UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 
 Washington, D.C. 20549
 
 FORM 10-Q
 (Mark One)
 
 [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 ACT OF 1934
 
 For the quarterly period ended June 30, 2009
 
 OR
 
 [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
 ACT OF 1934
  For the transition period from ________ to ___________





Commission file number: 0-24855





WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5





California
33-0745418(State or other jurisdiction of
(I.R.S. Employerincorporation or organization)
Identification No.)17782 Sky Park CircleIrvine, CA
92614-6404(Address of principal executive offices)
(Zip Code)





(714) 662-5565


(Telephone number)





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 ___No _X__





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).





Yes ___No _X__





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):




Large accelerated filer___ Accelerated filer___  Non-accelerated filer___X__Smaller reporting company___





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes ___No _X__  WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 INDEX TO FORM 10-Q
 
 For the Quarterly Period Ended June 30, 2009


PART I. FINANCIAL INFORMATIONItem 1.
Financial StatementsCondensed Balance SheetsAs of June 30, 2009 and March 31, 2009
3Condensed Statements of OperationsFor the Three Months Ended June 30, 2009 and 2008
4Condensed Statement of Partners' Equity (Deficit)For the Three Months Ended June 30, 2009
5Condensed Statements of Cash FlowsFor the Three Months Ended June 30, 2009 and 2008
6Notes to Condensed Financial Statements

7Item 2.
Management's Discussion and Analysis of FinancialCondition and Results of Operations
17Item 3.
Quantitative and Qualitative Disclosures about Market Risks

19Item 4T.
Controls and Procedures

20PART II. OTHER INFORMATIONItem 1.
Legal Proceedings

21Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds

21Item 3.
Defaults Upon Senior Securities

21Item 4.
(Removed and Reserved)

21Item 5.
Other Information

21Item 6.
Exhibits

21Signatures


22


2
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 CONDENSED BALANCE SHEETS
 (unaudited)





June 30, 2009

March 31, 2009ASSETSCash
$
61,263
$
22,245Investments in Local Limited Partnerships, net

(Notes 2 and 3)

647,518

1,766,047Total Assets
$
708,781
$
1,788,292LIABILITIES AND PARTNERS' EQUITY (DEFICIT)Liabilities:Accrued fees and expenses due toGeneral Partner and affiliates (Note 3)
$
821,110
$
808,669Partners’ Equity (Deficit):General Partner

(65,309)

(54,389)Limited Partners (25,000 Partnership Units authorized;25,000 Partnership Units issued and outstanding)

(47,020)

1,034,012Total Partners’ Equity (Deficit)

(112,329)

979,623Total Liabilities and Partners’ Equity (Deficit)
$
708,781
$
1,788,292


See accompanying notes to condensed financial statements
 3
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 CONDENSED STATEMENTS OF OPERATIONS
 
 For the Three Months Ended June 30, 2009 and 2008
 (unaudited)


2009

2008Three Months

Three MonthsReporting fees
$
10,000
$
10,000Recovery of bad debt

35,696

-Total operating income

45,696

10,000Operating expenses and loss:Amortization (Note 2)

2,115

15,481Asset management fees (Note 3)

17,517

17,517Legal and accounting fees

-

104,927Impairment loss (Note 2)

955,137

3,162,730Other

2,732

6,471Total operating expenses and loss

977,501

3,307,126Loss from operations

(931,805)

(3,297,126)Equity in losses of LocalLimited Partnerships (Note 2)

(161,277)

(243,088)Gain on sale of investments in Local

Limited Partnerships

1,123

-Interest income

7

16Net loss
$
(1,091,952)
$
(3,540,198)Net loss allocated to:General Partner
$
(10,920)
$
(35,402)Limited Partners
$
(1,081,032)
$
(3,504,796)Net loss per Partnership Unit
$
(43)
$
(140)Outstanding weighted Partnership

Units

25,000

25,000


See accompanying notes to condensed financial statements
 4
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 CONDENSED STATEMENT OF PARTNERS’ EQUITY (DEFICIT)
 
 For the Three Months Ended June 30, 2009
 (unaudited)





General

LimitedPartner

Partners

TotalPartners’ equity (deficit) at March 31, 2009
$
(54,389)
$
1,034,012
$
979,623Net loss

(10,920)

(1,081,032)

(1,091,952)Partners’ equity (deficit) at June 30, 2009
$
(65,309)
$
(47,020)
$
(112,329)


See accompanying notes to condensed financial statements
 5
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 CONDENSED STATEMENTS OF CASH FLOWS
 
 For the Three Months Ended June 30, 2009 and 2008
 (unaudited)


2009

2008Cash flows from operating activities:Net loss
$
(1,091,952)
$
(3,540,198)Adjustments to reconcile net loss to netcash provided by operating activities:Amortization

