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, 2003

                                       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.)



                              17782 Sky Park Circle
                              Irvine, CA 92614-6404
                    (Address of principal executive offices)

                                 (714) 622-5565

 3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes           No      X
    ---------    ----------


Indicate by check mark whether the registrant 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 Quarter Ended September 30, 2003





PART I. FINANCIAL INFORMATION

     Item 1. Financial Statements

       Balance Sheets,
             September 30, 2003 and March 31, 2003.............................3

       Statements of Operations
             For the three and six  months ended September 30, 2003 and 2002...4

       Statement of Partners' Deficit
             For the six months ended September 30, 2003 ......................5

       Statements of Cash Flows
             For the six months ended September 30, 2003 and 2002..............6

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


     Item 2. Management's Discussion and Analysis of Financial
             Condition and Results of Operations..............................14

     Item 3. Quantitative and Qualitative Disclosures about Market Risk.......15

     Item 4. Procedures and Controls..........................................15

PART II. OTHER INFORMATION

     Item 1. Legal Proceedings................................................16

     Item 6. Exhibits and Reports on Form 8-K.................................16

     Signatures...............................................................17





                                       2
<PAGE>


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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                     September 30, 2003            March 31, 2003
                                                                   -----------------------        ------------------
                                                                        (unaudited)
<S>                                                              <C>                            <C>
ASSETS

Cash and cash equivalents                                        $               233,179        $         251,056
Investments in limited partnerships, net (Note 2)                              1,182,450                1,358,412
                                                                   -----------------------        ------------------

                                                                 $             1,415,629        $       1,609,468
                                                                   =======================        ==================


LIABILITIES AND PARTNERS' DEFICIT

Liabilities:
   Accrued fees and expenses due to
     General Partner and affiliates (Note 3)                                   2,523,507                2,392,085
                                                                   -----------------------        ------------------

      Total liabilities                                                        2,523,507                2,392,085
                                                                   -----------------------        ------------------

Commitments and contingencies

Partners' deficit:
  General Partner                                                                (51,600)                 (48,347)
  Limited Partners (15,000 units authorized and 15,000
    units issued and outstanding)                                             (1,056,278)                (734,270)
                                                                   -----------------------        ------------------

      Total partners' deficit                                                 (1,107,878)                (782,617)
                                                                   -----------------------        ------------------

                                                                 $             1,415,629        $       1,609,468
                                                                   =======================        ==================
</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 Six months Ended September 30, 2003 and 2002
                                   (unaudited)
<TABLE>
<CAPTION>

                                                 2003                    2003                  2002                2002
                                             Three months             Six months           Three months         Six months
                                          -------------------     -------------------    -----------------   ------------------

<S>                                     <C>                     <C>                    <C>                 <C>
Interest income                         $                536    $              1,181   $            1,120  $             2,298
Distribution income                                   13,815                  20,409                6,664                6,664
                                          -------------------     -------------------    -----------------   ------------------

                                                      14,351                  21,590                7,784                8,962
                                          -------------------     -------------------    -----------------   ------------------

Operating expenses:
  Amortization (Note 2)                                7,235                  14,470                7,235               14,470
  Asset management fees (Note 3)                      74,866                 149,732               74,757              149,514
  Legal and accounting                                15,474                  19,044               14,975               20,950
  Other                                                1,717                   8,635                  916                4,113
                                          -------------------     -------------------    -----------------   ------------------

    Total operating expenses                          99,292                 191,881               97,883              189,047
                                          -------------------     -------------------    -----------------   ------------------

Loss from operations                                 (84,941)               (170,291)             (90,099)            (180,085)

Equity in losses of
 limited partnerships (Note 2)                      (108,485)               (154,970)             (74,503)            (143,008)
                                          -------------------     -------------------    -----------------   ------------------


Net loss                                $           (193,426)   $           (325,261)  $         (164,602) $          (323,093)
                                          ===================     ===================    =================   ==================

Net loss allocated to:
  General Partner                       $             (1,934)   $             (3,253)  $           (1,646) $            (3,231)
                                          ===================     ===================    =================   ==================

  Limited Partners                      $           (191,492)   $           (322,008)  $         (162,956) $          (319,862)
                                          ===================     ===================    =================   ==================

Net loss per limited
  partner unit                          $                (13)   $                (21)  $              (11) $               (21)
                                          ===================     ===================    =================   ==================

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' DEFICIT

                   For the Six months Ended September 30, 2003
                                   (unaudited)
<TABLE>
<CAPTION>


