AMENDMENT NO. 1 TO FORM 10-K

                       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, 1997

                                       OR

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

For the transition period from ________ to ___________

Commission file number: 0-21895


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

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

California                                                   33-6163848

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

                                                            (714) 662-5565

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

Title of Securities                                Exchanges on which Registered

NONE                                               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


<PAGE>


                       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>


Item 1.  Business

         PART I.


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

WNC Housing Tax Credit Fund V, L.P., Series 3 ("the  Partnership" or "Series 3")
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 to
acquire limited partnership  interests in limited  partnerships  ("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").  The business of the Partnership is conducted  primarily  through the
General Partner as Series 3 has no employees of its own.

On July 18, 1994, the Partnership commenced a public offering of 20,000 units of
limited partnership interests ("Units"). As of the close of the public offering,
January 21, 1996 a total of 18,000 Limited  Partnership  Interests  representing
$17,558,985,  net of discounts of $441,015,  had been sold. Holders of Units are
referred to herein as "Limited Partners."

Description of Business
-----------------------

The Partnership's principal business is to provide its Limited Partners with Low
Income Housing Credits. The Partnership's  principal business therefore consists
of investing as a limited  partner in Local Limited  Partnerships  each of which
will own and  operate an  apartment  complex  ("Apartment  Complex")  which will
qualify for the federal Low Income Housing Credit. In general, under Section 42,
an owner of a low-income  housing  project is entitled to receive the Low Income
Housing  Credit in each year of a  ten-year  period.  The  Apartment  Complex is
subject to a 15-year compliance period (the "Compliance Period").

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 a Local Limited  Partnership of any Apartment Complex prior to the end of the
applicable  Compliance  Period.  Because  of (i)  the  nature  of the  Apartment
Complexes,  (ii) the  difficulty of predicting  the resale market for low-income
housing  15 or  more  years  in the  future,  and  (iii)  the  inability  of the
Partnership  to directly  cause the sale of  Apartment  Complexes by the general
partners  of  the  respective   Local  Limited   Partnerships   ("Local  General
Partners"),  but generally  only to require such Local  General  Partners to use
their  respective best efforts to find a purchaser for the Apartment  Complexes,
it is  not  possible  at  this  time  to  predict  whether  the  liquidation  of
substantially  all  of the  Partnership's  assets  and  the  disposition  of the
proceeds,  if any, in  accordance  with the  Partnership's  Agreement of Limited
Partnership  ("Partnership  Agreement") will be able to be accomplished promptly
at the end of the Compliance Period. If a Local Limited Partnership is unable to
sell an Apartment Complex, it is anticipated that the Local General Partner will
either continue to operate such Apartment  Complex or take such other actions as
the Local  General  Partner  believes  to be in the best  interest  of the Local
Limited  Partnership.  In  addition,  circumstances  beyond  the  control of the
General  Partner may occur during the Compliance  Period which would require the
Partnership to approve the disposition of an Apartment  Complex prior to the end
thereof.

As of December  31,  1997,  the  Partnership  had  invested in 18 Local  Limited
Partnerships. Each of these Local Limited Partnerships owns an Apartment Complex
that is or is expected to be eligible for the Low Income Housing Credit.  All of
the Local Limited  Partnerships also benefit from government  programs promoting
low- or moderate-income housing.

                                       3
<PAGE>

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  multifamily  residential  real estate.  Some of these
risks are that the Low Income Housing Credit could be recaptured and neither the
Partnership's  investments  nor the Apartment  Complexes  owned by Local Limited
Partnerships will be readily marketable. Additionally, there can be no assurance
that the  Partnership  will be able to  dispose  of its  interests  in the Local
Limited  Partnerships  at the end of the  Compliance  Period.  The  value of the
Partnership's  investments  could 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
Apartment Complexes and the Partnership. The Apartment Complexes will be subject
to loss through  foreclosure.  In addition,  each Local Limited  Partnership  is
subject to risks relating to  environmental  hazards which might be uninsurable.
Because the Partnership's ability to control its 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 Partnership operations will be
profitable or that the  anticipated Low Income Housing Credits will be available
to Limited Partners.

As of  December  31,  1997,  17 of the 18  Apartment  Complexes  acquired by the
Partnership were completed and in operation and one was under construction.  The
Apartment  Complexes  owned by the  Local  Limited  Partnerships  in  which  the
Partnership  has  invested  were or are being  developed  by the  Local  General
Partners  who  acquired  the sites and  applied  for  applicable  mortgages  and
subsidies.  The Partnership  became the principal limited partner in these Local
Limited  Partnerships  pursuant  to  arm's-length  negotiations  with the  Local
General  Partners.  As  a  limited  partner,  the  Partnership's  liability  for
obligations of each Local Limited Partnership is limited to its investment.  The
Local General Partner of the Local Limited Partnership retain responsibility for
developing,  constructing,  maintaining,  operating  and managing the  Apartment
Complex.

Following is recap of the status of the 18 Apartment  Complexes  owned by the 18
Limited Partnerships invested in by the Partnership:
<TABLE>
<CAPTION>

            SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                   IN WHICH THE PARTNERSHIP HAS AN INVESTMENT
                             AS OF DECEMBER 31, 1996

                                                     No. of           Units             Units            Percentage
Name & Location                                       Units       Completed          Occupied             Occupancy
---------------                                       -----       ---------          --------             ---------
<S>                                                 <C>             <C>              <C>                   <C>   
Alliance Apartments I                                   19              19               10                    54%
 Alliance, Nebraska
Blessed Rock of El Monte                               137             137              136                    99%
 El Monte, California
Broadway Apartments                                     78               0                0                     0%
 Hobbs, New Mexico
Cascade Pines, L.P., II                                375             375              360                    96%
 Atlanta, Georgia
Curtis Associates I                                     12              12               11                    92%
 Curtis, Nebraska
Escatawpa Village Associates                            31              31               29                    94%
 Escatawpa, Mississippi
Evergreen Apartments I                                  76              76               22                    29%
 Tulsa, Oklahoma
Hastings Apartments I                                   18              18               16                    89%
 Hastings, Nebraska
Heritage Apartments I                                   30              30               30                   100%
 Berkeley, Montana

                                       4
<PAGE>
<CAPTION>

                                                     No. of           Units             Units            Percentage
Name & Location                                       Units       Completed          Occupied             Occupancy
---------------                                       -----       ---------          --------             ---------
<S>                                                 <C>             <C>              <C>                   <C>   
Hillcrest Associates                                    28              28               26                    93%
 Ontario, Oregon
Patten Towers, L.P. II                                 221             221              221                   100%
 Chattanooga, Tennessee
Prairieland Prop of Syracuse II                          8               8                8                   100%
 Syracuse, Kansas
Raymond S. King Apts.                                   22              22               22                   100%
 Greensboro, North Carolina
Rosedale Limited Partnership                            31              31               29                    94%
 Silver City, New Mexico
Shepherd South Apts. I                                  24              24               22                    92%
 Shepherd, Texas
Solomon Associates I, L.P.                              16              16               13                    81%
 Solomon, Kansas
Talladega Co. Housing Ltd.                              30              30               30                   100%
 Talladega, Alabama
The Willows Apartments                                  36              36               32                    89%
 Morganton, North Carolina                          ______          ______           ______          _____________
                                                    ------          ------           ------          -------------

                                                     1,192           1,114            1,017                    91%
                                                     =====           =====            =====                    ===
</TABLE>

         Series 3 has become a limited partner in Evergreen Apartments I Limited
Partnership,   an  Oklahoma   limited   partnership   ("EVERGREEN");   Hillcrest
Associates, a Limited Partnership,  an Oregon limited partnership ("HILLCREST");
Shepherd South Apartments I, Ltd., a Texas limited  partnership  ("SHEPHERD I");
Talladega County Housing,  Ltd., an Alabama limited  partnership  ("TALLADEGA");
and  The  Willows  Apartments  Limited  Partnership,  a North  Carolina  limited
partnership ("WILLOWS"). Patten Towers, L.P. II, a Tennessee limited partnership
("PATTEN").  Series 3 expects to become a limited partner in Alliance Apartments
I, Limited Partnership,  a Nebraska limited partnership  ("ALLIANCE");  Hastings
Apartments I, L.P., a Nebraska limited partnership ("HASTINGS");  and Raymond S.
King Apartments,  a North Carolina  limited  partnership  ("KING");  Prairieland
Properties of Syracuse II, L.P., a Kansas limited  partnership  ("PRAIRIELAND");
Heritage  Apartments I, L.P., a Missouri limited partnership  ("HERITAGE");  and
Solomon Associates I, L.P., a Missouri limited partnership ("SOLOMON");  Cascade
Pines, L.P. II, a Georgia limited partnership ("CASCADE");  and Rosedale Limited
Partnership, a New Mexico limited partnership ("ROSEDALE"); Curtis Associates I,
L.P., a Nebraska limited partnership ("CURTIS").

         Series 3 and WNC Housing Tax Credit Fund V, L.P., Series 4 ("SERIES 4")
have each acquired one-half of the Local Limited Partnership Interest in Blessed
Rock of El Monte, a California limited partnership ("BLESSED ROCK").

         Series 3 expects to become a limited  partner in  Broadway  Apartments,
Limited  Partnership,  a  New  Mexico  limited  partnership  ("BROADWAY");   and
Escatawpa  Village   Associates,   L.P.,  a  Mississippi   limited   partnership
("ESCATAWPA").

                                       5
<PAGE>

EVERGREEN owns the Evergreen  Apartments in Tulsa  Oklahoma;  HILLCREST owns the
Hillcrest  Apartments  in Ontario,  Oregon;  SHEPHERD I owns the Shepherd  South
Apartments  I in  Shepherd,  Texas;  TALLADEGA  owns  Indian  Hills  Estates  in
Talladega,  Alabama; and WILLOWS owns The Willows Apartments in Morganton, North
Carolina; ALLIANCE owns the Alliance Apartments in Alliance,  Nebraska; HASTINGS
owns the Hastings  Apartments  in Hastings,  Nebraska;  KING owns the Raymond S.
King Apartments in Greensboro, North Carolina; and PATTEN owns the Patten Towers
Apartments in Chattanooga,  Tennessee;  BROADWAY owns the Broadway Apartments in
Hobbs, New Mexico; HERITAGE owns the Heritage Apartments in Berkeley,  Missouri;
PRAIRIELAND  owns the North Ridge  Apartments in Syracuse,  Kansas;  and SOLOMON
owns the North Pine Village Apartments in Solomon, Kansas; BLESSED ROCK owns the
Blessed Rock of El Monte  Apartments in El Monte,  California;  CASCADE owns the
Cascade  Pines  Apartments  in  Atlanta,   Georgia;  CURTIS  owns  the  Bergwood
Apartments in Curtis, Nebraska;  ESCATAWPA owns the Escatawpa Village Apartments
in  Escatawpa,  Mississippi;  and ROSEDALE  owns the Valley View  Apartments  in
Silver City, New Mexico.

         Included herein is a discussion of a Local Limited Partnership Interest
acquired by SERIES 3.

         Series 3's currently required capital contribution to the Local Limited
Partnerships  identified  herein will  represent  investment in 18 Local Limited
Partnerships  and  all of the  Partnership's  offering  proceeds  available  for
investment. The Apartment Complexes owned by all such Local Limited Partnerships
are located in 13 states and are being developed and constructed by 13 different
development teams. Seven of the Apartment  Complexes are financed by RECDS, nine
are financed by other government  assistance  programs or a combination of other
government  assistance  programs  and  "conventional"  financing,  and  two  are
financed solely by "conventional" financing. Five of the Apartment Complexes are
designed for senior citizens.