2,115

15,481Equity in losses of Local Limited Partnerships

161,277

243,088Impairment loss

955,137

3,162,730Gain on sale of investments in Local Limited Partnerships

(1,123)

-Increase in accrued fees and expenses due toGeneral Partner and affiliates

12,441

128,915Cash provided by operating activities:

37,895

10,016Cash flows from investing activities:Proceeds from sale of investments in Local Limited

Partnerships

36,819

-Recovery of advances made to Local Limited Partnerships

that were previously written off

(35,696)

-Cash provided by investing activities

1,123

-Net increase in cash

39,018

10,016Cash, beginning of period

22,245

125,926Cash, end of period
$
61,263
$
135,942SUPPLEMENTAL DISCLOSURE OF

CASH FLOW INFORMATIONTaxes paid
$
-
$
-


See accompanying notes to condensed financial statements
 6
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 
 For the Quarterly Period Ended June 30, 2009
 (unaudited)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





General





The accompanying condensed unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of 1934.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the three months ended June 30, 2009 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2010.  For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the fiscal year ended March 31, 2009.





Organization





WNC Housing Tax Credit Fund VI, L.P., Series 5, a California Limited Partnership (the "Partnership"), was formed on March 3, 1997 under the laws of the State of California. The Partnership was formed to acquire limited partnership interests in other limited partnerships ("Local Limited Partnerships") which own multi-family housing complexes (“Housing Complexes”) that are eligible for Federal low income housing tax credits (“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 Complexes. Each Local Limited Partnership is governed by its agreement of limited partnership (the “Local Limited Partnership Agreement”).





WNC & Associates, Inc. is the general partner of the Partnership (the “General Partner” or “Associates”).  The chairman and president owns all 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.





The Partnership shall continue to be in full force and effect until December 31, 2052 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 25,000 units of limited partnership interest (“Partnership Units”) at $1,000 per Partnership Unit. The offering of Partnership Units has concluded and 25,000 Partnership Units, representing subscriptions in the amount of $24,918,175, net of discounts of $54,595 for volume purchases and dealer discounts of $27,230 had been accepted.  The General Partner has a 1% interest in operating profits and losses, taxable income and losses, in cash available for distribution from the Partnership and Low Income Housing Tax Credits of the Partnership.  The investors in the Partnership (“Limited Partners”) will be allocated the remaining 99% of these items in proportion to their respective investments.


7
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTNUED
 
 For the Quarterly Period Ended June 30, 2009
 (unaudited)
  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued





The proceeds from the disposition of any of the Local Limited Partnership properties will be used first to pay debts and other obligations per the respective Local Limited Partnership Agreement.  Any remaining proceeds will then be paid to the Partnership.  The sale of a Housing Complex may be subject to other restrictions and obligations.  Accordingly, there can be no assurance that a Local Limited Partnership will be able to sell its Housing Complex.  Even if it does so, there can be no assurance that any significant amounts of cash will be distributed to the Partnership.  Should such distributions occur, the Limited Partners will be entitled to receive distributions equal to their capital contributions and their return on investment (as defined in the Partnership Agreement) and the General Partner would then be entitled to receive proceeds equal to its capital contributions 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.





Risks and Uncertainties





An investment in the Partnership and the Partnership’s investments in Local Limited Partnerships and their Housing Complexes are subject to risks.  These risks may impact the tax benefits of an investment in the Partnership, and the amount of proceeds available for distribution to the Limited Partners, if any, on liquidation of the Partnership’s investments.  Some of those risks include the following:





The Low Income Housing Tax Credit rules are extremely complicated. Noncompliance with these rules results in the loss of future Low Income Housing Tax Credits and the fractional recapture of Low Income Housing Tax Credits already taken. In most cases the annual amount of Low Income Housing Tax Credits that an individual can use is limited to the tax liability due on the person’s last $25,000 of taxable income. The Local Limited Partnerships may be unable to sell the Housing Complexes at a price which would result in the Partnership realizing cash distributions or proceeds from the transaction.  Accordingly, the Partnership may be unable to distribute any cash to its Limited Partners.  Low Income Housing Tax Credits may be the only benefit from an investment in the Partnership.





The Partnership has invested in a limited number of Local Limited Partnerships. Such limited diversity means that the results of operation of each single Housing Complex will have a greater impact on the Partnership. With limited diversity, poor performance of one Housing Complex could impair the Partnership’s ability to satisfy its investment objectives.  Each Housing Complex is subject to mortgage indebtedness. If a Local Limited Partnership failed to pay its mortgage, it could lose its Housing Complex in foreclosure. If foreclosure were to occur during the Compliance Period, the loss of any remaining future Low Income Housing Tax Credits, a fractional recapture of prior Low Income Housing Tax Credits, and a loss of the Partnership’s investment in the Housing Complex would occur. The Partnership is a limited partner or non-managing member of each Local Limited Partnership. Accordingly, the Partnership will have very limited rights with respect to management of the Local Limited Partnerships. The Partnership will rely totally on the Local General Partners. Neither the Partnership’s investments in Local Limited Partnerships, nor the Local Limited Partnerships’ investments in Housing Complexes, are 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 interests in Local Limited Partnerships; limitations on removal of Local General Partners; limitations on subsidy programs; and possible changes in applicable regulations.  Uninsured casualties could result in loss of property and Low Income Housing Tax Credits and recapture of Low Income Housing Tax Credits previously taken. The value of real estate is subject to risks from fluctuating economic conditions, including employment rates, inflation, tax, environmental, land use and zoning policies, supply and demand of similar properties, and neighborhood conditions, among others.