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


<S>                        <C> <C>                   <C>                  <C>                   <C>
Partners' deficit at March 31, 2003                  $       (48,347)     $       (734,270)     $         (782,617)

Net loss                                                      (3,253)             (322,008)               (325,261)
                                                       ---------------      ----------------      ------------------

Partners' deficit at September 30, 2003              $       (51,600)     $     (1,056,278)     $       (1,107,878)
                                                       ===============      ================      ==================
</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, 2003 and 2002
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                            2003                 2002
                                                                        --------------      ---------------
<S>                                                                   <C>                 <C>
Cash flows from operating activities:
  Net loss                                                            $     (325,261)     $      (323,093)
    Adjustments to reconcile net loss to net
      cash used in operating activities:
        Amortization                                                          14,470               14,470
        Equity in losses of limited partnerships                             154,970              143,008
        Change in accrued  fees and expenses due to
           General Partner and affiliates                                    131,422              138,741
                                                                        --------------      ---------------
Net cash used in operating activities                                        (24,399)             (26,874)
                                                                        --------------      ---------------
Cash flows from investing activities:
    Distributions from limited partnerships                                    6,522                3,179
                                                                        --------------      ---------------
Net decrease in cash and cash equivalents                                    (17,877)             (23,695)

Cash and cash equivalents, beginning of period                               251,056              294,946
                                                                        --------------      ---------------
Cash and cash equivalents, end of period                              $      233,179      $       271,251
                                                                        ==============      ===============
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 Quarter Ended September 30, 2003
                                   (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 six months ended
September  30, 2003 are not  necessarily  indicative  of the results that may be
expected  for the fiscal year ending March 31,  2004.  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,
2003.

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 - CONTINUED
                    For the Quarter Ended September 30, 2003
                                   (unaudited)


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

Risks and Uncertainties
-----------------------

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

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

The Partnership has invested in a limited number of Local Limited  Partnerships.
Such  limited  diversity  means that the  results of  operation  of each  single
Housing  Complex  will have a greater  impact on the  Partnership.  With limited
diversity,   poor   performance   of  one  Housing   Complex  could  impair  the
Partnership's ability to satisfy its investment objectives. Each Housing Complex
is subject to mortgage  indebtedness.  If a Local Limited  Partnership failed to
pay its  mortgage,  it  could  lose  its  Housing  Complex  in  foreclosure.  If
foreclosure  were to occur during the first 15 years,  the loss of any remaining
Low Income Housing Credits,  a fractional  recapture of prior Low Income Housing
Credits and a loss of the Partnership's  investment in the Housing Complex would
occur. The Partnership is a limited partner or non-managing member of each Local
Limited Partnership.  Accordingly, the Partnership will have very limited rights
with respect to management of the Local Limited  Partnerships.  The  Partnership
will rely  totally on the Local  General  Partners.  Neither  the  Partnership's
investments in Local Limited  Partnerships,  nor the Local Limited Partnerships'
investments  in Housing  Complexes,  are readily  marketable.  To the extent the
Housing Complexes receive government financing or operating subsidies,  they may
be subject to one or more of the  following  risks:  difficulties  in  obtaining
tenants for the Housing  Complexes;  difficulties  in obtaining rent  increases;
limitations  on cash  distributions;  limitations  on  sales or  refinancing  of
Housing  Complexes;  limitations  on transfers  of  interests  in Local  Limited
Partnerships;  limitations on removal of Local General Partners;  limitations on
subsidy  programs;  and possible  changes in applicable  regulations.  Uninsured
casualties  could result in loss of property and Low Income Housing  Credits and
recapture of Low Income  Housing  Credits  previously  taken.  The value of real
estate is subject  to risks  from  fluctuating  economic  conditions,  including
employment rates, inflation,  tax, environmental,  land use and zoning policies,
supply and demand of similar  properties,  and  neighborhood  conditions,  among
others.

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

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


                                       8
<PAGE>



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

                          NOTES TO FINANCIAL STATEMENTS
                    For the Quarter Ended September 30, 2003
                                   (unaudited)

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

Exit Strategy
-------------

The IRS  compliance  period for  low-income  housing  tax credit  properties  is
generally  15 years from  occupancy  following  construction  or  rehabilitation
completion.  WNC was one of the first in the industry to offer investments using
the tax credit.  Now these very first programs are completing  their  compliance
period.

