FORM 10-K/A
                                 AMENDMENT NO. 1

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   (Mark One)

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

                   For the fiscal year ended December 31, 1998

                                       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: 0-21895


                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3

California                                                           33-6163848
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)


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

                                 (714) 662-5565

           Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

           Securities registered pursuant to section 12(g) of the Act:

                      UNITS OF LIMITED PARTNERSHIP INTEREST

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x

                                       1

<PAGE>


State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant.

                                  INAPPLICABLE


                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K  (e.g.,  Part I, Part II,  etc.)  into  which the  document  is
incorporated:  (1) Any  annual  report  to  security  holders;  (2) Any proxy or
information  statement;  and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the  Securities Act of 1933.  The listed  documents  should be clearly
described for identification  purposes (e.g.,  annual report to security holders
for fiscal year ended December 24, 1980).

                                      NONE





















                                       2

<PAGE>

PART I.

Item 1.  Business

Organization

WNC  Housing  Tax  Credit  Fund  V,  L.P.,  Series  3 ("the  Partnership")  is a
California Limited  Partnership formed under the laws of the State of California
on March 28, 1995, and commenced operations on October 24, 1995. The Partnership
was  formed  to  acquire   limited   partnership   interests  in  other  limited
partnerships or limited liability companies ("Local Limited Partnerships") which
own  multifamily  apartment  complexes that are eligible for low-income  housing
federal income tax credits (the "Low Income Housing Credit").

The general partner of the  Partnership is WNC & Associates,  Inc. (the "General
Partner" or "Associates").  Wilfred N. Cooper, Sr., through the Cooper Revocable
Trust,  owns 66.8% of the outstanding stock of Associates.  John B. Lester,  Jr.
was the original limited partner of the Partnership and owns, through the Lester
Family Trust, 28.6% of the outstanding stock of Associates.  The business of the
Partnership  is  conducted   primarily   through  the  General  Partner  as  the
Partnership has no employees of its own.

Pursuant to a  registration  statement  filed with the  Securities  and Exchange
Commission  on July 26, 1995,  the  Partnership  commenced a public  offering of
25,000 Units of Limited Partnership  Interest ("Units") at a price of $1,000 per
Unit. As of the close of the public offering, January 21, 1996 a total of 18,000
Limited Partnership Interests representing $17,558,985 had been sold.

Sempra Energy Financial, a California corporation,  which is not an affiliate of
the Partnership or General Partner,  has purchased 4,560 Units, which represents
25.3% of the Units  outstanding  for the  Partnership.  Sempra Energy  Financial
invested  $4,282,600.  A  discount  of  $277,400  was  allowed  due to a  volume
discount.  Western  Financial  Savings  Bank,  which is not an  affiliate of the
Partnership or General Partner,  has purchased 1,068 units, which represent 5.9%
of the Units  outstanding for the Partnership.  Western  Financial  Savings Bank
invested $1,000,000. A discount of $68,000 was allowed due to a volume discount.
See Item 12(a) in this 10-K.

Description of Business

The  Partnership's  principal  business  objective  is to  provide  its  Limited
Partners with Low Income Housing Credits.  The Partnership's  principal business
therefore  consists of investing as a limited partner or non-managing  member in
Local  Limited  Partnerships  each of which will own and operate a  multi-family
housing  complex (the "Housing  Complex")  which will qualify for the Low Income
Housing Credit.  In general,  under Section 42 of the Internal  Revenue Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
to reduce  Federal  taxes  otherwise due in each year of a ten-year  period.  In
general,  under Section 17058 of the  California  Revenue and Taxation  Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
against  California taxes otherwise due in each year of a four-year period.  The
Housing Complex is subject to a fifteen-year  compliance period (the "Compliance
Period"),  and under state law may have to be maintained  as low income  housing
for 30 or more years.

In general,  in order to avoid  recapture  of Low Income  Housing  Credits,  the
Partnership  does not  expect  that it will  dispose of its  interests  in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited  Partnership of its Housing Complex prior to the end of the
applicable  Compliance  Period.  Because  of  (i)  the  nature  of  the  Housing
Complexes,  (ii) the  difficulty of predicting  the resale market for low-income
housing  15 or more years in the  future,  and (iii) the  ability of  government
lenders to  disapprove  of transfer,  it is not possible at this time to predict
whether the liquidation of the  Partnership's  assets and the disposition of the
proceeds,  if any, in  accordance  with the  Partnership's  Agreement of Limited
Partnership,  as amended "by Supplements thereto" (the "Partnership Agreement"),
will be able to be accomplished  promptly at the end of the 15-year period. If a
Local  Limited  Partnership  is  unable  to  sell  its  Housing  Complex,  it is
anticipated that the local general partner ("Local General Partner") will either
continue to operate such Housing Complex or take such other actions as the Local
General  Partner  believes  to be in the  best  interest  of the  Local  Limited

                                       3
<PAGE>

Partnership.  Notwithstanding the preceding, circumstances beyond the control of
the  General  Partner  or the  Local  General  Partners  may  occur  during  the
Compliance   Period,   which  would  require  the  Partnership  to  approve  the
disposition of an Housing Complex prior to the end thereof,  possibly  resulting
in recapture of Low Income Housing Credits.

As of December 31, 1998, the  Partnership had invested in eighteen Local Limited
Partnerships.  Each of these Local Limited  Partnerships  owns a Housing Complex
that is eligible  for the  federal  Low Income  Housing  Credit.  Certain  Local
Limited Partnerships may also benefit from government programs promoting low- or
moderate-income housing.

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 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 subject to mortgage
indebtedness.  If a Local  Limited  Partnership  does  not  makes  its  mortgage
payments,  the lender could foreclose resulting in a loss of the Housing Complex
and Low Income Housing Credits.  As a limited partner or non-managing  member 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  general  partners  or  managing  members  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 Local Limited  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  Partnership  management
decisions are made by the General Partner.

As a limited partner or non-managing  member,  the  Partnership's  liability for
obligations of each Local Limited Partnership is limited to its investment.  The
Local General Partners of each Local Limited  Partnership retain  responsibility
for developing,  constructing,  maintaining,  operating and managing the Housing
Complexes.

Item 2.  Properties

Through its investments in Local Limited  Partnerships,  the  Partnership  holds
limited  partnership  interests in the Housing  Complexes.  The following  table
reflects  the status of the eighteen  Housing  Complexes as of December 31, 1998
and for the periods indicated:


                                       4
<PAGE>
<TABLE>
<CAPTION>



                                                    --------------------------------------------------------------------------------
                                                                                   As of December 31, 1998
                                                    --------------------------------------------------------------------------------
                                                                        Partnership's                                  Encumbrances
                                                        Number          Total Investment  Amount of    Estimated Low   of Local
Partnership                     General Partner          of    Occu-    in Local Limited  Investment   Income Housing  Limited
Name              Location      Name                    Units  pancy    Partnerships      Paid to Date Credits         Partnerships
------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>           <C>                     <C>     <C>     <C>              <C>           <C>             <C>

Alliance          Alliance,     Retro Development,
Apartments I      Nebraska      Inc.                     19      84%    $    604,000     $   604,000  $  363,000       $    615,000
Limited
Partnership

Blessed Rock of   El Monte,     Everland, Inc.          137      99%       2,511,000       2,511,000   8,899,000         3,841,000
El Monte          California

Broadway          Hobbs, New    Trianon - Broadway,
Apartments,       Mexico        LLC, a New Mexico
Limited                         Limited Liability
Partnership                     Company                  78      83%       2,004,000       1,931,000   2,335,000         1,402,000

Cascade Pines,    Atlanta,      Urban Residential
L.P. II           Georgia       Management, Inc.,
                                a Georgia Corporation   376      83%       1,347,000       1,347,000   2,533,000         8,023,000

Curtis            Curtis,       Joseph A. Shepard
Associates I,     Nebraska      and Kenneth M. Vitor     12      58%          88,000          66,000     156,000           427,000
L.P.

Escatawpa         Escatawpa,    Clifford E. Olsen        32     100%         249,000         249,000     458,000           898,000
Village           Mississippi
Associates,
Limited
Partnership

Evergreen         Tulsa,        Retro Development,
Apartments I      Oklahoma      Inc. of Oklahoma and
Limited                         Most Worshipful Prince
Partnership                     Hall Grand Lodge         76      68%         549,000         549,000     991,000           652,000

Hastings          Hastings,     Retro Development,
Apartments I,     Nebraska      Inc. of Oklahoma and
Limited                         Most Worshipful Prince
Partnership                     Hall Grand Lodge         18      83%         542,000         542,000   1,005,000           611,000

Heritage          Berkeley,     Joseph A. Shepard
Apartments I,     Missouri      and Kenneth M. Vitor     30     100%         752,000         752,000   1,333,000           694,000
L.P.