8
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended June 30, 2009
 (unaudited)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued





The ability of Limited Partners to claim tax losses from the Partnership is limited. The IRS may audit the Partnership or a Local Limited Partnership and challenge the tax treatment of tax items. The amount of Low Income Housing Tax Credits and tax losses allocable to the Limited Partners could be reduced if the IRS were successful in such a challenge.  The alternative minimum tax could reduce tax benefits from an investment in the Partnership.  Changes in tax laws could also impact the tax benefits from an investment in the Partnership and/or the value of the Housing Complexes.





Anticipated future and existing cash resources of the Partnership are not sufficient to pay existing liabilities of the Partnership.  However, substantially all of the existing liabilities of the Partnership are payable to the General Partner and/or their affiliates.  Though the amounts payable to the General Partner and/or its affiliates are contractually currently payable, the Partnership anticipates that the General Partner and/or its affiliates will not require the payment of these contractual obligations until capital reserves are in excess of the aggregate of then existing contractual obligations and then anticipated future foreseeable obligations of the Partnership.  The Partnership would be adversely affected should the General Partner and/or its affiliates demand current payment of the existing contractual obligations and or suspend services for this or any other reason.





The Partnership currently has insufficient working capital to fund its operations. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through January 31, 2012.





No trading market for the Partnership Units exists or is expected to develop. Limited Partners may be unable to sell their Partnership Units except at a discount and should consider their Partnership Units to be a long-term investment. Individual Limited Partners will have no recourse if they disagree with actions authorized by a vote of the majority of Limited Partners.





Exit Strategy





The Compliance Period for a Housing Complex is generally 15 years following construction or rehabilitation completion. Associates was one of the first in the industry to offer syndicated investments in Low Income Housing Tax Credits.  The initial programs have completed their Compliance Periods.





Upon the sale of a Local Limited Partnership interest or Housing Complex after the end of the Compliance Period, there would be no recapture of Low Income Housing Tax Credits.  A sale prior to the end of the Compliance Period could result in recapture if certain conditions are not met.  None of the Housing Complexes have completed their 15-year Compliance Period.





With that in mind, the General Partner is continuing its review of the Housing Complexes.  The review considers many factors, including extended use requirements (such as those due to mortgage restrictions or state compliance agreements), the condition of the Housing Complexes, and the tax consequences to the Limited Partners from the sale of the Housing Complexes.





Upon identifying those Housing Complexes with the highest potential for a successful sale, refinancing or re-syndication, the Partnership expects to proceed with efforts to liquidate them. The objective is to maximize the Limited Partners’ return wherever possible and, ultimately, to wind down the Partnership.   Local Limited Partnership interests may be disposed of any time by the General Partner in its discretion.  While liquidation of the Housing Complexes continues to be evaluated, the dissolution of the Partnership was not imminent as of June 30, 2009.


9
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended June 30, 2009
 (unaudited)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued





The Housing Complex of Concord was sold on May 27, 2009. Concord started to struggle with occupancy starting in the first quarter of 2008 and continued to struggle until the Housing Complex was sold in May 2009.  Throughout 2008 and 2009, the occupancy gradually decreased, reaching a low of 54% in the first part of 2009.  Due to the occupancy issues, the Housing Complex was operating with negative cash flow.  As of December 31, 2006, the Partnership received all of the Low Income Housing Tax Credits from Concord.  The Compliance Period expires in 2011 but the buyer has indemnified against any tax credit recapture.  The sales price was $400,000.  Sales proceeds of $253,000 were used to pay the mortgage debt off, $72,000 was used to pay the broker’s fee, selling costs (including attorney fees), property taxes and other selling related expenses.  An additional $23,000 was paid to the Local General Partner for repayment of loans that had been made and $5,000 paid to the management company for final partnership expenses.  The Partnership received approximately $47,000 related to the sale.  Of that amount, $36,000 was paid for loans it had made, $10,000 was paid for accrued reporting fees and $1,000 was distributed to the Partnership according to the Limited Partnership Agreement. The $1,000 is remaining in the Partnership’s reserves to be used for payment of future expenses.  If there was a recapture, the maximum exposure would be $132,931, which includes the actual recapture amount and the applicable interest, and equates to $5.32 per Partnership Unit.





