of                           Low Income    of Local
                                  General Partner    in Local Limited  Investment   Number of    Occu-     Housing       Limited
Partnership Name  Location            Name             Partnerships    Paid to Date   Units      pancy     Credits      Partnerships
------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>             <C>               <C>             <C>                <C>       <C>     <C>            <C>

601 Main Street   Stockton,       Daniels C. Louge  $  1,656,000    $  1,656,000       165        96%    $  4,080,000   $  4,011,000
Investors         California

ADI Development   Delhi,          Anthony Donovan        699,000         699,000        31       100%       1,757,000      1,226,000
Partners          California

Bayless Garden    Red Bluff,      Douglas W. Young     1,110,000       1,110,000        46        91%       2,741,000      1,291,000
Apartments        California
Investors

Blackberry        Lodi,           Bonita Homes
Oaks, Ltd         California      Incorporated           463,000         463,000        42       100%       1,063,000      1,934,000

Jacob's Square    Exeter,         Philip R. Hammond,
                  California      Jr. and Diane M.
                                  Hammond              1,324,000       1,324,000        45        91%       2,933,000      1,717,000

Mecca             Mecca,          Sam Jack, Jr. and
Apartments II     California      Sam Jack and
                                  Associates           2,200,000       2,200,000        60        98%       5,183,000      2,519,000

Nevada Meadows    Grass Valley,   Thomas G. Larson,
                  California      William H. Larson
                                  and Raymond L.
                                  Tetzlaff               459,000         459,000        34        97%       1,030,000      1,940,000

Northwest Tulare  Ivanhoe,        Philip R. Hammond,
Associates        California      Jr. and Diane M.
                                  Hammond              1,226,000       1,226,000        54        74%       2,950,000      1,787,000

Orland            Orland,         Richard E. Huffman
Associates        California      and Robert A. Ginno    432,000         432,000        40       100%         972,000      1,718,000

</TABLE>

                                       5
<PAGE>
<TABLE>
<CAPTION>


                                                  --------------------------------  ------------------------------------------------
                                                       As of March 31, 1999                       As of December 31, 1998
                                                  --------------------------------  ------------------------------------------------

                                                       Partnership's                                       Estimated    Encumbrances
                                                     Total Investment  Amount of                           Low Income    of Local
                                  General Partner    in Local Limited  Investment   Number of    Occu-     Housing       Limited
Partnership Name  Location            Name             Partnerships    Paid to Date   Units      pancy     Credits      Partnerships
------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>             <C>                  <C>            <C>             <C>       <C>      <C>           <C>

Pine Gate         Ahoskie,        Regency Investment
Limited           California      Associates, Inc.,
Partnership                       Boyd Management,
                                  Inc. and Gordon L.
                                  Blackwell              272,000         272,000        56        98%         611,000      1,458,000

Silver Birch      Huron,          Philip R. Hammond,
Associates        California      Jr. and Diane M.
                                  Hammond                378,000         378,000        35        91%       1,131,000      1,347,000

Twin Pines        Groveland,      Donald S. Kavanagh
Apartments        California      and John N. Brezzo   1,278,000       1,278,000        39        79%       3,055,000      1,789,000
Associates

Ukiah Terrace     Ukiah,          Thomas G. Larson,
                  California      William H. Larson
                                  and Raymond L.
                                  Tetzlaff               349,000         349,000        41        98%         825,000      1,779,000

Woodlake Garden   Woodlake,       David J. Michael
Apartments        California      and Pamela J.
                                  Michael                548,000         548,000        48        98%       1,374,000      1,943,000

Yucca-Warren      Joshua Tree,    WNC & Associates,
Vista             California      Inc.                   520,000         520,000        50        96%       1,251,000      2,167,000
Associates                                             ---------      ----------      ----       ----      ----------     ----------
                                                    $ 12,914,000    $ 12,914,000       786        94%    $ 30,956,000   $ 28,626,000
                                                      ==========      ==========      ====       ====      ==========     ==========

</TABLE>




                                       6
<PAGE>

<TABLE>
<CAPTION>

                                      ------------------------------------------
                                          For the year ended December 31, 1998
                                      ------------------------------------------

                                                                   Low Income
                                                                 Housing Credits
                                           Rental         Net     Allocated to
Partnership Name                           Income         Loss    Partnership
--------------------------------------------------------------------------------
<S>                                    <C>          <C>                <C>

601 Main Street Investors              $   366,000  $   (353,000)      99%

ADI Development Partners                   119,000       (44,000)      90%

Bayless Garden Apartments Investors        168,000       (99,000)      99%

Blackberry Oaks, Ltd                       206,000       (17,000)      99%

Jacob's Square                             183,000      (109,000)      99%

Mecca Apartments II                        252,000      (164,000)      99%

Nevada Meadows                             192,000       (20,000)      99%

Northwest Tulare Associates                183,000      (117,000)      99%

Orland Associates                          187,000       (21,000)      99%

Pine Gate Limited Partnership              225,000        (6,000)      99%

Silver Birch Associates                    129,000       (36,000)      99%

Twin Pines Apartments Associates            95,000      (263,000)      99%

Ukiah Terrace                              179,000       (54,000)      99%

Woodlake Garden Apartments                 181,000       (52,000)      95%

Yucca-Warren Vista Associates, Ltd         214,000       (39,000)      99%
                                         ---------    ----------
                                       $ 2,879,000  $ (1,394,000)
                                         =========    ==========
</TABLE>

                                       7
<PAGE>

Item 3.  Legal Proceedings

NONE

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

NONE

PART II.

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 and  none  exists.  Units  can be
     assigned  only if certain  requirements  in the  Partnership  Agreement are
     satisfied.

(b)  At March 31, 1999, there were 1,272 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.

(d)  No unregistered  securities  were sold by the Partnership  during the three
     months ended March 31, 1999.

Item 5b.

NOT APPLICABLE

Item 6.  Selected Financial Data

Selected  balance  sheet  information  for the  Partnership  is as follows as of
December 31:
<TABLE>
<CAPTION>

                                 March 31                                      December 31
                         -------------------------  --------------------------------------------------------------

                               1999         1998         1998         1997         1996         1995         1994
                               ----         ----         ----         ----         ----         ----         ----
                                      (Unaudited)
ASSETS
Cash and cash
<S>                    <C>          <C>          <C>          <C>          <C>          <C>          <C>
  equivalents          $    364,853 $    379,515 $    379,754 $    377,378 $    517,151 $  1,113,575 $  1,692,560
Investments in
  limited
  partnerships, net       6,240,560    7,033,082    6,439,942    7,291,595    8,447,282    9,460,622   11,178,031
Other assets                      -        1,183            -            -       12,492       34,288        5,919
                          ---------    ---------    ---------    ---------    ---------   ----------   ----------
                       $  6,605,413 $  7,413,780 $  6,819,696 $  7,668,973 $  8,976,925 $ 10,788,485 $ 12,876,510
                          =========    =========    =========    =========    =========   ==========   ==========
LIABILITIES
Payable to limited
  partnerships         $          - $          - $          - $          - $          - $    555,000 $    967,593
Accrued fees and
  expenses due to
  general partner and
  affiliates              1,077,385      887,884    1,044,307      836,316      703,693      566,653      408,571

PARTNERS' EQUITY          5,528,028    6,525,896    5,775,389    6,832,657    8,273,232    9,666,832   11,500,346
                          ---------    ---------    ---------    ---------    ---------   ----------   ----------
                       $  6,605,413 $  7,413,780 $  6,819,696 $  7,668,973 $  8,976,925 $ 10,788,485 $ 12,876,510
                          =========    =========    =========    =========    =========   ==========   ==========
</TABLE>


                                       8

<PAGE>

Selected  results  of  operations,  cash  flows  and other  information  for the
Partnership is as follows:
<TABLE>
<CAPTION>

                           For the Three Months                          For the Years Ended
                              Ended March 31                                 December 31
                          ------------------------  -------------------------------------------------------------------
                               1999          1998         1998          1997           1996          1995          1994
                               ----          ----         ----          ----           ----          ----          ----
                                         (Unaudited)
<S>                     <C>           <C>          <C>          <C>            <C>            <C>          <C>
Loss from operations    $   (68,998)  $   (65,161) $  (274,539) $   (284,989)  $   (264,807)  $  (253,862) $   (342,010)

Equity in loss from
  limited partnerships     (178,363)     (241,600)    (782,729)   (1,155,586)    (1,128,793)   (1,579,652)   (1,194,095)
                           --------      --------    ---------    -----------    ----------    ----------    ----------
Net loss                $  (247,361)  $  (306,761) $(1,057,268) $ (1,440,575)  $ (1,393,600)  $(1,833,514) $ (1,536,105)
                           ========      ========    =========    ==========     ==========    ==========    ==========
Net loss allocated to:
   General partner      $    (2,474)  $    (3,068) $   (10,573) $    (14,406)  $    (13,936)  $   (18,335) $    (15,361)
                           ========      ========    =========    ==========     ==========    ==========    ==========
   Limited partners     $  (244,887)  $  (303,693) $(1,046,695) $ (1,426,169)  $ (1,379,664)  $(1,815,179) $ (1,520,744)
                           ========      ========    =========    ==========     ==========    ==========    ==========
Net loss per limited
  partner unit          $    (13.82)  $    (17.13) $    (59.05) $     (80.46)  $     (77.83)  $   (102.40) $     (85.79)
                           ========      ========    =========    ==========     ==========    ==========    ==========
Outstanding weighted
  limited partner
  units                      17,726        17,726       17,726        17,726         17,726        17,726        17,726
                           ========      ========    =========    ==========     ==========    ==========    ==========

                           For the Three Months                           For the Years Ended
                              Ended March 31                                  December 31
                          ------------------------  -------------------------------------------------------------------

                               1999          1998         1998          1997           1996          1995          1994
                               ----          ----         ----          ----           ----          ----          ----
                                         (Unaudited)
Net cash provided by
 (used in):
 Operating activities   $   (22,613) $     (1,469)$    (13,320)  $   (95,215)   $   (46,174)  $   (68,921)  $    42,033
 Investing activities         7,712         3,606       15,696       (44,558)      (550,250)     (510,064)   (2,299,805)
                           --------      --------    ---------   -----------     ----------    ----------    ----------
Net change in cash
  and cash equivalents      (14,901)        2,137        2,376      (139,773)      (596,424)     (578,985)   (2,257,772)

Cash and cash
  equivalents,
  beginning of period       379,754       377,378      377,378       517,151      1,113,575     1,692,560     3,950,332
                           --------      --------    ---------   -----------     ----------    ----------    ----------
Cash and cash
  equivalents, end of
  period                $   364,853  $    379,515 $    379,754  $    377,378   $    517,151  $  1,113,575     1,692,560
                           ========      ========    =========    ==========     ==========    ==========    ==========
</TABLE>

Low Income Housing Credit per limited  partner unit was as follows for the years
ended December 31:
<TABLE>
<CAPTION>

                                          1998               1997               1996             1995              1994
                                          ----               ----               ----             ----              ----
<S>                                 <C>                <C>               <C>             <C>               <C>
 Federal                            $      117         $      117        $       116     $        108      $         85
 State                                       9                 27                 37               98               109
                                      --------           --------          ---------       ----------        ----------
 Total                              $      126         $      144        $       153     $        206      $        194
                                      ========           ========          =========       ==========        ==========
</TABLE>

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

Financial Condition

The  Partnership's  assets at March 31, 1999 consisted  primarily of $364,853 in
cash and aggregate  investments  in the fifteen Local  Limited  Partnerships  of
$6,240,560.  Liabilities at March 31, 1999 primarily  consisted of $1,078,068 of
accrued annual management fees due to the General Partners.

