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 December 31, 2002

                                       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: 0-21494


                      WNC HOUSING TAX CREDIT FUND III, L.P.

                        California                                33-0463432
              (State or other jurisdiction of                 (I.R.S. Employer
             incorporation or organization)                  Identification No.)



              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
    ---------    ---------


Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in rule 12b-2 of the Exchange Act).

Yes           No      X
    ---------    ---------




<PAGE>


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

                               INDEX TO FORM 10-Q

                For the Quarterly Period Ended December 31, 2002




PART I. FINANCIAL INFORMATION

     Item 1. Financial Statements

             Balance Sheets,
              December 31, 2002 and March 31, 2002.............................3

             Statements of Operations
              For the three and nine months ended December 31, 2002
              and 2001.........................................................4

             Statement of Partners' Equity (Deficit)
              For the nine months ended December 31, 2002 .....................5

             Statements of Cash Flows
              For the nine months ended December 31, 2002 and 2001.............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 about Market Risk.......14

     Item 4.  Procedures and Controls.........................................14

PART II. OTHER INFORMATION

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

     Item 4. Submission of Matters to a Vote of Security Holders..............14

     Item 5. Other Information................................................14

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

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

     Certifications...........................................................16



                                       2
<PAGE>


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

                                 BALANCE SHEETS
<TABLE>
<CAPTION>




                                                                     December 31, 2002             March 31, 2002
                                                                   -----------------------        ------------------
                                                                        (unaudited)
<S>                                                              <C>                            <C>
ASSETS

Cash and cash equivalents                                        $               250,668        $         294,946
Investments in limited partnerships, net (Note 2)                              1,582,283                1,816,995
                                                                   -----------------------        ------------------

                                                                 $             1,832,951        $       2,111,941
                                                                   =======================        ==================


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
   Accrued fees and expenses due to
     General Partner and affiliates (Note 3)                                   2,316,689                2,122,532
                                                                   -----------------------        ------------------

      Total liabilities                                                        2,316,689                2,122,532
                                                                   -----------------------        ------------------

Commitments and contingencies

Partners' equity (deficit):
  General Partner                                                                (45,358)                 (40,627)
  Limited Partners (15,000 units authorized and 15,000
    units issued and outstanding)                                               (438,380)                  30,036
                                                                   -----------------------        ------------------

      Total partners' deficit                                                   (483,738)                 (10,591)
                                                                   -----------------------        ------------------

                                                                 $             1,832,951        $       2,111,941
                                                                   =======================        ==================
</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 Three and Nine Months Ended December 31, 2002 and 2001
                                   (unaudited)

<TABLE>
<CAPTION>
                                               2002                    2002                  2001                2001
                                           Three months            Nine months           Three months        Nine months
                                        -------------------     -------------------    -----------------   -----------------

<S>                                   <C>                     <C>                    <C>                 <C>
Interest income                       $              1,007    $              3,305   $            1,403  $            6,887
Distribution income                                  2,000                   8,664                    -              17,151
                                        -------------------     -------------------    -----------------   -----------------

                                                     3,007                  11,969                1,403              24,038
                                        -------------------     -------------------    -----------------   -----------------

Operating expenses:
  Amortization (Note 2)                              7,235                  21,705                5,726              20,196
  Asset management fees (Note 3)                    74,757                 224,271               74,757             224,271
  Legal and accounting                               2,256                  23,206                2,189              23,246
  Other                                              1,993                   6,106                5,170               9,561
                                        -------------------     -------------------    -----------------   -----------------

    Total operating expenses                        86,241                 275,288               87,842             277,274
                                        -------------------     -------------------    -----------------   -----------------

Loss from operations                               (83,234)               (263,319)             (86,439)           (253,236)

Equity in losses of
 limited partnerships (Note 2)                     (66,820)               (209,828)            (131,237)           (456,395)
                                        -------------------     -------------------    -----------------   -----------------