With that in mind,  the  Partnership  is continuing to review the  Partnership's
holdings,  with special emphasis on the more mature  properties  including those
that have satisfied the IRS compliance  requirements.  The Partnership's  review
will consider many factors  including  extended use requirements on the property
(such as those due to mortgage restrictions or state compliance agreements), the
condition of the property,  and the tax  consequences  to the investors from the
sale of the property.

Upon identifying  those  properties with the highest  potential for a successful
sale,  refinancing  or  syndication,  the  Partnership  expects to proceed  with
efforts  to  liquidate  those  properties.  The  Partnership's  objective  is to
maximize the investors' return wherever possible and,  ultimately,  to wind down
those  funds  that no longer  provide  tax  benefits  to  investors.  To date no
properties in the Partnership have been selected.

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  Partnerships'  results of operations
and for any  contributions  made and  distributions  received.  The  Partnership
reviews the  carrying  amount of an  individual  investment  in a Local  Limited
Partnership for possible  impairment whenever events or changes in circumstances
indicate that the carrying  amount of such  investment  may not be  recoverable.
Recoverability  of such  investment  is measured by a comparison of the carrying
amount to future  undiscounted  net cash flows  expected to be generated.  If an
investment  is  considered  to be impaired,  the  impairment to be recognized is
measured by the amount by which the carrying  amount of the  investment  exceeds
fair value.  The  accounting  policies of the Local  Limited  Partnership's  are
generally  consistent  with  those of the  Partnership.  Costs  incurred  by the
Partnership  in  acquiring  the  investments  are  capitalized  as  part  of the
investment account and are being amortized over 30 years (See Notes 2 and 3).

Equity in losses from Local Limited Partnerships for the periods ended September
30, 2003 and 2002 have been recorded by the  Partnership  based on six months of
results  estimated by management at the Partnership.  Management's  estimate for
the six-month period is based on either actual unaudited results reported by the
Local Limited  Partnerships or historical  trends in the operations of the Local
Limited Partnerships. Equity in losses from Local Limited Partnerships allocated
to the Partnership are not recognized to the extent that the investment  balance
would be adjusted  below zero. As soon as the investment  balance  reaches zero,
amortization of the related costs of acquiring the investment are accelerated to
the extent of losses available (See 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.

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.


                                       9
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS
                    For the Quarter Ended September 30, 2003
                                   (unaudited)


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

Cash and Cash Equivalents
-------------------------

The  Partnership   considers  all  highly  liquid   investments  with  remaining
maturities of three months or less when purchased to be cash equivalents.  As of
September 30, 2003 and March 31, 2003, the Partnership had no cash equivalents.

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

At September 30, 2003, the Partnership has maintained cash balances 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 loss 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 June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("SFAS")  No. 143,  "Accounting  for Asset
Retirement  Obligations",  which requires that the fair value of a liability for
an asset  retirement  obligation  be  recognized  in the  period  in which it is
incurred with the associated asset retirement costs being  capitalized as a part
of the  carrying  amount of the  long-lived  asset.  SFAS No. 143 also  includes
disclosure   requirements   that  provide  a  description  of  asset  retirement
obligations   and   reconciliation   of  changes  in  the  components  of  those
obligations.  The statement is effective for fiscal years  beginning  after June
15,  2002.  The  adoption of SFAS No. 143 did not have a material  effect on the
Partnership's financial position or results of operations.

In August  2001,  the FASB  issued  SFAS No.  144,  "Impairment  or  Disposal of
Long-Lived  Assets," which addresses  accounting and financial reporting for the
impairment or disposal of long-lived assets. This standard was effective for the
Partnership's financial statements beginning January 1, 2002. The implementation
of SFAS No. 144 did not have a material  impact on the  Partnership's  financial
position or results of operations.

In April 2002, the FASB issued SFAS No. 145,  "Rescission of FASB Statements No.
4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical  Corrections."
SFAS No. 145 rescinded three previously  issued  statements and amended SFAS No.
13, "Accounting for Leases." The statement provides reporting standards for debt
extinguishments   and   provides   accounting   standards   for  certain   lease
modifications that have economic effects similar to sale-leaseback transactions.
The statement is effective for certain lease  transactions  occurring  after May
15,  2002 and all other  provisions  of the  statement  shall be  effective  for
financial statements issued on or after May 15, 2002. The implementation of SFAS
No. 145 did not 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,"  which  updates  accounting  and  reporting
standards for personnel and operational restructurings.  The Partnership adopted
SFAS No. 146 for exit,  disposal  or other  restructuring  activities  initiated
after  December 31,  2002.  The adoption of SFAS No. 146 did not have a material
effect on the Partnership's financial position or results of operations.