                                       9


<PAGE>

Results of Operations

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.
The  Partnership's  net loss for the  three  months  ended  March  31,  1999 was
$(247,000),  reflecting a decrease of $60,000 from the net loss  experienced for
the three months ended March 31, 1998.  The decline in net loss is primarily due
to equity in losses  of  limited  partnerships  which  declined  by  $64,000  to
$(178,000)  for the three  months ended March 31, 1999 from  $(242,000)  for the
three months ended March 31, 1998. This decrease was a result of the Partnership
not  recognizing  certain  losses  of  the  Local  Limited   Partnerships.   The
investments in such Local Limited Partnerships reached $0 during 1998. Since the
Partnership's  liability with respect to its  investments is limited,  losses in
excess  of  investment  are not  recognized.  The  reduction  in  equity  losses
recognized was partially offset by an increase in loss from operations of $4,000
to $(69,000)  for the three months ended March 31, 1999 from  $(65,000)  for the
three  months ended March 31,  1998,  due to a comparable  increase in operating
expense allocations.

Year Ended  December 31, 1998  Compared to Year Ended  December  31,  1997.  The
Partnership's  net loss for 1998 was  $(1,057,000),  reflecting  a  decrease  of
$384,000  from the net loss  experienced  in 1997.  The  decline  in net loss is
primarily due to equity in losses from limited  partnerships  which  declined to
$(783,000) in 1998 from  $(1,156,000) in 1997. This decrease was a result of the
Partnership  not recognizing  certain losses of the Local Limited  Partnerships.
The investments in such Local Limited Partnerships reached $0 during 1998. Since
the Partnership's  liability with respect to its investments is limited,  losses
in excess of  investment  are not  recognized.  Other  operating  expenses  also
fluctuate  $(8,000)  to  $(10,000)  per  year,  depending  on the  needs  of the
Partnership.

Year Ended  December 31, 1997  Compared to Year Ended  December  31,  1996.  The
Partnership's  net loss for 1997 was  $(1,441,000),  reflecting  an  increase of
$(47,000)  from the net loss  experienced  in 1996.  The increase in net loss is
primarily  due  to a  $(27,000)  increase  in  recognized  losses  from  limited
partnerships  and an $(11,000)  decline in interest income  commensurate  with a
decline  in  cash  available  for  investment.  Other  operating  expenses  also
fluctuate  $(8,000)  to  $(10,000)  per  year,  depending  on the  needs  of the
Partnership.

Cash Flows

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.
Net cash used  during  the three  months  ended  March  31, 1999 was  $(15,000),
compared to a net  increase in cash for the three months ended March 31, 1998 of
$2,000.  The change was due primarily to an increase in cash paid to the general
partner or  affiliates  of $19,000,  and an increase in operating  costs paid to
third  parties of  $5,000,  partially  offset by an  increase  in  distributions
received from Local Limited Partnerships of $4,000.

Year Ended  December 31, 1998 Compared to Year Ended  December 31, 1997. The net
decrease in cash used in operating activities of $82,000 was primarily due to an
increase in the  deferral of fees and  expenses  due to the General  Partner and
affiliates.  Net cash provided by investing  activities  increased to $16,000 in
1998  compared  to a use of  $(45,000)  in 1997  primarily  as a  result  of the
Partnership making its final,  scheduled capital  contributions to Local Limited
Partnerships in 1997.

Year Ended  December 31, 1997 Compared to Year Ended  December 31, 1996. The net
change in cash and cash equivalents  declined to a net use of cash of $(140,000)
in 1997 compared to $(596,000) in 1996. The decline in cash uses is primarily as
a result of the Partnership making its final, scheduled capital contributions to
Local Limited Partnerships in 1997, net of recovery of certain loans made to the
Local Limited Partnerships.

During the three  months  ended March 31, 1999 and the year ended  December  31,
1998,  accrued  payables,  which consist of related party management fees due to
the General  Partner,  increased  by $33,000  and  $208,000,  respectively.  The
General  Partner does not anticipate  that these accrued fees will be paid until
such time as capital reserves are in excess of future forseeable working capital
requirements of the Partnership.

                                       10
<PAGE>

The Partnership  expects its future cash flows,  together with its net available
assets at March 31, 1999, to be  sufficient  to meet all  currently  foreseeable
future cash requirements.

Impact of Year 2000

WNC & Associates, Inc.

Status of Readiness

Information Technology (IT) Systems. The Partnership relies on the IT systems of
WNC, its ultimate  general  partner.  IT systems include  computer  hardware and
software  used to produce  financial  reports and tax return  information.  This
information  is then  used to  generate  reports  to  investors  and  regulatory
agencies, including the Internal Revenue Service and the Securities and Exchange
Commission. The IT systems of WNC are year 2000 compliant.

Non-IT Systems. The Partnership also relies on the non-IT systems of WNC. Non-IT
systems  include  machinery and  equipment  such as  telephones,  voice mail and
electronic  postage  equipment.  Except  for one  telephone  system,  the non-IT
systems of WNC are year 2000  compliant.  The one telephone  system will require
the replacement of one computer and one software application, both of which will
be completed on or before October 1, 1999.

Service  Providers.  WNC also  relies on the IT and  non-IT  systems  of service
providers. Service providers include utility companies,  financial institutions,
telecommunications carriers,  municipalities, and other outside vendors. WNC has
obtained verbal assurances from its material service providers (electrical power
provider,  financial institutions and telecommunications carriers) that their IT
and non-IT systems are year 2000 compliant.  There can be no assurance that this
compliance  information  is  correct.  There also can be no  assurance  that the
systems of other,  less-important  service providers and outside vendors will be
year 2000 compliant.

Costs to Address Year 2000 Issues

The cost to address  year 2000  issues for WNC has been less than  $20,000.  The
cost to replace the telephone  system noted above will be less than $5,000.  The
cost to deal with potential year 2000 issues of other outside  vendors cannot be
estimated at this time.

Risk of Year 2000 Issues

The most  reasonable and likely result from non-year 2000  compliance of systems
of the service  providers  noted above will be the disruption of normal business
operations for WNC. This disruption would, in turn, lead to delays in performing
reporting and fiduciary responsibilities on behalf of the Partnership. The worst
case scenario would be the replacement of a service provider. These delays would
likely  be  temporary  and  would  likely  not  have a  material  effect  on the
Partnership or WNC.

                                     11
<PAGE>

Local Limited Partnerships

Status of Readiness

WNC is in the  process of  obtaining  year 2000  certifications  from each Local
General Partner of each Local Limited  Partnership.  Those  certifications  will
represent  to the  Partnership  that the IT and non-IT  systems  critical to the
operation of the Housing Complexes and investor reporting to the Partnership are
year 2000 compliant. These certifications will also represent to the Partnership
that the IT and non-IT  systems of property  management  companies,  independent
accountants,    electrical   power   providers,   financial   institutions   and
telecommunications  carriers used by the Local Limited Partnership are year 2000
compliant.

There can be no assurance that the representations in the certifications will be
correct.   There  also  can  be  no   assurance   that  the  systems  of  other,
less-important  service  providers  and  outside  vendors,  upon which the Local
Limited Partnerships rely, will be year 2000 compliant.

Costs to Address Year 2000 Issues

There  will be no cost to the  Partnership  as a result of  assessing  year 2000
issues for the Local Limited Partnerships.  The cost to deal with potential year
2000 issues of the Local Limited Partnerships cannot be estimated at this time.

Risk of Year 2000 Issues

There may be Local  General  Partners who indicate  that they or their  property
management  company are not year 2000  compliant and do not have plans to become
year 2000  compliant  before the end of 1999.  There may be other Local  General
Partners who are  unwilling to respond to the  certification  request.  The most
likely result of either non-compliance or failure to respond will be the removal
and  replacement  of the property  management  company  and/or the Local General
Partner with year 2000 compliant operators.

Despite the efforts to obtain certifications, there can be no assurance that the
Partnership  will be unaffected  by year 2000 issues.  The most  reasonable  and
likely  result from non-year 2000  compliance  will be the  disruption of normal
business  operations  for the  Local  Limited  Partnerships,  including  but not
limited  to the  possible  failure  to  properly  collect  rents and meet  their
obligations in a timely manner.  This disruption  would, in turn, lead to delays
by  the  Local  Limited  Partnerships  in  performing  reporting  and  fiduciary
responsibilities  on behalf of the  Partnership.  The worst-case  scenario would
include the  initiation of  foreclosure  proceedings on the property by mortgage
debt holders. Under these circumstances, WNC or its affiliates will take actions
necessary  to  minimize  the risk of  foreclosure,  including  the  removal  and
replacement of a Local General  Partner by the  Partnership.  These delays would
likely  be  temporary  and  would  likely  not  have a  material  effect  on the
Partnership or WNC.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

NOT APPLICABLE

Item 8.  Financial Statements and Supplementary Data

                                       12
<PAGE>

               Report of Independent Certified Public Accountants


To the Partners
WNC California Housing Tax Credits II, L.P.


We have audited the  accompanying  balance sheets of WNC California  Housing Tax
Credits II, L.P. (a California  Limited  Partnership) (the  "Partnership") as of
March 31, 1999 and December 31, 1998, and the related  statements of operations,
partners'  equity  (deficit) and cash flows for the three months ended March 31,
1999 and the year ended December 31, 1998.  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.  A  significant
portion of the  financial  statements of the limited  partnerships  in which the
Partnership  is a limited  partner were audited by other  auditors whose reports
have been  furnished to us. As discussed in Note 2 to the financial  statements,
the Partnership  accounts for its investments in limited  partnerships using the
equity  method.   The  portion  of  the  Partnership's   investment  in  limited
partnership  represented 76% of the total assets of the Partnership at March 31,
1999 and December 31,  1998.  Our opinion,  insofar as it relates to the amounts
included in the financial  statements  for the limited  partnerships  which were
audited by others, is based solely on the reports of the other auditors.

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

In our opinion,  based on our audits and the reports of the other auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position  of WNC  California  Housing  Tax  Credits  II, L.P. (a
California Limited  Partnership) as of March 31, 1999 and December 31, 1998, and
the  results of its  operations  and its cash flows for the three  months  ended
March  31,  1999 and the year  ended  December  31,  1998,  in  conformity  with
generally accepted accounting principles.




                                                        BDO SEIDMAN, LLP

Orange County, California
July 7, 1999










                                       13

<PAGE>





                          INDEPENDENT AUDITORS' REPORT



To the Partners
WNC California Housing Tax Credits II, L.P.