         The  following  tables  contain  information  concerning  the Apartment
Complexes owned by the Local Limited Partnerships identified herein


                                       6
<PAGE>

<TABLE>
<CAPTION>

                                                                                       LOCAL LIMITED
                                ESTIMATED                                PERMANENT     PARTNERSHIP'S
                                CONSTRUC-                                MORTGAGE      ANTICIPATED
LOCAL          PROJECT          TION         NUMBER OF      BASIC        LOAN          AGGREGATE
LIMITED        NAME/NUMBER      COMPLETION   APARTMENT      MONTHLY      PRINCIPAL     TAX CREDITS
PARTNERSHIP    OF BUILDINGS     DATE         UNITS          RENTS        AMOUNT        (1)
-----------    ------------     ----         -----          -----        ------        ---

<S>            <C>              <C>           <C>             <C>        <C>           <C>

EVERGREEN      Evergreen        November      25 1BR          $280       $650,000      $990,850
               Apartments       1995          units           $320       CFB (3)
               (2)                            43 2BR          $450
                                              units                      $324,425
               3 buildings                    8 3BR                      MWPHGL
                                              units                      (4)


HILLCREST      Hillcrest        Completed      26 1BR         $350       $1,311,000    $683,400
               Apartments                     units           $370       RECDS (6)
               (5)                            2 2BR
                                              units
               8 buildings


SHEPHERD       Shepherd         November      8 1BR           $232       $583,900      $277,640
  I            South            1995          units           $300       RECDS (6)
               Apartments                     16 2BR
               I                              units
               (2)

               6 buildings

TALLADEGA      Indian           August        8 1BR           $198       $576,000      $1,265,000
               Hills            1996          units           $237       AHFA(7)
               Estates                        12 2BR          $374
                                              units                      $246,513
                                              6 3BR                      Colonial
               5                              units                      Bank (8)
               buildings


WILLOWS        The Willows      December      34 1BR          $269-312   $254,500      $1,426,280
               Apartments       1996          units           $375       CICNC (9)
               (5)                            2 2BR
                                              units                      $900,000
               1 building                                                NCHFA (10)

                                                                         $40,000
                                                                         City of
                                                                         Morganton(11)

ALLIANCE       Alliance         Completed     6 2BR           $336       $500,000      $1,089,660
               Apartment        July 1995     units           $468       CFB (12)
                                              13 3BR
               9 buildings                    units                      $147,779
                                                                         City of
                                                                         Alliance
                                                                         (13)


HASTINGS       Hastings         February      6 2BR           $359       $450,000      $993,600
               Apartments       1996          units           $419       FNBO (14)
                                              12 3BR
               9 buildings                    units



KING           Raymond S.       November      22 2BR          $250       $719,000      $974,798
               King             1996          units                      City of
               Apartments                                                Greensboro
               (5)                                                       (15)

               2 buildings

</TABLE>
                                       7
<PAGE>

<TABLE>
<CAPTION>
                                                                                       LOCAL LIMITED
                                ESTIMATED                                PERMANENT     PARTNERSHIP'S
                                CONSTRUC-                                MORTGAGE      ANTICIPATED
LOCAL          PROJECT          TION         NUMBER OF     BASIC         LOAN          AGGREGATE
LIMITED        NAME/NUMBER      COMPLETION   APARTMENT     MONTHLY       PRINCIPAL     TAX CREDITS
PARTNERSHIP    OF BUILDINGS     DATE         UNITS         RENTS         AMOUNT        (1)
-----------    ------------     ----         -----         -----         ------        ---
<S>            <C>              <C>           <C>           <C>          <C>           <C>
PATTEN         Patten           June 1996     32 studio      $508 (8)    $7,000,000    $3,911,130
               Towers                         units                      Hamilton
               Apartments                     188 1BR        $563 (8)    County IDB
               (5) (2)                        units                      (16)
                                              1 2BR unit     $644 (8)    $875,000
               1 building                                                Hamilton
                                                                         County IDB
                                                                         (17)

BROADWAY       Broadway         December      30 1BR         $272-335    $1,215,000    $3,613,990
               Apartments       1996          units          $324-399    BA (2)
                                    16        2BR            $372-458
               9 buildings                    units                      $150,538
                                              32 3BR                     HOME (3)
                                              units

HERITAGE       Heritage         June          30 1BR         $250-300    $577,350      $1,370,670
               Apartments       1997          units                      MHDC (5)

               1 building                                                $135,957
               (5)                                                       St. Louis
                                                                         County (6)

PRAIRIE-       North Ridge      September     2 1BR units    $270        $295,171      $152,460
LAND           Apartments       1996          4 2BR units    $315        RECDS (6)
                                              2 3BR units    $340
               4 buildings


SOLOMON        North Pine       January       4 1BR units    $269        $561,366      $253,678
               Village          1997          12 BR units    $352        RECDS (6
               Apartments

               4 buildings


BLESSED        Blessed          August        136     1BR    $402        $2,600,000    $9,147,920
ROCK           Rock of El       1997          units          $0 (mgr     FENB (22)
               Monte                          1 2BR unit     unit)
               Apartments                                                $275,000
                                                                         EMCRA (23)
               14
               buildings                                                 $650,000
               (5)                                                       DCF (24)

CASCADE        Cascade          October       94 1BR         $329-$365   $2,465,000    $2,681,950
               Pines            1996          units          $399-$470   URFA (25)
               Apartments                     187 2BR        $499-$530
                                              units                      $4,990,000
               38                             94 3BR                     URFA (25)0
               buildings                      units
               (5)                                                       $1,100,000
                                                                         URFA (25)

-------  ------------  -----------  ------------  -----------  ------------  -----------
</TABLE>

                                       8
<PAGE>
<TABLE>
<CAPTION>


                                                                                      LOCAL LIMITED
                                ESTIMATED                                PERMANENT     PARTNERSHIP'S
                                CONSTRUC-                                MORTGAGE      ANTICIPATED
LOCAL          PROJECT          TION         NUMBER OF     BASIC         LOAN          AGGREGATE
LIMITED        NAME/NUMBER      COMPLETION   APARTMENT     MONTHLY       PRINCIPAL     TAX CREDITS
PARTNERSHIP    OF BUILDINGS     DATE         UNITS         RENTS         AMOUNT        (1)
<S>            <C>              <C>           <C>           <C>          <C>           <C>
CURTIS         Bergwood      July 1996        4 1BR units    $265        $430,000     $181,120
               Apartments                     8 2BR units    $320        RECDS (6)

               3 buildings
               (2)
ESCATAWPA      Escatawpa     September        8 1BR units    $317        $900,500     $493,720
               Village       1996             23 2BR units   $369        RECDS (6)
               Apartments

               12
               buildings
               (2)
ROSEDALE       Valley View   January          6 1BR units    $295        $1,330.000   $547,280
               Apartment     1996             19 2BR units   $358        RECDS (6)
                                              6 3BR units    $418
               4 buildings

------  ------------  -----------  -------------  -----------  -----------  ------------
</TABLE>

(1) Low Income Housing Credits are available over a 10-year period. For the year
in which the credit  first  becomes  available,  Series 3 will receive only that
percentage of the annual credit which corresponds to the number of months during
which  Series 3 was a limited  partner  of the Local  Limited  Partnership,  and
during  which the  Apartment  Complex  was  completed  and in  service.  See the
discussion under "The Low Income Housing Credit" in the Prospectus.

(2)      Rehabilitation property.

(3)  Commercial  Federal Bank ("CFB") will provide the first mortgage loan for a
term of 15 years at an annual interest rate of 8.5%. Principal and interest will
be payable monthly based on a 22-year amortization  schedule with the balance of
the loan due and payable in the 15th year.

(4) Most Worshipful  Prince Hall Grand Lodge  ("MWPHGL") will provide the second
mortgage loan for a term of 15 years at an annual interest rate of 5%. Principal
and interest will be payable monthly based on a 15- year amortization schedule.

(5) Property designed for senior citizens.

(6) RECDS  provides  mortgage  loans under the RECDS  Section 515 Mortgage  Loan
Program.  Each of these  mortgage  loans  will be a  50-year  loan and will bear
annual  interest at a market rate prior to reduction  of the interest  rate by a
mortgage  interest  subsidy to an annual rate of 1%, with principal and interest
payable monthly based on a 50-year amortization schedule.

(7) Alabama Housing Finance Agency ("AHFA") will provide the first mortgage loan
under the HOME program for a term of 20 years at an annual  interest rate of .5%
with  principal  payable  monthly based on a 20-year  amortization  schedule and
interest payable at maturity.

(8) Colonial  Bank will provide the second  mortgage loan for a term of 20 years
at an annual interest rate of 10.5% with principal and interest  payable monthly
based on a 20-year amortization schedule.

(9) Community  Investment  Corporation of North Carolina  ("CICNC") will provide
the first  mortgage  loan for a term of 30 years at an annual  interest  rate of
9.25%.  Principal  and  interest  will be  payable  monthly,  based on a 30-year
amortization schedule.

(10) North Carolina  Housing  Financial Agency ("NCHFA") will provide the second
mortgage  loan  interest-free  for  a  term  of  30  years  based  on a  30-year
amortization schedule, payable monthly.

                                       9
<PAGE>

(11) The City of Morganton  will provide the third  mortgage loan  interest-free
for a term of 20 years, with principal payments due upon maturity of the loan.

(12) Commercial  Federal Bank ("CFB") will provide the first mortgage loan for a
term of 15 years at an annual interest rate of 8.5%. Principal and interest will
be payable monthly based on a 22-year  amortization  schedule.  (13) The City of
Alliance  will  provide  the second  mortgage  loan for a term of 20 years at an
annual interest rate of 0.1%.
Principal and interest will be payable  monthly based on a 20-year  amortization
schedule.

(14) First  National Bank of Omaha ("FNBO") will provide the mortgage loan for a
term of 15 years at a variable interest rate. The note rate will be fixed for 36
months, and every 36 months thereafter,  at the adjusted rate which is 225 basis
points over the Three-year  Treasury Constant  Maturities.  The note will have a
floor rate of 8.5% and a ceiling rate of 12.5%.  Principal  and interest will be
payable monthly based on a 15-year amortization schedule.

(15) The City of Greensboro has approved funding for the  rehabilitation  of the
Apartment Complex in the aggregate amount of $719,000.  The funding sources will
be $355,240 of HOME fundings and $363,750 from the City's Community  Development
Block Grant Loan Guarantee  Program.  The mortgage loan is  interest-free  for a
term of 30 years with a balloon payment at the end of the term. The HOME Program
was  created  under  the  National  Affordable  Housing  Act  of  1990.  States,
metropolitan  cities,  urban counties and consortia  (contiguous  units of local
government)  are  eligible  to become  participating  jurisdictions  in the HOME
Program.  The HOME  funds are  allocated  by  formula,  with 60% of these  funds
available  for  metropolitan  cities,  urban  counties and consortia and 40% for
states. HOME funds may be used for tenant-based rental assistance, assistance to
home-buyers and homeowners, property acquisition, new construction,  moderate or
substantial rehabilitation,  site improvements,  demolition, relocation expenses
and other reasonable and necessary expenses related to development of non-luxury
housing.

(16) The Local Limited Partnership has received tax-exempt bond financing in the
aggregate  principal amount of $7,000,000 (the "Tax-Exempt Bond"). The issuer of
the  bonds is the  Industrial  Development  Board  of the  County  of  Hamilton,
Tennessee ("IDB").  The Tax-Exempt Bond was issued in five separate bonds, fully
amortized by their  respective  maturity dates,  as follows:  $2,465,000 at 5.5%
interest per year  maturing on August 1, 2005;  $1,080,000  at 5.9% interest per
year maturing on February 1, 2008;  $830,000 at 7% interest per year maturing on
February 1, 2009; $670,000 at 6.1% interest per year maturing on August 1, 2015;
and  $1,955,000  at 6.175%  interest per year  maturing on August 1, 2026.  Upon
funding of the bonds  approximately  $390,000  will be held by the  Trustee in a
separate debt service  reserve fund to be used by the Trustee for payment of the
bonds,   if  required.   Principal  and  interest  on  the  bonds  will  be  due
semi-annually on February 1 and August 1 of each year.

(17) The Local Limited  Partnership  will receive  taxable bond financing in the
principal amount of $875,000 at 6.45% interest per year and maturing on February
1, 2002  ("Taxable  Bond").  The Taxable Bond,  which is fully  amortized by its
maturity date with  principal and interest due  semi-annually  on February 1 and
August 1 of each year, was issued by IDB.

(18) Bank of America ("BA") will provide the first mortgage loan for 15 years at
an annual interest rate of 11.5%. Principal and interest will be payable monthly
based on a 30-year amortization  schedule,  and all unpaid principal will be due
upon maturity of the loan.

(19) HOME funds will be provided for the second  mortgage  loan for a term of 50
years at an annual interest rate of 7%. Payments are based upon the availability
of cash flow.  Principal  and  interest  will accrue if not paid and will be due
upon maturity of the loan.

                                       10
<PAGE>

 (20) Missouri Housing  Development  Commission  ("MHDC") will provide the first
mortgage loan for a term of 35 years at an annual interest rate of 1%. Principal
and interest will be payable monthly based on a 35-year amortization schedule.

(21) St.  Louis County will  provide the second  mortgage  loan for a term of 35
years at no interest. Principal payments will be made from surplus cash flow and
will  accrue if not paid.  Accrued  principal  will be due upon  maturity of the
loan.

(22) Far East National Bank ("FENB") will provide the first  mortgage loan for a
term of 30 years at an annual interest rate of 8.5%. Principal and interest will
be payable monthly, based on a 20-year amortization schedule.