Hillcrest         Ontario,      Riley J. Hill            28      96%         354,000         354,000     683,000         1,301,000
Associates, A     Oregon
Limited
Partnership
</TABLE>


                                       5
<PAGE>
<TABLE>
<CAPTION>



                                                    --------------------------------------------------------------------------------
                                                                                   As of December 31, 1998
                                                    --------------------------------------------------------------------------------
                                                                        Partnership's                                   Encumbrances
                                                        Number          Total Investment  Amount of    Estimated Low    of Local
Partnership                     General Partner          of    Occu-    in Local Limited  Investment   Income Housing   Limited
Name              Location      Name                    Units  pancy    Partnerships      Paid to Date Credits          Partnerships
------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>           <C>                     <C>     <C>     <C>              <C>           <C>          <C>

Patten Towers,    Chattanooga,  Patten Towers Partners,
L.P. II           Tennessee     LLC                      221     98%       2,154,000     2,154,000      3,938,000        7,275,000

Prairieland       Syracuse,     Kenneth M. Vitor           8    100%          85,000        85,000        152,000          294,000
Properties of     Kansas
Syracuse II,
L.P.

Raymond S. King   Greensboro,   Project Homestead, Inc.   23    100%         437,000       437,000        883,000          782,000
Apartments        North
Limited           Carolina
Partnership

Rosedale          Silver City,  Deke Noftsker and ABO
Limited           New Mexico    Corporation               32     94%         309,000       309,000        547,000        1,324,000
Partnership

Shepherd South    Shepherd,     Donald W. Sowell          24    100%         121,000       121,000        223,000          577,000
Apartments I,     Texas
Ltd.

Solomon           Solomon,      Joseph A. Shepard
Associates I,     Kansas        and Kenneth M. Vitor      16    100%         138,000       138,000        250,000          569,000
L.P.

Talladega         Talladega,    Apartment Developers,
County Housing    Alabama       Inc. and Thomas H.
Ltd.                            Cooksey                   30     97%         653,000       653,000      1,200,000          811,000

The Willows       Morganton,    John C. Loving, Gordon
Apartments        North         D. Brown, Jr. and
Limited           Carolina      Western N.C. Housing
Partnership                     Partnership               36    100%         841,000       841,000      1,545,000        1,122,000
                                                      ------    ----      ----------    ----------     ----------       ----------
                                                       1,196     91%    $ 13,738,000  $ 13,643,000   $ 27,494,000     $ 31,218,000
                                                      ======    ====      ==========    ==========     ==========       ==========

</TABLE>

                      6


<PAGE>
<TABLE>
<CAPTION>

                                    ------------------------
                                       For the year ended
                                       December 31, 1998
                                    ------------------------
                                                             Low Income Housing
                                        Rental        Net    Credits Allocated
Partnership Name                        Income        Loss     to Partnership
--------------------------------------------------------------------------------
<S>                               <C>            <C>                <C>
Alliance Apartments
I Limited Partnership             $     65,000   $   (64,000)           99%

Blessed Rock of
El Monte                               656,000      (111,000)        49.49%

Broadway Apartments, Limited
Partnership                            152,000      (285,000)           99%

Cascade Pines, L.P. II               1,821,000      (152,000)           98%

Curtis Associates I, L.P.               30,000       (24,000)           99%

Escatawpa Village Associates,
Limited Partnership                    119,000       (25,000)           99%

Evergreen Apartments I Limited
Partnership                            174,000      (224,000)           99%

Hastings Apartments I, Limited
Partnership                             83,000       (59,000)           99%

Heritage Apartments I, L.P.            102,000       (45,000)         98.9%

Hillcrest Associates, A Limited
Partnership                            188,000       (37,000)           99%

Patten Towers, L.P. II               1,483,000       (38,000)           99%

Prairieland Properties of Syracuse
II, L.P.                                51,000        (9,000)           99%

Raymond S. King Apartments Limited
Partnership                             65,000       (32,000)           99%

Rosedale Limited Partnership           135,000       (47,000)           99%

Shepherd South Apartments I, Ltd.       87,000        (4,000)           99%

Solomon Associates I, L.P.              92,000       (27,000)           99%

Talladega County Housing Ltd.           86,000       (41,000)           99%

The Willows Apartments Limited
Partnership                            112,000       (19,000)           99%
                                    ----------    ----------
                                 $   5,501,000  $ (1,243,000)
                                    ==========    ==========
</TABLE>

                                       7

<PAGE>

Item 3.  Legal Proceedings

NONE.

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

NONE.

PART II.

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

Item 5a.

(a)  The  Units  are not  traded on a public  exchange  but were sold  through a
     public offering.  It is not anticipated that any public market will develop
     for the  purchase  and  sale of any  Unit and  none  exists.  Units  can be
     assigned  only if certain  requirements  in the  Partnership  Agreement are
     satisfied.

(b)  At December 31, 1998, there were 856 Limited Partners.

(c)  The Partnership was not designed to provide cash  distributions  to Limited
     Partners in  circumstances  other than  refinancing  or  disposition of its
     investments in Local Limited Partnerships.

(d   No unregistered securities were sold by the Partnership during 1998.

Item 5b.

NOT APPLICABLE

Item 6.  Selected Financial Data

Selected  balance  sheet  information  for the  Partnership  is as follows as of
December 31:
<TABLE>
<CAPTION>

                                                       1998              1997               1996               1995
                                                       ----              ----               ----               ----
<S>                                          <C>                <C>                <C>                 <C>
ASSETS
Cash and cash equivalents                    $      950,372     $   2,018,591      $   2,567,217       $    660,999
Cash in escrow                                            -                 -                  -          1,873,262
Subscriptions receivable                                  -                 -          2,195,000            484,000
Investments in limited partnerships, net         12,559,525        13,836,734         12,782,751          1,046,532
Interest receivable                                       -            19,435                  -                  -
Loan receivable                                           -                 -            522,190            661,306
Other assets                                              -                 -            105,998                 73
                                                 ----------        ----------         ----------          ---------
                                             $   13,509,897     $  15,874,760      $  18,173,156       $  4,726,172
                                                 ==========        ==========         ==========          =========

LIABILITIES
Due to limited partnerships                  $       95,030     $   1,290,351      $   2,822,885       $    309,852
Accrued fees and expenses due to general
  partner and affiliates                             62,496             4,640             43,807            570,137

PARTNERS' EQUITY                                 13,352,371        14,579,769         15,306,464          3,846,183
                                                 ----------        ----------         ----------          ---------
                                             $   13,509,897     $  15,874,760      $  18,173,156       $  4,726,172
                                                 ==========        ==========         ==========          =========
</TABLE>

                                        8


<PAGE>


Selected  results of  operations,  cash  flows,  and other  information  for the
Partnership  is as follows  for the years  ended  December 31 and for the period
from October 24, 1995 (Date Operations Commenced) to December 31, 1995:
<TABLE>
<CAPTION>

                                                      1998               1997               1996              1995
                                                      ----               ----               ----              ----
<S>                                           <C>                <C>                <C>               <C>

Income (loss) from operations                 $    (52,065)      $     20,214       $    117,374      $     (9,346)

Equity in losses from limited partnerships      (1,175,333)          (789,697)          (185,071)             (343)
                                                 ---------          ---------          ---------         ---------
Net loss                                      $ (1,227,398)      $   (769,483)      $    (67,697)     $     (9,689)
                                                 =========          =========          =========         =========
Net loss allocated to:
    General partner                           $    (12,274)      $     (7,695)      $       (677)     $        (97)
                                                 =========          =========          =========         =========
    Limited partners                          $ (1,215,124)      $   (761,788)      $    (67,020)     $     (9,592)
                                                 =========          =========          =========         =========
Net loss per limited partner unit             $     (67.51)      $     (42.32)      $      (4.94)     $     (14.58)
                                                 =========          =========          =========         =========
Outstanding weighted limited partner units          18,000             18,000             13,564               658
                                                 =========          =========          =========         =========

                                                      1998               1997               1996              1995
                                                      ----               ----               ----              ----
Net cash provided by (used in):
    Operating activities                      $     60,991       $    102,215       $   (205,999)     $      3,402
    Investing activities                        (1,129,210)        (2,888,629)        (7,704,761)       (2,944,048)
    Financing activities                                 -          2,237,788          9,816,978         3,601,645
                                                 ---------          ---------          ---------         ---------
Net change in cash and cash equivalents         (1,068,219)          (548,626)         1,906,218           660,999
Cash and cash equivalents, beginning of
  period                                         2,018,591          2,567,217            660,999                 -
                                                 ---------          ---------          ---------         ---------
Cash and cash equivalents, end of period      $    950,372       $  2,018,591       $  2,567,217      $    660,999
                                                 =========          =========          =========         =========

Low Income  Housing  Credit per Unit was as follows for the years ended December 31:

                                                      1998               1997               1996              1995
                                                      ----               ----               ----              ----
Federal                                       $        131       $         83       $         59      $         14
State                                                    -                  -                  -                 -
                                                 ---------          ---------          ---------         ---------
Total                                         $        131       $         83       $         59      $         14
                                                 =========          =========          =========         =========
</TABLE>

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operation

Financial Condition

The Partnership's assets at December 31, 1998 consisted primarily of $950,000 in
cash and aggregate  investments  in the eighteen Local Limited  Partnerships  of
$12,560,000. Liabilities at December 31, 1998 primarily consisted of $95,000 due
to limited partnerships and $51,000 of accrued annual management fees due to the
General Partner.

