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 June 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.

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

                              California 33-0463432


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

                                 (714) 622-5565


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



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

                               INDEX TO FORM 10-Q

                       FOR THE QUARTER ENDED JUNE 30, 2000






PART I. FINANCIAL INFORMATION

     Item 1. Financial Statements

         Balance Sheets, June 30, 2000 and March 30, 2000......................3

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

         Statement of Partners' Equity
              For the three months ended June 30, 2000 ........................5

         Statements of Cash Flows
              For the three months ended June 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 Above Markets Risks.....14

PART II. OTHER INFORMATION

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

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

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

                                       2
<PAGE>


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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>


                                                                 June 30, 2000            March 31, 2000
                                                                ----------------         ------------------
                                                                  (unaudited)
                                                  ASSETS
<S>                                                          <C>                      <C>

Cash and cash equivalents                                     $         341,586        $           330,386
 Investments in limited
  partnerships (Note 2)                                               3,353,757                  3,533,290
                                                                ----------------         ------------------

                                                              $       3,695,343        $         3,863,676
                                                                ================         ==================


                                LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
 Due to limited partnerships (Note 4)                         $          50,818        $            50,818
 Accrued fees and expenses due to
   General Partner and affiliates (Note 3)                            1,656,057                  1,581,300
                                                                ----------------         ------------------

    Total liabilities                                                 1,706,875                  1,632,118
                                                                ----------------         ------------------

Partners' equity (deficit):
 General Partner                                                       (20,637)                   (18,206)
 Limited Partners (15,000 units authorized;
 15,000 units issued and outstanding)                                 2,009,105                  2,249,764
                                                                ----------------         ------------------

    Total partners' equity                                            1,988,468                  2,231,558
                                                                ----------------         ------------------

                                                              $       3,695,343        $         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 Months Ended June 30, 2000 and 1999
                                   (unaudited)


<TABLE>
<CAPTION>


                                                                   2000                      1999
                                                              ---------------         -------------------
       <S>                                                 <C>                     <C>

        Interest income                                     $          4,736        $              3,686
        Miscellaneous income                                           7,420                           -
                                                              ---------------         -------------------
                                                                      12,156                       3,686

        Operating expenses:
        Amortization                                                  11,812                      11,812
        Asset management fees (Note 3)                                74,757                      74,757
        Other                                                          5,577                       5,890
                                                              ---------------         -------------------

        Total operating expenses                                      92,146                      92,459
                                                              ---------------         -------------------

        Loss from operations                                        (79,990)                    (88,773)
                                                              ---------------         -------------------

        Equity in losses of
         limited partnerships (Note 2)                             (163,100)                   (185,560)
                                                              ---------------         -------------------

        Net loss                                            $      (243,090)        $          (274,333)
                                                              ===============         ===================

        Net loss allocated to:
          General Partner                                   $        (2,431)        $            (2,743)
                                                              ===============         ===================

          Limited Partners                                  $      (240,659)        $          (271,590)
                                                              ===============         ===================

        Net loss per limited
         partnership unit (15,000 units
         issued and outstanding)                            $           (16)        $               (18)
                                                              ===============         ===================
</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 Three Months Ended June 30, 2000
                                   (unaudited)
<TABLE>
<CAPTION>


                                                    General                 Limited
                                                    Partner                Partners                  Total
                                                -----------------      ------------------       -----------------
<S>                                          <C>                    <C>                      <C>

Equity (deficit), March 31, 2000              $         (18,206)     $         2,249,764      $        2,231,558

Net loss for the three months ended
 June 30, 2000                                           (2,431)               (240,659)               (243,090)
                                                -----------------      ------------------       -----------------

Equity (deficit), June 30, 2000               $         (20,637)     $         2,009,105      $        1,988,468
                                                =================      ==================       =================
</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 Three Months Ended June 30, 2000 and 1999
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                            2000                1999
                                                                       ---------------     ---------------
<S>                                                                 <C>                 <C>

Cash flows from operating activities:
  Net loss                                                           $      (243,090)    $      (274,453)

    Adjustments to reconcile net loss to net
        cash provided by operating activities:
        Amortization                                                           11,812              11,812
        Equity in losses of limited partnerships                              163,100             185,680
        Change in accrued fees and expense due to
          General Partner and affiliates                                       74,757              79,848
                                                                       ---------------     ---------------

             Net cash provided by operating activities                          6,579               2,887
                                                                       ---------------     ---------------

Cash flows from investing activities:
     Distributions from limited partnerships                                    4,621               8,030
                                                                       ---------------     ---------------

Net increase in cash and cash equivalents                                      11,200              10,917

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

Cash and cash equivalents, end of period                             $        341,586    $        346,663
                                                                       ===============     ===============


</TABLE>

                See accompanyoing notes to financial statements

                                       6


<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS

                                  June 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 months ended June 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
risks are that the low income housing credit could be recaptured and

                                       7
<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                  June 30, 2000
                                   (Unaudited)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

that neither the  Partnership's  investments nor the Housing  Complexes owned by
the Local Limited  Partnerships  will 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 (Note 2).

