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, 2000

                                       OR

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

             For the transition period from ________ to ___________

                         Commission file number: 0-21494


                      WNC HOUSING TAX CREDIT FUND III, L.P.

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 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, 2000



PART I. FINANCIAL INFORMATION

  Item 1. Financial Statements

    Balance Sheets,
     September 30, 2000 and March 31, 2000..................................3

    Statements of Operations
     For the three and six months ended September 30, 2000 and 1999.........4

    Statement of Partners' Equity (Deficit)
     For the six months ended September 30, 2000 ...........................5

    Statements of Cash Flows
     For the six months ended September 30, 2000 and 1999...................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 Markets Risks......13

PART II. OTHER INFORMATION

  Item 1. Legal Proceedings.................................................13

  Item 6. Exhibits and Reports on Form 8-K..................................13

  Signatures................................................................14







                                       2

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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                     September 30, 2000             March 31, 2000
                                                                   ----------------------         ------------------
                                                                        (Unaudited)
ASSETS
<S>                                                              <C>                            <C>
Cash and cash equivalents                                        $              315,133         $         330,386
Investments in limited partnerships (Note 2)                                  3,202,389                 3,533,290
                                                                   ----------------------         ------------------

                                                                 $            3,517,522         $       3,863,676
                                                                   ======================         ==================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
 Due to limited partnerships (Note 4)                            $               50,818         $          50,818
 Accrued asset management fees due to
  General Partner                                                             1,714,147                 1,581,300
                                                                   ----------------------         ------------------

    Total liabilities                                                         1,764,965                 1,632,118
                                                                   ----------------------         ------------------

Partners' equity (deficit):
 General partner                                                                (22,996)                  (18,206)
 Limited partners (15,000 units authorized and
  15,000 units issued and outstanding)                                        1,775,553                 2,249,764
                                                                   ----------------------         ------------------

Total partners' equity                                                        1,752,557                 2,231,558
                                                                   ----------------------         ------------------

                                                                 $            3,517,522         $       3,863,676
                                                                   ======================         ==================

</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, 2000 and 1999
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     2000                                  1999
                                       ----------------------------------    ---------------------------------
                                          Three               Six               Three              Six
                                          Months             Months             Months            Months
                                       --------------     --------------     -------------     --------------
<S>                                  <C>                <C>                <C>               <C>
Interest income                      $       4,771      $        9,507     $       3,910     $       7,596
Distribution income                          4,150              11,570                 -                 -
                                       --------------     --------------     -------------     --------------
    Total income                             8,921              21,077             3,910             7,596
                                       --------------     --------------     -------------     --------------

Operating expenses:
 Amortization                               11,812              23,624            11,812            23,624
 Asset management fees (Note 3)             74,757             149,514            74,757           149,514
 Legal and accounting                       15,474              18,204             2,950            11,956
 Other                                       3,233               6,080            10,431             7,315
                                       --------------     --------------     -------------     --------------

    Total operating expenses               105,276             197,422            99,950           192,409
                                       --------------     --------------     -------------     --------------

Loss from operations                       (96,355)          (176,345)          (96,040)          (184,813)

Equity in losses of
 limited partnerships (Note 2)            (139,556)          (302,656)         (179,799)          (365,479)
                                       --------------     --------------     -------------     --------------

Net loss                             $    (235,911)    $     (479,001)    $    (275,839)    $     (550,292)
                                       ==============     ==============     =============     ==============

Net loss allocated to:
 General partner                     $      (2,359)    $       (4,790)    $      (2,758)    $       (5,503)
                                       ==============     ==============     =============     ==============

 Limited partners                    $    (233,552)    $     (474,211)    $    (273,081)    $     (544,789)
                                       ==============     ==============     =============     ==============

Net loss per limited
 partnership unit                    $         (16)    $          (32)    $         (18)    $          (36)
                                       ==============     ==============     =============     ==============


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 Six Months Ended September 30, 2000
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                          General              Limited
                                                          Partner              Partners                 Total
                                                      ----------------      ---------------       ------------------

<S>                                                 <C>                   <C>                   <C>
Partners' equity (deficit) at March 31, 2000        $        (18,206)     $    2,249,764        $        2,231,558

Net loss                                                      (4,790)           (474,211)                 (479,001)
                                                      ----------------      ---------------       ------------------

Partners' equity (deficit) at September 30, 2000    $        (22,996)     $    1,775,553        $        1,752,557
                                                      ================      ===============       ==================

</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, 2000 and 1999
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                             2000                1999
                                                                       ---------------     ---------------
<S>                                                                 <C>                 <C>
Cash flows from operating activities:
 Net loss                                                           $      (479,001)    $     (550,292)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
    Amortization                                                             23,624             23,624
    Equity in losses of limited partnerships                                302,656            365,479
    Change in accrued asset management fees                                 132,847            149,514
    Change in accrued  fees and expenses due to
     General Partner and affiliates                                               -             (2,190)
                                                                       ---------------     ---------------