Results of Operations

Year Ended  December 31, 1998  Compared to Year Ended  December  31,  1997.  The
Partnership's  net loss for 1998 was  $(1,227,000),  reflecting  an  increase of
$458,000  from the net loss  experienced  in 1997.  The  increase in net loss is
primarily due to equity in losses from limited  partnerships  which increased to
$(1,175,000)  in 1998 from  $(790,000)  in 1997,  in  addition  to a decrease in
interest income of $67,000 and an increase in operating expenses of $6,000.

                                       9

<PAGE>
Year Ended  December 31, 1997  Compared to Year Ended  December  31,  1996.  The
Partnership's  net loss  for 1997 was  $(769,000),  reflecting  an  increase  of
$701,000  from the net loss  experienced  in 1996.  The  increase in net loss is
primarily due to equity in losses from limited  partnerships  which increased to
$(790,000)  in 1997 from  $(185,000)  in 1996,  in  addition  to a  decrease  in
interest income of $88,000 and an increase in operating expenses of $9,000.

Cash Flows

Year Ended  December 31, 1998  Compared to Year Ended  December  31,  1997.  Net
decrease in cash in 1998 was $(1,068,000), compared to a net decrease in cash in
1997 of $(549,000).  The decrease in cash was higher in 1998 as compared to 1997
due primarily to a decrease in capital contributions from partners of $2,250,000
and a decrease in cash provided by operating activities of $41,000,  offset by a
decrease in offering  expenses of $12,000,  a decrease in investments in Limited
Partnerships  of  $1,745,000  and an  increase  in  distributions  from  Limited
Partnerships of $15,000.

Year Ended  December 31, 1997  Compared to Year Ended  December  31,  1996.  Net
decrease in cash in 1997 was  $(549,000),  compared to a net increase in cash in
1997 of  $1,906,000.  The change  was due  primarily  to a  decrease  in capital
contributions  from  partners  of  $9,084,000,  offset by a decrease in offering
expenses  of  $1,505,000,  a decrease in  investing  activities  of  $4,816,000,
primarily from a decrease in investments in Limited Partnerships,  a decrease in
cash in escrow, an increase in loans  receivable,  and a decrease in capitalized
acquisition costs. In addition,  net cash from operating activities increased by
$308,000.

During  1998  accrued  payables,   which  consist  primarily  of  related  party
management fees due to the General  Partner,  increased by $58,000.  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 December 31, 1998, to be  sufficient to meet all currently  forseeable
future cash requirements.

Impact of Year 2000

WNC & Associates, Inc.

Status of Readiness

Information Technology (IT) Systems. The Partnership relies on the IT systems of
WNC, its 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.  Except  for one  telephone  system,  the non-IT
systems of WNC are year 2000  compliant.  The one telephone  system will require
the replacement of one computer and one software application, both of which will
be completed on or before October 1, 1999.

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.  There can be no assurance that this
compliance  information  is  correct.  There also can be no  assurance  that the
systems of other,  less-important  service providers and outside vendors will be
year 2000 compliant.

                                       10

<PAGE>
Costs to Address Year 2000 Issues

The cost to address  year 2000  issues for WNC has been less than  $20,000.  The
cost to replace the telephone  system noted above will be less than $5,000.  The
cost to deal with potential year 2000 issues of other outside  vendors cannot be
estimated at this time.

Risk of Year 2000 Issues

The most  reasonable and likely result from non-year 2000  compliance of systems
of the service  providers  noted above will be the disruption of normal business
operations for WNC. This disruption would, 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

WNC is in the  process of  obtaining  year 2000  certifications  from each Local
General Partner of each Local Limited  Partnership.  Those  certifications  will
represent  to the  Partnership  that the IT and non-IT  systems  critical to the
operation of the Housing Complexes and investor reporting to the Partnership are
year 2000 compliant. These certifications will also represent to the Partnership
that the IT and non-IT  systems of property  management  companies,  independent
accountants,    electrical   power   providers,   financial   institutions   and
telecommunications  carriers used by the Local Limited Partnership are year 2000
compliant.

There can be no assurance that the representations in the certifications will be
correct.   There  also  can  be  no   assurance   that  the  systems  of  other,
less-important  service  providers  and  outside  vendors,  upon which the Local
Limited Partnerships rely, will be year 2000 compliant.

Costs to Address Year 2000 Issues

There  will be no cost to the  Partnership  as a result of  assessing  year 2000
issues for the Local Limited Partnerships.  The cost to deal with potential year
2000 issues of the Local Limited Partnerships cannot be estimated at this time.

Risk of Year 2000 Issues

There may be Local  General  Partners who indicate  that they or their  property
management  company are not year 2000  compliant and do not have plans to become
year 2000  compliant  before the end of 1999.  There may be other Local  General
Partners who are  unwilling to respond to the  certification  request.  The most
likely result of either non-compliance or failure to respond will be the removal
and  replacement  of the property  management  company  and/or the Local General
Partner with year 2000 compliant operators.

Despite the efforts to obtain certifications, 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 7A.   Quantitative and Qualitative Disclosures About Market Risk

NOT APPLICABLE

Item 8.  Financial Statements and Supplementary Data

                                       11
<PAGE>









                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                              FINANCIAL STATEMENTS

              For The Years Ended December 31, 1998, 1997 and 1996

                                      with

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
















                                       12
<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3


We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund V,
L.P.,  Series 3 (a California  Limited  Partnership)  (the  "Partnership") as of
December 31, 1998, and the related  statements of operations,  partners'  equity
(deficit) and cash flows for the year then ended. These financial statements are
the  responsibility of the Partnership's  management.  Our  responsibility is to
express  an  opinion  on  these  financial  statements  based  on our  audit.  A
significant portion of the financial  statements of the limited  partnerships in
which the  Partnership is a limited partner were audited by other auditors whose
reports  have been  furnished  to us. As  discussed  in Note 2 to the  financial
statements, the Partnership accounts for its investments in limited partnerships
using the equity method. The portion of the Partnership's  investment in limited
partnerships  audited by other auditors  represented  83% of the total assets of
the Partnership at December 31, 1998. Our opinion,  insofar as it relates to the
amounts included in the financial  statements for the limited partnerships which
were audited by others, is based solely on the reports of the other auditors.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that our audit and the  reports  of the  other  auditors  provide a
reasonable basis for our opinion.

In our opinion,  based on our audit and the reports of the other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position of WNC  Housing  Tax Credit  Fund V, L.P.,  Series 3 (a
California Limited  Partnership) as of December 31, 1998, and the results of its
operations  and its cash  flows  for the year then  ended,  in  conformity  with
generally accepted accounting principles.


                                                       BDO SEIDMAN, LLP


Orange County, California
June 14, 1999





                                       13
<PAGE>



                          INDEPENDENT AUDITORS' REPORT



To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3


We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund V,
L.P.,  Series 3 (a California  Limited  Partnership)  (the  "Partnership") as of
December 31, 1997, and the related  statements of operations,  partners'  equity
(deficit)  and cash  flows for each of the years in the  two-year  period  ended
December 31, 1997.  These  financial  statements are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial  statements  based  on our  audit.  We did  not  audit  the  financial
statements of the limited  partnerships  in which WNC Housing Tax Credit Fund V,
L.P., Series 3 is a limited partner.  These investments,  as discussed in Note 3
to the  financial  statements,  are  accounted  for by the  equity  method.  The
investment in these limited partnerships  represented 87% of the total assets of
WNC  Housing  Tax  Credit  Fund V,  L.P.,  Series  3 at  December  31,  1997.  A
substantial portion of the financial statements of the limited partnerships were
audited by other  auditors  whose  reports  have been  furnished  to us, and our
opinion,  insofar  as it  relates  to the  amounts  included  for these  limited
partnerships, is based solely on the reports of the other auditors.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that our audits and the  reports  of the other  auditors  provide a
reasonable basis for our opinion.

In our opinion,  based on our audits and the reports of the other auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position of WNC  Housing  Tax Credit  Fund V, L.P.,  Series 3 (a
California Limited  Partnership) as of December 31, 1997, and the results of its
operations and its cash flows for each of the years in the two-year period ended
December 31, 1997, in conformity with generally accepted accounting principles.