We have audited the  accompanying  balance sheets of WNC California  Housing Tax
Credits II, L.P. ( a California Limited  Partnership) (the  "Partnership") as of
December 31, 1997, and the related  statements of operations,  partners'  equity
(deficit)  and cash  flows for each of the years in the  two-year  period  ended
December 31, 1997.  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  audit.  We did  not  audit  the  financial
statements  of the  limited  partnerships  in which WNC  California  Housing Tax
Credits II, L.P. 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 95% of the total assets of
WNC California  Housing Tax Credits II, L.P. at December 31, 1997. 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 these limited partnerships,  is based solely on the reports
of the other auditors.

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

In our opinion,  based on our audits and the reports of the other auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position  of WNC  California  Housing  Tax  Credits  II, L.P. (a
California Limited  Partnership) as of December 31, 1997, and the results of its
operations and its cash flows for each of the years in the two-year period ended
December 31, 1997, in conformity with generally accepted accounting principles.



                                                       CORBIN & WERTZ

Irvine, California
April 1, 1998








                                       14



<PAGE>


                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                                 BALANCE SHEETS



<TABLE>
<CAPTION>

                                                              March 31                        December 31
                                                    ------------------------------   ------------------------------

                                                             1999             1998             1998            1997
                                                             ----             ----             ----            ----
                                                                        (Unaudited)

ASSETS

<S>                                               <C>               <C>               <C>             <C>
Cash and cash equivalents                         $       364,853   $      379,515    $     379,754   $     377,378
Investments in limited  partnerships,
  net (Note 2)                                          6,240,560        7,033,082        6,439,942       7,291,595
Other assets                                                   -             1,183                -               -
                                                        ---------        ---------        ---------       ---------
                                                  $     6,605,413   $    7,413,780    $   6,819,696   $   7,668,973
                                                        =========        =========        =========       =========
LIABILITIES AND PARTNERS' EQUITY
  (DEFICIT)

Liabilities:
   Accrued  fees  and  expenses  due to  General
     Partner and affiliates (Note 3)              $     1,077,385   $      887,884    $   1,044,307   $     836,316
                                                        ---------        ---------        ---------       ---------
Commitments and contingencies

Partners' equity (deficit):
    General partner                                      (109,982)        (100,003)        (107,508)        (96,935)
    Limited partners  (20,000 units  authorized;
     17,726 units issued and outstanding)               5,638,010        6,625,899        5,882,897       6,929,592
                                                        ---------        ---------        ---------       ---------
      Total partners' equity                            5,528,028        6,525,896        5,775,389       6,832,657
                                                        ---------        ---------        ---------        --------
                                                  $     6,605,413   $    7,413,780    $   6,819,696   $   7,668,973
                                                        =========        =========        =========       =========

</TABLE>



                 See accompanying notes to financial statements
                                       15


<PAGE>


                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>


                                         For the Three Months Ended
                                                  March 31                     For the Years Ended December 31
                                         -----------------------------   -----------------------------------------

                                                1999            1998           1998            1997           1996
                                                ----            ----           ----            ----           ----
                                                            (Unaudited)

<S>                                     <C>             <C>            <C>            <C>             <C>
Interest income                         $      4,060    $      3,116   $     16,353   $      13,218   $     24,231
                                           ---------      ----------      ---------       ---------      ---------
Operating expenses:
  Amortization (Note 2)                       13,307          13,307         53,228          54,445         54,836
  Asset management fees (Note 3)              52,521          52,521        210,084         210,084        209,807
  Other                                        7,230           2,449         27,580          33,678         24,395
                                           ---------      ----------      ---------       ---------      ---------
    Total operating expenses                  73,058          68,277        290,892         298,207        289,038
                                           ---------      ----------      ---------       ---------      ---------

Loss from operations                         (68,998)        (65,161)      (274,539)       (284,989)      (264,807)

Equity in losses of limited
  partnerships (Note 2)                     (178,363)       (241,600)      (782,729)     (1,155,586)    (1,128,793)
                                           ---------      ----------      ---------       ---------      ---------
Net loss                                $   (247,361)   $   (306,761)  $ (1,057,268)  $  (1,440,575)  $ (1,393,600)
                                           =========      ==========      =========       =========      =========
Net loss allocated to:
  General partner                       $     (2,474)   $     (3,068)  $    (10,573)  $     (14,406)  $    (13,936)
                                           =========      ==========      =========       =========      =========
  Limited partners                      $   (244,887)   $   (303,693)  $ (1,046,695)  $  (1,426,169)  $ (1,379,664)
                                           =========      ==========      =========       =========      =========
Net loss per limited
  partnership unit                      $     (13.82)   $     (17.13)  $     (59.05)  $      (80.46)  $     (77.83)
                                           =========      ==========      =========       =========      =========
Outstanding weighted limited
  partner units                               17,726          17,726         17,726          17,726         17,726
                                           =========      ==========      =========       =========      =========

</TABLE>


                 See accompanying notes to financial statements
                                       16

<PAGE>


                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

                  For the Three Months Ended March 31, 1999 and
              For The Years Ended December 31, 1998, 1997 and 1996


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

Partners' equity (deficit)
  at January 1, 1996             $    (68,593)   $   9,735,425    $   9,666,832

Net loss                              (13,936)      (1,379,664)      (1,393,600)
                                    ---------       ----------       ----------
Partners' equity (deficit)
  at December 31, 1996                (82,529)       8,355,761        8,273,232

Net loss                              (14,406)      (1,426,169)      (1,440,575)
                                    ---------       ----------       ----------
Partners' equity (deficit)
  at December 31, 1997                (96,935)       6,929,592        6,832,657

Net loss                              (10,573)      (1,046,695)      (1,057,268)
                                    ---------       ----------       ----------
Partners' equity (deficit)
  at December 31, 1998               (107,508)       5,882,897        5,775,389

Net loss                               (2,474)        (244,887)        (247,361)
                                    ---------       ----------       ----------
Partners' equity (deficit)
  at March 31, 1999               $  (109,982)   $   5,638,010    $   5,528,028
                                    =========       ==========       ==========









                 See accompanying notes to financial statements
                                       17

<PAGE>
                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                         For the Three Months Ended
                                                  March 31                     For the Years Ended December 31
                                         ----------------------------   -------------------------------------------

                                                1999            1998           1998            1997           1996
                                                ----            ----           ----            ----           ----
                                                            (Unaudited)
Cash flows from operating activities:
<S>                                     <C>            <C>             <C>            <C>             <C>
   Net loss                             $   (247,361)  $    (306,761)  $ (1,057,268)  $  (1,440,575)  $ (1,393,600)

   Adjustments  to reconcile net loss
     to net cash used in operating
     activities:
       Amortization                           13,307          13,307         53,228          54,445         54,836
       Equity in losses of limited
         partnerships                        178,363         241,600        782,729       1,155,586      1,128,793
       Change in other assets                      -          (1,183)             -           2,706         26,757
       Increase in accrued fees and
         expenses due to General
         Partner and affiliates               33,078          51,568        207,991         132,623        137,040
                                          ----------     -----------     ----------      ----------     ----------

Net cash used in operating activities        (22,613)         (1,469)       (13,320)        (95,215)       (46,174)
                                          ----------     -----------     ----------      ----------     ----------
Cash flows from investing activities:
  Investments in limited
    partnerships, net                              -               -              -         (75,526)      (555,000)
  Distributions from limited
    partnerships                               7,712           3,606         15,696          22,399         11,319
  Change in loans receivable                       -               -              -           8,569         (6,569)
                                          ----------     -----------     ----------      ----------     ----------

Net  cash   provided   by  (used  in)
    investing activities                       7,712           3,606         15,696         (44,558)      (550,250)
                                          ----------     -----------     ----------      ----------     ----------
Net increase (decrease) in cash and
  cash equivalents                           (14,901)          2,137          2,376        (139,773)      (596,424)

Cash and cash equivalents, beginning
  of period                                  379,754         377,378        377,378         517,151      1,113,575
                                          ----------     -----------     ----------      ----------     ----------
Cash and cash equivalents, end of
  period                                $    364,853   $     379,515   $    379,754    $    377,378   $    517,151
                                          ==========     ===========     ==========      ==========     ==========
SUPPLEMENTAL DISCLOSURE OF
  CASH FLOW INFORMATION:
    Taxes paid                         $           -  $            -  $         800   $         800  $         800
                                          ==========     ===========     ==========      ==========     ==========

</TABLE>

                 See accompanying notes to financial statements
                                       18
<PAGE>
                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

       For the Three Months Ended March 31, 1999 and 1998 (Unaudited) and
              For The Years Ended December 31, 1998, 1997 and 1996


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

WNC  California  Housing Tax Credits II, L.P. a California  Limited  Partnership
(the  "Partnership"),  was formed on  September  13,  1990 under the laws of the
State of California.  The  Partnership  was formed to invest  primarily in other
limited  partnerships (the "Local Limited  Partnerships")  which own and operate
multi-family housing complexes (the "Housing Complex") that are eligible for low
income  housing tax credits.  The local  general  partners  (the "Local  General
Partners")  of  each  Local  Limited   Partnership  retain   responsibility  for
maintaining, operating and managing the Housing Complex.

The general partner is WNC Tax Credit  Partners,  L.P. (the "General  Partner").
WNC & Associates, Inc. ("WNC") and Wilfred N. Cooper are the general partners of
WNC Tax  Credit  Partners,  L.P.  Wilfred  N.  Cooper  Sr.,  through  the Cooper
Revocable Trust owns 66.8% of the outstanding stock of WNC. John B. Lester,  Jr.
was the original limited partner of the Partnership and owns, through the Lester
Family Trust, 28.6% of the outstanding stock of WNC.

The Partnership  shall continue in full force and effect until December 31, 2045
unless  terminated  prior to that date pursuant to the partnership  agreement or
law.

The financial  statements  include only activity relating to the business of the
Partnership,  and do not give  effect to any assets that the  partners  may have
outside of their interests in the Partnership, or to any obligations,  including
income taxes, of the partners.

The  Partnership  Agreement  authorized the sale of up to 20,000 units at $1,000
per Unit  ("Units").  The  offering of Units  concluded in January 1993 at which
time 17,726 Units, representing subscriptions in the amount of $17,726,000,  had
been accepted.  The General  Partner has a 1% interest in operating  profits and
losses,  taxable  income and losses,  cash available for  distribution  from the
Partnership  and tax credits of 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  proceeds
equal  to its  capital  contribution  and a  subordinated  disposition  fee  (as
described in Note 3) from the  remainder,  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.

Change in Reporting Year End

The  Partnership  has  elected  to change its year end for  financial  reporting
purposes from December 31 to March 31. All  financial  information  reflected in
the financial statements and related footnotes has been adjusted for this change
in year end except for the combined condensed financial  information relating to
the Local Limited Partnerships included in Note 2.

Due to the change in year end, unaudited financial information as of and for the
three months ended March 31, 1998 is included in the  financial  statements  for
comparative  purposes  only.  The  financial  statements as of and for the three
months  ended  March  31,  1998  are  unaudited  but  include  all   adjustments
(consisting  of normal  recurring  adjustments)  which  are,  in the  opinion of
management,  necessary for a fair statement of financial position and results of
operations of the Partnership for the interim period.