Net loss                              $           (150,054)   $           (473,147)  $         (217,676) $         (709,631)
                                        ===================     ===================    =================   =================

Net loss allocated to:
  General Partner                     $             (1,500)   $             (4,731)  $           (2,177) $           (7,096)
                                        ===================     ===================    =================   =================

  Limited Partners                    $           (148,554)   $           (468,416)  $         (215,499) $         (702,535)
                                        ===================     ===================    =================   =================

Net loss per limited
  partner unit                        $                (10)   $                (31)  $              (15) $              (47)
                                        ===================     ===================    =================   =================

Outstanding weighted limited
  partner units                                     15,000                  15,000               15,000              15,000
                                        ===================     ===================    =================   =================
</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 (DEFICIT)

                   For the Nine Months Ended December 31, 2002
                                   (unaudited)
<TABLE>
<CAPTION>


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

<S>                                                  <C>                  <C>                   <C>
Partners' equity (deficit) at March 31, 2002         $       (40,627)     $         30,036      $          (10,591)

Net loss                                                      (4,731)             (468,416)               (473,147)
                                                       ---------------      ----------------      ------------------

Partners' deficit at December 31, 2002               $       (45,358)     $       (438,380)     $         (483,738)
                                                       ===============      ================      ==================
</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 Nine Months Ended December 31, 2002 and 2001
                                   (unaudited)
<TABLE>
<CAPTION>


                                                                            2002                 2001
                                                                        --------------      ---------------
<S>                                                                   <C>                 <C>
Cash flows from operating activities:
  Net loss                                                            $     (473,147)     $      (709,631)
    Adjustments to reconcile net loss to net
      cash used in operating activities:
        Amortization                                                          21,705               20,196
        Equity in losses of limited partnerships                             209,828              456,395
        Change in accrued  fees and expenses due to
           General Partner and affiliates                                    194,157              195,770
                                                                        --------------      ---------------

Net cash used in operating activities                                        (47,457)             (37,270)
                                                                        --------------      ---------------

Cash flows from investing activities:
    Investments in limited partnerships                                            -               (5,000)
    Distributions from limited partnerships                                    3,179               18,259
                                                                        --------------      ---------------

Net cash provided by investing activities                                      3,179               13,259
                                                                        --------------      ---------------

Net decrease in cash and cash equivalents                                    (44,278)             (24,011)

Cash and cash equivalents, beginning of period                               294,946              310,526
                                                                        --------------      ---------------

Cash and cash equivalents, end of period                              $      250,668      $       286,515
                                                                        ==============      ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

   Taxes paid                                                         $          800      $           800
                                                                        ==============      ===============
</TABLE>
                 See accompanying notes to financial statements
                                       6
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS
                For the Quarterly Period Ended December 31, 2002
                                   (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 and nine
months ended  December 31, 2002 are not  necessarily  indicative  of the results
that may be  expected  for the fiscal year ending  March 31,  2003.  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,
2002.

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 of the  Partnership is WNC Tax Credit  Partners,  L.P. (the
"General Partner"). WNC & Associates, Inc. ("Associates") and Wilfred N. Cooper,
Sr. are the general partners of the General Partner.  The chairman and president
own substantially  all of the outstanding  stock of Associates.  The business of
the Partnership is conducted primarily through Associates as the General Partner
and the Partnership has no employees of their own.

The Partnership  shall continue in full force and effect until December 31, 2050
unless  terminated prior to that date pursuant to the partnership  agreement and
law.

The  partnership  agreement  authorized the sale of up to 15,000 units at $1,000
per Unit  ("Units").  The offering of Units  concluded on December 31, 1993,  at
which time 15,000 Units representing  subscriptions in the amount of $15,000,000
had been accepted.  The General Partner has 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
                For the Quarterly Period Ended December 31, 2002
                                   (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's
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 (Note 2).

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.