Offering Expenses

Offering  expenses consist of underwriting  commissions,  legal fees,  printing,
filing and  recordation  fees,  and other costs  incurred  with selling  limited
partnership  interests in the  Partnership.  The General Partner is obligated to
pay all  offering  and  organization  costs in  excess of 15%  (including  sales
commissions) of the total offering proceeds.  Offering expenses are reflected as
a reduction of partners'  capital and amounted to  $2,250,000  at the end of all
periods presented.

                                       8
<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                  June 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
June 30, 2000 and March 31, 2000 the Partnership had cash equivalents of $11,760
and $11,599, respectively.

Concentration of Credit Risk

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

NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIPS

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

Equity  in  losses  of the  Local  Limited  Partnerships  is  recognized  in the
financial  statements until the related  investment account is reduced to a zero
balance. Losses incurred after the investment account is reduced to zero are not
recognized. If the Local Limited Partnerships report net income in future years,
the  Partnership  will resume applying the equity method only after its share of
such net  income  equals  the share of net  losses  not  recognized  during  the
period(s) the equity method was suspended.



                                       9

<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                  June 30, 2000
                                   (Unaudited)

NOTE 2 - INVESTMENT 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>

                                                                    June 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                                                    (163,100)               (959,660)
        Distributions received                                              (4,621)                (16,145)
        Amortization of paid
          acquisition fees and costs                                       (11,812)                (47,248)
                                                                   -----------------      ------------------
        Investments per balance sheet,
          end of period                                          $        3,353,757     $         3,533,290
                                                                   =================      ==================
</TABLE>

Selected  financial  information  for the three  months  ended  June 30 from the
unaudited combined financial statements of the limited partnerships in which the
Partnership has invested as follows:
<TABLE>
<CAPTION>
                                                                        2000                    1998
                                                                  ------------------      ------------------
       <S>                                                     <C>                     <C>
        Revenues                                                $         1,642,000     $         1,635,000

        Expenses:
          Interest expense                                                  454,000                 466,000
          Depreciation and amortization                                     482,000                 484,000
          Operating expenses                                              1,062,000               1,000,000
                                                                  ------------------      ------------------

             Total expenses                                               1,998,000               1,950,000
                                                                  ------------------      ------------------

        Net loss                                                $          (356,000)     $         (315,000)
                                                                  ==================      ==================
        Net loss allocable to the
          Partnership                                           $          (353,000)     $         (311,000)
                                                                  ==================      ==================
        Net loss recorded by the
          Partnership                                           $          (163,000)     $         (186,000)
                                                                  ==================      ==================
</TABLE>

                                       10
<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                  June 30, 2000
                                   (Unaudited)

NOTE 3 - RELATED PARTY TRANSACTIONS

The Partnership has no officers,  employees,  or directors.  However,  under the
terms of the  Partnership  Agreement the Partnership is obligated to the General
Partner or its affiliates for the following fees:

     (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 $74,757 were incurred during each of the
          three months ended June 30, 2000 and 1999.  The  Partnership  paid the
          General  Partner or its affiliates $0 of those fees during each of the
          three  months  ended  June  30,  2000  and  1999.

     (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.

Accrued fees and expenses due to General  Partner and affiliates  consist of the
following:
<TABLE>
<CAPTION>

                                                                      June 30, 2000            March 31, 2000
                                                                     -----------------        ------------------
         <S>                                                     <C>                      <C>


          Asset management fee payable                            $         1,656,057      $          1,581,300
                                                                     -----------------        ------------------
                                                                  $         1,656,057      $          1,581,300
                                                                     =================        ==================
</TABLE>


NOTE 4 - PAYABLES TO LIMITED PARTNERSHIPS

Payables  to limited  partnerships  represent  amounts  which are due at various
times  based on  conditions  specified  in the  respective  limited  partnership
agreements.  These  contributions  are payable in installments and are generally
due upon the limited  partnership  achieving  certain  development and operating
benchmarks (generally within two years of the Partnership's initial investment).


NOTE 5 - INCOME TAXES

No provision  for income taxes has been recorded in the  accompanying  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 Operation

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
fiscal  quarter 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 June 30, 2000  consisted  primarily of $342,000 in
cash and aggregate  investments in the forty-eight Local Limited Partnerships of
$3,354,000.  Liabilities at June 30, 2000  primarily  consisted of $1,656,000 of
accrued annual management fees due to the General Partner.

Results of Operations

Three Months  Ended June 30, 2000  Compared to Three Months Ended June 30, 1999.
The  Partnership's  net loss  for the  three  months  ended  June  30,  2000 was
$(243,000),  a decrease of $31,000  from the net loss for the three months ended
June 30,  1999 of $  (274,000).  The  decrease in net loss is  primarily  due to
equity  in  losses  of  limited  partnerships  which  decreased  by  $23,000  to
$(163,000)  for the three months ended June 30, 2000 from  $(186,000)  for the
three months ended June 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 June 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  from the  limited  partnerships,  there was a decrease in loss
from  operations of $9,000 for the three months ended June 30, 2000 to $(80,000)
from  $(89,000)  for the  three  months  ended  June  30,  1999,  mainly  due to
approximately  $7,000 of miscellaneous income recognized during the three months
ended June 30, 2000.