                                       19
<PAGE>

                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

       For the Three Months Ended March 31, 1999 and 1998 (Unaudited) and
              For The Years Ended December 31, 1998, 1997 and 1996


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

Risks and Uncertainties

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 of multi-unit  residential  real estate.  Some of these
risks  are that the low  income  housing  credit  could be  recaptured  and that
neither the  Partnership's  investments  nor the Housing  Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes  receive  government  financing  or operating  subsidies,  they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests;  limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations.  The Housing Complexes are or will be subject
to mortgage  indebtedness.  If a Local  Limited  Partnership  does not makes its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex  and low  income  housing  credits.  As a limited  partner  of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local  Limited  Partnerships,  and will rely totally on the
Local General  Partners of the Local Limited  Partnerships for management of the
Local 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  Housing  Complexes  and the
Partnership.  In addition,  each Local Limited  Partnership  is subject to risks
relating  to  environmental   hazards  and  natural  disasters  which  might  be
uninsurable. Because the Partnership's 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 the  anticipated  low income  housing
credits will be available to Limited Partners.

In addition,  Limited  Partners are subject to risks in that the rules governing
the low income  housing  credit are  complicated,  and the use of credits can be
limited.  The only  material  benefit from an investment in Units may be the low
income housing credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop.  All management decisions will
be made by the General Partner.

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 Local Limited  Partnership's  results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnerships are consistent with those of the Partnership. Costs incurred by the
Partnership  in  acquiring  the  investments  are  capitalized  as  part  of the
investment account and are being amortized over 30 years (see Note 2).

Losses from limited partnerships for the years ended December 31, 1998, 1997 and
1996 have been recorded by the Partnership based on reported results provided by
the Local Limited  Partnerships.  Losses from limited partnerships for the three
months ended March 31, 1999 and 1998 have been  estimated by  management  of the
Partnership. Losses from Local Limited Partnerships allocated to the Partnership
are not recognized to the extent that the  investment  balance would be adjusted
below zero.

                                       20

<PAGE>
                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

       For the Three Months Ended March 31, 1999 and 1998 (Unaudited) and
              For The Years Ended December 31, 1998, 1997 and 1996

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

Offering Expenses

Offering  expenses consist of underwriting  commissions,  legal fees,  printing,
filing and  recordation  fees,  and other costs  incurred  with selling  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 and amounted to $2,389,519 at the end
of all periods presented.

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  highly  liquid   investments  with  remaining
maturities of three months or less when purchased to be cash equivalents.  As of
March  31,  1999 and  December  31,  1998 and  1997,  the  Partnership  had cash
equivalents of $363,876, $378,777 and $375,601, respectively.

Concentration of Credit Risk

At March 31, 1999, the Partnership maintained cash balances at certain financial
institutions in excess of the federally insured maximum.

Net Loss Per Limited Partner Unit

Net loss per limited  partnership  unit is  calculated  pursuant to Statement of
Financial  Accounting  Standards No. 128,  Earnings Per Share. Net loss per unit
includes no dilution  and is computed  by  dividing  loss  available  to limited
partners by the weighted average number of units outstanding during the period.
Calculation of diluted net income per unit is not required.

Reporting Comprehensive Income

In June 1997,  the FASB  issued  Statement  of  Financial  Accounting  Standards
("SFAS") No. 130, Reporting  Comprehensive  Income.  This statement  establishes
standards for reporting the components of comprehensive income and requires that
all items that are  required to be  recognized  under  accounting  standards  as
components of comprehensive  income be included in a financial statement that is
displayed with the same prominence as other financial statements.  Comprehensive
income  includes net income as well as certain items that are reported  directly
within a separate  component  of  partners'  equity and bypass net  income.  The
Partnership  adopted the  provisions of this  statement in 1998. For the periods
presented,  the Partnership has no elements of other  comprehensive  income,  as
defined by SFAS No. 130.

                                       21

<PAGE>
                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

       For the Three Months Ended March 31, 1999 and 1998 (Unaudited) and
              For The Years Ended December 31, 1998, 1997 and 1996

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS

As of the periods  presented,  the Partnership has acquired limited  partnership
interests in fifteen Local Limited  Partnerships  each of which owns one Housing
Complex  consisting  of an  aggregate of 786  apartment  units.  The  respective
general  partners  of the  Local  Limited  Partnerships  manage  the  day to day
operations  of the entities.  Significant  Local  Limited  Partnership  business
decisions require approval from the Partnership.  The Partnership,  as a limited
partner,  is  generally  entitled  to 99%,  as  specified  in the Local  Limited
Partnership agreements,  of the operating profits and losses, taxable income and
losses and tax credits of the Limited Partnerships.

The  Partnership's  investments  in Local Limited  Partnerships  as shown in the
balance  sheets at December 31, 1998 and 1997 are  approximately  $1,835,000 and
$1,328,000,  respectively, greater than the Partnership's equity as shown in the
Local Limited Partnerships  financial  statements.  This difference is primarily
due to unrecorded  losses,  as discussed below,  and acquisition,  selection and
other  costs  related  to the  acquisition  of the  investments  which have been
capitalized in the Partnership's investment account.

Equity  in  losses  of the  Local  Limited  Partnerships  is  recognized  in the
financial  statements until the related  investment account is reduced to a zero
balance. Losses incurred after the investment account is reduced to zero are not
recognized. If the Local Limited Partnerships report net income in future years,
the  Partnership  will resume applying the equity method only after its share of
such net  income  equals  the share of net  losses  not  recognized  during  the
period(s) the equity method was suspended.

Distributions  received by limited  partners are accounted for as a reduction of
the investment balance.  Distributions received after the investment has reached
zero are recognized as income.

At March 31, 1999, the investment accounts in certain Local Limited Partnerships
have  reached  a zero  balance.  Consequently,  a portion  of the  Partnership's
estimate  of its  share of losses  for the three  months  ended  March 31,  1999
amounting to approximately $159,294 have not been recognized.  The Partnership's
share of losses during the years ended  December 31, 1998 and 1997  amounting to
approximately $567,892 and $152,775,  respectively, have not been recognized. As
of March 31,  1999,  the  aggregate  share of net losses not  recognized  by the
Partnership amounted to $879,961.

Following is a summary of the equity method activity of the investments in Local
Limited Partnerships for the periods presented:
<TABLE>
<CAPTION>

                                         For the Three
                                          Months Ended             For the Years Ended
                                           March 31                   December 31
                                        ---------------    -----------------------------------

                                                  1999               1998                1997
                                                  ----               ----                ----

Investments per balance sheet,
<S>                                      <C>             <C>                 <C>
  beginning of period                    $   6,439,942   $      7,291,595    $      8,447,282
Capital contributions paid, net                      -                  -              75,526
Distributions received                          (7,712)           (15,696)            (22,399)
Equity in losses of limited
  partnerships                                (178,363)          (782,729)         (1,155,586)
Amortization of paid acquisition
  fees and costs                               (13,307)           (53,228)            (53,228)
                                            ----------         ----------          ----------
Investments per balance sheet,
  end of period                          $   6,240,560   $      6,439,942    $      7,291,595
                                            ==========         ==========          ==========
</TABLE>

                                       22




<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

       For the Three Months Ended March 31, 1999 and 1998 (Unaudited) and
              For The Years Ended December 31, 1998, 1997 and 1996

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

The financial  information from the individual financial statements of the Local
Limited Partnerships include rental and interest subsidies. Rental subsidies are
included in total revenues and interest  subsidies are generally  netted against
interest expense.  Approximate combined condensed financial information from the
individual financial statements of the Local Limited Partnerships as of December
31 and for the years then ended is as follows:

                        COMBINED CONDENSED BALANCE SHEETS

                                                        1998             1997
                                                        ----             ----
ASSETS

Buildings and improvements,(net of accumulated
  depreciation for 1998 and 1997 of $7,793,000
  and $6,533,000, respectively)                   $  31,200,000    $  32,347,000
Land                                                  2,465,000        2,465,000
Other assets                                          2,656,000        2,627,000
                                                     ----------       ----------
                                                  $  36,321,000    $  37,439,000
                                                     ==========       ==========

LIABILITIES

Mortgage and construction loans payable           $  28,626,000    $  28,603,000
Other liabilities (including due to related
  parties of $582,000 and $536,000 as of
  December  31, 1998 and 1997, respectively)          2,719,000        2,413,000
                                                     ----------       ----------
                                                     31,345,000       31,016,000
                                                     ----------       ----------
PARTNERS' CAPITAL

WNC California Housing Tax Credits II, L.P            4,605,000        5,964,000
Other partners                                          371,000          459,000
                                                     ----------       ----------
                                                      4,976,000        6,423,000
                                                     ----------       ----------
                                                  $  36,321,000    $  37,439,000
                                                     ==========       ==========


                                       23


<PAGE>
                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

       For the Three Months Ended March 31, 1999 and 1998 (Unaudited) and
              For The Years Ended December 31, 1998, 1997 and 1996

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

                                      1998             1997            1996
                                      ----             ----            ----
Revenues                        $  3,034,000     $  3,021,000    $  3,081,000
                                  ----------       ----------      ----------
Expenses:
  Operating expenses               2,220,000        2,137,000       2,043,000
  Interest expense                   924,000          935,000         875,000
  Depreciation and
    amortization                   1,284,000        1,276,000       1,305,000
                                  ----------       ----------      ----------
   Total expenses                  4,428,000        4,348,000       4,223,000
                                  ----------       ----------      ----------
Net loss                        $ (1,394,000)    $ (1,327,000)   $ (1,142,000)
                                  ==========       ==========      ==========
Net loss allocable
  to the Partnership            $ (1,351,000)    $ (1,312,000)   $ (1,129,000)
                                  ==========       ==========      ==========
Net loss recorded
  by the Partnership            $   (783,000)    $ (1,159,000)   $ (1,129,000)
                                  ==========       ==========      ==========

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

NOTE 3 - RELATED PARTY TRANSACTIONS

Under the terms of the  Partnership  Agreement,  the  Partnership has paid or is
obligated to the General Partner or its affiliates for the following items:

         Acquisition  fees  equal to 9% of the gross  proceeds  from the sale of
         Units as  compensation  for services  rendered in  connection  with the
         acquisition  of Local Limited  Partnerships.  At the end of all periods
         presented,  the Partnership  incurred  acquisition  fees of $1,595,340.
         Accumulated  amortization  of these  capitalized  costs  was  $364,674,
         $351,380  and  $298,204 as of March 31, 1999 and  December 31, 1998 and
         1997, respectively.

         Reimbursement of costs incurred by an  affiliate of the General Partner
         in connection  with the  acquisition  of  Local  Limited  Partnerships.
         These reimbursements have not exceeded 1.7% of  the gross proceeds.  As
         of  the  end  of  all  periods  presented,  the  Partnership   incurred
         acquisition costs of $1,520 which have been  included in investments in
         limited partnerships.  Accumulated  amortization  was insignificant for
         the periods presented.