                                       8
<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                For the Quarterly Period Ended December 31, 2002
                                   (unaudited)

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

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 remaining maturity
of three months or less when  purchased to be cash  equivalents.  As of December
31, 2002 and March 31, 2002, the Partnership had no cash equivalents.

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

At December 31,  2002,  the  Partnership  maintained a cash balance at a certain
financial institution in excess of the maximum federally insured amounts.

Net Loss Per Limited Partner Unit
---------------------------------

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

Reporting Comprehensive Income
------------------------------

The  Statement of Financial  Accounting  Standards  ("SFAS") No. 130,  Reporting
Comprehensive  Income  established  standards  for the  reporting and display of
comprehensive  income (loss) and its components in a full set of general-purpose
financial statements. The Partnership had no items of other comprehensive income
for all periods presented, as defined by SFAS No. 130.

New Accounting Pronouncements
-----------------------------

In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144,  "Accounting  for the  Impairment or Disposal of Long-Lived  Assets" ("SFAS
144"), which addresses  accounting and financial reporting for the impairment or
disposal of long-lived assets.  SFAS 144 is effective for fiscal years beginning
after December 15, 2001, and generally, is to be applied prospectively. SFAS 144
is not  expected  to  have a  material  impact  on the  Partnership's  financial
position or results of operations.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with  Exit or  Disposal  Activities."  SFAS No.  146  addresses  accounting  and
reporting for costs  associated  with exit or disposal  activities and nullifies
Emerging  Issues Task Force Issue No. 94-3,  "Liability  Recognition for Certain
Employee  Termination  Benefits  and Other Costs to Exit an Activity  (Including
Certain  Costs  Incurred  in a  Restructuring)."  SFAS No. 146  requires  that a
liability for a cost associated with an exit or disposal  activity be recognized
and measured  initially at fair value when the  liability is incurred.  SFAS No.
146 is  effective  for exit or  disposal  activities  that are  initiated  after
December 31, 2002, with early application  encouraged.  SFAS 146 is not expected
to have a material impact on the Partnership's  financial position or results of
operations.

                                        9
<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                For the Quarterly Period Ended December 31, 2002
                                   (unaudited)


NOTE 2 - INVESTMENTS 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.

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

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

                                                                    For the Nine             For the Year
                                                                    Months Ended                 Ended
                                                                 December 31, 2002          March 31, 2002
                                                                ---------------------      ------------------
<S>                                                           <C>                        <C>
     Investments per balance sheet, beginning of period       $           1,816,995      $        2,387,646
     Capital contribution                                                         -                   5,000
     Capital contribution payable                                                 -                 (50,818)
     Equity in losses of limited partnerships                              (209,828)               (495,399)
     Distributions received from limited partnerships                        (3,179)                 (3,512)
     Amortization of capitalized acquisition fees and
     costs                                                                  (21,705)                (25,922)
                                                                ---------------------      ------------------
     Investments per balance sheet, end of period             $           1,582,283      $        1,816,995
                                                                =====================      ==================
</TABLE>

Selected  financial  information for the nine months ended December 31, 2002 and
2001 from the unaudited combined condensed  financial  statements of the limited
partnerships in which the Partnership has invested as follows:
<TABLE>
<CAPTION>

                                COMBINED CONDENSED STATEMENTS OF OPERATIONS
                                                                       2002                      2001
                                                               ----------------------      ------------------
<S>                                                          <C>                        <C>
        Revenues                                             $            5,252,000     $         4,962,000
                                                               ----------------------      ------------------
        Expenses:
          Operating expenses                                              3,436,000               3,264,000
          Interest expense                                                1,394,000               1,337,000
          Depreciation and amortization                                   1,433,000               1,427,000
                                                               ----------------------      ------------------
        Total expenses                                                    6,263,000               6,028,000
                                                               ----------------------      ------------------