(23) El Monte Community  Redevelopment  Agency ("EMCDA") will provide the second
mortgage loan for a term of 15 years at an annual  interest rate of 4%. The loan
will be repaid based on residual receipts.

(24) Deferred City Fees ("DCF") will provide the third  mortgage loan for a term
of 30 years at an annual  interest  rate of 1%. The loan will be repaid based on
residual receipts

(25) Urban Residential  Finance Authority (URFA) will provide the first mortgage
loan for a term of 15 years at an annual  interest rate of 6.25%.  Principal and
interest will be payable annually based on a 15-year amortization schedule. URFA
will  provide  the  second  mortgage  loan for a term of 30  years at an  annual
interest rate of 6.6%.  Principal and interest will be payable annually based on
a 30-year amortization schedule. URFA will provide the third mortgage loan for a
term of 30 years at an annual  interest rate of 7%.  Principal and interest will
be payable annually based on a 30-year amortization schedule.

Tulsa  (EVERGREEN):  Tulsa  (population  367,000)  is the  county  seat of Tulsa
County,  and is in northeast  Oklahoma at the intersection of Interstate Highway
44 and U.S.  Highway 75. The major  employers  for Tulsa  residents are American
Airlines, Tulsa Public Schools, and St. Francis Hospital.

Ontario  (HILLCREST):  Ontario  (population  9,700)  is  in  Malheur  County  in
east-central  Oregon on U.S. Highway 20-26, near Interstate  Highway 84. Ontario
is the trade center for this area, known as the Western  Treasure Valley.  Major
employers for the Ontario area include Ore-Ida Foods,  Woodgrain  Moulding,  and
American Fine Foods.

Shepherd  (SHEPHERD I): Shepherd  (population 1,800) is in San Jacinto County at
the intersection of U.S. Highway 59 and State Highway 156, in east-central Texas
approximately  50 miles  northeast of Houston.  The major employers for Shepherd
residents are the Shepherd Independent School District and EGC Plastics.

Talladega  (TALLADEGA):  Talladega  (population  74,000) is in  central  Alabama
approximately  55 miles east of  Birmingham  and is the county seat of Talladega
County.  Interstate  Highway  20 is ten  miles  north  of the  city.  The  major
employers  in the area are  Kimberly  Clark  Corporation  (paper/pulp),  Russell
Corporation    (apparel),    Sullivan   Graphics   (commercial   printing)   and
Georgia-Pacific (plywood lumber pulp).

Morganton (WILLOWS):  Morganton  (population 15,200) is the county seat of Burke
County in the western section of North Carolina, 70 miles northwest of Charlotte
and 55 miles east of Asheville, at the intersection of Interstate Highway 40 and
U.S.  Highway 64. The city's major  industries are furniture  manufacturing  and
textiles.  Two of the area's largest employers are Alba Waldensian (hosiery) and
Masco/Drexel Heritage (furniture).

                                       11
<PAGE>

Alliance (ALLIANCE): Alliance (population 9,800) is the county seat of Box Butte
County,  Nebraska,  and is near the  intersection of U.S.  Highway 385 and State
Highway  2, in the  western  part of the state.  Major  employers  for  Alliance
residents are Burlington Northern, Dayco, and Woolrich.

Hastings  (HASTINGS):  Hastings  (population 23,000) is the county seat of Adams
County, Nebraska, in the south-central part of the state, 150 miles southwest of
Omaha, at the  intersection of U.S.  Highways 6, 34 and 281. The major employers
are Mary Lanning Memorial  Hospital,  Hastings Regional  Hospital,  and Hastings
Public School District.

Greensboro  (KING):  Greensboro  (population  187,000)  is the  county  seat  of
Guilford  County,  North  Carolina,  and  is  located  at  the  intersection  of
Interstate Highways 40 and 85,  approximately 25 miles east of Winston-Salem and
85 miles northwest of Raleigh.  The largest  employers for Greensboro  residents
are local and county  governments,  Sears,  Roebuck and  Company,  and  American
Telephone and Telegraph.

Chattanooga  (PATTEN):  Chattanooga  (population 150,000) is located in Hamilton
County,  Tennessee,  in the south-central part of the state near the Georgia and
Alabama borders,  at the intersection of Interstate  Highways 24, 59 and 75. The
major employers are the Tennessee Valley Authority,  Erlanger Medical Center and
Provident Life and Accident (insurance company).

Hobbs  (BROADWAY):  Hobbs  (population  30,000)  is  located  in Lea  County  in
southeast New Mexico on U.S.  Highway  62/180.  The economy of Hobbs is based on
the  petroleum  industry,  with  four of the ten  largest  employers  conducting
petroleum  related  businesses.  However,  the three largest employers for Hobbs
residents  are the Hobbs  Municipal  Schools,  Lea  Regional  Hospital  and city
government.

Berkeley (HERITAGE): Berkeley (population 11,000) is located in St. Louis County
in eastern Missouri,  near Interstate  Highways 70, 170 and 270, and is a suburb
of the city of St.  Louis.  The  major  employers  for  Berkeley  residents  are
McDonnell Douglas, Ferguson-Florissant Schools, and Lambert-St. Louis Airport.

Syracuse  (PRAIRIELAND):  Syracuse  (population  1,600)  is the  county  seat of
Hamilton County,  Kansas, and is located in the western part of the state at the
intersection  of U.S.  Highway 50 and State  Highway 27. The economy of Hamilton
County is based largely on agriculture.  The Syracuse  Unified School  District,
Hamilton  County  Hospital and county  government  are the largest  employers in
Syracuse.

Solomon  (SOLOMON):  Solomon  (population 1,000) is located in Dickinson County,
Kansas,  in  the  central  part  of  the  state  along  Interstate  Highway  70,
approximately  90 miles  west of Topeka.  Agriculture  plays a major role in the
economy of Dickinson County.  Many of Solomon's residents commute to Abilene and
Salina  for  employment.  The  largest  employers  within  Solomon  are  Solomon
Corporation (transformer  manufacturing),  Mid Kansas Auto Truck Center, and the
Solomon Unified School District.

El Monte (BLESSED ROCK): El Monte (population 106,000) is in Los Angeles County,
California,  in the San Gabriel Valley,  approximately 12 miles east of downtown
Los Angeles.  The major  employers for El Monte  residents are Wells Fargo Bank,
Von's Co., Inc. (distribution warehouse), and Sargent-Fletcher (air frames).

Atlanta (CASCADE): Atlanta (population 394,000) is the state capital of Georgia,
and is located in Fulton County at the  intersection of Interstate  Highways 85,
75 and 20. Atlanta is considered the  commercial,  transportation  and financial
capital of the Southeast.  It is the national  headquarters for Coca-Cola,  CNN,
Delta Air Lines, United Parcel Service, Home Depot, and Holiday Inn-Worldwide.

Curtis  (CURTIS):   Curtis  (population  800)  is  in  Frontier  County  in  the
south-central  part of Nebraska,  near the  intersection of U.S.  Highway 83 and
State Highways 18 and 23. Major employers for Curtis residents are Maywood Corp.
(agricultural  products),  Sunset Haven Nursing  Community,  and NCTA  Technical
School.

Escatawpa  (ESCATAWPA):  Escatawpa  (population  3,900) is in Jackson  County in
southern  Mississippi  on  Interstate  Highway  10.  Mobile,  Alabama is located
approximately  20 miles east of  Escatawpa.  Major  employers in Jackson  County
include Ingalls (shipbuilding), Chevron Refinery, and International Paper.

Silver City (ROSEDALE):  Silver City  (population  10,600) is the county seat of
Grant County in southwest New Mexico near the  intersection of U.S.  Highway 180
and State  Highway 90. Major  employers  for Rosedale  residents are Silver City
Daily Press and Southwest Transit Mix.

                                       12
<PAGE>

<TABLE>
<CAPTION>

                                                                ALLOCATIONS (3)    SERIES 3's
LOCAL         LOCAL                           SHARING RATIOS:   AND SALE OR        CAPITAL
LIMITED       GENERAL         PROPERTY        CASH FLOW         REFINANCING        CONTRIBUTION
PARTNERSHIP   PARTNERS        MANAGER (1)     (2)               PROCEEDS (4)       (5)


<S>           <C>             <C>             <C>               <C>                <C>    

EVERGREEN     Most            Retro           WNC: 1st $5,000   99/1               $549,305
              Worshipful      Management      LGP: 2nd $5,000   50/50
              Prince Hall     Group, Inc.     Balance:
              Grand Lodge     (8)             WNC: 25%
              (6)                             LGP: 75%

              Retro
              Development
              of Oklahoma,
              Inc. (7)



HILLCREST     Riley J. Hill   Riley J. Hill   WNC: 1st          99/1               $353,505
              (9)             (9)             $1,000            50/50
                                              LGP: the
                                              balance



SHEPHERD      Donald W.       Wilmic          WNC: 1/3          99/1               $121,369
   I          Sowell (10)     Ventures,       LGP: 2/3          50/50
                              Inc.
                              (11)


TALLADEGA     Thomas H.       Apartment       WNC: 1/3          99/1               $653,237
              Cooksey (12)    Services and    LGP: 2/3          50/50
                              Management
              Apartment       Co.
              Developers,     (13)
              Inc. (12)

WILLOWS       Gordon          GEM             WNC: 1/3          99/1               $841,433
              Douglas         Management,     LGP: 2/3          50/50
              Brown, Jr.      Inc. (17)
              (14)

              John C.
              Loving (15)

              Western N.C.
              Housing
              Partnership,
              Inc. (16)


ALLIANCE      Retro           Retro           WNC: 1st $2,500   99/1               $604,108
              Development,    Management      LGP: 2nd $2,500   50/50
              Inc. (18)       Group, Inc.     Balance:
                              (8)             WNC: 25%
                                              LGP: 75%

                                       13

<PAGE>
<CAPTION>


                                                                SHARING RATIOS:
                                                                ALLOCATIONS (3)    SERIES 3's
LOCAL         LOCAL                           SHARING RATIOS:   AND SALE OR        CAPITAL
LIMITED       GENERAL         PROPERTY        CASH FLOW         REFINANCING        CONTRIBUTION
PARTNERSHIP   PARTNERS        MANAGER (1)     (2)               PROCEEDS (4)       (5)
-----------   --------        -----------     ---               ------------       ---


<S>           <C>             <C>             <C>               <C>                <C>    

HASTINGS      Retro           Retro           WNC: 1st $2,500   99/1               $542,107
              Development,    Management      LGP: 2nd $2,500   25/75
              Inc. (18)       Group, Inc.     Balance:
                              (8)             WNC: 25%
              Most                            LGP: 75%
              Worshipful
              Prince Hall
              Grand Lodge
              (19)



 KING         Project         Wynnefield      WNC: 1/3          99/1               $473,100
              Homestead,      Properties,     LGP: 2/3          50/50
              Inc. (20)       Inc.
                              (21)


PATTEN        Patten          Lawler-Wood,    WNC: Greater of   99/1               $2,154,201
              Towers, LLC     Inc. (23)       $5,000 or 15%     50/50
              (22)                            LGP: 40%
                                              Balance:
                                              WNC: 50%
                                              LGP: 50%

BROADWAY      Trianon         Trianon         WNC:  Greater of  99/1               $2,003,595
              Development     Development     15% or $5,000     50/50
              Corporation     Corporation     LGP:  40%
              (24)            (24)            Balance: 50/50

              Foundation
              for
              Social
              Resources,
              Inc.
              (25)


HERITAGE      Kenneth M.      Lockwood        WNC: 1/3          99/1               $753,295
              Vitor (26)      Realty,         LGP:  2/3         50/50
                              Inc. (28)
              Joseph A.
              Shepard (27)
-------- -------------- -------------- ----------------- ------------- ----------------

PRAIRIE-      Kenneth M.      Lockwood        WNC:  1/3         99/1               $84,524
LAND          Vitor (26)      Realty, Inc.    LGP: 2/3          50/50
                              (28)
              Joseph A.
              Shepard (27)
-------- -------------- -------------- ----------------- ------------- ----------------

SOLOMON       Kenneth M.      Lockwood        WNC: 1/3          99/1               $142,061
              Vitor (26)      Realty,         LGP:  2/3         50/50
                              Inc. (28)
              Joseph A.
              Shepard (27)

BLESSED       Everland,       Professional    WNC: Greater      98.99/.01/1        $2,603,955
ROCK          Inc.            Apartment       of 30% or         50/50
              (28)            Management,     $12,000
                              Inc. (29)       LGP: 40% of
                                              the balance
                                              The balance:
                                              50/50

CASCADE       Urban           Brencor Asset   WNC:    greater   98/2               $1,346,961
              Residential     Management,     of    10%    or   50/50
              Management,     Inc. (31)       $5,000
              Inc. (30)                       LGP: 45%
                                              Balance:
                                              WNC:10.9%;
                                              LGP: 89.1%
-------- -------------- -------------- ---------------- -------------- ----------------