                                       10
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS
                    For the Quarter Ended September 30, 2003
                                   (unaudited)


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

In November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of Others."  The adoption of FIN 45 did not have a
material impact on the Partnership's finacial position or results of operations.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and Disclosure - an Amendment to SFAS No. 123." SFAS
No. 148 provides alternative methods of transition for a voluntary change to the
fair value based method on accounting for stock-based employee compensation. The
implementation  of SFAS No. 148 is not expected to have a material effect on the
Partnership's financial position or results of operations.

In January 2003, the FASB issued Interpretation No. 46 ("FIN46"), "Consolidation
of  Variable  Interest  Entities,"  FIN 46  provides  guidance on when a company
should include the assets,  liabilities,  and activities of a variable  interest
entity  ("VIE")  in  its  financial  statements  and  when  it  should  disclose
information  about its relationship  with a VIE. A VIE is a legal structure used
to conduct activities or hold assets, which must be consolidated by a company if
it is the primary  beneficiary  because it absorbs the  majority of the entity's
expected losses,  the majority of the expected returns,  or both. The provisions
of FIN 46 were  effective  February 1, 2003 for all  arrangements  entered  into
after  January 31, 2003.  FIN 46 is effective in the second  quarter of 2004 for
those  arrangements  entered  into prior to January 31, 2003.  We are  currently
reviewing whether we have  relationships with VIEs and, if so, whether we should
consolidate them and disclose  information about them as the primary beneficiary
or  disclose  information  about  them as an  interest  holder.  We may  have to
consolidate  some of our  equity  investments  in  partnerships  based on recent
interpretations from accounting professionals. We currently record the amount of
our investment in these partnerships as an asset on our balance sheet, recognize
our share of partnership income or losses in our income statement,  and disclose
how we account for material  types of these  investments  in our 2003  financial
statements.   However,  we  do  not  yet  know  the  extent  of  the  impact  of
consolidating  the assets and  liabilities of these  partnerships on our balance
sheet   because  of  the   complexities   of  applying   FIN  46,  the  evolving
interpretations  from  accounting   professionals,   and  the  nuances  of  each
individual partnership.

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.

                                       11
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS
                    For the Quarter Ended September 30, 2003
                                   (unaudited)

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

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 Six              For the Year
                                                                    Months Ended                 Ended
                                                                 September 30, 2003         March 31, 2003
                                                                ---------------------      ------------------
<S>                                                           <C>                        <C>
     Investments per balance sheet, beginning of period       $           1,358,412      $        1,816,995
     Equity in losses of limited partnerships                              (154,970)               (409,732)
     Distributions received from limited partnerships                        (6,522)                (19,911)
     Amortization of capitalized acquisition fees and
     costs                                                                  (14,470)                (28,940)
                                                                ---------------------      ------------------
     Investments per balance sheet, end of period             $           1,182,450      $        1,358,412
                                                                =====================      ==================
</TABLE>


Selected  financial  information for the six months ended September 30, 2003 and
2002 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
                                                                       2003                      2002
                                                               ----------------------      ------------------
<S>                                                          <C>                         <C>
        Revenues                                             $             3,544,000     $         3,501,000
                                                               ----------------------      ------------------
        Expenses:
          Operating expenses                                               2,406,000               2,291,000
          Interest expense                                                   880,000                 929,000
          Depreciation and amortization                                      934,000                 955,000
                                                               ----------------------      ------------------
        Total expenses                                                     4,220,000              4,175, 000
                                                               ----------------------      ------------------

        Net loss                                             $              (676,000)    $          (674,000)
                                                               ======================      ==================

        Net loss allocable to the Partnership                 $              (669,000)   $          (668,000)
                                                               ======================      ==================
        Net loss recorded by the Partnership                 $              (155,000)    $          (143,000)
                                                               ======================      ==================
</TABLE>

Certain Local Limited  Partnerships have incurred  significant  operating losses
and/or have  working  capital  deficiencies.  In the event  these Local  Limited
Partnerships continue to incur significant operating losses,  additional capital
contributions  by the  Partnership  may be required to sustain 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 $149,732 and  $149,514  were
     incurred  during  the  six  months  ended  September  30,  2003  and  2002,
     respectively.  The Partnership paid the General Partner $25,000 and $22,500
     of those fees  during the six months  ended  September  30,  2003 and 2002,
     respectively.