                                              CORBIN & WERTZ

Irvine, California
April 21, 1998






                                       14
<PAGE>
                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                                 BALANCE SHEETS

                           December 31, 1998 and 1997



                                                    1998                   1997
                                                    ----                   ----

ASSETS

Cash and cash equivalents               $        950,372      $       2,018,591
Investments in limited partnerships
  (Note 2)                                    12,559,525             13,836,734
Interest receivable                                    -                 19,435
                                              ----------             ----------
                                        $     13,509,897      $      15,874,760
                                              ==========             ==========

LIABILITIES AND PARTNERS' EQUITY
  (DEFICIT)

Liabilities:
  Payables to limited partnerships
    (Note 4)                             $        95,030      $       1,290,351
  Accrued fees and advances due to
    General Partner and affiliates
    (Note 3)                                      62,496                  4,640
                                              ----------             ----------
         Total liabilities                       157,526              1,294,991
                                              ----------             ----------
Partners' equity (deficit):
  General partner                                (41,967)               (29,693)
  Limited partners (25,000 units
    authorized; 18,000 units
    outstanding at December 31,
    1998 and 1997)                            13,394,338             14,609,462
                                              ----------             ----------
         Total partners' equity               13,352,371             14,579,769
                                              ----------             ----------
                                        $     13,509,897      $      15,874,760
                                              ==========             ==========





                 See accompanying notes to financial statements
                                       15
<PAGE>


                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                            STATEMENTS OF OPERATIONS

              For The Years Ended December 31, 1998, 1997 and 1996



                                             1998          1997          1996
                                             ----          ----          ----

Interest income                    $       55,326  $    121,703  $    209,940
                                       ----------    ----------    ----------

Operating expenses:
  Amortization (Note 2)                    35,765        34,605        23,436
  Asset management fees (Note 3)           49,500        49,500        49,500
  Other                                    22,126        17,384        19,630
                                       ----------    ----------    ----------

        Total operating expenses          107,391       101,489        92,566
                                       ----------    ----------    ----------

Income (loss) from operations             (52,065)       20,214       117,374

Equity in losses from limited
  partnerships (Note 2)                (1,175,333)     (789,697)     (185,071)
                                       ----------    ----------    ----------

Net loss                           $   (1,227,398) $   (769,483) $    (67,697)
                                       ==========    ==========    ==========

Net loss allocable to:
   General partner                 $      (12,274) $     (7,695) $       (677)
                                       ==========    ==========    ==========

   Limited partners                $   (1,215,124) $   (761,788) $    (67,020)
                                       ==========    ==========    ==========

Net loss per limited partner unit  $       (67.51) $     (42.32) $      (4.94)
                                       ==========    ==========    ==========

Outstanding weighted limited
  partner units                            18,000        18,000        13,564
                                       ==========    ==========    ==========


                 See accompanying notes to financial statements
                                       16
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

              For The Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>

                                                           General        Limited
                                                           Partner        Partners           Total
                                                           -------        --------           -----
<S>                                                 <C>             <C>            <C>
Partners' equity (deficit)at January 1, 1996        $       (6,029) $    3,852,212  $    3,846,183

Capital contributions, net of discount of $438,015               -      13,064,985      13,064,985

Cash collected on notes receivable (Note 6)                      -          35,000          35,000

Capital issued for notes receivable (Note 6)                     -         (55,000)        (55,000)

Offering expenses                                          (15,170)     (1,501,837)     (1,517,007)

Net loss                                                      (677)        (67,020)        (67,697)
                                                        ----------      ----------      ----------

Partners' equity (deficit) at December 31, 1996            (21,876)     15,328,340      15,306,464

Offering expenses                                             (122)        (12,090)        (12,212)

Cash collected on notes receivable (Note 6)                      -          55,000          55,000

Net loss                                                    (7,695)       (761,788)       (769,483)
                                                        ----------      ----------      ----------

Partners' equity (deficit) at December 31, 1997            (29,693)     14,609,462      14,579,769

Net loss                                                   (12,274)     (1,215,124)     (1,227,398)
                                                        ----------      ----------      ----------

Partners' equity (deficit) at December 31, 1998     $      (41,967) $   13,394,338  $   13,352,371
                                                        ==========      ==========      ==========
</TABLE>



                 See accompanying notes to financial statements
                                       17
<PAGE>


                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                            STATEMENTS OF CASH FLOWS

              For The Years Ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>

                                                               1998            1997           1996
                                                               ----            ----           ----
<S>                                                   <C>            <C>             <C>
Cash flows from operating activities:
  Net loss                                            $  (1,227,398) $     (769,483) $     (67,697)
  Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
      Amortization                                           35,765          34,605         23,436
      Equity in losses from limited partnerships          1,175,333         789,697        185,071
      Change in interest receivable                          19,435          86,563       (105,925)
      Increase in accrued fees and advances
        due to general partner and affiliates                57,856         (39,167)      (240,884)
                                                         ----------      ----------     ----------
   Net cash provided by (used in) operating
     activities                                              60,991         102,215       (205,999)
                                                         ----------      ----------     ----------
Cash flows from investing activities:
  Investments in limited partnerships, net               (1,120,181)     (3,432,735)    (8,693,189)
  Cash in escrow                                                  -               -      1,873,262
  Loans receivable                                                -         522,190        139,116
  Capitalized acquisition fees and costs                    (32,076)        (28,975)    (1,023,950)
  Return of acquisition fees (Note 3)                             -          42,551              -
  Distributions from limited partnerships                    23,047           8,340              -
                                                         ----------      ----------     ----------
  Net cash used in investing activities                  (1,129,210)     (2,888,629)    (7,704,761)
                                                         ----------      ----------     ----------
Cash flows from financing activities:
  Capital contributions from partners                             -       2,250,000     11,333,985
  Offering expenses                                               -         (12,212)    (1,517,007)
                                                         ----------      ----------     ----------
  Net cash provided by financing activities                       -       2,237,788      9,816,978
                                                         ----------      ----------     ----------
  Net increase (decrease) in cash and cash equivalents   (1,068,219)       (548,626)     1,906,218

Cash and cash equivalents, beginning of year              2,018,591       2,567,217        660,999
                                                         ----------      ----------     ----------
Cash and cash equivalents, end of year                $     950,372  $    2,018,591  $   2,567,217
                                                         ==========      ==========     ==========
</TABLE>


                 See accompanying notes to financial statements
                                       18
<PAGE>


                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                      STATEMENTS OF CASH FLOWS - CONTINUED

              For The Years Ended December 31, 1998, 1997 and 1996




                                            1998      1997        1996
                                            ----      ----        ----

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:
    Taxes paid                           $   800  $    800   $     800
                                           =====     =====       =====

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:

   During  1998 and 1997,  the  Partnership  incurred,  but did not pay,  $0 and
   $526,643,  respectively,  of payables to limited  partnerships (in connection
   with its investments in limited partnerships) (see Note 4).


















                 See accompanying notes to financial statements
                                       19

<PAGE>


                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

              For The Years Ended December 31, 1998, 1997 and 1996





NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

WNC Housing Tax Credit Fund V, L.P., Series 3, a California Limited  Partnership
(the  "Partnership"),  was formed on March 28, 1995, 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 & Associates,  Inc. ("WNC").  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.

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

The financial  statements  include only activity relating to the business of the
Partnership,  and do not give  effect to any assets that the  partners  may have
outside of their interests in the Partnership, or to any obligations,  including
income taxes, of the partners.

The  partnership  agreement  authorized the sale of up to 25,000 units at $1,000
per Unit  ("Units").  The offering of Units  concluded in January 1996, at which
time 18,000 Units representing  subscriptions in the amount of $17,558,985,  net
of $441,015 of discounts for volume  purchases,  had been accepted.  The General
Partner has a 1% interest in operating  profits and losses,  taxable  income and
loss and in cash available for distribution  from the  Partnership.  The limited
partners  will be allocated  the  remaining  99% interest 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.



                                       20


<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1998, 1997 and 1996


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 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 Local Limited  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 in 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
Partnerships 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 (see Note 2).

                                       21

<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1998, 1997 and 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Losses from Local Limited Partnerships  allocated to the Partnership will not be
recognized to the extent that the  investment  balance  would be adjusted  below
zero.

Offering Expenses

Offering  expenses consist of underwriting  commissions,  legal fees,  printing,
filing and recordation fees, and other costs incurred in connection 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 limited partners' capital and amounted to $2,132,000
as of December 31, 1998 and 1997.

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 highly liquid investments with remaining maturities of
three  months or less when  purchased  to be cash  equivalents.  At December 31,
1997,  the  Partnership  had cash  equivalents  of  $978,453  representing  U.S.
Treasury Bills. At December 31, 1998, the Partnership had no cash equivalents.

Concentration of Credit Risk

At December  31,  1998,  the  Partnership  maintained  cash  balances at certain
financial institutions in excess of the federally insured maximum.

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.


                                       22
<PAGE>
                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1998, 1997 and 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

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 years
presented,  the Partnership has no elements of other  comprehensive  income,  as
defined by SFAS No. 130.

Reclassifications

Certain  prior  year  balances  have been  reclassified  to  conform to the 1998
presentation.

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS

As of December 31,  1998,  the  Partnership  has  acquired  limited  partnership
interests  in 18 Local  Limited  Partnerships,  each of which  owns one  Housing
Complex  consisting of an aggregate of 1,196  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 of the Local Limited
Partnerships.