                                       14
<PAGE>
<CAPTION>


                                                                SHARING RATIOS:
                                                                ALLOCATIONS (3)    SERIES 3's
LOCAL        LOCAL                            SHARING RATIOS:   AND SALE OR        CAPITAL
LIMITED      GENERAL           PROPERTY       CASH FLOW         REFINANCING        CONTRIBUTION
PARTNERSHIP  PARTNERS          MANAGER (1)    (2)               PROCEEDS (4)       (5)

------- -------------- -------------- --------------------------- -------- -----------
<S>           <C>             <C>             <C>               <C>                <C>    
CURTIS       Joseph A.         Lockwood       WNC: 1/3          99/1               $88,366
             Shepard (27)      Realty,        LGP:  2/3         50/50
                               Inc. (28)
             Kenneth M.
             Vitor (26)

------- -------------- -------------- --------------------------- -------- -----------
ESCATAWPA     Olsen            Olsen          WNC: 1/3          99/1               $248,646
             Securities        Securities     LGP: 2/3          91/9
             Corporation       Corporation
             (32)              (32)

------- -------------- -------------- --------------------------- -------- -----------
------- -------------- -------------- --------------------------- -------- -----------
ROSEDALE     Deke Noftsker     M-DC Group,    WNC:  greater  of  33%  or   99/1    $308,762
             (33)              Inc. dba       $1,400                       50/50
                               Alpha          LGP: 67%
                               Management
                               Co, Inc. (34)

------- -------------- -------------- --------------------------- -------- -----------
</TABLE>

(1) The maximum annual  management fee payable to the property manager generally
is determined  pursuant to lender  regulations.  Each Local  General  Partner is
authorized to employ either itself or one of its  Affiliates,  or a third party,
as property manager for leasing and management of the Apartment  Complex so long
as the fee therefor  does not exceed the amount  authorized  and approved by the
lender for the Apartment Complex.

(2)  Reflects  the amount of the net cash flow from  operations,  if any,  to be
distributed to Series 3 ("WNC") and the Local General  Partner(s) ("LGP") of the
Local Limited Partnership for each year of operations.  Generally, to the extent
that the specific  dollar  amounts which are to be paid to Series 3 are not paid
annually,  they will accrue and be paid from sale or refinancing  proceeds as an
obligation of the Local Limited Partnership.

(3) Subject to certain special allocations,  reflects the respective  percentage
interests of Series 3 and the Local General  Partner(s)  in profits,  losses and
Low  Income  Housing  Credits  commencing  with  entry of  Series 3 as a limited
partner.

(4)  Reflects  the  percentage  interests  of  Series  3 and the  Local  General
Partner(s) in any net cash proceeds  from sale or  refinancing  of the Apartment
Complex,  after payment of the mortgage loan and other Local Limited Partnership
obligations (see, e.g., note 3), and the following,  in the order set forth: The
capital  contribution  of Series 3; and the  capital  contribution  of the Local
General Partner.

(5)  Series  3 will  make  its  capital  contributions  to  each  Local  Limited
Partnership  in  stages,  with each  contribution  due when  certain  conditions
regarding  construction  or  operations  of  the  Apartment  Complex  have  been
fulfilled.

(6) Most Worshipful Prince Hall Grand Lodge ("MWPHGL") was formed 103 years ago,
and was  incorporated  in 1982. One of its goals is to foster the development of
safe,  decent and affordable  housing to individuals  and families  earning less
than 60% of the median income of the area. The  corporation  has  represented to
Series  3 that,  as of  December  10,  1994,  it had a net  worth in  excess  of
$3,000,000.  (7) Retro  Development  of  Oklahoma,  Inc.  was  formed in 1994 by
Douglas E. Hiner.  The company has  represented to the  Partnership  that, as of
December 31, 1994, its net worth was minimal  Construction and operating deficit
guarantees  will be  provided  by  Douglas  E.  Hiner.  Mr.  Hiner,  age 55, has
represented  to the Series 3 that,  as of August 2, 1995,  he had a net worth in
excess of $6,500,000.

(8) Retro  Management  Group,  Inc.  was formed in 1994.  The company  currently
manages more than 2,200 units in conventional and government  financed apartment
projects in Oklahoma,  Nebraska and Iowa.  The company's  principal,  Douglas E.
Hiner, has been involved in property management since 1974.

                                       15
<PAGE>

(9) Riley J. Hill has been involved in the construction  industry since 1969. He
owns and manages in excess of 200 tax credit apartment units. Mr. Hill graduated
from Yakima Valley College.  Mr. Hill, age 48, has represented to Series 3 that,
as of December 31, 1994, he had a net worth in excess of $3,000,000.

(10) Donald W. Sowell has been a principal and chief executive officer of D.W. &
S. Construction,  Inc. since 1985. The corporation was formed for the purpose of
providing  construction and  construction-related  services to the multi-family,
single-family  and  commercial-use  markets.  D.W. & S.  Construction,  Inc. has
completed  more  than   $12,000,000  in   multi-family,   light  commercial  and
residential  construction.  Since 1979 Mr. Sowell has been a principal and chief
executive  officer  of Don Sowell  Development,  Inc.,  a  property  development
company which has developed $19,000,000 of real estate in Texas and Mississippi.
Mr. Sowell,  age 56, has represented to Series 3 that, as of September 30, 1994,
he had a net worth in excess of $3,000,000.

(11) Wilmic  Ventures,  Inc. is a Texas  corporation  which was  incorporated in
1984.  The  corporation  is comprised of Wilmic  Property  Management and Wilmic
Laundries,  two separate  divisions.  Donald W. Sowell is a principal  and chief
executive  officer of Wilmic  Ventures,  Inc. Wilmic Property  Management  began
operating in 1979 and manages more than 1,200 apartment  units, 386 of which are
tax credit units.

(12)  Thomas  H.  Cooksey  has been  involved  in real  estate  development  and
apartment  management  since  1980 and,  currently,  is the  general  partner of
partnerships that own apartment  complexes  located in 65 towns,  principally in
Alabama.  Mr. Cooksey,  age 54, has represented to Series 3 that, as of June 22,
1995, he had a net worth in excess of $8,900,000. Apartment Developers, Inc. was
formed in 1993 by Mr. Cooksey,  Charles Farrow,  Jr. and Kay Wallace to act as a
corporate  general  partner  of the Local  Limited  Partnership  which  owns the
Apartment  Complex.  Mr. Cooksey is the president and owner of the  corporation.
Apartment Developers, Inc.
has a nominal shareholders' equity.

(13) Apartment Services and Management Co. was formed in 1986. Thomas H. Cooksey
is  president  and  owner  of 50% of the  corporation.  Apartment  Services  and
Management  Co.  manages in excess of 1,200  apartment  units,  more than 800 of
which are tax credit units.

(14) Gordon  Douglas  Brown,  Jr. has been involved in real estate  development,
finance,   and  analysis  since  1964.  His  development   experience   includes
apartments, office buildings,  condominiums, and shopping centers. Together with
John C. Loving, Mr. Brown has developed 20 apartment projects in North Carolina.
Mr. Brown, age 55, has represented to Series 3 that, as of September 1, 1995, he
had a net worth in excess of $1,700,000.

(15) John C.  Loving  is the  owner  and  general  manager  of John  Loving  and
Associates.  Since 1971,  Mr. Loving has been  involved in real estate  finance,
management,  sales and  development.  He earned a Masters of Commerce  degree in
finance from the University of Richmond,  and is a member of the Raleigh Chamber
of Commerce and the Wake County Homebuilders Association.  Mr. Loving has served
as director of Raleigh Academy,  and is a director of the North Carolina Council
for Rural Rental Housing.  Mr. Loving, age 50, has represented to Series 3 that,
as of August 31, 1995, he had a net worth in excess of $1,600,000.

(16)  Western  N.  C.  Housing  Partnership,   Inc.  was  formed  in  1987,  and
incorporated in 1993 as a  not-for-profit  organization  in North Carolina.  The
corporation  provides technical  assistance to the private and public sectors in
preparing grant and loan applications for affordable housing,  and has a nominal
fund surplus.

(17) GEM  Management,  Inc. was formed in North Carolina in 1991. Its president,
Gary D. Ellis,  has been involved in low and moderate  income  housing  programs
since 1981. The corporation  currently manages 72 apartment complexes consisting
of more  than  2,000  affordable  rental  units  located  in  Alabama,  Georgia,
Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia.

                                       16
<PAGE>

(18) Retro Development, Inc. was formed in 1994 by Douglas E. Hiner. The company
has represented to the Partnership  that, as of December 31, 1994, its net worth
was minimal.  However,  construction  and operating  deficit  guarantees will be
provided by Douglas E. Hiner.  Mr. Hiner,  age 55, has  represented  to Series 3
that, as of August 2, 1995, he had a net worth in excess of $6,500,000.

(19) Most Worshipful Prince Hall Grand Lodge ("MWPHGL") was formed 103 years ago
and was  incorporated  in 1982. One of its goals is to foster the development of
safe,  decent and affordable  housing to individuals  and families  earning less
than 60% of the median income of the area. The  corporation  has  represented to
Series  3 that,  as of  September  1,  1995,  it had a net  worth in  excess  of
$3,500,000.

(20) Project Homestead,  Inc. is a North Carolina  non-profit  corporation which
was formed in 1991 for the purpose of  building  and  providing  housing for low
income families. The corporation has represented to Series 3 that, as of October
31, 1995, it had a fund balance in excess of $890,000.

(21)  Wynnefield  Properties,  Inc.  was founded in 1987 by Norwood  Stone.  The
corporation  specializes in property acquisition,  construction,  rehabilitation
and real estate  management.  Mr. Stone, who is the sole  shareholder,  has more
than 30 years' experience in construction, management and development of low and
moderate income housing and commercial  properties.  The  corporation  currently
manages 12 properties consisting of 656 units.

(22) Patten Towers Partners, LLC is a limited liability company which was formed
in Tennessee in November 1995. Its members are Patten Housing,  LLC and Flagship
Housing, LLC. Robert A. Crowder is the chief manager of Patten Housing, LLC, and
Chris A. Hodges is the chief manager of Flagship  Housing,  LLC. The company has
represented to Series 3 that, as of December 1, 1995, its net worth was nominal.
Brencor,  Inc.  will  serve  as a  guarantor  for  the  construction  completion
guarantee  and  the  operating   deficit   guarantee  which  the  Local  Limited
Partnership  grants to Series 3. Robert A. Crowder is the  principal of Brencor,
Inc. The  corporation has represented to Series 3 that, as of December 31, 1995,
it had a net worth in excess of $1,000,000.

(23) Lawler-Wood,  Inc. is located in Knoxville,  Tennessee, and has been in the
management  business  for  18  years.  The  corporation   currently  manages  17
affordable  housing  properties  comprised  of 3,250 units of family and elderly
housing in four southeast states.


(24)  Trianon  Development  Corporation  is a California  corporation  which was
formed in 1986 by Lester G. Day.  Mr. Day, who is  currently  the  corporation's
chairman,  has 40 years'  experience  in property  development  and  management.
Trianon Development Corporation currently manages 72 affordable housing projects
consisting of approximately 6,500 units. The company has represented to Series 3
that, as of December 31, 1995,  it had retained  earnings in excess of $130,000.
Construction  and operating  deficit  guarantees will be provided by Lester Day.
Mr. Day has  represented to Series 3 that, as of December 31, 1995, he had a net
worth in excess of $3,000,000.

(25) Foundation for Social Resources, Inc., a non-profit corporation,  will be a
special general partner.  The corporation was founded in 1988 for the purpose of
fostering the development,  preservation and  rehabilitation of low and moderate
income  housing.  It  currently  owns  more  than 600  units  in  seven  housing
communities.  The president of Foundation for Social Resources,  Inc. is William
W. Hirsch. Mr. Hirsch has developed apartment communities in Southern California
totaling more than 7,500 units. The corporation has represented to Series 3 that
it has a nominal net worth. As noted above, operating deficit guarantees will be
provided by Lester Day.

(26)  Kenneth M. Vitor is a partner of The  Lockwood  Group,  vice  president of
Lockwood Housing Development Corporation,  president of Lockwood Equities, Inc.,
and president of Mid-America Securities,  Inc. Before joining The Lockwood Group
in June 1984, he was president and chief executive officer of Texstar Automotive

                                       17
<PAGE>

Group and its  subsidiaries.  Mr.  Vitor  currently  serves as  president of the
Missouri  Council for Rural Housing and Development,  a non-profit  organization
dedicated  to  improving  multi-family  housing  in rural  areas.  He is an NASD
licensed  principal.  Mr. Vitor, age 53, has represented to Series 3 that, as of
September 1, 1995, he had a net worth in excess of $4,000,000.