         An annual  management  fee equal to 0.5% of the invested  assets of the
         Local Limited Partnerships, including the Partnership's allocable share
         of the mortgages.  Management  fees of $52,521 were incurred during the
         three months ended March 31, 1999 and  $210,084,  $210,084 and $209,807
         were incurred for 1998, 1997 and 1996,  respectively,  of which $19,400
         were paid during the three months ended March 31, 1999 and $0,  $75,000
         and $75,000 were paid in 1998, 1997 and 1996, respectively.

                                       24

<PAGE>

                   WNC CALIFORNIA HOUSING TAX CREDITS II, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

       For the Three Months Ended March 31, 1999 and 1998 (Unaudited) and
              For The Years Ended December 31, 1998, 1997 and 1996

NOTE 3 - RELATED PARTY TRANSACTIONS, continued

          A subordinated  disposition  fee in an amount equal to 1% of the sales
          price of real estate sold.  Payment of this fee to the General Partner
          is  subordinated  to the limited  partners  who receive a 6% preferred
          return (as defined in the  Partnership  Agreement) and is payable only
          if the General Partner or its affiliates  render services in the sales
          effort.

          An affiliate of the General Partner provides  management  services for
          two of the  properties in the Local Limited  Partnerships.  Management
          fees were  earned by the  affiliate  in the  amount of $7,300  for the
          three months  ended March 31, 1999 and  $40,513,  $4,130 and $0 during
          1998, 1997 and 1996,  respectively.  In May 1999, the affiliate of the
          General  Partner  refunded  $14,503 and $2,076 of the management  fees
          related  to 1998  and  1997,  respectively,  in  accordance  with  the
          Partnership's prospectus.

The accrued fees and expenses due to General  Partner and affiliates  consist of
the following:

                                     March 31               December 31
                                  -------------   ------------------------------

                                       1999             1998           1997
                                       ----             ----           ----
Reimbursement  for expenses
  paid by the General Partner
  or an affiliate                 $       (683)    $       (640)   $     1,453

Asset management fee payable         1,078,068        1,044,947        834,863
                                     ---------        ---------      ---------

Total                             $  1,077,385     $  1,044,307    $   836,316
                                     =========        =========      =========

The General  Partner does not anticipate that these accrued fees will be paid in
full  until such time as capital  reserves  are in excess of future  foreseeable
working capital requirements of the Partnership.

NOTE 4 - 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.


                                       25

<PAGE>

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

NOT APPLICABLE

PART III.

Item 10.  Directors and Executive Officers of the Registrant

Directors of Registrant

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

Directors and Executive Officers of WNC & Associates, Inc.

The directors of WNC & Associates,  Inc. 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.  The principal  shareholders of WNC & Associates,
Inc. are trusts established by Wilfred N. Cooper, Sr. and John B. Lester, Jr.

Wilfred N. Cooper,  Sr., age 68, is the founder,  Chief Executive  Officer and a
Director of WNC & Associates, Inc., a Director of WNC Capital Corporation, and a
general partner in some of the programs previously sponsored by the Sponsor. Mr.
Cooper has been involved in real estate  investment and  acquisition  activities
since 1968.  Previously,  during 1970 and 1971,  he was founder and 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 where
he  had  responsibility   for  factory-built   housing  evaluation  and  project
management in urban  planning and  development.  Mr. Cooper is a Director of the
National  Association of Home Builders (NAHB) and a National  Trustee for NAHB's
Political Action Committee,  a Director of the National Housing Conference (NHC)
and a  member  of NHC's  Executive  Committee  and a  Director  of the  National
Multi-Housing  Council (NMHC).  Mr. Cooper graduated from Pomona College in 1956
with a Bachelor of Arts degree.

John B. Lester, Jr., age 65, is President, a Director, Secretary and a member of
the  Acquisition  Committee  of WNC &  Associates,  Inc.,  and a Director of WNC
Capital  Corporation.  Mr. Lester has 27 years of experience in engineering  and
construction  and has been involved in real estate  investment  and  acquisition
activities since 1986 when he joined the Sponsor. Previously, 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  graduated  from  the
University of Southern  California in 1956 with a Bachelor of Science  degree in
Mechanical Engineering.

Wilfred N. Cooper,  Jr., age 36, is Executive Vice  President,  a Director and a
member of the  Acquisition  Committee of WNC & Associates,  Inc. He is President
of, and a registered principal with, WNC Capital  Corporation,  a member firm of
the NASD,  and is a Director of WNC  Management,  Inc.  He has been  involved in
investment  and  acquisition  activities  with  respect to real estate  since he
joined  the  Sponsor in 1988.  Prior to this,  he served as  Government  Affairs
Assistant with Honda North America in Washington, D.C. Mr. Cooper is a member of
the Advisory Board for LIHC Monthly Report,  a Director of NMHC and an Alternate
Director of NAHB.  He  graduated  from The  American  University  in 1985 with a
Bachelor of Arts degree.

                                       26

<PAGE>


David N. Shafer, age 47, is Senior Vice President, a Director,  General Counsel,
and a member of the  Acquisition  Committee  of WNC &  Associates,  Inc.,  and a
Director and Secretary of WNC  Management,  Inc. Mr. Shafer has been involved in
real estate  investment and acquisition  activities since 1984. Prior to joining
the Sponsor in 1990, he was  practicing  law with a specialty in real estate and
taxation.  Mr. Shafer is a Director and President of the  California  Council of
Affordable  Housing  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 (cum laude) and from the  University  of San Diego in 1986 with a
Master of Law degree in Taxation.

Michael L. Dickenson, age 42, is Vice President and Chief Financial Officer, and
a member of the  Acquisition  Committee  of WNC &  Associates,  Inc.,  and Chief
Financial Officer of WNC Management,  Inc. He has been involved with acquisition
and  investment  activities  with  respect to real estate  since 1985.  Prior to
joining the Sponsor in March 1999, he was the Director of Financial  Services at
TrizecHahn  Centers Inc., a developer  and operator of  commercial  real estate,
from 1995 to 1999,  a Senior  Manager  with E&Y  Kenneth  Leventhal  Real Estate
Group, Ernst & Young, LLP, from 1988 to 1995, and Vice President of Finance with
Great Southwest  Companies,  a commercial and residential real estate developer,
from  1985 to 1988.  Mr.  Dickenson  is a  member  of the  Financial  Accounting
Standards  Committee for the National  Association of Real Estate  Companies and
the  American  Institute  of  Certified  Public  Accountants,  and a Director of
HomeAid  Southern  California,  a charitable  organization  affiliated  with the
building  industry.  He  graduated  from  Texas Tech  University  in 1978 with a
Bachelor of Business  Administration  -  Accounting  degree,  and is a Certified
Public Accountant in California and Texas.

Thomas J. Riha, age 44, is Vice President - Asset Management and a member of the
Acquisition  Committee  of WNC &  Associates,  Inc.  and a  Director  and  Chief
Executive  Officer  of WNC  Management,  Inc.  Mr.  Riha  has been  involved  in
acquisition  and investment  activities  with respect to real estate since 1979.
Prior to joining the  Sponsor in 1994,  Mr.  Riha was  employed by Trust  Realty
Advisor, a real estate acquisition and management company,  last serving as Vice
President - Operations. 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  and  a  member  of  the  American   Institute  of  Certified  Public
Accountants.

Sy P. Garban,  age 53, is Vice  President - National  Sales of WNC & Associates,
Inc.  and has been  employed by the  Sponsor  since  1989.  Mr.  Garban has been
involved in real estate  investment  activities since 1978. Prior to joining the
Sponsor he served as  Executive  Vice  President  of MRW,  Inc.,  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.

N. Paul Buckland,  age 36, is Vice President - Acquisitions of WNC & Associates,
Inc. He has been involved in real estate acquisitions and investments since 1986
and has been employed with WNC & Associates,  Inc. since 1994. Prior to that, he
served on the  development  team of the Bixby Ranch that  constructed  apartment
units and Class A office space in California and  neighboring  states,  and 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.

David Turek, age 44, is Vice President - Originations of WNC & Associates,  Inc.
He has been involved with real estate  investment and finance  activities  since
1976 and has been employed by WNC & Associates,  Inc.  since 1996.  From 1995 to
1996,  Mr. Turek served as a consultant  for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties.  From 1990 to 1995, he was involved in the development of
conventional  and tax credit  multi-family  housing.  He is a Director  with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.

                                       27

<PAGE>


Kay L. Cooper,  age 62, is a Director of WNC & Associates,  Inc. Mrs. Cooper was
the founder and sole  proprietor  of Agate 108, a  manufacturer  and retailer of
home  accessory  products,  from 1975 until 1998.  She is the wife of Wilfred N.
Cooper,  Sr.,  the mother of Wilfred  N.  Cooper,  Jr. and the sister of John B.
Lester,  Jr. Ms. 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 its  affiliates  during the current or future years for the following
fees:

(a)  Annual Asset  Management  Fee. An annual asset  management fee in an amount
     equal  to 0.5% of the  Invested  Assets  of the  Partnership,  as  defined.
     "Invested  Assets" means the sum of the  Partnership's  Investment in Local
     Limited Partnership Interests and the Partnership's  allocable share of the
     amount of the  mortgage  loans on and other  debts  related to, the Housing
     Complexes  owned by such Local  Limited  Partnerships.  Fees of $52,521 and
     $210,084 were incurred during the three months ended March 31, 1999 and for
     the year December 31, 1998, respectively.  The Partnership paid the General
     Partner or its  affiliates  $19,400  and $0 of those fees  during the three
     months ended March 31, 1999 and the year December 31, 1998, respectively.

(b)  Subordinated  Disposition Fee. A subordinated  disposition fee in an amount
     equal to 1% of the  sale  price  received  in  connection  with the sale or
     disposition  of a Housing  Complex or Local Limited  Partnership  Interest.
     Subordinated  disposition  fees will be subordinated to the prior return of
     the Limited  Partners'  capital  contributions and payment of the Preferred
     Return on investment to the Limited Partners.  "Preferred  Return" means an
     annual,  cumulative but not  compounded,  "return" to the Limited  Partners
     (including Low Income Housing Credits) as a class on their adjusted capital
     contributions  commencing  for each Limited  Partner on the last day of the
     calendar quarter during which the Limited Partner's capital contribution is
     received by the  Partnership,  calculated at the following  rates:  (i) 16%
     through  December 31, 2001, and (ii) 6% for the balance of the Partnerships
     term. No disposition fees have been paid.

(c)  Operating  Expense.  The Partnership over reimbursed the General Partner or
     its affiliates for operating expenses of approximately $0 and $1,000 during
     the three months ended March 31, 1999 and the year ended December 31, 1998,
     respectively.

(d)  Interest  in  Partnership.   The  General   Partners   receive  1%  of  the
     Partnership's  allocated Low Income Tax Housing Credits, which approximated
     $22,000  for the  General  Partner for the year ended  December  31,  1998,
     respectively.  The General Partners are also entitled to receive 1% of cash
     distributions.  There were no distributions of cash to the General Partners
     during the three months ended March 31, 1999 or the year ended December 31,
     1998.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

(a)  Security Ownership of Certain Beneficial Owners

     No person is known to own  beneficially  in excess of 5% of the outstanding
     Units.

