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, 2002

                                       OR

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

             For the transition period from ________ to ___________

                         Commission file number: 0-21494


                      WNC HOUSING TAX CREDIT FUND III, L.P.
California                                                           33-0463432
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)



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

                                 (714) 622-5565


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




<PAGE>


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

                               INDEX TO FORM 10-Q

                       For the Quarter Ended June 30, 2002




PART I. FINANCIAL INFORMATION

     Item 1. Financial Statements

             Balance Sheets,
              June 30, 2002 and March 31, 2002.................................3

             Statements of Operations
              For the three months ended June 30, 2002 and 2001................4

             Statement of Partners' Equity (Deficit)
              For the three months ended June 30, 2002 ........................5

             Statements of Cash Flows
              For the three months ended June 30, 2002 and 2001................6

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


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

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

PART II. OTHER INFORMATION

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

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

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

     Certification Pursuant To 18 U.S.C. Section 1350.........................16



                                       2
<PAGE>


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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>



                                                                       June 30, 2002               March 31, 2002
                                                                   -----------------------        ------------------
                                                                        (unaudited)
<S>                                                              <C>                            <C>
ASSETS

Cash and cash equivalents                                        $               282,863        $         294,946
Investments in limited partnerships, net (Note 2)                              1,734,386                1,816,995
                                                                   -----------------------        ------------------

                                                                 $             2,017,249        $       2,111,941
                                                                   =======================        ==================


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
   Accrued fees and expenses due to
     General Partner and affiliates (Note 3)                                   2,186,331                2,122,532
                                                                   -----------------------        ------------------

      Total liabilities                                                        2,186,331                2,122,532
                                                                   -----------------------        ------------------

Commitments and contingencies

Partners' equity (deficit):
  General Partner                                                                (42,212)                 (40,627)
  Limited Partners (15,000 units authorized and 15,000
    units issued and outstanding)                                               (126,870)                  30,036
                                                                   -----------------------        ------------------

      Total partners' deficit                                                   (169,082)                 (10,591)
                                                                   -----------------------        ------------------

                                                                 $             2,017,249        $       2,111,941
                                                                   =======================        ==================
</TABLE>


                 See accompanying notes to financial statements
                                       3
<PAGE>



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

                            STATEMENTS OF OPERATIONS

                For the Three Months Ended June 30, 2002 and 2001
                                   (unaudited)
                 See accompanying notes to financial statements
<TABLE>
<CAPTION>


                                                    2002                                2001
                                                Three months                        Three months
                                       -------------------------------      ------------------------------

<S>                                  <C>                                  <C>
Interest income                      $                         1,178     $                         2,993
                                       -------------------------------      ------------------------------

Operating expenses:
  Amortization (Note 2)                                        7,235                               7,235
  Asset management fees (Note 3)                              74,757                              74,767
  Legal and accounting                                         5,975                               4,504
  Other                                                        3,197                               3,460
                                       -------------------------------      ------------------------------

    Total operating expenses                                  91,164                              89,966
                                       -------------------------------      ------------------------------

Loss from operations                                         (89,986)                            (86,973)

Equity in losses of
 limited partnerships (Note 2)                               (68,505)                           (122,085)
                                       -------------------------------      ------------------------------

Net loss                             $                      (158,491)     $                     (209,058)
                                       ===============================      ==============================

Net loss allocated to:
  General Partner                    $                        (1,585)     $                       (2,091)
                                       ===============================      ==============================

  Limited Partners                   $                      (156,906)     $                     (206,967)
                                       ===============================      ==============================

Net loss per limited
  partner unit                       $                           (10)     $                          (14)
                                       ===============================      ==============================

Outstanding weighted limited
  partner units                                               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 Three Months Ended June 30, 2002
                                   (unaudited)
                 See accompanying notes to financial statements
<TABLE>
<CAPTION>


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

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

Net loss                                                      (1,585)             (156,906)               (158,491)
                                                       ---------------      ----------------      ------------------

Partners' deficit at June 30, 2002                   $       (42,212)     $       (126,870)     $         (169,082)
                                                       ===============      ================      ==================
</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, 2002 and 2001
                                   (unaudited)
<TABLE>
<CAPTION>