Subsequent to the quarterly period ended June 30, 2009, the Partnership sold its limited partner interests in Murfreesboro Villas, L.P. (“Murfreesboro”) and Chillicothe Plaza Apartments, L.P. (“Chillicothe”); see Note 5 for more information on these subsequent sales.


Method of Accounting for Investments in Local Limited Partnerships





The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting, whereby the Partnership adjusts its investment balance for its share of the Local Limited Partnerships’ results of operations and for any contributions made and distributions received.  The Partnership reviews the carrying amount of an individual investment in a Local Limited Partnership for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable.  Recoverability of such investment is measured by the estimated value derived by management, generally consisting of the sum of the remaining future Low Income Housing Tax Credits estimated to be allocated to the Partnership and any estimated residual value to the Partnership.  If an investment is considered to be impaired, the Partnership reduces the carrying value of its investment in any such Local Limited Partnership.  The accounting policies of the Local Limited Partnerships, generally, are expected to be consistent with those of the Partnership.  Costs incurred by the Partnership in acquiring the investments are capitalized as part of the investment and are being amortized over 30 years (see Note 2).





“Equity in losses of Local Limited Partnerships” for the periods ended June 30, 2009 and 2008 have been recorded by the Partnership. Management’s estimate for the three-month period is based on either actual unaudited results reported by the Local Limited Partnerships or historical trends in the operations of the Local Limited Partnerships. In subsequent annual financial statements, upon receiving the actual annual results reported by the Local Limited Partnerships, management reverses its prior estimate and records the actual results reported by the Local Limited Partnerships.  Equity in losses of Local Limited Partnerships allocated to the Partnership are not recognized to the extent that the investment balance would be adjusted below zero. If the Local Limited Partnerships reported 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 (see Note 2).


10
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended June 30, 2009
 (unaudited)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued





In accordance with the accounting guidance for the consolidation of variable interest entities, the Partnership determines when it should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements, and when it should disclose information about its relationship with a VIE. A VIE is a legal structure used to conduct activities or hold assets, and a VIE must be consolidated by a company if it is the primary beneficiary because a primary beneficiary absorbs the majority of the entity’s expected losses, the majority of the expected   residual returns, or both. The Local Limited Partnerships in which the Partnership invests are VIEs. However,management does not consolidate the Partnership’s interests in these VIE’s as the Partnership is not considered the primary beneficiary. The Partnership’s balance in its investment in Local Limited Partnerships, plus the risk of recapture of tax credits previously recognized on these investments, represents its maximum exposure to loss. The Partnership may be subject to additional losses to the extent of any financial support that the Partnership voluntarily provides to the Local Limited Partnerships in the future.





Distributions received by the Partnership are accounted for as a reduction of the investment balance.  Distributions received after the investment has reached zero are recognized as income.  As of June 30, 2009, eleven of the investment balances had reached zero.





Use of Estimates





The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 original maturities of three months or less when purchased to be cash equivalents. As of June 30, 2009 and March 31, 2009, the Partnership had no cash equivalents.





Reporting Comprehensive Income





The Partnership had no items of other comprehensive income for all periods presented.





Income Taxes





The Partnership has elected to be treated as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns.  The Partnership’s federal tax status as a pass-through entity is based on its legal status as a partnership. Accordingly, the Partnership is not required to take any tax positions in order to qualify as a pass-through entity. The Partnership is required to file and does file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly, these financial statements do not reflect a provision for income taxes and the Partnership has no other tax positions which must be considered for disclosure.


11
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended June 30, 2009
 (unaudited)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued





Net Loss Per Partnership Unit





Net loss per Partnership Unit includes no dilution and is computed by dividing loss available to Limited Partners by the weighted average number of Partnership Units outstanding during the period.  Calculation of diluted net loss per Partnership Unit is not required.





Revenue Recognition





The Partnership is entitled to receive reporting fees from the Local Limited Partnerships.  The intent of the reporting fees is to offset (in part) administrative costs incurred by the Partnership in corresponding with the Local Limited Partnerships.  Due to the uncertainty of the collection of these fees, the Partnership recognizes reporting fees as collections are made.





Amortization





Acquisition fees and costs were being amortized over 30 years using the straight-line method. Amortization expense for the three months ended June 30, 2009 and 2008 was $2,115 and $15,481, respectively.  During the three months ended June 30, 2009 and 2008, impairment loss of $162,743 and $1,051,842, respectively, was recorded against these fees and costs.





Impairment





The Partnership reviews its investments in Local Limited Partnership for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value of such investments may not be recoverable. Recoverability is measured by a comparison of the carrying amount of the investment to the sum of the total amount of the remaining Low Income Housing Tax Credits allocated to the Partnership and any estimated residual value of the investment.  For the three months ended June 30, 2009 and 2008, impairment loss related to investments in Local Limited Partnerships was $792,394 and $2,110,888, respectively.