Cash Flows

Three Months  Ended June 30, 2000  Compared to Three Months Ended June 30, 1999.
Net cash provided  during the three months ended June 30, 2000 and June 30, 1999
was $11,000.  Expenses  paid to the General  Partner and  affiliates  during the
three months ended June 30, 2000  increased by $3,000.  This increase was offset
by a decrease in distributions from limited partnerships of $3,000.

During the three  months  ended June 30, 2000 and the year ended March 31, 2000,
accrued  payables,  which consist  primarily of asset management fees due to the
General  Partner,  increased  by $75,000 and $80,000, 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 forseeable working capital
requirements of the Partnership.

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


                                       12
<PAGE>

Impact of Year 2000

WNC & Associates, Inc.

Status of Readiness

Information Technology (IT) Systems. The Partnership relies on the IT systems of
WNC, its ultimate  general  partner.  IT systems include  computer  hardware and
software  used to produce  financial  reports and tax return  information.  This
information  is then  used to  generate  reports  to  investors  and  regulatory
agencies, including the Internal Revenue Service and the Securities and Exchange
Commission. The IT systems of WNC are year 2000 compliant.

Non-IT Systems. The Partnership also relies on the non-IT systems of WNC. Non-IT
systems  include  machinery and  equipment  such as  telephones,  voice mail and
electronic postage equipment. The non-IT systems of WNC are year 2000 compliant.

Service  Providers.  WNC also  relies on the IT and  non-IT  systems  of service
providers. Service providers include utility companies,  financial institutions,
telecommunications carriers,  municipalities, and other outside vendors. WNC has
obtained verbal assurances from its material service providers (electrical power
provider,  financial institutions and telecommunications carriers) that their IT
and non-IT systems are year 2000  compliant.  To date,  WNC has not  encountered
significant year 2000 issues or business disruptions from its service providers.

Costs to Address Year 2000 Issues

The cost to address year 2000 issues for WNC has been less than $25,000.

Risk of Year 2000 Issues

Although WNC has  encountered no significant  year 2000 issues to date, the most
reasonable  and likely result from  non-year  2000  compliance of systems of the
service  providers  noted  above  would be the  disruption  of  normal  business
operations for WNC. This disruption could, in turn, lead to delays in performing
reporting and fiduciary responsibilities on behalf of the Partnership. The worst
case scenario would be the replacement of a service provider. These delays would
likely  be  temporary  and  would  likely  not  have a  material  effect  on the
Partnership or WNC.

Local Limited Partnerships

Status of Readiness

To date, WNC and the  Partnership  have  encountered  no  significant  year 2000
issues with respect to the Local Limited Partnerships.

Costs to Address Year 2000 Issues

There has been and will be no cost to the  Partnership  as a result of assessing
year 2000 issues for the Local  Limited  Partnerships.  Although no  significant
year 2000 issues have been  encountered to date, the cost to deal with potential
year 2000 issues of the Local Limited  Partnerships  cannot be estimated at this
time.



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<PAGE>

Risk of Year 2000 Issues

Although no significant  year 2000 issues have been  encountered to date,  there
can be no assurance that the Partnership will be unaffected by year 2000 issues.
The most  reasonable and likely result from non-year 2000 compliance will be the
disruption of normal  business  operations  for the Local Limited  Partnerships,
including but not limited to the possible  failure to properly collect rents and
meet their obligations in a timely manner.  This disruption would, in turn, lead
to  delays  by the  Local  Limited  Partnerships  in  performing  reporting  and
fiduciary responsibilities on behalf of the Partnership. The worst-case scenario
would  include the  initiation  of  foreclosure  proceedings  on the property by
mortgage debt holders.  Under these  circumstances,  WNC or its affiliates  will
take  actions  necessary  to minimize  the risk of  foreclosure,  including  the
removal and  replacement of a Local General  Partner by the  Partnership.  These
delays would likely be temporary and would likely not have a material  effect on
the Partnership or WNC.

Item 3:  Quantitative and Qualitative Disclosures Above Market Risks

         None

Part II.  Other Information

Item 1.  Legal Proceedings

         None

Item 6.  Exhibits and Reports on Form 8-K

         None


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<PAGE>





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

WNC HOUSING TAX CREDIT FUND III, L.P.

By:  WNC Tax Credit Partners, L.P., General Partner of the Registrant

By:  WNC & ASSOCIATES, INC., General Partner



By:  /s/ Will N Cooper, Jr.
Will N Cooper, Jr., President - Chief Operating Officer of
WNC & Associates, Inc.

Date: August 21, 2000



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

Date: August 21, 2000





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