The Partnership's  investments in Local Limited Partnerships as reflected in the
balance sheet at December 31, 1998 and 1997,  are  approximately  $1,187,000 and
$2,206,000  greater than the Partnership's  equity as shown in the Local Limited
Partnerships'  financial  statements.   This  difference  is  primarily  due  to
acquisition  costs related to the acquisition of the investments  that have been
capitalized in the Partnership's investment account and to capital contributions
payable to the limited partnerships which were netted against partner capital in
the Local Limited Partnerships' financial statements (see Note 3).

Equity in losses of 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.  During 1998,  no  investment  accounts in Local
Limited Partnerships reached a zero balance.

                                       23
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1998, 1997 and 1996

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

The following is a summary of the equity method  activity of the  investments in
Local Limited Partnerships for the years ended December 31:
<TABLE>
<CAPTION>

                                                                   1998             1997
                                                                   ----             ----

<S>                                                      <C>             <C>
Investments per balance sheet, beginning of year         $   13,836,734  $    12,782,751
Capital contributions  paid, net                                      -        1,373,557
Capital contributions payable to limited partnerships                 -          526,644
Capitalized acquisition fees and costs                           32,076           28,975
Tax credit adjustments                                          (75,140)               -
Return of acquisition fees (Note 4)                                   -          (42,551)
Distributions paid                                              (23,047)          (8,340)
Equity in losses of limited partnerships                     (1,175,333)        (789,697)
Amortization of acquisition fees and costs                      (35,765)         (34,605)
                                                          -------------   --------------
Investments per balance sheet, end of year               $   12,559,525  $    13,836,734
                                                          =============   ==============
</TABLE>
The financial  information from the individual financial statements of the Local
Limited Partnerships include rental and interest subsidies. Rental subsidies are
included in total  revenues  and  interest  subsidies  are  generally  netted in
interest expense.  Approximate combined condensed financial information from the
individual financial statements of the Local Limited Partnerships as of December
31 and for the years then ended is as follows:

                        COMBINED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                 1998           1997
                                                                 ----           ----
<S>                                                     <C>             <C>
ASSETS

Buildings and improvements, net of accumulated
  depreciation for 1998 and 1997 of $3,757,000
  and $2,187,000, respectively                          $  43,183,000   $ 44,490,000
Construction in progress                                            -         95,000
Land                                                        2,943,000      2,939,000
Other assets (including due from affiliates of $44,000
  and $235,000 as of December 31, 1998 and 1997,
  respectively)                                             4,293,000      4,608,000
                                                           ----------     ----------
                                                        $  50,419,000   $ 52,132,000
                                                           ==========     ==========
</TABLE>
                                       24
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1998, 1997 and 1996

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

                  COMBINED CONDENSED BALANCE SHEETS, continued
<TABLE>
<CAPTION>

                                                                  1998           1997
                                                                  ----           ----
<S>                                                      <C>            <C>
LIABILITIES

Mortgage and construction loans payable                  $  31,218,000  $  32,582,000
Other liabilities (including due to related parties of
  $3,459,000 and $3,667,000, as of December 31,
  1998 and 1997, respectively)                               4,714,000      5,143,000
                                                            ----------     ----------
                                                            35,932,000     37,725,000
                                                            ----------     ----------
PARTNERS' CAPITAL

WNC Housing Tax Credit Fund V, L.P., Series 3               11,373,000     11,631,000
Other partners                                               3,114,000      2,776,000
                                                            ----------     ----------
                                                            14,487,000     14,407,000
                                                            ----------     ----------

                                                         $  50,419,000  $  52,132,000
                                                            ==========     ==========

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

                                                  1998            1997           1996
                                                  ----            ----           ----
Revenues                                 $   5,705,000   $   5,339,000  $   3,981,000
                                            ----------      ----------     ----------
Expenses:
  Operating expenses                         3,580,000       3,331,000      2,053,000
  Interest expense                           1,739,000       1,625,000      1,282,000
  Depreciation and amortization              1,629,000       1,246,000        864,000
                                            ----------      ----------     ----------
         Total expenses                      6,948,000       6,202,000      4,199,000
                                            ----------      ----------     ----------
Net loss                                 $  (1,243,000)  $    (863,000) $    (218,000)
                                            ==========      ==========     ==========
Net loss allocable to the Partnership    $  (1,175,000)  $    (790,000) $    (185,000)
                                            ==========      ==========     ==========
Net loss recorded by the Partnership     $  (1,175,000)  $    (790,000) $    (185,000)
                                            ==========      ==========     ==========
</TABLE>

                                       25

<PAGE>
                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1998, 1997 and 1996

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

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

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 items:

         Acquisition  fees of up to 7.5% of the gross  proceeds from the sale of
         Units as  compensation,  for services  rendered in connection  with the
         acquisition of Local Limited Partnerships. As of December 31, 1996, the
         Partnership incurred acquisition fees of $1,008,550 which were included
         in investments in limited partnerships.  During 1997,  acquisition fees
         of $42,551 were returned to the Partnership by an affiliate, as allowed
         by the terms of the  Partnership  Agreement,  resulting in  acquisition
         fees  of  $965,999  as of  December  31,  1997  and  1998.  Accumulated
         amortization  of these  capitalized  costs was  $86,912 and $54,714 for
         1998 and 1997, respectively.

         Reimbursement  of costs incurred by an affiliate of the General Partner
         in connection with the acquisition of Local Limited Partnerships. These
         reimbursements  have  not  exceeded  1% of the  gross  proceeds.  As of
         December 31, 1998 and 1997, the Partnership  incurred acquisition costs
         of $131,087  and  $99,011,  respectively,  which have been  included in
         investments  in  limited  partnerships.  Accumulated  amortization  was
         insignificant for 1998, 1997 and 1996.

         An  annual  asset  management  fee equal to the  greater  amount of (i)
         $2,000 for each apartment complex, or (ii) 0.275% of gross proceeds. In
         either case,  the fee will be decreased or increased  annually based on
         changes to the  Consumer  Price  Index.  However,  in no event will the
         maximum  amount  exceed  0.2% of the  invested  assets  (defined as the
         Partnership's  capital  contributions plus its allocable  percentage of
         the mortgage debt  encumbering the apartment  complexes) of the limited
         partnerships.  Management  fees of $49,500 were incurred for 1998, 1997
         and 1996,  of which $0, $110,000 and $0 were paid during 1998, 1997 and
         1996, respectively.

         A  subordinated  disposition  fee in an amount equal to 1% of the sales
         price of real estate sold.  Payment of this fee to the General  Partner
         is  subordinated  to  the  limited  partners   receiving  a  return  on
         investment  (as defined in the  Partnership  Agreement)  and is payable
         only if the General  Partner or its affiliates  render  services in the
         sales effort.


                                       26
<PAGE>
                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

              For The Years Ended December 31, 1998, 1997 and 1996

NOTE 3 - RELATED PARTY TRANSACTIONS, continued

The accrued fees and expenses due to the General  Partner and  affiliates  as of
December 31, 1998 and 1997 consist of the following:

                                                    1998                  1997
                                                    ----                  ----

   Advances from WNC                    $         11,629     $           3,273

   Asset management fee payable                   50,867                 1,367
                                            ------------         -------------
                                        $         62,496     $           4,640
                                            ============         =============

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 and are
generally due upon the Local Limited Partnerships  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.

NOTE 6 - SUBSCRIPTIONS AND NOTES RECEIVABLE

During 1996, the Partnership  received  subscriptions for 2,250 Units consisting
of receivables of $2,195,000 and promissory notes of $55,000,  all of which were
collected in 1997. During 1995, the Partnership  received  subscriptions for 519
Units consisting of receivables of $484,000 and promissory notes of $35,000, all
of which were collected in 1996. Limited partners who subscribed for ten or more
Units of limited  partnership  interest  ($10,000) could elect to pay 50% of the
purchase price in cash upon  subscription  and the remaining 50% by the delivery
of a promissory  note payable,  together with interest at the rate of 10.25% per
annum,  due  no  later  than  13  months  after  the  subscription  date.  Since
subscription  receivables  were collected  subsequent to year end but before the
issuance of the respective financial statements,  the Partnership reflected such
amounts as capital contributions and an asset in the financial statements. Since
the promissory  notes had not been collected prior to issuance of the respective
financial  statements,  the unpaid  balance  was  reflected  as a  reduction  of
partners' equity in the financial statements.  Upon collection of the promissory
notes,  such  amounts  were  reflected  as  capital  contributions  in the  year
collected.

                                       27
<PAGE>
Item  9.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure

(a)(1)

(i)      On December 16, 1998, Corbin & Wertz, Irvine,  California was dismissed
         as the Partnership's principal independent accountant.

(ii)     During the last two fiscal  years of the  Partnership,  the  reports of
         Corbin & Wertz  respecting the financial  statements of the Partnership
         did not contain an adverse opinion or a disclaimer of opinion, nor were
         any such reports  qualified or modified as to uncertainty,  audit scope
         or accounting principles.