The Partnership also evaluates its intangibles for impairment in connection with its investments in Local Limited Partnerships. Impairment on the intangibles is measured by comparing the Partnership’s total investment balance after impairment of investments in Local Limited Partnerships to the sum of the total of the remaining Low Income Housing Tax Credits allocated to the Partnership and the estimated residual value of the investments. During the three months ended June 30, 2009 and 2008, an impairment loss of $162,743 and $1,051,842, respectively, was recorded against the related intangibles.


12
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended June 30, 2009
 (unaudited)


NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS





As of June 30, 2009 and March 31, 2009, the Partnership owns limited partnership interests in 14 and 15 Local Limited Partnerships, respectively, each of which owns one Housing Complex consisting of an aggregate 598 and 624 apartment units, respectively. The respective Local 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 99.9%, as specified in the Local Limited Partnership agreements, of the operating profits and losses, taxable income and losses, and Low Income Housing Tax Credits of the Local Limited Partnerships.





The following is a summary of the equity method activity of the investments in Local Limited Partnerships for the periods presented below:





For the Three Months Ended

June 30, 2009

For the Year

Ended

March 31, 2009Investments per balance sheet, beginning of period
$
1,766,047
$
5,687,350Equity in losses of Local Limited Partnerships

(161,277)

(736,747)Impairment loss

(955,137)

(3,162,730)Amortization of capitalized acquisition fees and costs

(2,115)

(21,826)Investments per balance sheet, end of period
$
647,518
$
1,766,047





13
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended June 30, 2009
 (unaudited)


NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued





For the Three Months Ended

June 30, 2009

For the Year Ended

March 31, 2009Investments in Local Limited Partnerships, net
$
647,518
$
1,601,189Acquisition fees and costs, net of accumulated amortization of

$0 and $6,345

-

164,858Investments per balance sheet, end of period
$
647,518
$
1,766,047





Selected financial information for the three months ended June 30, 2009 and 2008 from the unaudited combined condensed financial statements of the Local Limited Partnerships in which the Partnership has invested is as follows:





COMBINED CONDENSED STATEMENTS OF OPERATIONS2009

2008Revenues
$
770,000
$
832,000Expenses:Interest expense

172,000

204,000Depreciation and amortization

307,000

317,000Operating expenses

569.000

573,000Total expenses

1,048,000

1,094,000Net loss
$
(278,000)
$
(262,000)Net loss allocable to the Partnership
$
(277,000)
$
(260,000)Net loss recorded by the Partnership
$
(161,000)
$
(243,000)





Certain Local Limited Partnerships have incurred significant operating losses and/or 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 operations of such Local Limited Partnerships.  If additional capital contributions are not made when they are required, the Partnership's investments in certain of such Local Limited Partnerships could be impaired, and the loss and recapture of the related Low Income Housing Tax Credits could occur.


14
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended June 30, 2009
 (unaudited)


NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued





TroubledHousing Complexes





Enhanced Limited Partnership (“Enhanced”) has been experiencing operational issues.  The 23 unit property is located in Baton Rouge, Louisiana.  As of  December 31, 2010, the occupancy rate was 43% and over the past year it has fluctuated between 35% and 65%.  Management has been continually marketing the project.  The property has also been operating with negative cash flows although the mortgage, property taxes and insurance are all current.   The last year of Low Income Housing Tax Credits was taken in 2008 and therefore the Partnership is still in the Compliance Period, which will end in 2013.  The Partnership is in the beginning stages of discussions with the General Partner regarding purchasing its limited partnership interest.  The Partnership does not anticipate receiving any cash proceeds for its interest but would be seeking either a guarantee for the Compliance Period or a bond issued, due to the risk of recapture through the Compliance Period.  Enhanced is being closely monitored by the Partnership.





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 the following fees:





(a)
Acquisition fees of up to 7% of the gross proceeds from the sale of Partnership Units as compensation for services rendered in connection with the acquisition of Local Limited Partnerships.  The Partnership originally incurred cumulative acquisition fees of $1,750,000.   Accumulated amortization of these capitalized costs was $0 and $6,345 as of June 30, 2009 and March 31, 2009, respectively.  The Partnership evaluates its intangibles for impairment in connection with its investments in Local Limited Partnerships. Impairment on the intangibles is measured by comparing the Partnership’s total investment balance after impairment of investments in Local Limited Partnerships to the sum of the total of the remaining Low Income Housing Tax Credits allocated to the Partnership and the estimated residual value of the investments. If an impairment loss related to the acquisition fees is recorded, the accumulated amortization is reduced to zero at that time.  As of June 30, 2009 these costs were fully amortized and impaired.