(27) Joseph A. Shepard is president of Lockwood Housing Development Corporation,
chairman of the board of Lockwood Equities,  Inc., and a partner of The Lockwood
Group.  Since entering the real estate field in the  mid-1970s,  he has directed
the development, construction,  rehabilitation, ownership and management of over
8,000 multifamily rental units. Mr. Shepard served two terms as president of the
National  Council for Rural Housing and Development and is vice president of the
National Leased Housing Association. He is a member of the Multifamily Committee
and Rural Committee of the National  Association of Home Builders.  Mr. Shepard,
age 49, has  represented  to Series 3 that,  as of October 1, 1995, he had a net
worth in excess of $7,000,000.

(28) Lockwood  Realty,  Inc. is owned by Joseph A. Shepard and Kenneth M. Vitor.
It was formed as a Missouri  corporation  in 1979 as SMR Realty,  Inc.  Lockwood
Realty,  Inc. is in charge of the  day-to-day  operations  of over 200 apartment
projects  with more than  8,000  units in five  states.  The  company  manages a
variety of rental  housing  complexes  which  include  conventional  apartments,
moderate  housing  rehabilitation  projects,  HUD Section 8 apartment units, and
RECDS  apartment  units.  Lockwood  Realty,  Inc.  employs  over  150  personnel
including project managers and support staff at each site.

(28) Everland, Inc. is a California corporation which was formed in 1986. It has
acted as  developer  of  projects  in El Monte  and  Rosemead,  California.  The
corporation's president, Tom Y. Lee, is a Certified Public Accountant and one of
the founding  organizers  and directors of First  Continental  Bank in Rosemead.
Everland,  Inc. has represented  that, as of June 30, 1996, its total equity was
($382,185);  however,  construction  and operating  deficit  guarantees  will be
provided by Tom Y. Lee. Mr. Lee, age 47, as represented that, as of December 31,
1995, he had a net worth in excess of $3,500,000.

(29)  Professional  Apartment  Management,  Inc. is a California  licensed  real
estate broker which provides full property management services for more than 100
facilities,  consisting of more than 5,000 units, and having a combined value of
more than $200 million.  The company has been managing affordable housing for 26
years, and currently manages approximately 500 tax credit units.


(30) Urban  Residential  Management,  Inc.  is a Georgia  corporation  which was
formed  for the  purpose  of serving as the  general  partner  of  CASCADE.  The
president of Urban Residential  Management Inc. is Herbert Kohn. Brencor,  Inc.,
an  Affiliate  of  the  property  manager,  will  serve  as  guarantor  for  the
construction completion guarantee and the operating deficit guarantee.  Brencor,
Inc.  has  represented  to Series 3 that,  as of September  30,  1995,  it had a
shareholder's equity in excess of $400,000.

(31) Brencor Asset Management, Inc. was formed in Tennessee in 1993. The company
currently manages more than 580 properties,  including two tax credit properties
consisting of 317 units.

(32) Olsen Securities  Corporation is the parent company of Delta  International
Construction Corporation, Delta Wholesale Distributors, Inc., Delta Management &
Systems  Corporation,  and  Delta  International  Investor  Corporation.   These
entities have been engaged in real estate construction, development, investment,
and management  since 1975 and have organized and  administered  several private

                                       18
<PAGE>

real  estate  syndications  since that time.  The  management  division of Olsen
Securities  Corporation  currently  manages  50  properties  (21  of  which  are
receiving Tax Credits)  with an aggregate  value in excess of  $50,000,000.  The
various projects under management  include family,  handicapped,  congregate and
elderly care  developments.  Clifford E. Olsen,  an attorney,  is President  and
Chairman  of the  Board of  Directors  of Olsen  Securities  Corporation.  Olsen
Securities Corporation has represented to Series 3 that, as of July 31, 1995, it
had a stockholder's equity in excess of $1,200,000.

(33)  Deke  Noftsker,  age 50, is the  president  of ABO  Corp.,  and has been a
builder of commercial and residential  (single and multi-family)  properties for
the past 13 years.  Mr. Noftsker has represented to Series 3 that, as of May 31,
1995, he had a net worth in excess of $4,000,000.

  (34) M-DC Group,  Inc.,  dba Alpha  Management  Co.,  Inc.  is a  Dallas-based
  property  management  firm that was  established by Elmer Allgeier in 1979. In
  1990,  the firm was acquired by Michael  Clark,  through the M-DC Group,  Inc.
  Presently the firm manages 78  properties  consisting of more than 3,800 units
  in  Texas,  New  Mexico  and  Colorado.  Thirty-eight  of the  properties  are
  receiving Low Income Housing


Item 2.  Properties

Through its investment in Local Limited  Partnerships  the Partnership  holds an
interest in eighteen Apartment Complexes.  See Item 1 for information pertaining
to these Apartment Complexes.


Item 3.  Legal Proceedings

None.


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

None.


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

PART II.

The  Units are not  traded on a public  exchange  but are being  sold  through a
public  offering.  It is not anticipated that any public market will develop for
the  purchase  and sale of any  Unit.  Units  can be  assigned  only if  certain
requirements in the Partnership Agreement are satisfied.

At December 31, 1997, there were 857 Limited  Partners in the  Partnership.  The
Partnership was not designed to provide cash  distributions  to Limited Partners
in  circumstances  other than  refinancing or disposition of its  investments in
Local  Partnerships.  The Limited Partners invested in the Partnership  received
Low Income Housing Credits per Unit as follows:

         1995                $2
         1996              $91
         1997              $83

                                       19
<PAGE>

Item 6.  Selected Financial Data

<TABLE>
<CAPTION>

                                                                                               October 24, 1995
                                                                                               (Date operations
                                                            Years Ended December 31,          commenced) through
                                                          1997              1996               December 31,1995
                                                          ----              ----               ----------------
<S>                                              <C>                  <C>                      <C>

     Revenue                                     $     121,703         $    209,940             $       3,487

     Partnership operating expenses
                                                     (101,489)              (92,566)                  (12,833)

     Equity in loss of
     Local Partnerships                              (789,697)             (185,071)                     (343)
                                                     ---------             ---------                     -----

     Net loss                                    $   (769,483)          $   (67,697)              $    (9,689)
                                                  ============             =========                    =====

     Net loss per Limited
     Partnership Interest                          $   (42.32)             $  (4.94)                  $(14.58)
                                                   ===========                ======                   ======

     Total assets                                $  15,874,760         $  18,173,156                $4,726,172
                                                  ============          ============                 =========

     Net investment in
     Local Partnerships                          $  13,836,734         $  12,782,751                $1,046,532
                                                  ============          ============                 =========

     Capital contributions payable
     to
     Local Partnerships                           $  1,290,351          $  2,822,885                  $309,852
                                                   ===========           ===========                   =======

     Accrued fees and expenses due
     to affiliates                                    $  4,640             $  43,807                  $570,137
                                                       =======              ========                   =======
</TABLE>


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


Liquidity and Capital Resources
-------------------------------

Since inception the  Partnership has received  $17,558,985 in cash from the sale
of  Units.  Substantially  all of the  $17,558,985  has  been  committed  to the
purchase  price and  acquisition  fees and cost of  investments in Local Limited
Partnerships,  reserves and expenses of the offering. Although not presently the
case, the  Partnership  previously had identified its  investments in advance of
receipt of sufficient cash capital to fund the  investments.  As of December 31,
1997, the Partnership had made capital  contribution to Limited  Partnerships in
the  amount  of  approximately   $12,546,000  and  had  further  obligations  of
approximately $1,290,000.

As of December 31, 1997,  the  Partnership  was  indebted to  Associates  in the
amount of  approximately  $4,600.  The  component of such  indebtedness  were as
follows:  advances  to pay  front-end  fees of  approximately  $3,300 and assets
management fees of approximately, $1,300.

                                       20
<PAGE>

Overall,  as reflected in its Statement of Cash Flows, the Partnership had a net
decrease in cash and cash equivalents of approximately  $548,600. for the period
ended  December  31,  1997.  This  decrease  in cash  consisted  of cash used in
investing  activities  offset  by  cash  provided  by  financing  and  operating
activities for the  Partnership of  approximately  $(2,888,600),  $2,237,800 and
$102,200,  respectively.  Cash used in investing activities consisted of capital
contributions  made to Local Limited  Partnerships of approximately  $3,432,700,
acquisitions  fees paid to Associates of  approximately  $29,000,  offset by the
collection of loans receivable totaling  approximately  $522,200,  the return of
acquisition  fees  of  approximately  $42,600  and  distributions   received  of
approximately  $8,300. Cash flows provided by financing  activities consisted of
capital contributions from partners offset by offering expenses of approximately
$2,250,000 and $(12,200),  respectively.  Cash provided by operating  activities
consisted  of  interest  income.  Cash used in  operating  activities  consisted
primarily of payments for operating fees and expenses.  The major  components of
all these activities are discussed in greater detail below.

Overall,  as reflected in its Statement of Cash Flows, the Partnership had a net
increase  in cash and cash  equivalents  of  approximately  $1,906,200.  for the
period ended December 31, 1996. This increase in cash consisted of cash provided
by financing,  offset by cash used in investing and operating  activities of the
Partnership  of   approximately   $9,817,000,   $(7,704,800)   and   $(206,000),
respectively.   Cash  flows  from  financing  activities  consisted  of  capital
contributions  from  partners,  offset by  offering  expenses  of  approximately
$11,334,000 and $(1,517,000),  respectively.  Cash used in investing  activities
consisted  of  capital   contributions   to  Local   Limited   Partnerships   of
approximately $8,693,200,  acquisitions fees paid to Associates of approximately
$1,024,000,  offset by escrow cash applied of approximately $1,873,300 and loans
collected of  approximately  $139,100.  Cash  provided by  operating  activities
consisted  of primarily of interest  income.  Cash used in operating  activities
consisted  primarily  of payments for  operating  fees and  expenses.  The major
components of all these activities are discussed in greater detail below.

Prior to sale of the  Apartment  Complexes,  it is not expected  that any of the
Local Limited  Partnerships in which the Partnership has invested or will invest
will generate cash sufficient to provide distributions to The Partnership of any
material amount.  Distributions  to the Partnership  would first by used to meet
operating  expenses  of the  Partnership,  including  the  payment  of the Asset
Management Fee to the General Partner.  See Item 11 hereof.  As a result,  it is
not anticipated that the Partnership  will provide  distributions to the Limited
Partners prior to the same of the Apartment Complexes.

The Partnership's  investments are not readily marketable and may be affected by
adverse general economic conditions which, in turn, could substantially increase
the risk of operating  losses for the  Apartment  Complexes,  the Local  Limited
Partnerships  and the  Partnership.  These  problems may result from a number of
factors,   many  of  which  cannot  be  controlled   by  the  General   Partner.
Nevertheless,  the General Partner anticipates that capital raised from the sale
of the Limited  Partnership  Interests is sufficient  to fund the  Partnership's
operations.

The Partnership's investments will not be readily marketable and may be affected
by adverse  general  economic  conditions  which, in turn,  could  substantially
increase the risk of operating  losses for the  Apartment  Complexes,  the Local
Limited  Partnerships  and the  Partnership.  These  problems  may result from a
number of factors,  many of which cannot be controlled  by the General  Partner.
Nevertheless,  the General Partner anticipates that capital raised from the sale
of  the  Limited   Partnership   Interests   will  be  sufficient  to  fund  the
Partnership's investment commitments and proposed operations.

Subsequent  to the close of its  public  offering  the  Partnership  established
working  capital  reserves  of at least 3% of capital  contributions,  an amount
which is anticipated  to be sufficient to satisfy  general  working  capital and
administrative  expense requirements of the Partnership including payment of the
asset  management  fee as well as expenses  attendant to the  preparation of tax
returns  and  reports  to the  Limited  Partners  and other  investor  servicing
obligations of the Partnership.  Liquidity would, however, be adversely affected
by unanticipated  or greater than anticipated  operating costs. The Partnership'
liquidity could also be affected by defaults or delays in payment of the Limited
Partners' promissory notes, from which a portion of the working capital reserves
is  expected to be funded.  To the extent  that  working  capital  reserves  are
insufficient  to  satisfy  the  cash  requirements  of  the  Partnership,  it is
anticipated  that  additional  funds would be sought through bank loans or other
institutional   financing.   The  General   Partner  may  also  apply  any  cash
distributions  received from the Local Limited  Partnership for such purposes or
to replenish or increase working capital reserves.