        Net loss                                             $           (1,011,000)     $       (1,066,000)
                                                               ======================      ==================
                                                             $           (1,001,000)     $       (1,055,000)
        Net loss allocable to the Partnership
                                                               ======================      ==================
        Net loss recorded by the Partnership                 $             (210,000)     $         (456,000)
                                                               ======================      ==================
</TABLE>

                                       10
<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                For the Quarterly Period Ended December 31, 2002
                                   (unaudited)

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
-------------------------------------------------------

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

NOTE 3 - RELATED PARTY TRANSACTIONS
-----------------------------------

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

(a)  Annual Asset  Management Fee. An annual asset  management fee equal to 0.5%
     of the invested assets of the Local Limited  Partnerships.  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 Apartment Complexes owned
     by such Local Limited  Partnerships.  Fees of $224,271 were incurred during
     each of the nine months ended December 31, 2002 and 2001, respectively. The
     Partnership  paid the  General  Partner  $30,000  and $28,501 of those fees
     during the Nine months ended December 31, 2002 and 2001, respectively.

(b)  Subordinated  disposition fee. 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 16%
     through  December 31, 2002 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.

The accrued fees and expenses due to General Partner and affiliates consisted of
the following at:
<TABLE>
<CAPTION>

                                                        December 31, 2002              March 31, 2002
                                                        -----------------              --------------

<S>                                              <C>                            <C>
   Asset management fee payable                  $              2,315,126       $           2,120,855
   Advances from WNC & Associates                                   1,563                       1,677
                                                    ----------------------         -------------------
                                                 $              2,316,689       $           2,122,532
                                                    ======================         ===================
</TABLE>



The General  Partners do not anticipate that the accrued fees will be paid until
such time as capital  reserves are in excess of the future  foreseeable  working
capital requirements.

NOTE 4 - INCOME TAXES
---------------------

No provision for income taxes has been recorded in the financial statements,  as
any  liability  for  income  taxes  is the  obligation  of the  partners  of the
Partnership.

                                       11
<PAGE>



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,
"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,  our  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 us or
persons  acting on our behalf  are  expressly  qualified  in their  entirety  by
cautionary  statements  in this Form 10-Q and in other reports we filed with the
Securities and Exchange  Commission.  The following discussion should be read in
conjunction  with the  Consolidated  Financial  Statements and the Notes thereto
included elsewhere in this filing.

The following discussion and analysis compares the results of operations for the
three and nine months ended  December  31, 2002 and 2001,  and should be read in
conjunction  with the condensed  financial  statements  and  accompanying  notes
included within this report.

Financial Condition

The Partnership's assets at December 31, 2002 consisted primarily of $251,000 in
cash and aggregate  investments in the forty-eight Local Limited Partnerships of
$1,582,000.  Liabilities at December 31, 2002 primarily  consisted of $2,317,000
of accrued  asset  management  fees and expenses due to the General  Partner and
affiliates.

Results of Operations

Three Months Ended December 31, 2002 Compared to Three Months Ended December 31,
2001.  The  Partnership's  net loss for the three months ended December 31, 2002
was $(150,000), reflecting a decrease of $68,000 from the net loss for the three
months ended December 31, 2001 of $(218,000). This decrease primarily was due to
equity in  losses  of  limited  partnerships,  which  decreased  by  $64,000  to
$(67,000),  for the three months ended  December 31, 2002 compared to $(131,000)
for the three months ended December 31, 2001.  This decrease was a result of the
Partnership  not recognizing  certain losses of the Local Limited  Partnerships.
The  investments in such Local Limited  Partnerships  had reached $0 at December
31, 2002. Since the  Partnership's  liability with respect to its investments is
limited,  losses in excess of  investments  are not  recognized.  Along with the
decrease  in  equity in losses of  limited  partnerships,  loss from  operations
decreased by $3,000, from $(86,000) for the three months ended December 31, 2001
to $(83,000) for the three months ended December 31, 2002, caused by an increase
in total  income  approximately  of $2,000 and a decrease  in other  expenses by
$3,000,  offset by an increase of amortization expense of approximately  $2,000,
for the three months ended  December 31, 2002 compared to the three months ended
December 31, 2001.