(b)
Reimbursement of costs incurred by the General Partner or an affiliate in connection with the acquisition of Local Limited Partnerships.  These reimbursements have not exceeded 1.5% of the gross proceeds.  The Partnership originally incurred cumulative acquisition costs of $185,734, which have been included in investments in Local Limited Partnerships.  As of June 30, 2009 and March 31, 2009 these costs were fully amortized and impaired.





(c)
An annual asset management fee equal to 0.2% of the Invested Assets of the Partnership, as defined respectively.  “Invested Assets” means the sum of the Partnership’s investment in Local Limited Partnership interests and the Partnership’s allocable share of mortgage loans on and other debts related to the Housing Complexes owned by such Local Limited Partnerships.  Asset management fees of $17,517 were incurred during each of the three months ended June 30, 2009 and 2008, of which $7,500 and $0 was paid during the three months ended June 30, 2009 and 2008, respectively.





(d)
The Partnership reimburses the General Partner or its affiliates for operating expenses incurred by the Partnership and paid for by the General Partner or its affiliates on behalf of the Partnership. Operating expense reimbursements were $45 and $0 during the three months ended June 30, 2009 and 2008, respectively.





(e)
A subordinated disposition fee in an amount equal to 1% of the sales price of real estate sold.  Payment of this fee is subordinated to the limited partners receiving a preferred return of 12% through December 31, 2009 and 6% thereafter (as defined in the Partnership Agreement) and is payable only if the General Partner or its affiliates render services in the sales effort.  No disposition fees have been incurred for all periods presented.


15
 WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 5
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended June 30, 2009
 (unaudited)


NOTE 3 - RELATED PARTY TRANSACTIONS, continued





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





June 30, 2009

March 31, 2009Expenses paid by the General Partner or an affiliate on behalf of the Partnership
$
82,405
$
79,981Advances made to the Partnership from the General

Partner or affiliates

227,025

227,025Asset management fee payable

511,680

501,663Total
$
821,110
$
808,669





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





NOTE 4 -ADVANCES TO LOCAL LIMITED PARTNERSHIPS





As of June 30, 2009 and March 31, 2009, the Partnership in total had voluntarily advanced $897,382 and $935,579, respectively, to five Local Limited Partnerships, El Reno Housing Associates, L.P., Hillcrest Heights, L.P., Concord Apartments L.P. Partners, Mansur Wood Living Center, L.P., and Murfreesboro Villas L.P.  No advances were made during the three months ended June 30, 2009.  All advances were reserved in full the year they were advanced.





NOTE 5 - SUBSEQUENT EVENTS





Subsequent to the quarterly period ended June 30, 2009, the Partnership sold its limited partner interest in Murfreesboro Villas, L.P. (“Murfreesboro”).  The Partnership sold its limited partner interest in Murfreesboro on November 12, 2009.  At the time of sale, Murfreesboro was appraised with a value of $609,000 and the outstanding mortgage debt was $754,203.  Murfreesboro had been experiencing operational issues for several years.  The Housing Complex was 12 years old and the maintenance and administrative expenses associated with the aging Housing Complex were expected to increase.   The Partnership received all of the Low Income Housing Tax Credits from Murfreesboro.  The final credits were taken in 2009.   The Compliance Period expires in 2013, therefore a surety bond was no longer required and the buyer has indemnified against any Low Income Housing Tax Credit recapture.  If there was a recapture, the maximum exposure would be $387,573, which includes the actual recapture amount and the applicable interest, and equates to $15.50 per Partnership Unit.  The Partnership received $1 for its limited partner interest.





Subsequent to the quarterly period ended June 30, 2009, the Partnership sold its Local limited partnership interest in Chillicothe Plaza Apartments, L.P. (“Chillicothe”) to the Local General Partner.  Chillicothe was appraised at $380,000 and had a mortgage note balance of $548,000. The Local limited partnership interest was sold on December 31, 2010 for $20,000 which was paid to the Partnership.  The Partnership will use the cash proceeds to pay $14,000 of reimbursements of operating expenses to the General Partner and affiliates while the remaining $6,000 will be retained in reserves for future operating expenses.  The Partnership received all of the Low Income Housing Tax Credits from Chillicothe.  The final credits were taken in 2009.   The Compliance Period expires in 2013, therefore a surety bond was no longer required and the buyer has indemnified against any Low Income Housing Tax Credit recapture.  If there was a recapture, the maximum exposure would be $425,973 which includes the actual recapture amount and the applicable interest, and equates to $17.04 per Partnership Unit.


16
  Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations





Forward-Looking Statements





With the exception of the discussion regarding historical information, this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other discussions elsewhere in this Form 10-Q contain forward looking statements.  Such statements are based on current expectations subject to uncertainties and other factors which may involve known and unknown risks that could cause actual results of operations to differ materially from those projected or implied.  Further, certain forward-looking statements are based upon assumptions about future events which may not prove to be accurate.