Net cash used in operating activities                                       (19,874)           (13,865)
                                                                       ---------------     ---------------

Cash flows from investing activities:
 Distribution from limited partnerships                                       4,621              9,580
                                                                       ---------------     ---------------

Net cash provided by investing activities                                     4,621              9,580
                                                                       ---------------     ---------------

Net decrease in cash and cash equivalents                                   (15,253)            (4,285)

Cash and cash equivalents, beginning of period                              330,386            335,746
                                                                       ---------------     ---------------

Cash and cash equivalents, end of period                             $      315,133     $      331,461
                                                                       ===============     ===============
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

                               September 30, 2000
                                   (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The accompanying condensed consolidated unaudited financial statements have been
prepared in accordance with generally accepted accounting principles 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 generally accepted accounting  principles 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 six months ended September 30, 2000 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending  March  31,  2001.  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, 2000.

Organization

WNC Housing Tax Credit Fund III,  L.P., a California  Limited  Partnership  (the
"Partnership"),  was  formed  on May 10,  1991  under  the laws of the  State of
California.  The  Partnership  was formed to invest  primarily in other  limited
partnerships   (the  "Local  Limited   Partnerships")   which  own  and  operate
multi-family housing complexes (the "Housing Complex") that are eligible for low
income  housing  credits.   The  local  general  partners  (the  "Local  General
Partners")  of  each  Local  Limited   Partnership  retain   responsibility  for
maintaining, operating and managing the Housing Complex.

The general partner is WNC Tax Credit Partners,  L.P. (the "General Partner"), a
California limited  partnership,  WNC & Associates,  Inc. ("WNC") and Wilfred N.
Cooper, Sr. are the general partners of the General Partner.  Wilfred N. Cooper,
Sr., through the Cooper  Revocable Trust owns 66.8% of the outstanding  stock of
WNC. John B. Lester is the original  limited partner of the Partnership and owns
28.6% of the outstanding stock of WNC. Wilfred N. Cooper, Jr., President of WNC,
owns 2.1% of the outstanding stock of WNC.

The  partnership  agreement  authorized the sale of up to 15,000 units at $1,000
per Unit  ("Units").  The offering of Units  concluded on September  30, 1993 at
which time 15,000 Units representing  subscriptions in the amount of $15,000,000
had been accepted.  The General  Partner has a 1% interest in operating  profits
and losses,  taxable income and losses, cash available for distribution from the
Partnership  and  tax  credits.  The  limited  partners  will be  allocated  the
remaining 99% of these items in proportion to their respective investments.

After the limited  partners  have received  proceeds from a sale or  refinancing
equal to their capital  contributions and their return on investment (as defined
in the  Partnership  Agreement)  and the General  Partner has received  proceeds
equal  to its  capital  contribution  and a  subordinated  disposition  fee  (as
described in Note 3) from the  remainder,  any  additional  sale or  refinancing
proceeds will be distributed 90% to the limited partners (in proportion to their
respective investments) and 10% to the General Partner.

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

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                               September 30, 2000
                                   (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

risks  are that the low  income  housing  credit  could be  recaptured  and that
neither the  Partnership's  investments  nor the Housing  Complexes owned by the
Local  Limited  Partnerships  would be  readily  marketable.  To the  extent the
Housing Complexes receive government financing or operating subsidies,  they may
be subject to one or more of the  following  risks:  difficulties  in  obtaining
tenants for the Housing  Complexes;  difficulties  in obtaining rent  increases;
limitations  on cash  distributions;  limitations  on  sales or  refinancing  of
Housing  Complexes;  limitations  on  transfers  of  Local  Limited  Partnership
Interests;  limitations  on removal of Local General  Partners;  limitations  on
subsidy programs;  and possible changes in applicable  regulations.  The Housing
Complexes  are or will be subject to mortgage  indebtedness.  If a Local Limited
Partnership  does not make its mortgage  payments,  the lender  could  foreclose
resulting in a loss of the Housing Complex and low-income housing credits.  As a
limited partner of the Local Limited  Partnerships,  the  Partnership  will have
very  limited   rights  with  respect  to   management   of  the  Local  Limited
Partnerships,  and will rely totally on the Local General  Partners of the Local
Limited Partnerships for management of the Local Limited Partnerships. The value
of the  Partnership's  investments  will be subject to changes in  national  and
local  economic  conditions,  including  unemployment  conditions,  which  could
adversely impact vacancy levels, rental payment defaults and operating expenses.
This, in turn, could substantially increase the risk of operating losses for the
Housing  Complexes  and  the  Partnership.   In  addition,  each  Limited  Local
Partnership  is subject to risks relating to  environmental  hazards and natural
disasters, which might be uninsurable. Because the Partnership's operations will
depend on these and other factors beyond the control of the General  Partner and
the Local General  Partners,  there can be no assurance that the anticipated low
income housing credits will be available to Limited Partners.