                                       12
<PAGE>



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

                          NOTES TO FINANCIAL STATEMENTS
                    For the Quarter Ended September 30, 2003
                                   (unaudited)

NOTE 3 - RELATED PARTY TRANSACTIONS, contintued
-----------------------------------------------

(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 September 30, 2003 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>

                                                       September 30, 2003              March 31, 2003
                                                       ------------------              --------------

<S>                                              <C>                            <C>
   Asset management fee payable                  $              2,514,615       $           2,389,883
   Advances from Associates                                         8,892                       2,202
                                                    ----------------------         -------------------
                                                 $              2,523,507       $           2,392,085
                                                    ======================         ===================
</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.




                                       13
<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 six months ended  September  30, 2003 and 2002,  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 September 30, 2003 consisted  primarily of $233,000
in cash and aggregate  investments in the forty-eight Local Limited Partnerships
of  $1,182,000.  Liabilities  at  September  30,  2003  primarily  consisted  of
$2,524,000  of accrued  asset  management  fees and  expenses due to the General
Partner and affiliates.

Results of Operations

Three Months Ended  September 30, 2003 Compared to Three Months Ended  September
30, 2002. The  Partnership's  net loss for the three months ended  September 30,
2003 was  $(193,000),  reflecting an increase of $(28,000) from the net loss for
the three months  ended  September  30, 2002 of  $(165,000).  This  increase was
primarily due to equity in losses of limited  partnerships,  which  increased by
$(33,000) to $(108,000),  for the three months ended September 30, 2003 compared
to $(75,000) for the three months ended  September 30, 2002. This increase was a
result a few investments in Local Limited Partnerships  reaching $0 at September
30,  2003.  Therefore,  the  acquisition  fees and costs  associated  with those
properties  were  written off during  2003.  Offset by the loss from  operations
which  decreased by $5,000,  from $(90,000) for the three months ended September
30, 2002 to $(85,000) for the three months ended  September 30, 2003,  caused by
an  increase  in  distribution  income  of  approximately  $6,000,  offset by an
increase of total operating  expense of  approximately  $(1,000),  for the three
months ended September 30, 2003 compared to the three months ended September 30,
2002.

Six Months Ended  September 30, 2003 Compared to Six Months Ended  September 30,
2002. . The  Partnership's  net loss for the six months ended September 30, 2003
was $(325,000), reflecting an increase of $(2,000) from the net loss for the six
months ended  September 30, 2002 of $(323,000).  This increase was due to equity
in losses of limited  partnerships,  which increased by $(12,000) to $(155,000),
for the six months ended  September 30, 2003 compared to the  $(143,000) for the
six  months  ended  September  30,  2002.  This  increase  was a  result  of the
investments  of a few Local  Limited  Partnerships  reaching $0 at September 30,
2003. Therefore, the acquisition fees and costs associated with those properties
were written off during 2003.  Offset by a decrease in loss from  operations  of
$10,000 for the six months ended  September  30, 2003 compared to the six months
ended  September  30, 2002.  The decrease is due to an increase in  distribution
income of  approximately  $13,000,  offset  by an  increase  of total  operating
expense of approximately  $(3,000),  for the six months ended September 30, 2003
compared to the six months ended September 30, 2002.


                                       14
<PAGE>

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

Cash Flows

Six months Ended  September 30, 2003 Compared to Six months Ended  September 30,
2002.  Net cash  decreased by $(18,000)  for the six months ended  September 30,
2003,  compared to a $(24,000)  decrease for the six months ended  September 30,
2002 reflecting a change of $6,000.  The change was largely due to a decrease of
$8,000 in accrued fees and expenses due to general partner and affiliates  along
with a decrease in interest  income of $1,000 for the six months ended September
30, 2003. In addition, cash provided by investing activities increased by $3,000
to $7,000,  due to an  increase in  distributions  received  from Local  Limited
Partnerships.

During the six months ended  September 30, 2003,  accrued asset  management fees
payable and advances  due to the General  Partner  increased  by  $131,000.  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.


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 Associates' Chief Executive Officer
          and Chief Financial  Officer,  of the  effectiveness of the design and
          operation of the  Partnership's  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.





                                       15
<PAGE>


PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

          NONE

Item 6.   Exhibits and Reports on Form 8-K

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

1.        NONE

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


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

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

32.1      Certification of the Principal Executive Officer pursuant to 18 U.S.C.
          section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
          Act of 2002. (filed herewith)

32.2      Certification of the Principal Financial Officer pursuant to 18 U.S.C.
          section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
          Act of 2002. (filed herewith)





                                       16
<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:  November 14, 2003






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

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

Date:  November 14, 2003








                                       17