Risks and uncertainties inherent in forward looking statements include, but are not limited to, the Partnership’s future cash flows and ability to obtain sufficient financing, level of operating expenses, conditions in the Low Income Housing Tax Credit property market and the economy in general, as well as legal proceedings.  Historical results are not necessarily indicative of the operating results for any future period.





Subsequent written and oral forward looking statements attributable to the Partnership or persons acting on its behalf are expressly qualified in their entirety by cautionary statements in this Form 10-Q and in other reports filed with the Securities and Exchange Commission.





The following discussion and analysis compares the results of operations for the three months ended June 30, 2009 and 2008, and should be read in conjunction with the condensed unaudited financial statements and accompanying notes included within this report.





Financial Condition





The Partnership’s assets at June 30, 2009 consisted of $61,000 in cash and aggregate investments in fourteen Local Limited Partnerships of $648,000. Liabilities at June 30, 2009 consisted of $821,000 of accrued fees and expenses due to the General Partner and affiliates.





Results of Operations





Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008.The Partnership’s net loss for the three months ended June 30, 2009 was $(1,092,000), reflecting a decrease of $2,448,000 from the $(3,540,000) net loss experienced for the three months ended June 30, 2008.  The decrease was largely due to a decrease of $2,208,000 in impairment loss.  Impairment loss can vary from year to year depending on the annual decrease in Low Income Housing Tax Credits allocated to the Partnership compared to the current carrying value of each of the investments to the Partnership.  The equity in losses of Local Limited Partnerships also decreased by $82,000 for the three months ended June 30, 2009, compared to the three months ended June 30, 2008.  The equity in losses in Local Limited Partnerships can vary from year to year depending on the operations of the underlying Housing Complexes of the Local Limited Partnerships.  Additionally, as of June 30, 2009, investment balances for eleven of the Local Limited Partnerships reached zero compared to only eight reaching zero as of June 30, 2008.  Since losses cannot be recorded for investments that have reached zero, a decrease in the equity in losses of Local Limited Partnerships would be expected.   Amortization decreased by $13,000 due to the fact that some of the acquisition costs and fees were written off in the prior year thereby reducing the amortization expense for future years.  Legal and accounting fees decreased by $105,000 due to the timing issue of the accounting work being performed.  During the three months ended June 30, 2009, one of its Local Limited Partnerships was sold and the Partnership incurred a gain on disposal of $1,000 while none of the Local Limited Partnerships were sold for the three months ended June 30, 2008.  There is a recovery of bad debt income of $36,000 during the three months ended June 30, 2009 due to the fact that the advances made and reserved for the disposed Local Limited Partnership were recovered as a result of the disposal.


17


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





Liquidity and Capital Resources





Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008.The net increase in cash during the three months ended June 30, 2009 was $39,000 compared to a net increase in cash for the three months ended June 30, 2008 of 10,000.  The change of $29,000 is largely due to the fact that the Partnership received $37,000 in cash proceeds from the sale of a Local Limited Partnership.  In addition, no payment was made to the General Partner for asset management fees during the three months ended June 30, 2008 compared to $7,500 being paid to the General Partner during the three months ended June 30, 2009.





During the three months ended June 30, 2009, accrued payables, which consist primarily of related party asset management fees and advances due to the General Partner, increased by approximately $12,000. The General Partner does not anticipate that these accrued fees and advances will be paid until such time as capital reserves are in excess of foreseeable working capital requirements of the Partnership.





The Partnership expects its future cash flows, together with its net available assets as of June 30, 2009, to be insufficient to meet all currently foreseeable future cash requirements. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through January 31, 2012.





Recent Accounting Changes





In September 2006, the Financial Accounting Standards Board (the "FASB") issued accounting guidance for Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. This guidance is effective for financial statements issued for fiscal years beginning after November 15, 2008 and shall be applied prospectively except for very limited transactions. In February 2009, the FASB delayed for one year implementation of the guidance as it pertains to certain non-financial assets and liabilities. The Partnership adopted U.S. generally accepted accounting principles ("GAAP") for Fair Value Measurements effective April 1, 2008 except as it applies to those non-financial assets and liabilities, for which the effective date was April 1, 2009. The Partnership has determined that adoption of this guidance has no material impact on the Partnership's financial statements.





In November 2008, the FASB issued accounting guidance on Equity Method Investment Accounting Considerations that addresses how the initial carrying value of an equity method investment should be determined, how an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment should be performed, how an equity method investee's issuance of shares should be accounted for, and how to account for a change in an investment from the equity method to the cost method. This guidance is effective in fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. The Partnership adopted the guidance for the interim quarterly period beginning April 1, 2009. The impact of adopting it will not have a material impact on the Partnership's financial condition or results of operations.





In April 2009, the FASB issued accounting guidance for Interim Disclosures about Fair Value of Financial Instruments. This requires disclosure about the method and significant assumptions used to establish the fair value of financial instruments for interim reporting periods as well as annual statements. It became effective for as of and for the interim period ended June 30, 2009 and will have no impact on the Partnership's financial condition or results of operations.