                                       21
<PAGE>

Under the Partnership  Agreement,  the Partnership  does not have the ability to
assess their respective partners for additional capital contributions to provide
capital  if  needed  by the  Partnership  or their  Local  Limited  Partnership.
Accordingly, if circumstances arise that cause the Local Limited Partnerships to
require  capital in addition to that  contributed by the respective  Partnership
and any equity of the Local General  Partners,  the only sources from which such
capital  needs will be able to be  satisfied  (other than the  limited  reserves
available  at the  Partnership  level) will be (i)  third-party  debt  financing
(which may not be available  because the Apartment  Complexes owned by the Local
Limited  Partnerships  are already  substantially  leveraged),  (ii)  additional
equity  contributions  or advances of the Local  General  Partners,  (iii) other
equity sources (which could adversely affect the  Partnership's  interest in Low
Income Housing Credits,  cash flow and/or proceeds of sale or refinancing of the
Apartment  Complexes  and  result in adverse  tax  consequences  to the  Limited
Partners),  or (iv) the sale or  disposition of the Apartment  Complexes  (which
could have the same adverse  effects as discussed in (iii) above).  There can be
no assurance  that funds from any of such sources would be readily  available in
sufficient  amounts  to  fund  the  capital  requirement  of the  Local  Limited
Partnerships  in question.  If such funds are not  available,  the Local Limited
Partnerships  would risk  foreclosure on their Apartment  Complexes if they were
unable to  renegotiate  the terms of their  first  mortgages  and any other debt
secured by the Apartment Complexes to the extent the capital requirements of the
Local Limited Partnerships relate to such debt.

The  Partnership'  capital  needs and  resources  are expected to undergo  major
changes  during  the  first  several  years of  operations  as a  result  of the
completion  of  their   respective   offerings  of  Units  and   acquisition  of
investments.  Thereafter,  the  Partnership'  capital  needs and  resources  are
expected to be relatively stable over the holding periods of the investments.


Results of Operations
---------------------

As discussed  in Item 1 above,  as of December 31,  1997,  the  Partnership  had
acquired  eighteen Local Limited  Partnership  Interests.  Each of the Apartment
Complexes owned by such Local Limited Partnerships has received a reservation or
an  allocation  for Low Income  Low Income  Housing  Credits.  Seventeen  of the
eighteen Apartment Complexes are completed and in operation.

Consistent  with The  Partnership's  investment  objectives,  each Local Limited
Partnership is generating or is expected to generate Low Income Housing  Credits
for  a  period  of  approximately  ten  years,  commencing  with  completion  of
construction or  rehabilitation of its Apartment Complex and is generating or is
expected to generate losses until sale of the Apartment Complex.

As reflected on its  Statements of  Operations,  the  Partnership  had losses of
approximately  $769,500  and $67,700 for the years ended  December  31, 1997 and
1996,  respectively.  The  component  items of revenue and expense are discussed
below.

Revenue.  Revenues  consisted  entirely  of interest  earned on Limited  Partner
Promissory  Notes  and  cash  deposits  held in  financial  institutions  (i) as
reserves,  or (ii) pending  investment in Local Limited  Partnerships.  Interest
revenue in future years will be a function of prevailing  interest rates and the
amount of cash balances.  It is anticipated  that The Partnership  will maintain
cash  reserves  in an amount  not  materially  in excess of the  minimum  amount
required by its Partnership Agreement, which is 3% of investor capital.

Expenses. The most significant component of operating expenses is expected to be
the Asset  Management  Fee. The asset  management fee is equal to the greater of
$2,000 for each Apartment  Complex or 0.275 % of investor  capital,  and will be
increased based on changes in the Consumer Price Index. The asset management fee
of $49,500 was  incurred in each of the years ended  December 31, 1997 and 1996.
The  Partnership  paid the General  Partner or its affiliates  $110,000 of those
fees in 1997. No asset management fees were paid in 1996.

                                       22
<PAGE>

Amortization  expense consists of the amortization  over a period of 30 years of
the Acquisition Fee and other expenses  attributable to the acquisition of Local
Limited Partnership Interests.

Office expense consists of The Partnership's  administrative  expenses,  such as
accounting and legal fees, bank charges and investor reporting expenses.

Equity in Income from Local Limited  Partnerships.  The Partnership's  equity in
income from Local  Limited  Partnerships  is equal to  approximately  99% of the
aggregate net income of the Local Limited Partnerships  incurred after admission
of The Partnership as a limited partner thereof.

After rent-up,  the Local Limited  Partnerships  are expected to generate losses
during each year of operations;  this is so because,  although  rental income is
expected  to exceed  cash  operating  expenses,  depreciation  and  amortization
deductions claimed by the Local Limited  Partnerships are expected to exceed net
rental income.

                                       23
<PAGE>

Item 8.  
                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                              FINANCIAL STATEMENTS

                 For The Years Ended December 31, 1997 and 1996
              And For The Period October 24, 1995 (Date Operations
                         Commenced) To December 31, 1995

                                      with

                      INDEPENDENT AUDITORS' REPORT THEREON


<PAGE>








                          INDEPENDENT AUDITORS' REPORT



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


We have audited the  accompanying  balance sheets of WNC Housing Tax Credit Fund
V, L.P., Series 3 (a California Limited  Partnership) (the  "Partnership") as of
December 31, 1997 and 1996, and the related statements of operations,  partners'
equity  (deficit) and cash flows for the years ended  December 31, 1997 and 1996
and for the period October 24, 1995 (date operations  commenced) to December 31,
1995. 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 audits. 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  investments in these
limited partnerships  represented 87% and 70% of the total assets of WNC Housing
Tax Credit Fund V, L.P., Series 3 at December 31, 1997 and 1996, respectively. 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 those  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 1996,  and the
results of its  operations  and its cash flows for the years ended  December 31,
1997 and 1996 and for the period October 24, 1995 (date operations commenced) to
December 31, 1995 in conformity with generally accepted accounting principles.




                                                              /s/Corbin & Wertz

                                                               CORBIN & WERTZ

Irvine, California
April 21, 1998


<PAGE>


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

                                 BALANCE SHEETS

                           December 31, 1997 and 1996


<TABLE>
<CAPTION>

                                                                               1997                     1996
                                                                          ----------------        -----------------

ASSETS
<S>                                                                     <C>                     <C>    

Cash and cash equivalents                                               $      2,018,591        $       2,567,217
Subscriptions receivable (Note 7)                                                      -                2,195,000
Loans receivable (Note 2)                                                              -                  522,190
Investments in limited partnerships (Note 3)                                  13,836,734               12,782,751
Interest receivable                                                               19,435                  105,998
                                                                         ---------------         ----------------

                                                                        $     15,874,760        $      18,173,156
                                                                         ===============         ================

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
   Payables to limited partnerships (Note 5)                            $      1,290,351        $       2,822,885
   Accrued fees and advances due to General Partner
    and affiliates (Note 4)                                                        4,640                   43,807
                                                                         ---------------         ----------------

         Total liabilities                                                     1,294,991                2,866,692
                                                                         ---------------         ----------------

Commitments and contingencies (Note 5)

Partners' equity (deficit):
   General partner                                                               (29,693)                 (21,876)
   Limited partners (25,000 units authorized; 18,000 units
    outstanding at December 31, 1997 and 1996)                                14,609,462               15,328,340
                                                                         ---------------         ----------------

         Total partners equity                                                14,579,769               15,306,464
                                                                         ---------------         ----------------

                                                                        $     15,874,760        $      18,173,156
                                                                         ===============         ================
</TABLE>

                 See accompanying notes to financial statements
                                      FS-2
<PAGE>


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

                            STATEMENTS OF OPERATIONS

                 For The Years Ended December 31, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995

<TABLE>
<CAPTION>

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

Interest income                                            $      121,703      $      209,940     $        3,487
                                                            -------------       -------------      -------------

Operating expenses:
   Amortization                                                    34,605              23,436                454
   Asset management fees (Note 4)                                  49,500              49,500             12,367
   Other                                                           17,384              19,630                 12
                                                            -------------       -------------      -------------

         Total operating expenses                                 101,489              92,566             12,833
                                                            -------------       -------------      -------------

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

Equity in losses from limited partnerships (Note 3)              (789,697)           (185,071)              (343)
                                                            -------------       -------------      -------------

Net loss                                                   $     (769,483)     $      (67,697)    $       (9,689)
                                                            =============       =============      =============

Net loss allocated to:
   General partner                                         $       (7,695)     $         (677)    $          (97)
                                                            =============       =============      =============
   Limited partners                                        $     (761,788)     $      (67,020)    $       (9,592)
                                                            =============       =============      =============

Net loss per weighted limited partner units                $       (42.32)     $       (4.94)     $       (14.58)
                                                            =============       ============       =============

Outstanding weighted limited partner units                         18,000              13,564                658
                                                            =============       =============      =============

</TABLE>

                 See accompanying notes to financial statements
                                      FS-3
<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, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995

<TABLE>
<CAPTION>

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

Capital contributions, net of discount of $3,000           $          100      $    4,494,000     $    4,494,100

Offering expenses                                                  (6,032)           (597,196)          (603,228)

Capital issued for notes receivable (Note 7)                            -             (35,000)           (35,000)

Net loss                                                              (97)             (9,592)            (9,689)
                                                            -------------       -------------      -------------

Equity (deficit) December 31, 1995                                 (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 7)                             -              35,000             35,000

Capital issued for notes receivable (Note 7)                            -             (55,000)           (55,000)

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

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

Equity (deficit) December 31, 1996                                (21,876)         15,328,340         15,306,464

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

Cash collected on notes receivable (Note 7)                             -              55,000             55,000

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

Equity (deficit) December 31, 1997                         $      (29,693)     $   14,609,462     $   14,579,769
                                                            =============       =============      =============
</TABLE>

                 See accompanying notes to financial statements
                                      FS-4

<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, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995

<TABLE>
<CAPTION>

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

Cash flows from operating activities:
   Net loss                                                $     (769,483)     $      (67,697)    $       (9,689)
   Adjustments to reconcile net loss to net
    cash (used in ) provided by operating
    activities:
       Amortization                                                34,605              23,436                454
       Equity in loss of limited partnerships                     789,697             185,071                343
       Management fees incurred                                         -              49,500             12,367
       Change in interest receivable                               86,563            (105,925)               (73)
       Change in accrued fees and expenses due
        to general partner and affiliates                         (39,167)           (290,384)                 -
                                                            -------------       -------------      -------------

   Net cash (used in) provided by operating
    activities                                                    102,215            (205,999)             3,402
                                                            -------------       -------------      -------------

Cash flows from investing activities:
   Investments in limited partnerships                         (3,432,735)         (8,693,189)          (397,395)
   Cash in escrow                                                       -           1,873,262         (1,873,262)
   Loans receivable                                               522,190             139,116           (661,306)
   Acquisition fees and costs                                     (28,975)         (1,023,950)           (12,085)
   Returns of acquisition fees (Note 4)                            42,551                   -                  -
   Distributions received                                           8,340                   -                  -
                                                            -------------       -------------      -------------

   Net cash used in investing activities                       (2,888,629)         (7,704,761)        (2,944,048)
                                                            -------------       -------------      -------------

Cash flows from financing activities:
   Capital contributions from partners                          2,250,000          11,333,985          3,975,100
   Offering expenses                                              (12,212)         (1,517,007)          (373,455)
                                                            -------------       -------------      -------------

   Net cash provided by financing activities                    2,237,788           9,816,978          3,601,645
                                                            -------------       -------------      -------------

Net change in cash and cash equivalents                          (548,626)          1,906,218            660,999

Cash and cash equivalents, beginning of period                  2,567,217             660,999                  -
                                                            -------------       -------------      -------------

Cash and cash equivalents, end of period                   $    2,018,591      $    2,567,217     $      660,999
                                                            =============       =============      =============
</TABLE>

                 See accompanying notes to financial statements
                                      FS-5
<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, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995


<TABLE>
<CAPTION>
       
                                                                 1997               1996                1995
                                                            ---------------    ----------------    ----------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION Cash paid during the year for:
<S>                                                       <C>                  <C>                <C>   
 
      Interest                                             $            -      $            -     $            -
                                                            =============       =============      =============
       Income taxes                                        $          800      $          800     $            -
                                                            =============       =============      =============
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:

   During 1997 and 1996, the Partnership incurred, but did not pay, $526,643 and
   $2,513,033,  respectively, of payables to limited partnerships (in connection
   with its investments in limited partnerships) (see Note 5).

   During 1996, the Partnership  incurred,  but did not pay, $42,551 of payables
   to an affiliate for offering and acquisitions expenses (see Note 4).

   As of December 31, 1996, $2,195,000 of capital contributions were recorded as
subscriptions receivable.

