FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   (Mark One)

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

                For the quarterly period ended September 30, 1999

                                       OR

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

             For the transition period from ________ to ___________

                         Commission file number: 0-21494


                      WNC HOUSING TAX CREDIT FUND III, L.P.

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

California                                                           33-0463432


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

                                 (714) 622-5565


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_____




<PAGE>
                      WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                               INDEX TO FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 1999




PART I. FINANCIAL INFORMATION

 Item 1. Financial Statements

     Balance Sheets
          September 30, 1999 and March 31, 1999..............................3

     Statements of Operations
          For the three and six months ended September 30, 1999 and 1998.....4

     Statement of Partners' Equity
          For the six months ended September 30, 1999 .......................5

     Statements of Cash Flows
          For the six months ended September 30, 1999 and 1998...............6

     Notes to Financial Statements...........................................7


 Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations................................12

 Item 3. Quantitative and Qualitative Disclosures Above Markets Risks........14

PART II. OTHER INFORMATION

 Item 1. Legal Proceedings...................................................14

 Item 6. Exhibits and Reports on Form 8-K....................................14

 Signatures..................................................................15

                                       2

<PAGE>
                      WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>


                                                                     September 30, 1999            March 31, 1999
                                                                     ------------------            --------------
                                                                        (Unaudited)
                                     ASSETS

<S>                                                              <C>                            <C>
Cash and cash equivalents                                        $              331,461         $         335,746
Investment in limited partnerships - Note 2                                   4,157,660                 4,556,343
                                                                   --------------------           ---------------

                                                                 $            4,489,121         $       4,892,089
                                                                   ====================           ===============


                        LIABILITIES AND PARTNERS' EQUITY

Liabilities:
 Payable to limited partnerships -Note 4                         $               50,818         $          50,818
 Accrued fees and expenses due to
  general partner and affiliates - Note 3                                     1,442,560                 1,295,236
                                                                   --------------------           ---------------
                                                                              1,493,378                 1,346,054
Partners' equity (deficit):
 General partner                                                                (10,564)                   (5,061)

 Limited partners (15,000 units issued and outstanding)                       3,006,307                 3,551,096
                                                                   --------------------           ---------------

Total partners' equity                                                        2,995,743                 3,546,035
                                                                   --------------------           ---------------

                                                                 $            4,489,121         $       4,892,089
                                                                   ====================           ===============

</TABLE>

                 See accompanying notes to financial statements
                                        3

<PAGE>
                      WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF OPERATIONS

              For the Six Months Ended September 30, 1999 and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                     1999                                  1998
                                       ----------------------------------    ---------------------------------

                                            Three               Six               Three             Six
                                            Months              Months            Months            Months
                                           -------              ------            ------            ------

<S>                                  <C>                <C>                <C>               <C>
Interest income                      $       3,910      $        7,596     $       4,161     $       8,199
                                       -----------        ------------       -----------       -----------

Operating expenses:
Amortization                                11,812              23,624            11,812            23,624
Asset management fees - Note 3              74,757             149,514            74,868           149,737
Legal and accounting                         2,950              11,956                 -             5,250
Other                                       10,431               7,315             5,416            17,920
                                       -----------        ------------       -----------       -----------

Total operating expenses                    99,950             192,409            92,096           196,531
                                       -----------        ------------       -----------       -----------

Loss from operations                       (96,040)           (184,813)          (87,935)         (188,332)

Equity in loss from
 limited partnerships                     (179,799)           (365,479)         (304,600)         (583,900)
                                       -----------        ------------       -----------       -----------

Net loss                             $    (275,839)     $     (550,292)    $    (392,535)    $    (772,232)
                                       ===========        ============       ===========       ===========

Net loss allocated to:
 General partner                     $      (2,758)     $       (5,503)    $      (3,925)    $      (7,722)
                                       ===========        ============       ===========       ===========

 Limited partners                    $    (273,081)     $     (544,789)    $    (388,610)    $    (764,510)
                                       ===========        ============       ===========       ===========

Net loss per limited
 partner unit (15,000 units
 issued and outstanding)             $         (18)     $          (36)    $         (26)    $         (51)
                                       ===========        ============       ===========       ===========

</TABLE>

                 See accompanying notes to financial statements
                                        4
<PAGE>

                      WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                          STATEMENT OF PARTNERS' EQUITY

                   For the Six Months Ended September 30, 1999
                                   (Unaudited)

<TABLE>
<CAPTION>


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

<S>                                             <C>                     <C>                     <C>
Partners' equity (deficit), March 31, 1999      $          (5,061)      $      3,551,096        $        3,546,035

Net loss for the six months ended
 September 30, 1999                                        (5,503)              (544,789)                 (550,292)
                                                    -------------           ------------            --------------

Partners' equity (deficit), June 30, 1999       $         (10,564)      $      3,006,307        $        2,995,743
                                                    =============           ============            ==============

</TABLE>

                 See accompanying notes to financial statements
                                        5

<PAGE>
                      WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF CASH FLOWS

              For the Six Months Ended September 30, 1999 and 1998
                                   (Unaudited)