(iii)    The  decision  to  change  accountants  was  approved  by the  board of
         directors  of  WNC &  Associates,  Inc.,  the  general  partner  of the
         Partnership.

(iv)     During the last two fiscal years and  subsequent  interim period of the
         Partnership there were no disagreements  between Corbin & Wertz and the
         Partnership  on any  matter  of  accounting  principles  or  practices,
         financial statement  disclosure,  or auditing scope or procedure of the
         nature  described  in Item  304(a)(1)(iv)  of  Securities  and Exchange
         Commission Regulation S-K.

(v)      During the last two fiscal years and  subsequent  interim period of the
         Partnership  there were no reportable events of the nature described in
         Item 304(a)(1)(v) of Securities and Exchange Commission Regulation S-K.
(a)(2)

On December 16, 1998, BDO Seidman,  LLP,  Costa Mesa,  California was engaged as
the Partnership's principal independent  accountant.  During the last two fiscal
years and subsequent interim period of the Partnership,  the Partnership did not
consult BDO Seidman,  LLP regarding (i) either,  the  application  of accounting
principles to a specified  transaction;  or the type of audit opinion that might
be rendered on the Partnership's  financial statements,  or (ii) any matter that
was  the  subject  of a  disagreement  (as  defined  in  Item  304(a)(1)(iv)  of
Securities and Exchange Commission Regulation S-K) or was a reportable event (as
defined in Item  304(a)(1)(v) of Securities and Exchange  Commission  Regulation
S-K).

ITEM III.

Item 10. Directors and Executive Officers of the Registrant

The Partnership has no directors or executive officers of its own. The following
biographical  information is presented for the directors and executive  officers
of Associates which has principal responsibility for the Partnership's affairs.

Directors and Executive Officers of WNC & Associates, Inc.

The directors of WNC & Associates,  Inc. are Wilfred N. Cooper,  Sr., who serves
as Chairman of the Board,  John B.  Lester,  Jr.,  David N.  Shafer,  Wilfred N.
Cooper, Jr. and Kay L. Cooper.  The principal  shareholders of WNC & Associates,
Inc. are trusts established by Wilfred N. Cooper, Sr. and John B. Lester, Jr.

Wilfred N. Cooper,  Sr., age 68, is the founder,  Chief Executive  Officer and a
Director of WNC & Associates, Inc., a Director of WNC Capital Corporation, and a
general partner in some of the programs previously sponsored by the Sponsor. Mr.
Cooper has been involved in real estate  investment and  acquisition  activities

                                       28
<PAGE>
since 1968.  Previously,  during 1970 and 1971,  he was founder and principal of
Creative  Equity  Development  Corporation,  a predecessor  of WNC & Associates,
Inc., and of Creative Equity Corporation,  a real estate investment firm. For 12
years  prior  to  that,  Mr.  Cooper  was  employed  by  Rockwell  International
Corporation, last serving as its manager of housing and urban developments where
he  had  responsibility   for  factory-built   housing  evaluation  and  project
management in urban  planning and  development.  Mr. Cooper is a Director of the
National  Association of Home Builders (NAHB) and a National  Trustee for NAHB's
Political Action Committee,  a Director of the National Housing Conference (NHC)
and a  member  of NHC's  Executive  Committee  and a  Director  of the  National
Multi-Housing  Council (NMHC).  Mr. Cooper graduated from Pomona College in 1956
with a Bachelor of Arts degree.

John B. Lester, Jr., age 65, is President, a Director, Secretary and a member of
the  Acquisition  Committee  of WNC &  Associates,  Inc.,  and a Director of WNC
Capital  Corporation.  Mr. Lester has 27 years of experience in engineering  and
construction  and has been involved in real estate  investment  and  acquisition
activities since 1986 when he joined the Sponsor. Previously, he was Chairman of
the Board and Vice President or President of E & L Associates,  Inc., a provider
of engineering and construction  services to the oil refinery and  petrochemical
industries,  which  he  co-founded  in  1973.  Mr.  Lester  graduated  from  the
University of Southern  California in 1956 with a Bachelor of Science  degree in
Mechanical Engineering.

Wilfred N. Cooper,  Jr., age 36, is Executive Vice  President,  a Director and a
member of the  Acquisition  Committee of WNC & Associates,  Inc. He is President
of, and a registered principal with, WNC Capital  Corporation,  a member firm of
the NASD,  and is a Director of WNC  Management,  Inc.  He has been  involved in
investment  and  acquisition  activities  with  respect to real estate  since he
joined  the  Sponsor in 1988.  Prior to this,  he served as  Government  Affairs
Assistant with Honda North America in Washington, D.C. Mr. Cooper is a member of
the Advisory Board for LIHC Monthly Report,  a Director of NMHC and an Alternate
Director of NAHB.  He  graduated  from The  American  University  in 1985 with a
Bachelor of Arts degree.

David N. Shafer, age 46, is Senior Vice President, a Director,  General Counsel,
and a member of the  Acquisition  Committee  of WNC &  Associates,  Inc.,  and a
Director and Secretary of WNC  Management,  Inc. Mr. Shafer has been involved in
real estate  investment and acquisition  activities since 1984. Prior to joining
the Sponsor in 1990, he was  practicing  law with a specialty in real estate and
taxation.  Mr. Shafer is a Director and President of the  California  Council of
Affordable  Housing  and a member  of the State Bar of  California.  Mr.  Shafer
graduated  from the  University  of  California  at Santa Barbara in 1978 with a
Bachelor of Arts degree, from the New England School of Law in 1983 with a Juris
Doctor  degree (cum laude) and from the  University  of San Diego in 1986 with a
Master of Law degree in Taxation.

Michael L. Dickenson, age 42, is Vice President and Chief Financial Officer, and
a member of the  Acquisition  Committee  of WNC &  Associates,  Inc.,  and Chief
Financial Officer of WNC Management,  Inc. He has been involved with acquisition
and  investment  activities  with  respect to real estate  since 1985.  Prior to
joining the Sponsor in March 1999, he was the Director of Financial  Services at
TrizecHahn  Centers Inc., a developer  and operator of  commercial  real estate,
from 1995 to 1999,  a Senior  Manager  with E&Y  Kenneth  Leventhal  Real Estate
Group, Ernst & Young, LLP, from 1988 to 1995, and Vice President of Finance with
Great Southwest  Companies,  a commercial and residential real estate developer,
from  1985 to 1988.  Mr.  Dickenson  is a  member  of the  Financial  Accounting
Standards  Committee for the National  Association of Real Estate  Companies and
the  American  Institute  of  Certified  Public  Accountants,  and a Director of
HomeAid  Southern  California,  a charitable  organization  affiliated  with the
building  industry.  He  graduated  from  Texas Tech  University  in 1978 with a
Bachelor of Business  Administration  -  Accounting  degree,  and is a Certified
Public Accountant in California and Texas.

Thomas J. Riha, age 44, is Vice President - Asset Management and a member of the
Acquisition  Committee  of WNC &  Associates,  Inc.  and a  Director  and  Chief
Executive  Officer  of WNC  Management,  Inc.  Mr.  Riha  has been  involved  in
acquisition  and investment  activities  with respect to real estate since 1979.
Prior to joining the  Sponsor in 1994,  Mr.  Riha was  employed by Trust  Realty
Advisor, a real estate acquisition and management company,  last serving as Vice
President - Operations. Mr. Riha graduated from the California State University,
Fullerton  in 1977 with a  Bachelor  of Arts  degree  (cum  laude)  in  Business
Administration  with a  concentration  in Accounting  and is a Certified  Public
Accountant  and  a  member  of  the  American   Institute  of  Certified  Public
Accountants.

                                       29
<PAGE>
Sy P. Garban,  age 53, is Vice  President - National  Sales of WNC & Associates,
Inc.  and has been  employed by the  Sponsor  since  1989.  Mr.  Garban has been
involved in real estate  investment  activities since 1978. Prior to joining the
Sponsor he served as  Executive  Vice  President  of MRW,  Inc.,  a real  estate
development  and management  firm.  Mr. Garban is a member of the  International
Association of Financial  Planners.  He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.

N. Paul Buckland,  age 36, is Vice President - Acquisitions of WNC & Associates,
Inc. He has been involved in real estate acquisitions and investments since 1986
and has been employed with WNC & Associates,  Inc. since 1994. Prior to that, he
served on the  development  team of the Bixby Ranch that  constructed  apartment
units and Class A office space in California and  neighboring  states,  and as a
land  acquisition  coordinator with Lincoln Property Company where he identified
and analyzed multi-family  developments.  Mr. Buckland graduated from California
State  University,  Fullerton  in 1992  with a  Bachelor  of  Science  degree in
Business Finance.

David Turek, age 44, is Vice President - Originations of WNC & Associates,  Inc.
He has been involved with real estate  investment and finance  activities  since
1976 and has been employed by WNC & Associates,  Inc.  since 1996.  From 1995 to
1996,  Mr. Turek served as a consultant  for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties.  From 1990 to 1995, he was involved in the development of
conventional  and tax credit  multi-family  housing.  He is a Director  with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.