                                       12
<PAGE>


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

Nine Months Ended  December 31, 2002 Compared to Nine Months Ended  December 31,
2001. The Partnership's net loss for the nine months ended December 31, 2002 was
$(473,000),  reflecting  a decrease of  $236,000  from the net loss for the nine
months ended December 31, 2001 of $(709,000). This decrease primarily was due to
equity in  losses of  limited  partnerships,  which  decreased  by  $246,000  to
$(210,000),  for the nine months ended  December 31, 2002 compared to $(456,000)
for the nine months ended  December 31, 2001.  This decrease was a result of the
Partnership  not recognizing  certain losses of the Local Limited  Partnerships.
The  investments in such Local Limited  Partnerships  had reached $0 at December
31, 2002. Since the  Partnership's  liability with respect to its investments is
limited,  losses in excess of investments  are not  recognized.  The decrease in
equity in losses of limited  partnerships was offset by an increase in loss from
operations  of $10,000  due to a decrease  in total  income of  $(12,000)  and a
decrease of total  operating  expenses of $(2,000) from $(277,000) for the three
months ended December 31, 2001 to $(275,000) for the three months ended December
31, 2002.

Cash Flows

Nine Months Ended  December 31, 2002 Compared to Nine Months Ended  December 31,
2001.  Net cash  decreased by $(44,000)  for the nine months ended  December 31,
2002,  compared to a $(24,000)  decrease for the nine months ended  December 31,
2001  reflecting  a change  of  $(20,000).  The  change  was due to a  $(10,000)
increase in net cash used in  operating  activities  of  $(47,000)  for the nine
months  ended  December  31, 2002,  compared to the  $(37,000)  net cash used in
operating  activities  for the nine months ended December 31, 2001. In addition,
cash  provided  by  investing   activities   decreased  by  $10,000  to  $3,000,
substantially  due to a decrease in  distributions  received  from Local Limited
Partnerships,  for the nine months  ended  December  31,  2002  compared to cash
provided by investing  activities of $13,000 for the nine months ended  December
31, 2001.

During the nine months ended December 31, 2002,  accrued asset  management  fees
payable and advances  due to the General  Partner  increased  by  $194,000.  The
General  Partner does not anticipate  that the accrued fees and advances will be
paid until such time as capital  reserves are in excess of  foreseeable  working
capital requirements of the partnership.




                                       13
<PAGE>


Item 3:   Quantitative and Qualitative Disclosures About Market Risks

          NOT APPLICABLE

Item 4.   Procedures and Controls

          Within  the 90 days  prior to the  date of this  report,  the  General
          Partners  of the  General  Partner of the  Partnership  carried out an
          evaluation,  under  the  supervision  and  with the  participation  of
          Associates' management,  including Associate's Chief Executive Officer
          and Chief Financial  Officer,  of the  effectiveness of the design and
          operation of the  Partnerships'  disclosure  controls  and  procedures
          pursuant to Exchange Act Rule 13a- 14. Based upon that evaluation, the
          Chief Executive Officer and Chief Financial Officer concluded that the
          Partnership's disclosure controls and procedures are effective.  There
          were no significant changes in the Partnership's  internal controls or
          in other  factors  that  could  significantly  affect  these  controls
          subsequent to the date of their evaluation.



PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

          NONE

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

          The Consent  Solicitation  Statement  dated  August 15, 2002 was first
          sent to the Limited Partners on or about August 15, 2002.