(b)  Security Ownership of Management

     Neither the General  Partner,  its  affiliates,  nor any of the officers or
     directors  of  the  General  Partner  or its  affiliates  own  directly  or
     beneficially any Units in the Partnership.

                                       28
<PAGE>

(c)  Changes in Control

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

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

Item 13.  Certain Relationships and Related Transactions

The General Partner manages all of the Partnership's  affairs.  The transactions
with  the  General  Partner  are  primarily  in the  form  of  fees  paid by the
Partnership for services  rendered to the Partnership and the General  Partner's
interest in the  Partnership,  as  discussed  in Item 11 and in the notes to the
Partnership's financial statements.














                                       29
<PAGE>

PART IV.

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

(a)(1)   Financial statements included in Part II hereof:

         Report of Independent Certified Public Accountants
         Independent Auditors' Report
         Balance Sheets,  March 31, 1999  and 1998 (unaudited)  and December 31,
           1998 and 1997
         Statements of Operations  for the three months ended March 31, 1999 and
           1998  (unaudited)  and  for the  years ended December 31, 1998,  1997
           and 1996
         Statements  of  Partners'  Equity for  the three months ended March 31,
           1999 and for the years ended December 31, 1998, 1997 and 1996
         Statements  of Cash Flows for the three months ended March 31, 1999 and
           1998 (unaudited) and for the years ended December 31, 1998,  1997 and
           1996
         Notes to Financial Statements

(a)(2)   Financial statement schedules included in Part IV hereof:

         Report of Independent Certified Public Accountants  on Financial State-
           ment Schedules
         Schedule III - Real Estate Owned by Local Limited Partnerships

(b)      Reports on Form 8-K.

1.       A Form 8-K dated May 13, 1999 was filed on May 14,  1999 reporting  the
         Partnership's change in fiscal year  end  to  March  31.  No  financial
         statements were included.

(c)      Exhibits.

3.1      Agreement  of  Limited  Partnership dated as of September 13, 1990, in-
         cluded as Exhibit  28.1 to the Form 10-K filed for  the year ended  De-
         cember 31, 1992, is hereby incorporated herein as Exhibit 3.1.

10.1     Amended and Restated  Agreement of  Limited  Partnership  Orland  Asso-
         ciates dated  June 15, 1991 filed  as  exhibit  10.1 to Form 10-K dated
         December 31, 1992 is hereby incorporated herein by reference as exhibit
         10.1.

10.2     Amended and Restated Agreement of Limited  Partnership Ukiah  Terrace a
         California Limited Partnership dated  June 15, 1991  filed  as  exhibit
         10.2 to Form  10-K  dated  December  31,  1992 is  hereby  incorporated
         herein by reference as exhibit 10.2.

10.3     Amended and Restated Agreement of Limited Partnership  Northwest Tulare
         Associates dated July 3, 1991 filed as exhibit  10.3 to Form 10-K dated
         December 31, 1992 is hereby incorporated herein by reference as exhibit
         10.3.

10.4     Second Amended  and  Restated  Agreement of  Limited  Partnership Yucca
         Warren Vista,  Ltd.  dated July 15, 1991 filed as exhibit  10.4 to Form
         10-K dated December 31, 1992 is hereby incorporated herein by reference
         as exhibit 10.4.

                                       30
<PAGE>

10.5     Amended and  Restated  Agreement  of  Limited Partnership  of  Woodlake
         Garden Apartments  dated July 17,  1991  filed as exhibit  10.5 to Form
         10-K dated December 31, 1992 is hereby incorporated herein by reference
         as exhibit 10.5.

10.6     Amended and Restated  Agreement  of  Limited  Partnership  of  601 Main
         Street Investors  dated December 22, 1991 filed as exhibit 10.6 to Form
         10-K dated December 31, 1992 is hereby incorporated herein by reference
         as exhibit 10.6.

10.7     Amended and Restated Agreement of Limited  Partnership of ADI  Develop-
         ment Partners  dated  January  2, 1992  filed as  exhibit  10.7 to Form
         10-K dated December 31, 1992 is hereby incorporated herein by reference
         as exhibit 10.7.

10.8     Amended and Restated Agreement of Limited Partnership of Bayless Garden
         Apartment  Investors  dated  January  2, 1992 filed as exhibit  10.8 to
         Form 10-K dated  December 31, 1992  is hereby  incorporated  herein  by
         reference as exhibit 10.8.

10.9     Third  Amended  and Restated  Agreement of Limited  Partnership of Twin
         Pines Apartment  Associates dated January 2, 1992 filed as exhibit 10.9
         to Form 10-K dated December 31, 1992 is hereby  incorporated  herein by
         reference as exhibit 10.9.

10.10    Amended and Restated  Agreement of  Limited  Partnership  of Blackberry
         Oaks, Ltd.  dated  January  15,  1992 filed as  exhibit  10.10 to  Form
         10-K dated December 31, 1992 is hereby incorporated herein by reference
         as exhibit 10.10.

10.11    Amended and Restated  Agreement of Limited  Partnership of Mecca Apart-
         ments II dated  January 15,  1992 filed as exhibit  10.11 to Form  10-K
         dated December  31, 1992 is hereby  incorporated  herein  by  reference
         as exhibit 10.11.

10.12    Amended and Restated Agreement of Limited Partnership  of Silver  Birch
         Limited  Partnership dated November 23, 1992 filed as  exhibit 10.12 to
         Form 10-K dated December 31, 1992  is  hereby  incorporated  herein  by
         reference as exhibit 10.12.

10.13    Amended and Restated Agreement of Limited Partnership of Jacob's Square
         dated January 2, 1992 filed as exhibit 10.1 to Form 10-K dated December
         31, 1993 is hereby incorporated herein by reference as exhibit 10.13.

10.14    Amended and restated  limited  partnership agreement of Nevada Meadows,
         A California  Limited  Partnership  as  exhibit 10.2 to Form 10-K dated
         December 31, 1993 is hereby incorporated herein by reference as exhibit
         10.14.

21.1     Financial  Statements of Mecca  Apartments II, for  the years ended De-
         cember 31, 1998 and 1997  together  with  auditors  report  thereon;  a
         significant subsidiary of the Partnership.

(d)      Financial  statement  schedules  follow,  as  set  forth  in subsection
         (a)(2) hereof.


                                       31

<PAGE>


              Report of Independent Certified Public Accountants on
                          Financial Statement Schedules




To the Partners
California Housing Tax Credits II, L.P.


The audits  referred to in our report  dated July 7, 1999,  relating to the 1999
and 1998  financial  statements of WNC  California  Housing Tax Credits II, L.P.
(the  "Partnership"), which is contained in Item 8 of this Form 10-K,  included
the audit of the  accompanying  financial  statement  schedules.  The  financial
statement schedules are the responsibility of the Partnership's management.  Our
responsibility is to express an opinion on these financial  statement  schedules
based upon our audits.

In our opinion,  such  financial  statement  schedules  present  fairly,  in all
material respects, the financial information set forth therein.



                                                      BDO SEIDMAN, LLP


Orange County, California
July 7, 1999



















                                       32

<PAGE>

WNC California Housing Tax Credits II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999
<TABLE>
<CAPTION>

                                         -----------------------------------  ------------------------------------------------------
                                                    As of March 31, 1999                       As of December 31, 1998
                                         -----------------------------------  ------------------------------------------------------
                                           Total Investment     Amount of     Encumbrances of                              Net
                                           in Local Limited  Investment Paid  Local Limited   Property and  Accumulated    Book
Partnership Name            Location       Partnerships          to Date      Partnerships     Equipment    Depreciation   Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>            <C>              <C>            <C>             <C>          <C>            <C>

601 Main Street             Stockton,
Investors                   California     $  1,656,000     $  1,656,000   $  4,011,000    $  5,553,000 $  1,294,000   $  4,259,000

ADI Development             Delhi,
Partners                    California          699,000          699,000      1,226,000       1,898,000      348,000      1,550,000

Bayless Garden              Red Bluff,
Apartments Investors        California        1,110,000        1,110,000      1,291,000       2,560,000      655,000      1,905,000

Blackberry Oaks, Ltd        Lodi,
                            California          463,000          463,000      1,934,000       2,419,000      344,000      2,075,000

Jacob's Square              Exeter,
                            California        1,324,000        1,324,000      1,717,000       2,860,000      497,000      2,363,000

Mecca Apartments II         Mecca,
                            California        2,200,000        2,200,000      2,519,000       4,361,000      436,000      3,925,000

Nevada Meadows              Grass Valley,
                            California          459,000          459,000      1,940,000       2,593,000      292,000      2,301,000

Northwest Tulare            Ivanhoe,
Associates                  California        1,226,000        1,226,000      1,787,000       2,952,000      754,000      2,198,000

Orland Associates           Orland,
                            California          432,000          432,000      1,718,000       2,246,000      371,000      1,875,000

Pine Gate Limited           Ahoskie,
Partnership                 California          272,000          272,000      1,458,000       1,801,000      204,000      1,597,000

</TABLE>
                                       33
<PAGE>


WNC California Housing Tax Credits II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999
<TABLE>
<CAPTION>

                                         -----------------------------------  ------------------------------------------------------
                                                  As of March 31, 1999                        As of December 31, 1998
                                         -----------------------------------  ------------------------------------------------------
                                           Total Investment     Amount of     Encumbrances of                              Net
                                           in Local Limited  Investment Paid  Local Limited   Property and  Accumulated    Book
Partnership Name            Location       Partnerships          to Date      Partnerships     Equipment    Depreciation   Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>            <C>            <C>            <C>              <C>           <C>           <C>

Silver Birch                Huron,
Associates                  California           378,000        378,000       1,347,000       1,714,000      368,000      1,346,000

Twin Pines                  Groveland,
Apartments Associates       California         1,278,000      1,278,000       1,789,000       3,285,000      812,000      2,473,000

Ukiah Terrace               Ukiah,
                            California           349,000        349,000       1,779,000       2,280,000      596,000      1,684,000

Woodlake Garden             Woodlake,
Apartments                  California           548,000        548,000       1,943,000       2,423,000      412,000      2,011,000

Yucca-Warren Vista          Joshua Tree,
Associates                  California           520,000        520,000       2,167,000       2,513,000      410,000      2,103,000
                                              ----------     ----------      ----------      ----------    ---------     ----------

                                           $  12,914,000  $  12,914,000   $  28,626,000   $  41,458,000 $  7,793,000  $  33,665,000
                                              ==========     ==========      ==========      ==========    =========     ==========
</TABLE>

                                       34
<PAGE>


WNC California Housing Tax Credits II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999
<TABLE>
<CAPTION>

                                          -------------------------------------------------------------------------------------
                                                             For the year ended December 31, 1998
                                          -------------------------------------------------------------------------------------
                                                                                      Year                     Estimated Useful
Partnership Name                           Rental Income         Net Loss      Investment Acquired    Status    Life (Years)
-------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>            <C>                       <C>          <C>              <C>

601 Main Street Investors                     $  366,000     $  (353,000)              1991         Completed          39

ADI Development Partners                         119,000         (44,000)              1991         Completed          40