                                                        1999               1998
                                                       -----               ----
Cash flows from operating activities:
 Net loss                                       $   (550,292)    $     (772,232)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
    Equity in loss from limited partnerships         365,479            583,900
    Amortization                                      23,624             23,624
    Asset management fees                            149,514            149,737
    Change in other assets                                 -                259
    Accrued  fees and expenses due to
     general partner and affiliates                   (2,190)                 -
                                                  ----------        -----------

Net cash used in operating activities                (13,865)           (14,712)
                                                  ----------        -----------

Cash flows from investing activities
    Distribution from limited partnerships             9,580              3,056
                                                  ----------        -----------

Net cash provided by investing activities              9,580              3,056
                                                  ----------        -----------

Net decrease in cash and cash equivalents             (4,285)           (11,656)

Cash and cash equivalents, beginning of period       335,746            344,474
                                                  ----------        -----------

Cash and cash equivalents, end of period        $    331,461     $      332,818
                                                  ==========        ===========


                 See accompanying notes to financial statements
                                        6
<PAGE>
                      WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                               September 30, 1999
                                   (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The information  contained in the following notes to the financial statements is
condensed  from that  which  would  appear in the annual  financial  statements;
accordingly,  the  financial  statements  included  herein should be reviewed in
conjunction with the financial statements and related notes thereto contained in
the  Partnership's  Annual Report for the year ended March 31, 1999.  Accounting
measurements at interim dates  inherently  involve greater reliance on estimates
than at year end. The results of operations for the interim period presented are
not necessarily indicative of the results for the entire year.

In the opinion of the General  Partner,  the  accompanying  unaudited  financial
statements  contain  all  adjustments   (consisting  of  only  normal  recurring
accruals) necessary to present fairly the financial position as of September 30,
1999 and the  results  of  operations  and  changes  in cash flows for the three
months then ended.

Organization

WNC Housing Tax Credit Fund III,  L.P., a California  Limited  Partnership  (the
"Partnership"),  was  formed  on May 10,  1991  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  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"), a
California limited  partnership,  WNC & Associates,  Inc. ("WNC") and Wilfred N.
Cooper, Sr. are the general partners of the General Partner.  Wilfred N. Cooper,
Sr., through the Cooper  Revocable Trust owns 66.8% of the outstanding  stock of
WNC. John B. Lester is the original  limited partner of the Partnership and owns
28.6% of the outstanding stock of WNC.

The  partnership  agreement  authorized the sale of up to 15,000 units at $1,000
per Unit  ("Units").  The offering of Units  concluded on September  30, 1993 at
which time 15,000 Units representing  subscriptions in the amount of $15,000,000
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.  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.

                                       7
<PAGE>
                      WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                               September 30, 1999
                                   (Unaudited)

NOTE 1 - 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  would 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 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 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  Limited  Local
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
Partnership's  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.

                                       8
<PAGE>
                      WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                               September 30, 1999
                                   (Unaudited)

NOTE 1 - 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 partners'  capital and amounted to  $2,250,000  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.

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.

NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIPS

As of the periods  presented,  the Partnership has acquired limited  partnership
interests  in 48 Local  Limited  Partnerships,  each of which  owns one  Housing
Complex  consisting of an aggregate of 1,685  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 Local Limited Partnerships.

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.

                                       9


<PAGE>
                      WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                               September 30, 1999
                                   (Unaudited)

NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIPS, continued

The  following is a summary of the equity method  activity of the  investment in
Local Limited  Partnerships  for the six months ended September 30, 1999 and the
three months ended March 31, 1999:

                                   September 30, 1999          March 31, 1999
                                   ------------------          --------------
  Investment balance,
   beginning of period           $          4,556,343      $        4,811,538
  Equity in loss from limited
   Partnerships                              (365,479)               (231,166)
  Distributions from limited
   partnerships                                (9,580)                (12,217)
  Amortization of capitalized
   acquisition costs                          (23,624)                (11,812)
                                    -----------------           -------------
  Investment balance,
   end of period                 $          4,157,660      $        4,556,343
                                    =================           =============

Selected  operating  information from the combined  financial  statements of the
limited partnerships for the six months ended September 30, 1999 and 1998 are as
follows:

                                                 1999                    1998
                                                 ----                    ----

  Total revenue                  $          3,270,600      $        3,208,200
                                   ------------------            ------------

  Interest expense                            931,200                 927,100
  Depreciation                                967,200                 985,800
  Operating expenses                        2,001,200               1,987,700
                                   ------------------            -------------

  Total expenses                            3,899,600               3,900,600
                                   ------------------            -------------

  Net loss                       $           (629,000)     $         (692,400)
                                   ==================            =============
  Net loss allocable to the
   Partnership                   $           (622,710)     $         (685,476)
                                   ==================            =============
  Net loss recognized by the
   Partnership                   $           (365,479)     $         (583,900)
                                   ==================            ============

NOTE 3 - RELATED PARTY TRANSACTIONS

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 for the following fees:

                                       10
<PAGE>
                      WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                               September 30, 1999
                                   (Unaudited)

NOTE 3 - RELATED PARTY TRANSACTIONS, continued

(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 $149,514 and
     $149,737 and were incurred  during the six months ended  September 31, 1999
     and 1998. The Partnership  paid the General Partner or its affiliates $0 of
     those fees during the six months ended September 30, 1999 and 1998.