                                                                            2002                 2001
                                                                        --------------      ---------------
<S>                                                                   <C>                 <C>
Cash flows from operating activities:
  Net loss                                                            $     (158,491)     $      (209,058)
    Adjustments to reconcile net loss to net
      cash used in operating activities:
        Amortization                                                           7,235                7,235
        Equity in losses of limited partnerships                              68,505              122,085
        Change in accrued  fees and expenses due to
           General Partner and affiliates                                     63,799               73,931
                                                                        --------------      ---------------

Net cash used in operating activities                                        (18,952)              (5,807)
                                                                        --------------      ---------------

Cash flows from investing activities:
    Investments in limited partnerships                                            -               (5,000)
    Distributions from limited partnerships                                    6,869               15,037
                                                                        --------------      ---------------

Net cash provided by investing activities                                      6,869               10,037
                                                                        --------------      ---------------

Net increase (decrease) in cash and cash equivalents                         (12,083)               4,230

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

Cash and cash equivalents, end of period                              $      282,863      $       314,756
                                                                        ==============      ===============

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 June 30, 2002
                                   (unaudited)



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

General
-------

The accompanying  condensed unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
for quarterly  reports under Section 13 or 15(d) of the Securities  Exchange Act
of 1934.  Accordingly,  they do not include all of the information and footnotes
required by  accounting  principles  generally  accepted in the United States of
America for complete  financial  statements.  In the opinion of management,  all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair  presentation  have been included.  Operating  results for the three months
ended June 30, 2002 are not  necessarily  indicative  of the results that may be
expected  for the fiscal year ending March 31,  2003.  For further  information,
refer  to  the  financial  statements  and  footnotes  thereto  included  in the
Partnership's  annual  report on Form 10-K for the fiscal  year ended  March 31,
2002.

Organization
------------

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

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

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

The  partnership  agreement  authorized the sale of up to 15,000 units at $1,000
per Unit  ("Units").  The offering of Units  concluded on December 31, 1993,  at
which time 15,000 Units representing  subscriptions in the amount of $15,000,000
had been accepted.  The General Partner has 1% interest in operating profits and
losses,  taxable  income and losses,  cash available for  distribution  from the
Partnership  and  tax  credits.  The  limited  partners  will be  allocated  the
remaining 99% of these items in proportion to their respective investments.

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


                                       7
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS
                       For the Quarter Ended June 30, 2002
                                   (unaudited)


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

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

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

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

Method of Accounting for Investments in Limited Partnerships
------------------------------------------------------------

The Partnership  accounts for its investments in limited  partnerships using the
equity method of  accounting,  whereby the  Partnership  adjusts its  investment
balance for its share of the Local Limited  Partnership's  results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnership's  are consistent with those of the  Partnership.  Costs incurred by
the  Partnership  in acquiring the  investments  are  capitalized as part of the
investment account and are being amortized over 30 years (Note 2).

Offering Expenses
-----------------

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


                                       8
<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                       For the Quarter Ended June 30, 2002
                                   (unaudited)

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

Use of Estimates
----------------

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

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

The Partnership  considers all highly liquid investments with remaining maturity
of three months or less when  purchased to be cash  equivalents.  As of June 30,
2002 and March 31, 2002, the Partnership had no cash equivalents.

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

At June 30,  2002,  the  Partnership  maintained  a cash  balance  at a  certain
financial institution in excess of the maximum federally insured amounts.

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

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

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

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

New Accounting Pronouncement
----------------------------

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

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.

                                       9
<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS
                       For the Quarter Ended June 30, 2002
                                   (unaudited)


NOTE 2 - INVESTMENTS 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.