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

Method of Accounting for Investments in Limited Partnerships

The Partnership  accounts for its investments in limited  partnerships using the
equity method of  accounting,  whereby the  Partnership  adjusts its  investment
balance for its share of the Local Limited  Partnership's  results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnership's  are consistent with those of the  Partnership.  Costs incurred by
the  Partnership  in acquiring the  investments  are  capitalized as part of the
investment account and are being amortized over 30 years.

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

                               September 30, 2000
                                   (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent assets and liabilities at the date of the financial  statements,  and
the reported amounts of revenues and expenses during the reporting period.
Actual results could materially differ from those estimates.

Cash and Cash Equivalents

The  Partnership   considers  all  highly  liquid   investments  with  remaining
maturities of three months or less when purchased to be cash equivalents.  As of
September 30, 2000 and March 31, 2000, the Partnership  had cash  equivalents of
$0 and $11,599, respectively.

Concentration of Credit Risk

At September 30, 2000,  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  partnership  unit is  calculated  pursuant to Statement of
Financial  Accounting  Standards No. 128,  Earnings Per Share. Net loss per unit
includes no dilution  and is computed  by  dividing  loss  available  to limited
partners by the weighted average number of units outstanding  during the period.
Calculation of diluted net income per unit is not required.

Reporting Comprehensive Income

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

NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIPS

As of the periods  presented,  the Partnership has acquired limited  partnership
interests  in 48 Local  Limited  Partnerships,  each of which  owns one  Housing
Complex  consisting of an aggregate of 1,685  apartment  units.  The  respective
general  partners  of the  Local  Limited  Partnerships  manage  the  day-to-day
operations  of the entities.  Significant  Local  Limited  Partnership  business
decisions require approval from the Partnership.  The Partnership,  as a limited
partner,  is  generally  entitled  to 99%,  as  specified  in the Local  Limited
Partnership agreements,  of the operating profits and losses, taxable income and
losses and tax credits of the Local Limited Partnerships.

                                       9
<PAGE>
                     WNC HOUSING TAX CREDIT FUND III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                               September 30, 2000
                                   (Unaudited)

NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIPS, continued

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.

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, 2000          March 31, 2000
                                                         ----------------------      ------------------
<S>                                                    <C>                         <C>
  Investments per balance sheet, beginning of period   $            3,533,290      $        4,556,343
  Equity in losses of limited partnerships                           (302,656)               (959,660)
  Distributions received                                               (4,621)                (16,145)
  Amortization of paid acquisition fees and costs                     (23,624)                (47,248)
                                                         ======================      ==================
  Investments per balance sheet, end of period         $            3,202,389      $        3,533,290
                                                         ======================      ==================
</TABLE>
Selected  financial  information  for the six months ended September 30 from the
unaudited combined financial statements of the limited partnerships in which the
Partnership has invested as follows:

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                 2000                      1999
                                                         ----------------------      ------------------
<S>                                                    <C>                          <C>
  Revenues                                             $             3,303,000      $        3,270,000
                                                         ----------------------      ------------------

  Expenses:
   Operating expenses                                                2,185,000               2,001,000
   Interest expense                                                    866,000                 931,000
   Depreciation and amortization                                       964,000                 967,000
                                                         ----------------------      ------------------

  Total expenses                                                     4,015,000               3,899,000
                                                         ----------------------      ------------------

  Net loss                                             $              (712,000)     $         (629,000)
                                                         ======================      ==================

  Net loss allocable to the Partnership                $              (705,000)     $         (623,000)
                                                         ======================      ==================


  Net loss recorded by the Partnership                 $              (303,000)     $         (365,000)
                                                         ======================      ==================
</TABLE>
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

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                               September 30, 2000
                                   (Unaudited)

NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIPS, continued

such Local Limited  Partnerships.  If additional  capital  contributions are not
made when they are  required,  the  Partnership's  investment in certain of such
Local Limited Partnerships could be impaired.

NOTE 3 - RELATED PARTY TRANSACTIONS

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

(a)   Annual Asset  Management Fee. An annual asset  management fee in an amount
      equal to 0.5% of the  Invested  Assets  of the  Partnership,  as  defined.
      "Invested Assets" means the sum of the  Partnership's  Investment in Local
      Limited Partnership Interests and the Partnership's allocable share of the
      amount of the  mortgage  loans on and other  debts  related to the Housing
      Complexes owned by such Local Limited Partnerships.  Fees of $149,514 were
      incurred  during each of the six months ended September 31, 2000 and 1999.
      The Partnership paid the General Partner or its affiliates  $16,667 and $0
      of those fees  during the six months  ended  September  30, 2000 and 1999,
      respectively.