                 See accompanying notes to financial statements
                                      FS-6
<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, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995



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

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

WNC  Housing Tax Credit Fund V, L.P.,  Series 3 (the  "Partnership")  was formed
under the  California  Revised  Limited  Partnership  Act on March 28, 1995, and
commenced  operations  on October  24,  1995.  Prior to October  24,  1995,  the
Partnership was considered a development-stage  enterprise.  The Partnership was
formed to invest  primarily  in other  limited  partnerships  which will own and
operate  multi-family housing complexes that will qualify for low income housing
credits.

The general partner is WNC Tax Credit Partners, V, L.P. (the "General Partner"),
a California limited partnership.  WNC & Associates, Inc. is the general partner
of the WNC Tax Credit  Partners  V, L.P.  Wilfred N.  Cooper,  Sr.,  through the
Cooper Revocable Trust,  owns 70% of the outstanding  stock of WNC & Associates,
Inc. John B. Lester,  Jr. is the original limited partner of the Partnership and
owns,  through the Lester Family Trust,  30% of the  outstanding  stock of WNC &
Associates, Inc.

Pursuant to the  Partnership  Agreement,  the  Partnership is authorized to sell
25,000  Units at $1,000  per Unit (the  "Units")  of which  18,000  Units in the
amount of $17,558,985,  net of $441,015 of discounts for volume  purchases,  had
been sold  through  January  1996.  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% of these items in proportion to their respective investments.

After the limited  partners  have received  proceeds from a sale or  refinancing
equal to their capital  contributions and their return on investment (as defined
in  the   Partnership   Agreement)  and  the  General  Partner  has  received  a
subordinated  disposition  fee (as described in Note 4), 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.

The Partnership's  investments in limited  partnerships are subject to the risks
incident to the management and ownership of multifamily residential real estate,
and  include  the risks  that  neither  the  Partnership's  investments  nor the
apartment   complexes  owned  by  the  limited   partnerships  will  be  readily
marketable. Additionally, there can be no assurance that the Partnership will be
able to dispose of its interests in the 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
apartment  complexes  and the  Partnership.  The  apartment  complexes  could be
subject to loss through  foreclosure.  In addition,  each limited partnership is
subject to risks relating to  environmental  hazards which might be uninsurable.
Because the Partnership's ability to control its operations will depend on these
and other  factors  beyond the  control of the  General  Partner and the general
partners of the limited partnerships, there can be no assurance that Partnership
operations will be profitable or that the  anticipated  housing tax credits will
be available to limited partners.

                                      FS-7
<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, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995


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

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 limited partnership's results of operations and for
any distributions  received. The accounting policies of the limited partnerships
are  consistent  with the  Partnership.  Costs  incurred by the  Partnership  in
acquiring the investments in limited partnerships are capitalized as part of the
investment and amortized over 30 years (see Notes 3 and 4).

Losses  from  limited  partnerships  allocated  to the  Partnership  will not be
recognized to the extent that the  investment  balance  would be adjusted  below
zero.

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.

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

At December  31,  1997,  the  Partnership  maintained  cash  balances at certain
financial institutions in excess of the federally insured maximum.

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

Offering  expenses consist of underwriting  commissions,  legal fees,  printing,
filing and  recordation  fees, and other costs  incurred in connection  with the
selling of 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.  As of December 31,
1997 and 1996, the Partnership had recorded  offering expenses of $1,073,742 and
$1,061,530 and selling expenses of $1,058,705 and $1,058,705, respectively.

                                      FS-8
<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, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995


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

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

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

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

Net loss per limited partner unit is computed by dividing the limited  partners'
share of net loss by the weighted  number of limited  partner units  outstanding
during the period.

NOTE 2 - LOANS RECEIVABLE
-------------------------

Loans receivable  represent amounts loaned by the Partnership to certain limited
partnerships  in which the  Partnership  may  invest.  Loans  receivable  with a
balance of $522,190 as of December 31, 1996 were collectible from two additional
limited partnerships which were acquired in 1997 (see Note 3).

NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
--------------------------------------------

As of December 31,  1997,  the  Partnership  had  acquired  limited  partnership
interests in eighteen  limited  partnerships,  each of which owns one  apartment
complex.  As of December 31, 1997,  construction  had not been  completed on one
complex.  The respective general partners of the limited partnerships manage the
day  to  day  operations  of  the  limited  partnerships.   Significant  limited
partnership  business  decisions  require the approval of the  Partnership.  The
Partnership,  as a limited  partner,  is entitled to 99%,  as  specified  in the
partnership  agreements,  of the  operating  profits  and losses of the  limited
partnerships upon its acquisition of its limited partnership interests.

The  Partnership  investments  in  the  limited  partnerships  as  shown  in the
accompanying  balance  sheet as of December 31, 1997 and 1996 are  approximately
$2,206,000 and $3,454,000 greater than the Partnership's  equity as shown in the
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 are being amortized over
30 years (see Note 4) and capital contributions accrued but not paid.

                                      FS-9
<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, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995


NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
-------------------------------------------------------

Following  is a summary of the equity  method  activity  of the  investments  in
limited partnerships for the period ended December 31:
<TABLE>
<CAPTION>

                                                                               1997                     1996
                                                                          ----------------        -----------------

<S>                                                                     <C>                     <C>              
Investments, beginning of year                                          $     12,782,751        $       1,046,532
Capital contributed to limited partnerships, net                               1,373,557                8,693,189
Capital contributions payable to limited partnerships                            526,644                2,513,033
Capitalized acquisition fees and costs                                            28,975                  738,504
Return of acquisition fees (Note 4)                                              (42,551)                       -
Amortization of acquisition fees and costs                                       (34,605)                 (23,436)
Distributions                                                                     (8,340)                       -
Equity in losses of limited partnerships                                        (789,697)                (185,071)
                                                                         ---------------         ----------------

Investments, end of year                                                $     13,836,734        $      12,782,751
                                                                         ===============         ================
</TABLE>

The  financial  information  from the  individual  financial  statements  of the
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 limited  partnerships as of December 31
and for the years then ended is as follows:

                        COMBINED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                               1997                     1996
                                                                          ----------------        -----------------

ASSETS
<S>                                                                     <C>                     <C>                                 
Land                                                                    $      2,939,000        $       2,907,000
Construction in progress                                                          95,000                3,488,000
Buildings, net of accumulated depreciation of $2,187,000
  and $941,000                                                                44,490,000               28,565,000
Due from affiliates                                                              235,000                  433,000
Other assets                                                                   4,373,000                5,570,000
                                                                         ---------------         ----------------

                                                                        $     52,132,000        $      40,963,000
                                                                         ===============         ================

</TABLE>

                                      FS-11
<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, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995


NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
-------------------------------------------------------

<TABLE>
<CAPTION>

                  COMBINED CONDENSED BALANCE SHEETS - CONTINUED

                                                                               1997                     1996
                                                                          ----------------        -----------------

<S>                                                                     <C>                     <C>    
LIABILITIES AND PARTNERS' EQUITY

Liabilities:
   Construction and mortgage loans payable                              $     32,582,000        $      26,043,000
   Other liabilities (including due to related parties
     of $3,667,000 and $2,919,000)                                             5,143,000                3,599,000
                                                                         ---------------         ----------------
         Total liabilities                                                    37,725,000               29,642,000
                                                                         ---------------         ----------------

Partners' equity:
   WNC Housing Tax Credit Fund V, L.P., Series 3                              11,631,000                9,329,000
   Other partners                                                              2,776,000                1,992,000
                                                                         ---------------         ----------------
         Total partners' equity                                               14,407,000               11,321,000
                                                                         ---------------         ----------------

                                                                        $     52,132,000        $      40,963,000
                                                                         ===============         ================
</TABLE>

<TABLE>
<CAPTION>

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

                                                       1997                    1996                     1995
                                                  ---------------         ---------------         -----------------

<S>                                             <C>                    <C>                      <C>  

Total revenue                                   $      5,339,000        $      3,981,000        $          43,000
                                                 ---------------         ---------------         ----------------

Expenses:
   Operating expenses                                  3,331,000               2,053,000                   37,000
   Interest expense                                    1,625,000               1,282,000                    4,000
   Depreciation                                        1,246,000                 864,000                    2,000
                                                 ---------------         ---------------         ----------------

         Total expenses                                6,202,000               4,199,000                   43,000
                                                 ---------------         ---------------         ----------------

Net loss                                        $       (863,000)       $       (218,000)       $               -
                                                 ===============         ===============         ================

Net loss allocable to Partnership               $       (790,000)       $       (185,000)       $               -
                                                 ===============         ===============         ================

</TABLE>


                                      FS-11
<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, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995


NOTE 4 - RELATED PARTY TRANSACTIONS
-----------------------------------

Under the terms of the  Partnership  Agreement,  the Partnership 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
         Partnership  units as compensation for services  rendered in connection
         with the acquisition of limited partnerships.  As of December 31, 1996,
         the Partnership incurred acquisition fees of $1,008,550 which have been
         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.
         Accumulated amortization was $54,714 and $22,514 for 1997 and 1996.
         Amortization was insignificant for 1995.

         Reimbursement  of costs incurred by an affiliate of the General Partner
         in  connection  with the  acquisition  of limited  partnerships.  These
         reimbursements will not exceed 1% of the gross proceeds. As of December
         31,  1997 and  1996,  the  Partnership  incurred  acquisition  costs of
         $99,011  and  $70,036,  respectively,   which  have  been  included  in
         investments  in  limited  partnerships.  Accumulated  amortization  was
         insignificant for 1997, 1996 and 1995.

         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. The Partnership incurred asset management fees of $49,500
         for the years  ended  December  31,  1997 and 1996,  respectively,  and
         $12,367 for the period ended December 31, 1995.  Asset  management fees
         of $110,000 were paid during 1997. No asset  management  fees were paid
         during 1996 and 1995.

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

                                      FS-12
<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, 1997 and 1996
            And For The Period From October 25, 1995 (Date Operations
                         Commenced) To December 31, 1995


NOTE 4 - RELATED PARTY TRANSACTIONS, continued
----------------------------------------------

Accrued fees and advances due to (from) General  Partner and affiliates  consist
of the following at December 31:
<TABLE>
<CAPTION>

                                                                               1997                     1996
                                                                          ----------------        -----------------
<S>                                                                     <C>                     <C>    

         Acquisition fees                                               $              -        $          42,551
         Advance for acquisition of property                                           -                  (68,510)
         Advances made for acquisition costs, organizational,
          offering and selling expenses                                            3,273                    7,899
         Asset management fees                                                     1,367                   61,867
                                                                         ---------------         ----------------

                                                                        $          4,640        $          43,807
                                                                         ===============         ================
</TABLE>

NOTE 5 - PAYABLES TO LIMITED PARTNERSHIPS
-----------------------------------------

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

NOTE 6 - 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 7 - SUBSCRIPTIONS AND NOTES RECEIVABLE
-------------------------------------------

As of December 31, 1996, the  Partnership had 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. As of December 31, 1995,  the  Partnership
had 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,  the Company has reflected such amounts as a capital  contributions
and an asset in the  accompanying  financial  statements as of December 31, 1996
and 1995. Since the promissory notes had not been collected prior to issuance of
the 1996 and 1995  financial  statements,  respectively,  the unpaid balance has
been reflected as a reduction of partners' equity in the accompanying  financial
statements.

                                      FS-13


<PAGE>

Item  9.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure

NONE.

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 Associates  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.  Substantially  all of the  shares  of  Associates  are owned by
Wilfred N. Cooper,  Sr., through the Cooper Revocable Trust, and John B. Lester,
Jr., through the Lester Family Trust.

WILFRED  N.  COOPER,  SR.,  age 67,  has been the  principal  shareholder  and a
Director of WNC & ASSOCIATES,  INC. since its  organization  in 1971, of SHELTER
RESOURCE  CORPORATION since its organization in 1981 and of WNC RESOURCES,  INC.
from its organization in 1988 through its acquisition by WNC & ASSOCIATES,  INC.
in 1991,  serving  as  President  of  those  companies  until  1992 and as Chief
Executive Officer since 1992, and has been a Director of WNC CAPITAL CORPORATION
since its organization. He is also a general partner with WNC & ASSOCIATES, INC.
in WNC FINANCIAL GROUP,  L.P. and WNC TAX CREDIT PARTNERS,  L.P. During 1970 and
1971  he  was  a  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.  Previously,  he had  responsibility  for new  business
development including factory-built housing evaluation and project management in
urban  planning  and  development.  Mr.  Cooper is a Director  of the  Executive
Committee  of the  National  Association  of  Home  Builders  (NAHB)  and a past
Chairman of the NAHB's Rural Housing Council, a Director of the National Housing
Conference,  a Director of the Affordable  Housing Tax Credit Coalition,  a past
President of the California Council of Affordable Housing (CCAH) (formerly Rural
Builders  Council of  California),  and a past President of Southern  California
Chapter II of the Real Estate  Syndication and Securities  Institute  (RESSI) of
the National  Association of Realtors  (NAR).  Mr. Cooper  graduated from Pomona
College in 1956 with a Bachelor of Arts degree.