Bayless Garden Apartments Investors              168,000         (99,000)              1992         Completed        27.5

Blackberry Oaks, Ltd.                            206,000         (17,000)              1992         Completed          40

Jacob's Square                                   183,000        (109,000)              1993         Completed        27.5

Mecca Apartments II                              252,000        (164,000)              1993         Completed          40

Nevada Meadows                                   192,000         (20,000)              1993         Completed          40

Northwest Tulare Associates                      183,000        (117,000)              1991         Completed        27.5

Orland Associates                                187,000         (21,000)              1991         Completed          40

Pine Gate Limited Partnership                    225,000          (6,000)              1994         Completed          50

Silver Birch Associates                          129,000         (36,000)              1992         Completed        27.5

Twin Pines Apartments Associates                  95,000        (263,000)              1991         Completed        27.5

Ukiah Terrace                                    179,000         (54,000)              1991         Completed        27.5

Woodlake Garden Apartments                       181,000         (52,000)              1991         Completed          40

Yucca-Warren Vista Associates, Ltd.              214,000         (39,000)              1991         Completed          50
                                               ---------       ---------
                                           $   2,879,000  $   (1,394,000)
                                               =========       =========

</TABLE>
                                       35

<PAGE>

WNC California Housing Tax Credits II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998
<TABLE>
<CAPTION>
                                          ------------------------------------------------------------------------------------------
                                                                              As of December 31, 1998
                                          ------------------------------------------------------------------------------------------
                                           Total Investment     Amount of     Encumbrances of                              Net
                                           in Local Limited  Investment Paid  Local Limited   Property and  Accumulated    Book
Partnership Name            Location       Partnerships          to Date      Partnerships     Equipment    Depreciation   Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>            <C>              <C>            <C>             <C>          <C>            <C>
601 Main Street             Stockton,
Investors                   California     $  1,656,000     $  1,656,000   $  4,011,000    $  5,553,000 $  1,294,000   $  4,259,000

ADI Development             Delhi,
Partners                    California          699,000          699,000      1,226,000       1,898,000      348,000      1,550,000

Bayless Garden              Red Bluff,
Apartments Investors        California        1,110,000        1,110,000      1,291,000       2,560,000      655,000      1,905,000

Blackberry Oaks, Ltd        Lodi,
                            California          463,000          463,000      1,934,000       2,419,000      344,000      2,075,000

Jacob's Square              Exeter,
                            California        1,324,000        1,324,000      1,717,000       2,860,000      497,000      2,363,000

Mecca Apartments II         Mecca,
                            California        2,200,000        2,200,000      2,519,000       4,361,000      436,000      3,925,000

Nevada Meadows              Grass Valley,
                            California          459,000          459,000      1,940,000       2,593,000      292,000      2,301,000

Northwest Tulare            Ivanhoe,
Associates                  California        1,226,000        1,226,000      1,787,000       2,952,000      754,000      2,198,000

Orland Associates           Orland,
                            California          432,000          432,000      1,718,000       2,246,000      371,000      1,875,000

Pine Gate Limited           Ahoskie,
Partnership                 California          272,000          272,000      1,458,000       1,801,000      204,000      1,597,000

</TABLE>
                                       36
<PAGE>


WNC California Housing Tax Credits II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998
<TABLE>
<CAPTION>
                                         -------------------------------------------------------------------------------------------
                                                                           As of December 31, 1998
                                         -------------------------------------------------------------------------------------------
                                          Total Investment     Amount of     Encumbrances of                               Net
                                           in Local Limited  Investment Paid  Local Limited   Property and  Accumulated    Book
Partnership Name            Location       Partnerships          to Date      Partnerships     Equipment    Depreciation   Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>            <C>            <C>            <C>              <C>           <C>           <C>

Silver Birch                Huron,
Associates                  California           378,000        378,000       1,347,000       1,714,000      368,000      1,346,000

Twin Pines                  Groveland,
Apartments Associates       California         1,278,000      1,278,000       1,789,000       3,285,000      812,000      2,473,000

Ukiah Terrace               Ukiah,
                            California           349,000        349,000       1,779,000       2,280,000      596,000      1,684,000

Woodlake Garden             Woodlake,
Apartments                  California           548,000        548,000       1,943,000       2,423,000      412,000      2,011,000

Yucca-Warren Vista          Joshua Tree,
Associates                  California           520,000        520,000       2,167,000       2,513,000      410,000      2,103,000
                                              ----------     ----------      ----------      ----------    ---------     ----------

                                           $  12,914,000  $  12,914,000   $  28,626,000   $  41,458,000 $  7,793,000  $  33,665,000
                                              ==========     ==========      ==========      ==========    =========     ==========
</TABLE>
                                       37
<PAGE>


WNC California Housing Tax Credits II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998
<TABLE>
<CAPTION>

                                          -------------------------------------------------------------------------------------
                                                             For the year ended December 31, 1998
                                          -------------------------------------------------------------------------------------
                                                                                      Year                     Estimated Useful
Partnership Name                           Rental Income         Net Loss      Investment Acquired    Status    Life (Years)
-------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>            <C>                       <C>          <C>              <C>
601 Main Street Investors                     $  366,000     $  (353,000)              1991         Completed          39

ADI Development Partners                         119,000         (44,000)              1991         Completed          40

Bayless Garden Apartments Investors              168,000         (99,000)              1992         Completed        27.5

Blackberry Oaks, Ltd.                            206,000         (17,000)              1992         Completed          40

Jacob's Square                                   183,000        (109,000)              1993         Completed        27.5

Mecca Apartments II                              252,000        (164,000)              1993         Completed          40

Nevada Meadows                                   192,000         (20,000)              1993         Completed          40

Northwest Tulare Associates                      183,000        (117,000)              1991         Completed        27.5

Orland Associates                                187,000         (21,000)              1991         Completed          40

Pine Gate Limited Partnership                    225,000          (6,000)              1994         Completed          50

Silver Birch Associates                          129,000         (36,000)              1992         Completed        27.5

Twin Pines Apartments Associates                  95,000        (263,000)              1991         Completed        27.5

Ukiah Terrace                                    179,000         (54,000)              1991         Completed        27.5

Woodlake Garden Apartments                       181,000         (52,000)              1991         Completed          40

Yucca-Warren Vista Associates, Ltd.              214,000         (39,000)              1991         Completed          50
                                               ---------       ---------
                                           $   2,879,000  $   (1,394,000)
                                               =========       =========

</TABLE>

                                       38

<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 CALIFORNIA HOUSING TAX CREDITS II, L.P.

By:  WNC Tax Credit Partners, L.P., General Partner

By:  WNC & Associates, Inc., General Partner


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

Date: July 27, 1999


By:  /s/ Michael L. Dickenson
Michael L. Dickenson,
Vice-President - Chief Financial Officer of WNC & Associates, Inc.

Date: July 27, 1999

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., Chairman of the Board of WNC & Associates, Inc.

Date: July 27, 1999


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

Date July 27, 1999


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

Date: July 27, 1999






                                       39

<PAGE>


Exhibit
Number     Exhibit Description

EX-21.1    Financial  Statements of Mecca  Apartments  II, for the  years  ended
           December 31, 1998 and 1997 together  with  auditors  report  thereon;
           a significant subsidiary of the Partnership.
























                                       40
<PAGE>


                               Mecca Apartments II

                                Table of Contents

Independent Auditors' Report                                     Page

Financial Statements                                               43

         Balance Sheet                                             44
         Statement of Revenues and Expenses                        46
         Statement of Changes in Partners Deficit                  47
         Statement of Cash Flows                                   48
         Notes to Financial Statements                             50

















                                       41


<PAGE>





                               Mecca Apartments II
                       (A California Limited Partnership)









                              Financial Statements
                 For The Years Ended December 31, 1998 and 1997












                                       42

<PAGE>





                          INDEPENDENT AUDITOR'S REPORT


To the Partners of
Mecca Apartments II


We have audited the  accompanying  balance sheets of Mecca  Apartments II, as of
December 31, 1998, and 1997, and the related statements of income and changes in
partners'  capital  and cash flows for the years  then  ended.  These  financial
statements   are  the   responsibility   of  the   project's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We  conducted  our  audit  in  accordance  with  generally  accepted.   auditing
standards,  Government  Auditing Standards issued by the Comptroller  General of
'the United States.  Those standards  require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation,  We believe  that our audit  provides a  reasonable  basis for our
opinion.  In our opinion,  the  financial  statements  referred to above present
fairly, in all material respects, the financial position of Mecca Apartments II,
as of December 31, 1998,  and 1997,  and the results of its  operations  and its
cash  flows for the years  then  ended in  conformity  with  generally  accepted
accounting principles.

Our audit was  conducted  for the  purposes  of forming an opinion on the basic,
financial  statements taken as a whole. The supporting  information  included in
the report are presented  for the purposes of additional  analysis and are not a
required  part of the basic  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basic financial
statements  and, in our opinion,  is fairly  stated in all material  respects in
relation to the financial statements taken as a whole.


                                         ROBERT G. CLAPHAM
                                         ACCOUTANCY CORPORATION




February 12, 1999














                                       43
<PAGE>

                               MECCA APARTMENTS II

                                 BALANCE SHEETS

                          At December 31, 1998 and 1997
<TABLE>
<CAPTION>


                                                                 1998                            1997
                                                     -----------------------------   -----------------------------

ASSETS
<S>                                                <C>             <C>             <C>              <C>
Cash - on hand                                     $         100                   $          100
     - revenue accounts                                  107,107          107,207          63,367          63,467
                                                    ------------                    -------------

Accounts receivable
     - tenants (net of allowance for                                          723                           2,649
       uncollectible rent - $331 - 12/31/97

Prepaid expenses and deposits                                               3,378                           1,635

Deposits for taxes and insurance                                           20,435                          35,166

Tenants' security deposits                                                 20,318                          19,388
                                                                    -------------                     -----------

Total current assets                                                      152,061                         122,305

Replacement reserve                                                        49,562                          34,303

Operating reserve                                                          68,142                          58,981

Land                                                     259,698                          259,698
Buildings and improvements                             3,961,851                        3,961,851
Furniture and equipment                                  139,749                          139,749
                                                    ------------                    -------------
                                                       4,361,298                        4,361,298

Less accumulated depreciation                            436,134        3,925,164         319,459       4,041,839
                                                    ------------                    -------------

Deferred  organization and financing costs, less
  accumulated amortization                                                225,616                         259,948
                                                                    -------------                     -----------
                                                                   $    4,420,545                    $  4,517,376
                                                                    =============                     ===========

</TABLE>


                 See accompanying notes to financial statements
                                       44

<PAGE>


                               MECCA APARTMENTS II

                            BALANCE SHEETS-CONTINUED

                          At December 31, 1998 and 1997
<TABLE>
<CAPTION>

                                                                 1998                            1997
                                                     -----------------------------   -----------------------------

LIABILITIES

<S>                                                 <C>           <C>               <C>            <C>
Accounts payable, trade                                            $        5,622                  $        5,966

Accrued interest                                                            5,426                           5,469

Tenants' security deposits                                                 21,522                          18,046

Prepaid rents                                                                 634                           1,453