Kay L. Cooper,  age 62, is a Director of WNC & Associates,  Inc. Mrs. Cooper was
the founder and sole  proprietor  of Agate 108, a  manufacturer  and retailer of
home  accessory  products,  from 1975 until 1998.  She is the wife of Wilfred N.
Cooper,  Sr.,  the mother of Wilfred  N.  Cooper,  Jr. and the sister of John B.
Lester,  Jr. Ms. Cooper graduated from the University of Southern  California in
1958 with a Bachelor of Science degree.

Item 11.  Executive Compensation

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 Associates for the following fees:

(a)   Annual Asset Management Fee. An annual asset management fee of the greater
      of (i) $2,000 per  multi-family  housing  complex or (ii)  0.275% of Gross
      Proceeds.  The base fee amount will be adjusted  annually based on changes
      in the  Consumer  Price  Index,  however in no event will the annual asset
      management fee exceed 0.2% of Invested Assets. "Invested Assets" means the
      sum of the Partnership's  Investment in Local Limited Partnerships and the
      Partnership's allocable share of the amount of indebtedness related to the
      Housing  Complexes.  Fees of  $49,500  were  incurred  for the year  ended
      December  31,  1998.  The  Partnership  paid the  General  Partner  or its
      affiliates $0 of these fees in 1998.

(b)   Subordinated  Disposition Fee. A subordinated disposition fee in an amount
      equal to 1% of the sale  price  received  in  connection  with the sale or
      disposition of a Housing  Complex or Local Limited  Partnership  Interest.
      Subordinated  disposition fees will be subordinated to the prior return of
      the Limited Partners'  capital  contributions and payment of the Return on
      Investment  to the  Limited  Partners.  "Return  on  Investment"  means an
      annual,  cumulative but not compounded,  "return" to the Limited  Partners
      (including  Low  Income  Housing  Credits)  as a class on  their  adjusted
      capital contributions  commencing for each Limited Partner on the last day
      of the  calendar  quarter  during  which  the  Limited  Partner's  capital
      contribution is received by the  Partnership,  calculated at the following
      rates:  (i) 14% through  December  31, 2006 and (ii) 6% for the balance of
      the Partnerships term. No disposition fees have been paid.

(c)   Interest  in  Partnership.   The  General  Partner   receives  1%  of  the
      Partnership's  allocated Low Income Housing  Credits,  which  approximated
      $24,000 for the General  Partner for the year ended December 31, 1998. The
      General  Partners are also  entitled to receive 1% of cash  distributions.
      There were no  distributions  of cash to the General  Partners  during the
      year ended December 31, 1998.

                                       30

<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management

(a)      Security Ownership of Certain Beneficial Owners

         The  following  are the only  limited  partners  known  to the  General
         Partner to own beneficially in excess of 5% of the outstanding Units.

                       Name and Address              Amount of Units    Percent
Title of Class         of Beneficial Owner            Controlled        of Class
--------------------- ------------------------------ ---------------   ---------
Units of Limited       Sempra Energy Financial         4,560 units       25.3%
Partnership Interests     P.O. Box 126943
                       San Diego, CA 92113-6943

Units of Limited       Western Financial Savings Bank  1,068 units        5.9%
Partnership Interests     23 Pasteur
                       Irvine, CA 92718

(b)      Security Ownership of Management

         Neither the General Partner, its affiliates, nor any of the officers or
         directors  of the General  Partner or its  affiliates  own  directly or
         beneficially any Units in the Partnership.

(c)      Changes in Control

         The management and control of the General Partner may be changed at any
         time in  accordance  with its  organizational  documents,  without  the
         consent  or  approval  of  the  Limited  Partners.  In  addition,   the
         Partnership  Agreement  provides  for  the  admission  of one  or  more
         additional and successor General Partners in certain circumstances.

         First,   with  the  consent  of  any  other  General   Partners  and  a
         majority-in-interest  of the Limited Partners,  any General Partner may
         designate  one or more persons to be successor  or  additional  General
         Partners. In addition,  any General Partner may, without the consent of
         any other General  Partner or the Limited  Partners,  (i) substitute in
         its  stead  as  General  Partner  any  entity  which  has,  by  merger,
         consolidation or otherwise,  acquired  substantially all of its assets,
         stock or other evidence of equity  interest and continued its business,
         or (ii) cause to be admitted to the  Partnership an additional  General
         Partner or  Partners  if it deems such  admission  to be  necessary  or
         desirable so that the Partnership  will be classified a partnership for
         Federal income tax purposes.  Finally,  a  majority-in-interest  of the
         Limited  Partners  may at any time  remove the  General  Partner of the
         Partnership and elect a successor General Partner.

Item 13.  Certain Relationships and Related Transactions

The General Partner manages all of the Partnership's  affairs.  The transactions
with  the  General  Partner  are  primarily  in the  form  of  fees  paid by the
Partnership for services  rendered to the Partnership and the General  Partner's
interest in the  Partnership,  as  discussed  in Item 11 and in the notes to the
Partnership's financial statements.

                                       31
<PAGE>
PART IV.

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

Financial Statements

(a)(1)   Financial statements included in Part II hereof:

         Report of Independent Certified Public Accountants
         Independent Auditors' Report
         Balance Sheets, December 31, 1998 and 1997
         Statements of Operations  for the years ended  December 31, 1998,  1997
           and 1996
         Statements of Partners'  Equity  (Deficit) for the years ended December
           31, 1998, 1997 and 1996
         Statements of Cash Flows  for  the  years ended December 31, 1998, 1997
           and 1996
         Notes to Financial Statements

(a)(2)   Financial statement schedules included in Part IV hereof:

         Report of Independent Certified Public Accountants  on Financial State-
           ment Schedule
         Schedule III - Real Estate Owned by Local Limited Partnerships

(b)      Reports on Form 8-K

1.       A Form 8-K dated  December  16,  1998 was filed on  December  22,  1998
         reporting the dismissal of the  Partnership's  former  auditors and the
         engagement of new auditors. No financial statements were included.

(c)      Exhibits

3.1      Articles  of   incorporation   and  by-laws:   The  registrant  is  not
         incorporated. The Partnership Agreement is included as Exhibit B to the
         Prospectus,  filed as Exhibit 28.1 to Form 10-K dated December 31, 1995
         is hereby incorporated herein by reference as exhibit 3.1.

10.1     Amended and Restated Agreement of  Limited   Partnership  of  Evergreen
         Apartments  I  Limited  Partnership  filed as exhibit 10.1 to Form 8-K
         dated November  14, 1995 is hereby  incorporated  herein  by  reference
         as exhibit 10.1.

10.2     Amended and Restated Agreement of Limited Partnership of Shepherd South
         Apartments I, Ltd. filed as exhibit 10.1 to Form 8-K dated December 14,
         1995 is hereby incorporated herein by reference as exhibit 10.2.

10.3     Amended and Restated Agreement of Limited Partnership of Patten Towers,
         L.P. II filed  as exhibit  10.1 to  Form 8-K dated December 21, 1995 is
          hereby incorporated herein by reference as exhibit 10.3.

                                       32
<PAGE>

10.4     Second  Amended  and  Restated  Agreement  of  Limited  Partnership  of
         Alliance  Apartments  I Limited  Partnership  filed as exhibit  10.7 to
         Post-Effective Amendment No.2 to Registration Statement on Form S-11 of
         the Partnership is hereby  incorporated  herein by reference as exhibit
         10.4.

10.5     Amended  and  Restated  Agreement  of Limited  Partnership  of Hastings
         Apartments   I   Limited   Partnership   filed  as   exhibit   10.8  to
         Post-Effective Amendment No.2 to Registration Statement on Form S-11 of
         the Partnership is hereby  incorporated  herein by reference as exhibit
         10.5.

10.6     Agreement  of  Limited  Partnership  of Raymond  S. King  Apartments  I
         Limited  Partnership filed as exhibit 10.9 to Post-Effective  Amendment
         No. 2 to  Registration  Statement  on Form S-11 of the  Partnership  is
         hereby incorporated herein by reference as exhibit 10.6

10.7.    Amended and  Restated  Agreement of  Limited  Partnership  of Talladega
         County Housing,  Ltd.  filed as exhibit 10.10  to  Post-Effective Amend
         ment No. to Registration  Statement on  Form S-11  of  the  Partnership
         is hereby incorporated herein by reference as exhibit 10.7.