          The  General   Partner  has  proposed  that  the   Partnership   cease
          reproduction and mailing of quarterly and annual financial  statements
          to the  Limited  Partners,  to reduce  the  expenses  incurred  by the
          Partnership.  The Partnership  will continue to prepare  quarterly and
          annual  financial  statements so long as it is required to do so under
          the Securities and Exchange  Commission Act of 1934 and submit them to
          the Securities and Exchange Commission.  All votes were to be returned
          to the General Partner by October 15, 2002 to be counted. The proposal
          was approved by the Limited  Partners and the results of the vote were
          8,558  for  the  proposal,   1,115  against  the  proposal,   and  108
          abstentions.

Item 5.   Other Information

          Wilfred N. Cooper, Jr. has assumed the role of Chief Executive Officer
          of WNC & Associates.  Wilfred N. Cooper,  Sr. who previously  held the
          role of Chief Executive Officer remains the Chairman of The Board.

Item 6.   Exhibits and Reports on Form 8-K

(a)       Reports on Form 8-K.
          ---------------------

1.        NONE

(b)       Exhibits.
          ----------

99.1      Certification  pursuant to 18 U.S.C.  Section 1350 as adapted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.



                                       14
<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 of the Registrant

By:  WNC & Associates, Inc., General Partner of
     WNC Housing Tax Credit Fund III, L.P.






By: /s/  Wilfred N. Cooper, Jr.
    ----------------------------

Wilfred N. Cooper, Jr.
President and Chief Executive Officer of WNC & Associates, Inc.

Date:  February 11, 2003






By: /s/ Thomas J. Riha
    -------------------

Thomas J. Riha
Vice President-Chief Financial Officer of WNC & Associates, Inc.

Date:  February 11, 2003



                                       15
<PAGE>


                                 CERTIFICATIONS

     I,   Wilfred N. Cooper, Jr., certify that:

     1.   I have reviewed this quarterly  report on Form 10-Q of WNC HOUSING TAX
          CREDIT FUND III, L.P.;

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  registrant
          and we have:

          (a) designed such  disclosure  controls and  procedures to ensure that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's   disclosure
          controls  and  procedures  as of a date  within  90 days  prior to the
          filing date of this quarterly report (the "Evaluation Date"); and

          (c)  presented  in this  quarterly  report our  conclusions  about the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent function):

          (a)  all  significant  deficiencies  in the  design  or  operation  of
          internal  controls  which  could  adversely  affect  the  registrant's
          ability to record,  process,  summarize and report  financial data and
          have identified for the registrant's  auditors any material weaknesses
          in internal controls; and

          (b) any fraud,  whether or not material,  that involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal controls; and

     6.   The registrant's other certifying officer and I have indicated in this
          quarterly  report  whether  or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

     Date: February 11, 2003


     /s/  Wilfred N. Cooper, Jr.
     ---------------------------

     President and Chief Executive Officer of WNC & Associates, Inc.


                                       16

<PAGE>


                                 CERTIFICATIONS

     I,   Thomas J. Riha, certify that:

     1.   I have reviewed this quarterly  report on Form 10-Q of WNC HOUSING TAX
          CREDIT FUND III, L.P.;

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  registrant
          and we have:

          (a) designed such  disclosure  controls and  procedures to ensure that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's   disclosure
          controls  and  procedures  as of a date  within  90 days  prior to the
          filing date of this quarterly report (the "Evaluation Date"); and

          (c)  presented  in this  quarterly  report our  conclusions  about the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent function):

          (a)  all  significant  deficiencies  in the  design  or  operation  of
          internal  controls  which  could  adversely  affect  the  registrant's
          ability to record,  process,  summarize and report  financial data and
          have identified for the registrant's  auditors any material weaknesses
          in internal controls; and

          (b) any fraud,  whether or not material,  that involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal controls; and

     6.   The registrant's other certifying officer and I have indicated in this
          quarterly  report  whether  or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

     Date: February 11, 2003


     /s/  Thomas J. Riha
     -------------------

     Vice-President - Chief Financial Officer of WNC & Associates, Inc.



                                       17