(b)   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.

NOTE 4 - PAYABLES TO LIMITED PARTNERSHIPS

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

NOTE 5 - INCOME TAXES

No provision for income taxes has been  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

This  Quarterly  Report  contains  forward-looking   statements  concerning  the
Partnership's anticipated future revenues and earnings,  adequacy of future cash
flow and related matters. These forward-looking  statements include, but are not
limited to, statements containing the words "expect",  "believe", "will", "may",
"should", "project", "estimate", and like expressions, and the negative thereof.
These statements are subject to risks and uncertainties  that could cause actual
results to differ materially from the statements, including competition, as well
as those  risks  described  in the  Partnership's  SEC  reports,  including  the
Partnership's  Form 10-K filed  pursuant to the  Securities  and Exchange Act of
1934 on July 14, 2000.

The following discussion and analysis compares the results of operations for the
three  and six  months  ended  June 30,  2000 and  1999,  and  should be read in
conjunction   with  the  condensed   consolidated   financial   statements   and
accompanying notes included within this report.

Financial Condition

The Partnership's  assets at September 30, 2000 consisted  primarily of $315,000
in cash and aggregate  investments in the forty-eight Local Limited Partnerships
of  $3,202,000.  Liabilities  at  September  30,  2000  primarily  consisted  of
$1,714,000 of accrued asset management fees due to the General Partner.

Results of Operations

Three Months Ended  September 30, 2000 Compared to Three Months Ended  September
30, 1999. The  Partnership's  net loss for the three months ended  September 30,
2000  was  $(236,000),  reflecting  a  decrease  of  $40,000  from  the net loss
experienced  for the three months ended  September 30, 1999 of  $(276,000).  The
decline in net loss is primarily due to equity in losses of limited partnerships
which declined by $40,000 to $(140,000) for the three months ended September 30,
2000 from  $(180,000)  for the three  months  ended  September  30,  1999.  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 September 30, 2000.  Since the  Partnership's  liability  with
respect to its  investments  is limited,  losses in excess of investment are not
recognized. No significant change occurred in loss from operations.

Six Months Ended  September 30, 2000 Compared to Six Months Ended  September 30,
1999. The Partnership's net loss for the six months ended September 30, 2000 was
$(479,000),  reflecting a decrease of $71,000 from the net loss  experienced for
the six months ended  September 30, 1999 of $(550,000).  The decline in net loss
is primarily due to equity in losses of limited  partnerships  which declined by
$62,000  to  $(303,000)  for  the six  months  ended  September  30,  2000  from
$(365,000)  for the six months ended  September  30, 1999.  This  decrease was a
result of the Partnership  not  recognizing  certain losses of the Local Limited
Partnerships.  The investments in such Local Limited  Partnerships reached $0 at
September  30,  2000.  Since the  Partnership's  liability  with  respect to its
investments is limited, losses in excess of investment are not recognized. Along
with the  decrease  of equity in losses  of  limited  partnerships,  there was a
decrease in loss from  operations  of $9,000 for the six months ended  September
30, 2000 to $(176,0000)  from  $(185,000) for the six months ended September 30,
1999.

Cash Flows

Six Months Ended  September 30, 2000 Compared to Six Months Ended  September 30,
1999. Net cash used during the six months ended September 30, 2000 was $(15,000)
compared to a net cash  decrease of $(4,000) for the six months ended  September
30, 1999. The change was due primarily to an increase in operating costs paid of
$6,000 and by a decrease in distributions  received from limited partnerships of
$5,000.

                                       12
<PAGE>

During  the six  months  ended  September  30,  2000  and the six  months  ended
September 31, 1999, accrued payables, which consist of asset management fees due
to the General  Partner,  increased by $133,000 and $150,000  respectively.  The
General Partner does not anticipate that these accrued fees will be paid in full
until such time as capital reserves are in excess of future foreseeable  working
capital requirements of the Partnership.

The Partnership  expects its future cash flows,  together with its net available
assets at September 30, 2000, to be sufficient to meet all currently foreseeable
future cash requirements.

Item 3:  Quantitative and Qualitative Disclosures About Market Risks

         NOT APPLICABLE

Part II. Other Information

Item 1.  Legal Proceedings

         NONE

Item 6.  Exhibits and Reports on Form 8-K

         NONE

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<PAGE>

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

WNC HOUSING TAX CREDIT FUND III, L.P.

By:  WNC Tax Credit Partners, L.P., General Partner 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 - Chief Operating Officer of WNC & Associates, Inc.

Date: December 7, 2000



By: /s/ Michael L. Dickenson

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

Date: December 7, 2000





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