18


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





In May 2009, the FASB issued guidance regarding subsequent events, which was subsequently updated in February 2010. This guidance established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This guidance was effective for financial statements issued for fiscal years and interim periods ending after June 15, 2009, and was therefore adopted by the Partnership for the quarter ended June 30, 2009. The adoption did not have a significant impact on the subsequent events that the Partnership reports, either through recognition or disclosure, in the financial statements. In February 2010, the FASB amended its guidance on subsequent events to remove the requirement to disclose the date through which an entity has evaluated subsequent events, alleviating conflicts with current SEC guidance. This amendment was effective immediately and therefore the Partnership did not include the disclosure in this Form 10-Q.





In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for the consolidation of VIEs.  The amended guidance modifies the consolidation model to one based on control and economics, and replaces the current quantitative primary beneficiary analysis with a qualitative analysis. The primary beneficiary of a VIE will be the entity that has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE.  If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the amended guidance requires continual reconsideration of the primary beneficiary of a VIE and adds an additional reconsideration event for determination of whether an entity is a VIE.  Additionally, the amendment requires enhanced and expanded disclosures around VIEs.  This amendment is effective for fiscal years beginning after November 15, 2009.  The adoption of this guidance on April 1, 2010 is not expected to havea material effect on the Partnership’s financial statements.





In June 2009, the FASB issued the Accounting Standards Codification (Codification). Effective July 1, 2009, the Codification is the single source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with GAAP. The Codification is intended to reorganize, rather than change, existing GAAP. Accordingly, all references to currently existing GAAP have been removed and have been replaced with plain English explanations of the Partnership's accounting policies. The adoption of the Codification did not have a material impact on the Partnership's financial position or results of operations.





Item 3. Quantitative and Qualitative Disclosures About Market Risks





NOT APPLICABLE


19


Item 4T. Controls and Procedures





(a)           Disclosure controls and procedures





As of the end of the period covered by this report, the Partnership’s General Partner, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer of Associates, carried out an evaluation of the effectiveness of the Partnership’s “disclosure controls and procedures” as defined in Securities Exchange Act of 1934 Rule 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Partnership’s disclosure controls and procedures were not effective to ensure that material information required to be disclosed in the Partnership’s periodic report filings with SEC is recorded, processed, summarized and reported within the time period specified by the SEC’s rules and forms, consistent with the definition of “disclosure controls and procedures” under the Securities Exchange Act of 1934.





The Partnership must rely on the Local Limited Partnerships to provide the Partnership with certain information necessary to the timely filing of the Partnership’s periodic reports. Factors in the accounting at the Local Limited Partnerships have caused delays in the provision of such information during past reporting periods, and resulted in the Partnership’s inability to file its periodic reports in a timely manner.





Once the Partnership has received the necessary information from the Local Limited Partnerships, the Chief Executive Officer and the Chief Financial Officer of Associates believe that the material information required to be disclosed in the Partnership’s periodic report filings with SEC is effectively recorded, processed, summarized and reported, albeit not in a timely manner. Going forward, the Partnership will use the means reasonably within its power to impose procedures designed to obtain from the Local Limited Partnerships the information necessary to the timely filing of the Partnership’s periodic reports.





(b)           Changes in internal controls





There were no changes in the Partnership’s internal control over financial reporting that occurred during the quarter ended June 30, 2009 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.


20




Part II.
Other InformationItem 1.
Legal ProceedingsNONEItem 2.
Unregistered Sales of Equity Securities and Use of ProceedsNONEItem 3.
Defaults Upon Senior SecuritiesNONEItem 4.
(Removed and Reserved)Item 5.
Other InformationNONEItem 6.
Exhibits





31.1
Certification of the Principal Executive Officer pursuant to Rule 13a-14 and 15d-14, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.  (filed herewith)





31.2
Certification of the Principal Financial Officer pursuant to Rule 13a-14 and 15d-14, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.  (filed herewith)





32.1
Section 1350 Certification of the Chief Executive Officer.  (filed herewith)





32.2
Section 1350 Certification of the Chief Financial Officer.  (filed herewith)


21


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 WNC HOUSING TAX CREDIT FUND VI, L.P. SERIES 5
 
 By:  WNC & ASSOCIATES, INC. General Partner
 
 
 
 
 
 By: /s/  Wilfred N. Cooper, Jr.
 
 Wilfred N. Cooper, Jr.
 President and Chief Executive Officer of WNC & Associates, Inc.
 
 Date: January 28, 2011
 
 
 
 
 
 
 By:  /s/ Melanie R. Wenk
 
 Melanie R. Wenk
 Vice-President - Chief Financial Officer of WNC & Associates, Inc.
 
 Date: January 28, 2011
 
 
 
 
  22