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

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

                                                                   For the Three             For the Year
                                                                    Months Ended                 Ended
                                                                   June 30, 2002            March 31, 2002
                                                                ---------------------      ------------------
<S>                                                           <C>                        <C>
     Investments per balance sheet, beginning of period       $           1,816,995      $        2,387,646
     Capital contribution                                                         -                   5,000
     Capital contribution payable                                                 -                 (50,818)
     Equity in losses of limited partnerships                               (68,505)               (495,399)
     Distributions received from limited partnerships                        (6,869)                 (3,512)
     Amortization of capitalized acquisition fees and
     costs                                                                   (7,235)                (25,922)
                                                                ---------------------      ------------------
     Investments per balance sheet, end of period             $           1,734,386      $        1,816,995
                                                                =====================      ==================
</TABLE>

Selected financial information for the three months ended June 30, 2002 and 2001
from the  unaudited  combined  condensed  financial  statements  of the  limited
partnerships in which the Partnership has invested as follows:
<TABLE>
<CAPTION>

                                COMBINED CONDENSED STATEMENTS OF OPERATIONS
                                                                       2002                      2001
                                                               ----------------------      ------------------
<S>                                                          <C>                         <C>
        Revenues                                             $             1,751,000     $         1,654,000
                                                               ----------------------      ------------------
        Expenses:
          Operating expenses                                               1,145,000               1,088,000
          Interest expense                                                   465,000                 446,000
          Depreciation and amortization                                      478,000                 476,000
                                                               ----------------------      ------------------
        Total expenses                                                     2,088,000               2,010,000
                                                               ----------------------      ------------------

        Net loss                                             $              (337,000)     $         (356,000)
                                                               ======================      ==================
                                                             $              (334,000)     $         (352,000)
        Net loss allocable to the Partnership
                                                               ======================      ==================
                                                             $               (69,000)     $         (122,000)
        Net loss recorded by the Partnership
                                                               ======================      ==================
</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
                       For the Quarter Ended June 30, 2002
                                   (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 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  $74,757  and  $74,767  were
     incurred   during  the  three   months   ended  June  30,  2002  and  2001,
     respectively.  The Partnership  paid the General Partner $15,000 and $7,500
     of those  fees  during  the  three  months  ended  June 30,  2002 and 2000,
     respectively.

(b)  Subordinated  disposition fee. A subordinated  disposition fee in an amount
     equal to 1% of the sales price of real estate sold.  Payment of this fee is
     subordinated to the limited  partners  receiving a preferred  return of 16%
     through  December 31, 2002 and 6% thereafter (as defined in the Partnership
     Agreement)  and is payable  only if the General  Partner or its  affiliates
     render services in the sales effort.

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

                                                            June 30, 2002              March 31, 2002
                                                            -------------              --------------

<S>                                              <C>                            <C>
   Asset management fee payable                  $              2,180,612       $           2,120,855
   Advances from WNC & Associates                                   5,469                       1,677
   O&O Reimbursement Payable to WNC                                   250                           -
                                                    ----------------------         -------------------
                                                 $              2,186,331       $           2,122,532
                                                    ======================         ===================
</TABLE>



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

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

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

                                       11
<PAGE>



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

Forward-Looking Statements

With  the  exception  of  the  discussion  regarding   historical   information,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  and  other   discussions   elsewhere  in  this  Form  10-Q  contain
forward-looking  statements.  Such statements are based on current  expectations
subject to uncertainties and other factors,  which may involve known and unknown
risks that could cause actual  results of operations to differ  materially  from
those  projected or implied.  Further,  certain  forward-looking  statements are
based upon assumptions about future events, which may not prove to be accurate.

Risks and uncertainties inherent in forward-looking  statements include, but are
not  limited  to,  our  future  cash  flows and  ability  to  obtain  sufficient
financing, level of operating expenses, conditions in the low income housing tax
credit property market and the economy in general, as well as legal proceedings.
Historical  results are not necessarily  indicative of the operating results for
any future period.

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

The following discussion and analysis compares the results of operations for the
three  months  ended June 30, 2002 and 2001,  and should be read in  conjunction
with the condensed  financial  statements and accompanying notes included within
this report.

Financial Condition

The  Partnership's  assets at June 30, 2002  consisted  primarily of $283,000 in
cash and aggregate  investments in the forty-eight Local Limited Partnerships of
$1,734,000.  Liabilities at June 30, 2002  primarily  consisted of $2,181,000 of
accrued asset management fees due to the General Partner and affiliates.