(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.  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, 2002, and
     (ii) 6% for the balance of the Partnerships  term. No disposition fees have
     been paid.

(c)  Interest  in  Partnership.   The  General   Partner   receives  1%  of  the
     Partnership's  allocated Low Income  Housing  Credits,  which  approximated
     $24,000 for the General  Partner for the year ended  December 31, 1998. The
     General Partner is also entitled to receive 1% of cash distributions. There
     were no  distributions of cash to the General Partner during the six months
     ended September 30, 1999 or 1998.

Accrued fees and advances due to  affiliates of General  Partner  consist of the
following:

                                      September 30, 1999         March 31, 1999
                                      ------------------         --------------

  Advances made for expenses     $                   773   $              2,963
  Asset management fees                        1,441,787              1,292,273
                                      ------------------         --------------

                                 $             1,442,560   $          1,295,236
                                      ==================         ==============

NOTE 4 - PAYABLE TO LIMITED PARTNERSHIPS

Payable  to Limited  Partnerships  represent  amounts,  which are due at various
times  based on  conditions  specified  in the  respective  limited  partnership
agreements.  These contributions are payable in installments,  are generally due
upon the limited  partnership  achieving  certain  operating  benchmarks and are
generally  expected  to be paid  within two years of the  Partnership's  initial
investment.

NOTE 5 - INCOME TAXES

No provision  for income taxes has been made,  as the liability for income taxes
is an obligation of the partners of the Partnership.

                                       11

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

Financial Condition

The Partnership's  assets at September 30, 1999 consisted  primarily of $331,000
in cash and aggregate  investments in the forty-eight Local Limited Partnerships
of  $4,158,000.  Liabilities  at  September  30,  1999  primarily  consisted  of
$1,443,000 of accrued annual management fees due to the General Partner.

Results of Operations

Three Months Ended  September 30, 1999 Compared to Three Months Ended  September
30, 1998. The  Partnership's  net loss for the three months ended  September 30,
1999  was  $(276,000),  reflecting  a  decrease  of  $117,000  from the net loss
experienced  for the three months ended  September 30, 1998.  The decline in net
loss is primarily due to equity in losses of limited partnerships which declined
by $125,000 to  $(180,000)  for the three months ended  September  30, 1999 from
$(305,000)  for the three months ended  September 30, 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 at
September  30,  1999.  Since the  Partnership's  liability  with  respect to its
investments is limited, losses in excess of investment are not recognized. Along
with the decrease of equity in losses from the limited  partnerships there was a
increase in loss from  operations of $8,000 for the three months ended September
30, 1999 to $(96,000)  from  $(88,000) for the three months ended  September 30,
1998

Six Months Ended  September 30, 1999 Compared to Six Months Ended  September 30,
1998. The Partnership's net loss for the six months ended September 30, 1999 was
$(550,000),  reflecting a decrease of $222,000 from the net loss experienced for
the six months ended  September  30, 1998.  The decline in net loss is primarily
due to equity in losses of limited  partnerships  which  declined by $219,000 to
$(365,000) for the six months ended  September 30, 1999 from  $(584,000) for the
six  months  ended  September  30,  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 at September 30,
1999.  Since the  Partnership's  liability  with respect to its  investments  is
limited,  losses in excess of  investment  are not  recognized.  Along  with the
decrease of equity in losses from the limited  partnerships there was a decrease
in loss from operations of $3,000 for the six months ended September 30, 1999 to
$(185,0000) from $(188,000) for the six months ended September 30, 1998

Cash Flows

Six Months Ended  September 30, 1999 Compared to Six Months Ended  September 30,
1998. Net cash used during the six months ended  September  30,1999 was $(4,000)
compared to a net cash decrease of $(12,000) for the six months ended  September
30,  1998.  The change was due  primarily  to a decrease in  operating  costs of
$1,000, offset by an increase in distributions of $7,000.

During the six months ended September 30, 1999 and the six moths ended September
31, 1998, accrued payables,  which consist primarily of related party management
fees  due  to  the  General   Partner,   increased   by  $150,000  and  $150,000
respectively.  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.

The Partnership  expects its future cash flows,  together with its net available
assets at December 15, 1999, to be sufficient to meet all currently  foreseeable
future cash requirements.

                                       12
<PAGE>
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.

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.

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<PAGE>
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 3:  Quantitative and Qualitative Disclosures Above Market Risks

         NONE

Part II. Other Information

Item 1.  Legal Proceedings

         NONE

Item 6.  Exhibits and Reports on Form 8-K

         NONE


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<PAGE>

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 III, 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
WNC & Associates, Inc.

Date: November 17, 1999



By: /s/ Michael L. Dickenson

Michael L. Dickenson, Vice President-Finance
WNC & Associates, Inc.

Date: November 17, 1999





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