JOHN B. LESTER, JR., age 64, has been a shareholder, a Director and Secretary of
WNC & ASSOCIATES,  INC. since 1986,  Executive Vice President from 1986 to 1992,
and President and Chief Operating Officer since 1992, and has been a Director of
WNC CAPITAL CORPORATION since its organization. He was a shareholder,  Executive
Vice  President,  Secretary  and a Director  of WNC  RESOURCES,  INC.  from 1988
through its acquisition by WNC & ASSOCIATES,  INC. in 1991. From 1973 to 1986 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 is a former
Director of the Los Angeles  Chapter of the  Associated  General  Contractors of
California.  His  responsibilities  at WNC & ASSOCIATES,  INC.  include property
acquisitions and company operations. Mr. Lester graduated from the University of
Southern  California  in 1956 with a Bachelor  of Science  degree in  Mechanical
Engineering.

DAVID N. SHAFER,  age 45, has been a Director of WNC &  ASSOCIATES,  INC.  since
1997, a Senior Vice President  since 1992,  and General  Counsel since 1990, and
served as Asset  Management  Director from 1990 to 1992, and has been a Director

                                       24
<PAGE>

and Secretary of WNC Management, Inc. since its organization.  Previously he was
employed as an associate attorney by the law firms of Morinello,  Barone, Holden
& Nardulli  from 1987 until  1990,  Frye,  Brandt & Lyster from 1986 to 1987 and
Simon and Sheridan from 1984 to 1986.  Mr. Shafer is a Director and President of
CCAH, a member of NAHB's Rural  Housing  Council,  a past  President of Southern
California Chapter II of RESSI, a past Director of the Council of Affordable and
Rural Housing and Development  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 and from the  University of San Diego in 1986 with a Master
of Law degree in Taxation.

WILFRED N. COOPER,  JR.,  age 35, has been  employed by WNC &  ASSOCIATES,  INC.
since 1988 and has been a Director since 1997  Executive  Vice  President  since
1998, and a Senior Vice President  since 1992. Mr. Cooper heads the  Acquisition
Originations  department  at  WNC,  has  been  President  of,  and a  registered
principal with, WNC CAPITAL  CORPORATION,  a member firm of the NASD,  since its
organization,  and  has  been  a  Director  of WNC  Management  Inc.  since  its
organization.  Previously,  he was employed as a government affairs assistant by
Honda North America from 1987 to 1988, and as a legal  assistant with respect to
Federal  legislative and regulatory  matters by the law firm of Schwartz,  Woods
and Miller from 1986 to 1987. Mr. Cooper is an alternate  director and member of
NAHB's Rural Housing Council and serves as Chairman of its Membership Committee.
Mr.  Cooper  graduated  from The American  University in 1985 with a Bachelor of
Arts degree.

THEODORE M. PAUL, age 42, has been Vice President - Finance of WNC & ASSOCIATES,
INC. since 1992 and Chief Financial  Officer since 1990, and has been a Director
and Chief  Financial  Officer of WNC  Management  Inc.  since its  organization.
Previously,  he was a Vice  President  and Chief  Financial  Officer of National
Partnership  Investments  Corp.,  a sponsor  and general  partner of  syndicated
partnerships  investing in affordable  rental housing qualified for tax credits,
from 1986 until 1990, and was employed as an associate by the  accounting  firms
of Laventhol & Horwath,  during 1985, and Mann & Pollack Accountants,  from 1979
to 1984.  Mr. Paul is a member of the  California  Society of  Certified  Public
Accountants  and the American  Institute of Certified  Public  Accountants.  His
responsibilities  at WNC &  ASSOCIATES,  INC.  include  supervision  of investor
partnership  accounting  and tax reporting  matters and monitoring the financial
condition  of the  Local  Limited  Partnerships  in which the  Partnership  will
invest.  Mr.  Paul  graduated  from the  University  of  Illinois in 1978 with a
Bachelor of Science degree and is a Certified Public  Accountant in the State of
California.

THOMAS J. RIHA,  age 43, has been Vice  President  - Asset  Management  of WNC &
ASSOCIATES, INC. since 1994, and has been a Director and Chief Executive Officer
of WNC  Management  Inc.  since  its  organization.  He has more  than 17 years'
experience in commercial and multi-family real estate investment and management.
Previously,  Mr.  Riha was  employed  by Trust  Realty  Advisor,  a real  estate
acquisition  and  management  company,  from 1988 to 1994,  last serving as Vice
President - Operations.  His responsibilities at WNC & ASSOCIATES,  INC. include
monitoring  the  operations  and  financial   performance   of,  and  regulatory
compliance  by,  properties in the WNC  portfolio.  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 in the State of  California  and a member of the
American Institute of Certified Public Accountants.

SY P. GARBAN, age 52, has 20 years' experience in the real estate securities and
syndication industry. He has been associated with WNC & ASSOCIATES,  INC., since
1989,  serving as National Sales  Director  through 1992 and as Vice President -
National  Sales since  1992.  Previously,  he was  employed  as  Executive  Vice
President by MRW,  Inc.,  Newport  Beach,  California  from 1980 to 1989, 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.

                                       25
<PAGE>

CARL FARRINGTON,  age 55, has been associated with WNC & ASSOCIATES,  INC. since
1993, and has served as Director - Originations  since 1994. Mr.  Farrington has
more  than 12  years'  experience  in  finance  and  real  estate  acquisitions.
Previously,  he served as Acquisitions Director for The Arcand Company from 1991
to 1993, and as Treasurer and Director of Finance and Administrator for Polytron
Corporation  from 1988 to 1991.  Mr.  Farrington is a member and Director of the
Council  of  Affordable  and  Rural  Housing  and  Development.  Mr.  Farrington
graduated from Yale  University  with a Bachelor of Arts degree in 1966 and from
Dartmouth College with a Master of Business Administration in 1970.

DAVID TUREK, age 43, has been Director - Originations of WNC & ASSOCIATES,  INC.
since 1996. He has 23 years' experience in real estate finance and acquisitions.
Previously,  from 1995 to 1996 Mr. Turek  served as a consultant  for a national
Low  Income  Housing  Credit  sponsor  where  he  was  responsible  for  on-site
feasibility  studies and due  diligence  analyses of Low Income  Housing  Credit
properties,  from 1992 to 1995 he served as Executive Vice President for Levcor,
Inc., a  multi-family  development  company,  and from 1990 to 1992 he served as
Vice  President  for the Paragon Group where he was  responsible  for Low Income
Housing  Credit  development  activities.  Mr.  Turek  graduated  from  Southern
Methodist University in 1976 with a Bachelor of Business Administration degree.

N. PAUL BUCKLAND, age 36, has been employed by WNC & ASSOCIATES, INC. since 1994
and currently serves as Vice President Acquisitions. He has 11 years' experience
in  analysis  pertaining  to the  development  of  multi-family  and  commercial
properties.  Previously,  from 1986 to 1994 he served on the development team of
the Bixby Ranch which  constructed  more than 700 apartment  units and more than
one million square feet of "Class A" office space in California and  neighboring
states,  and from 1984 to 1986 he served 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.

MICHELE M. TAYLOR,  age 43, has been  employed by WNC & ASSOCIATES,  INC.  since
1986,  serving as a paralegal and office manager,  and currently is the Investor
Services  Director.  Previously she was  self-employed  between 1982 and 1985 in
non-financial  services  activities  and from 1978 to 1981 she was employed as a
paralegal by a law firm which  specialized  in real estate  limited  partnership
transactions.  Ms. Taylor graduated from the University of California, Irvine in
1976 with a Bachelor of Arts degree.

THERESA I. CHAMPANY,  age 40, has been employed by WNC & ASSOCIATES,  INC. since
1989 and currently is the Marketing Services Director and a registered principal
with WNC  CAPITAL  CORPORATION.  Previously,  she was  employed  as  Manager  of
Marketing  Services  by August  Financial  Corporation  from 1986 to 1989 and as
office manager and Assistant to the Vice  President of Real Estate  Syndications
by  McCombs  Securities  Co.,  Inc.  from 1979 to 1986.  Ms.  Champany  attended
Manchester (Conn.) Community College from 1976 to 1978.

KAY L.  COOPER,  age 61, has been an officer and  Director of WNC &  ASSOCIATES,
INC. since 1971 and of WNC RESOURCES,  INC. from 1988 through its acquisition by
WNC & ASSOCIATES, INC. in 1991. Mrs. Cooper has also been the sole proprietor of
Agate 108, a manufacturer and retailer of home accessory  products,  since 1975.
She is the wife of Wilfred N. Cooper,  Sr., the mother of Wilfred N. Cooper, Jr.
and the sister of John B. Lester,  Jr. Mrs. 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)  Selection  fees in an  amount of up to 7.5% of the  gross  proceeds  of the
Partnership's   Offering   ("Gross   Proceeds").   Through  December  31,  1997,
approximately, $966,000 of selection fees had been incurred by the Partnership.

                                       26
<PAGE>



(b) A  nonaccountable  expense  reimbursement  in an amount  not to exceed 1% of
Gross   Proceeds.   Through   December  31,  1997,   approximately   $99,000  of
nonaccountable expense reimbursement has been incurred the Partnership.

(c) An  annual  asset  management  fee in an  amount  equal  to the  greater  of
(i)$2,000 for each  Apartment  Complex or (ii) 0.275% of gross  proceeds.  Asset
management  fees of $49,500,  $49,500 and $12,367 were incurred during the years
ended  December 31,  1997,  1996 and  December  31,  1995,  respectively.  Asset
management fees of $110,000 were paid during 1997. No asset management fees were
paid during 1996 and 1995.

(d) A  subordinated  disposition  fee in an amount equal to 1% of the sale price
received in connection  with the sale or disposition of an Apartment  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.

(e) The General  Partner was allocated Low Income Housing Credits of $15,146 and
$8,067 for the years ended December 31, 1997 and 1996.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         Security Ownership of Certain Beneficial Owners(1)

<TABLE>
<CAPTION>

                               Name and Address                 Amount and
Title of Class                 of Beneficial Owner              Nature of                    Percent
                                                                Beneficial Owner             of Class
------------------------------------------------------------------------------------------------------------------------
<S>                            <C>                              <C>                          <C>   

Units of Limited Partnership   Enova Financial , Inc            4,560 units                  25.3%
Interests                      P.O. Box 126943
                               San Diego, CA  92113-6943

Units of Limited Partnership   Western Financial Savings Bank   1,068 units                   5.9%
                               23 Pasteur
                               Irvine, CA  92718
</TABLE>

The above are the only persons known to own  beneficially in excess of 5% of the
outstanding units.

(b)      Security Ownership of Management

Neither the General Partner,  Associates nor any of the officers or directors of
Associates own directly or beneficially any limited partnership interests in the
Partnership.

(c)      Changes in Control

The management and control of the General Partners may be changed at any time in
accordance with their respective 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.

                                       27
<PAGE>

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 anytime remove the General
Partner of the Partnership and elect a successor General Partner


Item 13.  Certain Relationships and Related Transactions

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

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

Financial Statements

Report of independent public accountants.

Balance sheet as of December 31, 1997 and 1996.

Statements of Operations  for the years ended December 31, 1997 and 1996 and for
the period from  October 24, 1995 (date  operations  commenced)  to December 31,
1995.

Statements of Partners'  Equity  (deficit) for the years ended December 31, 1997
and 1996 and for the period from October 24, 1995 (date operations commenced) to
December 31, 1995.

Statements of Cash Flows for the years ended  December 31, 1997 and 1996 and for
the period from  October 24, 1995 (date  operations  commenced)  to December 31,
1995.

Notes to Financial Statements.

N/A

Exhibits

(3) 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.

                                       28
<PAGE>

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.

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  Amendment 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

                                       29
<PAGE>



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



         REPORTS ON 8-K.

No reports on Form 8-K were filed during the fourth  quarter ended  December 31,
1997.

                                       30
<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: May 12, 1998

By:    /s/    Theodore M. Paul
     -----------------------------------------------------
Theodore M. Paul  Vice-President, Finance of WNC & Associates, Inc.

Date: May 12, 1998




         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: May 12, 1998

By:    /s/    John B. Lester, Jr.
     -----------------------------------------------------
John B. Lester, Jr.        Secretary of the Board of WNC & Associates, Inc.

Date: May 12, 1998


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

Date: May 12, 1998





                                       31