10.8     Amended and Restated  Agreement of Limited  Partnership  of The Willows
         Limited Partnership filed as exhibit 10.11 to Post-Effective  Amendment
         No. to Registration Statement on Form S-11 of the Partnership is hereby
         incorporated herein by reference as exhibit 10.8

10.9     Amended and  Restated Agreement of Limited Partnership of Cascade Pines
         L.P. II filed as exhibit  10.1 to Form  8-K  dated  April  26,  1996 is
         hereby incorporated herein by reference as exhibit 10.9

10.10    Amended  and  Restated  Agreement  of  Limited  Partnership of Rosedale
         Limited Partnership filed as exhibit  10.2 to Form 8-K dated April  26,
         1996 is hereby incorporated herein by reference as exhibit 10.10

10.11    Amended and Restated Agreement of Limited  Partnership  of Blessed Rock
         of El Monte filed as exhibit 10.1 to Form 8-K dated September 17,  1996
         is hereby incorporated herein by reference as exhibit 10.11

10.12.   Amended  and  Restated  Agreement  of  Limited  Partnership of Broadway
         Apartments, Limited Partnership filed as exhibit 10.1 to Form 8-K dated
         April 10, 1997 is hereby  incorporated  herein  by reference as exhibit
         10.12.

(d)      Financial  statement  schedule  follows,  as  set forth  in  subsection
         (a)(2) hereof.

                                       33
<PAGE>


              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON
                          FINANCIAL STATEMENT SCHEDULE



To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3


The audit  referred to in our report dated June 14,  1999,  relating to the 1998
financial  statements  of WNC  Housing  Tax Credit  Fund V, L.P.,  Series 3 (the
"Partnership"),  which is  contained  in Item 8 of this Form 10-K,  included the
audit of the accompanying  financial statement schedule. The financial statement
schedule  is  the   responsibility   of  the   Partnership's   management.   Our
responsibility  is to express an opinion on this  financial  statement  schedule
based upon our audit.

In our opinion,  such  financial  statement  schedule  presents  fairly,  in all
material respects, the financial information set forth therein.


                                                  BDO SEIDMAN, LLP
Orange County, California
June 14, 1999



                                       34

<PAGE>
   WNC Housing Tax Credit Fund V, L.P., Series 3
   Schedule III
   Real Estate Owned by Local Limited Partnerships
<TABLE>
<CAPTION>
                                             ---------------------------------------------------------------------------------------
                                                                        As of December 31, 1998
                                             ---------------------------------------------------------------------------------------
                                              Partnership's Total   Amount of    Encumbrances of                             Net
                                              Investment in Local   Investment   Local Limited  Property and  Accumulated    Book
Partnership Name             Location         Limited Partnerships  Paid to Date Partnerships   Equipment     Depreciation   Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>              <C>                <C>               <C>        <C>           <C>         <C>

Alliance Apartments I        Alliance,
Limited Partnership          Nebraska         $   604,000         $   604,000    $   615,000  $  1,549,000  $  141,000  $  1,408,000

Blessed Rock of El           El Monte,
Monte                        California         2,511,000           2,511,000      3,841,000     9,289,000     279,000     9,010,000

Broadway Apartments,         Hobbs, New
Limited Partnership          Mexico             2,004,000           1,931,000      1,402,000     3,334,000     156,000     3,178,000

Cascade Pines, L.P. II       Atlanta,
                             Georgia            1,347,000           1,347,000      8,023,000     8,392,000     706,000     7,686,000

Curtis Associates I,         Curtis,
L.P.                         Nebraska              88,000              66,000        427,000       497,000      44,000       453,000

Escatawpa Village            Escatawpa,
Associates, Limited          Mississippi          249,000             249,000        898,000     1,417,000     100,000     1,317,000
Partnership

Evergreen Apartments         Tulsa,
I Limited Partnership        Oklahoma             549,000             549,000        652,000     1,886,000     199,000     1,687,000

Hastings Apartments          Hastings,
I, Limited Partnership       Nebraska             542,000             542,000        611,000     1,335,000     106,000     1,229,000

Heritage Apartments          Berkeley,
I, L.P.                      Missouri             752,000             752,000        694,000     1,679,000      80,000     1,599,000

</TABLE>

                                       35
<PAGE>

WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
<TABLE>
<CAPTION>
                                             ---------------------------------------------------------------------------------------
                                                                        As of December 31, 1998
                                             ---------------------------------------------------------------------------------------
                                              Partnership's Total   Amount of    Encumbrances of                             Net
                                              Investment in Local   Investment   Local Limited  Property and  Accumulated    Book
Partnership Name             Location         Limited Partnerships  Paid to Date Partnerships   Equipment     Depreciation   Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>              <C>                <C>               <C>        <C>           <C>         <C>
Hillcrest Associates,        Ontario,
A Limited Partnership        Oregon                354,000            354,000      1,301,000    1,697,000       198,000    1,499,000

Patten Towers, L.P. II       Chattanooga,
                             Tennessee           2,154,000          2,154,000      7,275,000   10,715,000     1,095,000    9,620,000

Prairieland                  Syracuse,
Properties of                Kansas                 85,000             85,000        294,000      511,000        37,000      474,000
Syracuse II, L.P.

Raymond S. King              Greensboro,
Apartments Limited           North Carolina        437,000            437,000        782,000    1,096,000        84,000    1,012,000
Partnership

Rosedale Limited             Silver City,
Partnership                  New Mexico            309,000            309,000      1,324,000    1,679,000       193,000    1,486,000

Shepherd South               Shepherd,
Apartments I, Ltd.           Texas                 121,000            121,000        577,000      720,000        57,000      663,000

Solomon Associates I,        Solomon,
L.P.                         Kansas                138,000            138,000        569,000      716,000        68,000      648,000

Talladega County             Talladega,
Housing Ltd.                 Alabama               653,000            653,000        811,000    1,466,000       112,000    1,354,000

The Willows                  Morganton,
Apartments Limited           North Carolina        841,000            841,000      1,122,000    1,905,000       102,000    1,803,000
Partnership                                     ----------         ----------     ----------   ----------    ----------   ----------
                                            $   13,738,000    $    13,643,000  $  31,218,000 $ 49,883,000   $ 3,757,000 $ 46,126,000
                                                ==========         ==========     ==========   ==========    ==========   ==========

</TABLE>
                                       36




<PAGE>


WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
<TABLE>
<CAPTION>

                                       --------------------------------------------------------------------------
                                                          For the year ended December 31, 1998
                                       --------------------------------------------------------------------------
                                                                                     Year        Estimated
                                       Rental                                     Investment    Useful Life
Partnership Name                       Income       Net Loss         Status        Acquired       (Years)
-----------------------------------------------------------------------------------------------------------------
<S>                              <C>            <C>                <C>                <C>            <C>
Alliance Apartments I Limited
Partnership                      $    65,000    $   (64,000)       Completed          1997             40

Blessed Rock of El Monte             656,000       (111,000)       Completed          1997             40

Broadway Apartments, Limited
Partnership                          152,000       (285,000)       Completed          1997             40

Cascade Pines, L.P. II             1,821,000       (152,000)       Completed          1997             40

Curtis Associates I, L.P.             30,000        (24,000)       Completed          1997           27.5

Escatawpa Village Associates,
Limited Partnership                  119,000        (25,000)       Completed          1997           27.5

Evergreen Apartments I Limited
Partnership                          174,000       (224,000)       Completed          1996             40

Hastings Apartments I, Limited
Partnership                           83,000        (59,000)       Completed          1996             40

Heritage Apartments I, L.P.          102,000        (45,000)       Completed          1997           27.5

Hillcrest Associates, A Limited
Partnership                          188,000        (37,000)       Completed          1997           27.5

Patten Towers, L.P. II             1,483,000        (38,000)       Completed          1996           27.5

Prairieland Properties of
Syracuse II, L.P.                     51,000         (9,000)       Completed          1997           27.5

Raymond S. King Apartments
Limited Partnership                   65,000        (32,000)       Completed          1997             30

Rosedale Limited Partnership         135,000        (47,000)       Completed          1997             30

Shepherd South Apartments I, Ltd.     87,000         (4,000)       Completed          1996             40

Solomon Associates I, L.P.            92,000        (27,000)       Completed          1997           27.5

Talladega County Housing Ltd.         86,000        (41,000)       Completed          1996             40

The Willows Apartments Limited
Partnership                          112,000        (19,000)       Completed          1997             40
                                   ---------      ---------
                                 $ 5,501,000  $  (1,243,000)
                                   =========      =========
</TABLE>
                                       37




<PAGE>


         Pursuant to the  requirements  of Section 13 or 15(d) 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 V, L.P., SERIES 3

By:    WNC & Associates, Inc.       General Partner

By:  /s/ John B. Lester, Jr.
John B. Lester, Jr.,
President of WNC & Associates, Inc.

Date: July 27, 1999


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

Date: July 27, 1999


By:  /s/ Wilfred N. Cooper, Sr.
Wilfred N. Cooper, Sr., General Partner

Date: July 27, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.


By  /s/ Wilfred N. Cooper, Sr.
Wilfred N. Cooper, Sr., Chairman of the Board of WNC & Associates, Inc.

Date: July 27, 1999



By: /s/ John B. Lester, Jr.
John B. Lester, Jr., Director of WNC & Associates, Inc.

Date: July 27, 1999


By:  /s/ David N. Shafer
David N Shafer, Director of WNC & Associates, Inc.

Date: July 27, 1999















                                       38