Portion of notes payable due within one year                                6,106                           5,568
                                                                    -------------                   -------------
Total current liabilities                                                  39,310                          36,502

Deferred laundry income                                                     3,420                           5,340

Notes payable, secured by real property                2,518,529                        2,524,097

Less current portion due within one year                   6,106        2,512,423           5,568       2,518,529
                                                    ------------                    -------------

Deferred interest                                                         235,876                         163,939

Partners' capital                                                       1,629,516                       1,793,066
                                                                    -------------                   -------------
                                                                   $    4,420,545                  $    4,517,376
                                                                    =============                   =============

</TABLE>


                 See accompanying notes to financial statements
                                       45

<PAGE>


                               MECCA APARTMENTS II

                       STATEMENT OF REVENUES AND EXPENSES

                 For The Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>

                                                   1998                            1997
                                       -----------------------------   -----------------------------

<S>                                  <C>                 <C>       <C>                   <C>
Tenants' rent, gross potential       $     263,784                   $      262,286
Less vacancy loss                           12,181          251,603          21,719      $  240,567
                                      ------------                    -------------

Laundry concession                           8,933                            9,430
Interest income                              6,725                            2,922
Other income                                 4,187           19,845           4,810          17,162
                                      ------------         --------   -------------        --------
                                                            271,448                         257,729
                                                           --------                        --------
Administrative
   Salaries                                 18,793                           23,947
   Office expenses                           1,769                            1,544
   Management fee                           24,780                           23,330
   Telephone                                   600                              536
   Legal                                     1,625                                -
   Auditing                                  5,750                            6,300
   Bad debts                                   836                                -
   Other                                     2,523           56,676           4,138          59,795
                                      ------------                    -------------
Utilities
   Electricity                               5,596                            5,678
   Water and sewer                          10,912                           10,078
   Gas                                       1,962           18,470           2,111          17,867
                                      ------------                    -------------
Operating and Maintenance
   Exterminating                             1,031                            1,667
   Rubbish                                   9,999                            7,309
   Grounds                                  12,062                           12,373
   Materials and supplies                    5,430                            2,457
   Repairs contract and payroll             11,931                           12,859
   Painting and decorating                   2,943           43,396           1,411          38,076
                                      ------------                    -------------
Depreciation                                                116,675                         118,007

Taxes and Insurance
   Real property taxes                      13,659                           21,976
   Other taxes                               3,434                            3,338
   Insurance                                11,063           28,156           9,653          34,967
                                      ------------                    -------------
Interest, less reimbursement                                137,293                         137,787

Amortization                                                 34,332                          34,235
                                                           --------                      $ ---
                                                            434,998                         440,734
                                                           --------                   -------------
Net income (loss) for the year                           $ (163,550)                 $     (183,005)
                                                           ========                   =============
</TABLE>

                 See accompanying notes to financial statements
                                       46
<PAGE>


                               MECCA APARTMENTS II

                    STATEMENT OF CHANGES IN PARTNERS' DEFICIT

                 For The Years Ended December 31, 1998 and 1997


Capital, December 31, 1996                                 $       1,976,071

Net loss for the year ended December 31, 1997                       (183,005)
                                                            ----------------

Capital, December 31, 1997                                         1,793,066

Net loss for the year ended December 31, 1998                       (163,550)
                                                            ----------------

Capital, December 31, 1998                                 $       1,629,516
                                                            ================

















                 See accompanying notes to financial statements
                                       47
<PAGE>

                               MECCA APARTMENTS II

                             STATEMENT OF CASH FLOWS

                 For The Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>

                                                                 1998                            1997
                                                     -----------------------------   -----------------------------
Cash Flows provided by (Used for)
   Operating Activities
     Cash collected from tenants and
<S>                                                <C>             <C>             <C>            <C>
       concessionaires                             $     263,466                   $      244,249
     Cash paid to suppliers and employees               (144,865)                        (160,114)
     Interest paid - mortgage                            (65,399)                         (65,888)
     Interest collected                                    6,725                            2,922
     Withdrawals from (deposits to) restricted
       cash, net                                          13,801                           26,204
                                                    ------------                    -------------
Net cash flows provided by (used for) operating
  activities                                                               73,728                          47,373

Cash Flows Provided by (Used for) Financing
   Activities
   Payments on loans                                      (5,568)                          (5,078)
                                                    ------------                    -------------
Net cash flows provided by (used for) financing
   activities                                                              (5,568)                         (5,078)

Cash Flows Provided by (Used for) Investing
   Activities

     Release of deposit by lender                              -                            7,075
     Payments for additions to property and
       deferred costs                                          -                           (7,075)
     Deposits to restricted cash                         (24,420)                         (22,604)
                                                    ------------                    -------------
Net cash flows provided by (used for) investing
  activities                                                              (24,420)                        (22,604)
                                                                    -------------                    ------------
Increase (decrease) in cash                                                43,740                          19,691

Unrestricted cash, beginning of year                                       63,467                          43,776
                                                                    -------------                    -----------
Unrestricted cash, end of year                                     $      107,207                   $      63,467
                                                                    =============                    ===========

</TABLE>


                 See accompanying notes to financial statements
                                       48
<PAGE>


                               MECCA APARTMENTS II

                       STATEMENT OF CASH FLOWS - CONTINUED

                 For The Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>


                                                                 1998                            1997
                                                     -----------------------------   -----------------------------

Reconciliation of Net Income with Cash
Provided by (Used for) Operating Activities

<S>                                                <C>             <C>             <C>              <C>
   Net income (loss) for the year                  $    (163,550)                  $     (183,005)
   Add depreciation and amortization                     151,007                          152,242
   Deferred interest                                      71,937                           71,938
   Deferred income                                        (1,920)          57,474          (1,920)        39,255
                                                    ------------                    -------------

   (Increase) decrease in assets:                          1,926                             (510)
     Accounts receivable                                  (1,743)                           9,998
     Prepaid expenses and deposits                        13,801                           26,204
     Restricted cash

   Increase (decrease) in liabilities:
     Accounts payable and accrued liabilities               (387)                         (26,968)
     Other liabilities                                     2,657           16,254            (606)         8,118
                                                    ------------    -------------   -------------    -----------

Cash flows provided by (used for) operating
   activities                                                      $       73,728                   $     47,373
                                                                    =============                    ===========


</TABLE>








                 See accompanying notes to financial statements
                                       49

<PAGE>


                               MECCA APARTMENTS II

                          NOTES TO FINANCIAL STATEMENTS

                 For The Years Ended December 31, 1998 and 1997



NOTE 1 - ORGANIZATION

The partnership was organized to develop and operate  low-income  housing in the
City of Mecca,  California.  The property  included in the financial  statements
consists of sixty units of rental  housing.  The partnership has entered into an
agreement with the State of California Tax Credit Allowance Committee; under the
terms of which the  partnership  will be allocated  federal  low-income  housing
credits  which will be passed  through to the  partners  for the ten year period
following initial  occupancy of the housing.  The credits are to be 8.72% of the
eligible basis up to a maximum credit of $387,873 per year.  Agreements with the
Tax Credit Allocation Committee and the lender place substantial restrictions on
the  use  and  operation  of  the  housing,  including  restrictions  on  rents,
expenditures  and  withdrawals  and  requirements  that various  restricted cash
deposits be maintained.

NOTE 2 - ACCOUNTING PRINCIPLES

The partnership uses the accrual basis, in that income is recorded as earned and
expenses as they are incurred.

Income from rents is recorded at the gross potential amount,  with losses due to
vacancy of bad debts  shown as  reductions  of income  and free or  reduced-rate
occupancy by on-site employees is shown as an expense. Losses from bad debts are
recorded  at the time a tenant  vacates a unit owing more than the amount of the
security deposit.

Expenses  incurred that expire over a period of time are pro-rated over the time
period.

Property and equipment is recorded at cost;  depreciation  is provided using the
straight-line  method over estimated lives of 40 years for the building and 5 to
7 years for  furnishings.  Repairs  and  routine  replacement  of assets will be
recorded  as  a  current  expense.   Major  renovations  or  replacements  of  a
significant  part of a group of assets are recorded as additions to property and
disposal of the assets being replaced.

Estimates are used to determine amounts in financial statements.  Actual results
may vary from those estimates.

Expenses  being  incurred  during  the   construction   period  related  to  the
organization  or to financing have been deferred.  These costs will be amortized
over a thirty-year period on the straight-line  method for $219,053 of financing
costs, and a five-year period for $135,099 of organization costs.

During  1996 the  developer,  formerly a general  partner,  was  required to pay
certain  costs and expenses  under the terms of a completion  guarantee.  Of the
amount so paid,  $494,597,  $144,920  has been  applied as a  reduction  of 1996
interest expense, $137,291 as reimbursement of 1995 interest expense, $91,378 as
reimbursement of financing costs,  and the balance  $121,006,  as a reduction of
the developer's fee.


                                       50

<PAGE>
                               MECCA APARTMENTS II

                          NOTES TO FINANCIAL STATEMENTS

                 For The Years Ended December 31, 1998 and 1997


NOTE 3 - ACCOUNTS RECEIVABLE

The details of accounts  receivable  are  presented  in the  supplementary  data
following the financial statements.

NOTE 4 - PREPAID EXPENSES AND DEPOSITS

At December 31, 1998, prepaid expenses consisted of the following:

       Insurance                                 $        3,378
                                                   ============

NOTE 5 - REPLACEMENT RESERVE DEPOSITS

The  partnership  is required to make  deposits of $1,193 per month to a savings
account at Southern  California Bank to accumulate  funds for the replacement of
assets,  and $454 to another account as an operating  reserve. A schedule of the
activity in these reserve accounts is included in the supplementary data.

NOTE 6 - NOTES PAYABLE

The notes payable consist of a loan with an original balance of $715,000 payable
in monthly  installments of $5,914,  including  interest at 9.25% per annum, due
January 1, 2026, a loan with a balance of $500,000  from the County of Riverside
Home Funds, payable together with accumulated simple interest of 6.5% per annum,
over a fifteen-year  period  beginning May, 2010, in monthly  payments of $8,469
including  interest at 6.5% per annum,  and a loan with a balance of  $1,314,577
from  the  Rental  Housing  construction  program  of the  State  of  California
Department of Housing and Community  Development,  bearing simple interest at 3%
per annum, on which payments of interest and principal will be deferred,  unless
the  operation  of the  property  generates  surplus cash in excess of allowable
distributions.

The amounts of principal due in each of the five years after  December 31, 1998,
except for payments that might be required from surplus cash, and the amount due
after five years are as follows:

           1999                                    $        6,106
           2000                                             6,694
           2001                                             7,341
           2002                                             8,050
           2003                                             8,827
     Thereafter                                         2,481,511
                                                        ---------
                                                   $    2,518,529
                                                        =========
NOTE 7 - PROPERTY TAXES

The  managing  general  partner is Indio  Housing  Development  Corporation,  an
organization  exempt from income taxes under the provisions of Internal  Revenue
Code Section 501(c)(3). As a provider of rental housing to qualifying low income
families,  the partnership  qualifies for a welfare  exemption from a portion of
the property taxes assessed by the County of Riverside.


                                       51