Results of Operations

Three Months  Ended June 30, 2002  Compared to Three Months Ended June 30, 2001.
The  Partnership's  net loss  for the  three  months  ended  June  30,  2002 was
$(158,000),  reflecting  a decrease  of $51,000  from the net loss for the three
months ended June 30, 2001 of  $(209,000).  This  decrease  primarily was due to
equity in  losses  of  limited  partnerships,  which  decreased  by  $53,000  to
$(69,000),  for the three months ended June 30, 2002 compared to the  $(122,000)
for the three  months  ended June 30,  2001.  This  decrease was a result of the
Partnership  not recognizing  certain losses of the Local Limited  Partnerships.
The  investments in such Local Limited  Partnerships  had reached $0 at June 30,
2002.  Since the  Partnership's  liability  with respect to its  investments  is
limited,  losses in excess of investments  are not  recognized.  The decrease in
equity in losses of limited  partnerships was offset by an increase in loss from
operations of $3,000, from $(87,000) for the three months ended June 30, 2001 to
$(90,000)  for the three  months  ended June 30,  2002,  caused  primarily  by a
decrease  in total  income of $2,000 for the three  months  ended June 30,  2002
compared to the three months ended June 30, 2001.

                                       12
<PAGE>


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

Cash Flows

Three Months  Ended June 30, 2002  Compared to Three Months Ended June 30, 2001.
Net cash and cash equivalents  decreased by $(12,000) for the three months ended
June 30, 2002, compared to a $4,000 increase for the three months ended June 30,
2001  reflecting  a change of  $(16,000).  The  change  was  primarily  due to a
$(13,000) increase in net cash used in operating activities to $(19,000) for the
three  months  ended June 30,  2002,  compared to the  $(6,000) net cash used in
operating  activities  for the three months ended June 30, 2001.  In addition to
the increase in cash used in operating  activities,  cash  provided by investing
activities  decreased  by $3,000 to $7,000 for the three  months  ended June 30,
2002 compared to $10,000 for the three months ended June 30, 2001.

During the three months  ended June 30,  2002,  accrued  asset  management  fees
payable  and  advances  due to the General  Partner  increased  by $64,000.  The
General  Partner does not anticipate  that the accrued fees and advances will be
paid until such time as capital  reserves are in excess of  foreseeable  working
capital requirements of the partnership.




                                       13
<PAGE>


Item 3: Quantitative and Qualitative Disclosures About Market Risks

         NOT APPLICABLE

Part II.  Other Information

Item 1.  Legal Proceedings

         NONE

Item 6.  Exhibits and Reports on Form 8-K

         NONE



                                       14
<PAGE>


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

WNC HOUSING TAX CREDIT FUND III, L.P.

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

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






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

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

Date:  August 1, 2002






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

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

Date:  August 1, 2002



                                       15
<PAGE>


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection  with the Quarterly  Report on Form 10-Q of WNC Housing Tax Credit
Fund III, L.P. (the  "Partnership")  for the period ended June 30, 2002 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
and pursuant to 18 U.S.C.,  section 1350, as adopted  pursuant to section 906 of
the  Sarbanes-Oxley  Act of 2002, I, Wilfred N. Cooper,  Sr., Chairman and Chief
Executive  Officer of WNC & Associates,  Inc.,  general  partner [of the general
partner] of the Partnership, hereby certify that:

1.   The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information  contained in the Report fairly  presents,  in all material
     respects,   the  financial  condition  and  result  of  operations  of  the
     Partnership.


/s/WILFRED N. COOPER, SR.
-------------------------
Wilfred N. Cooper, Sr.
Chairman and Chief Executive Officer of WNC & Associates, Inc.
August 1, 2002



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection  with the Quarterly  Report on Form 10-Q of WNC Housing Tax Credit
Fund III, L.P. (the  "Partnership")  for the period ended June 30, 2002 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
and pursuant to 18 U.S.C.,  section 1350, as adopted  pursuant to section 906 of
the  Sarbanes-Oxley  Act of 2002, I, Thomas J. Riha, Chief Financial  Officer of
WNC &  Associates,  Inc.,  general  partner  [of  the  general  partner]  of the
Partnership, hereby certify that:

1.   The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information  contained in the Report fairly  presents,  in all material
     respects,   the  financial  condition  and  result  of  operations  of  the
     Partnership.


/s/THOMAS J. RIHA
-----------------
Thomas J. Riha
Chief Financial Officer of WNC & Associates, Inc.
August 1, 2002


                                       16