| 1. | I have reviewed this quarterly report on Form 10-Q      of United Development Funding III, L.P.;  |
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| 2. | Based on my knowledge, this report does not      contain any untrue statement of a material fact or omit to state a      material fact necessary to make the statements made, in light of the      circumstances under which such statements were made, not misleading with      respect to the period covered by this report;  |
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| 3. | Based on my knowledge, the financial statements,      and other financial information included in this report, fairly present in      all material respects the financial condition, results of operations and      cash flows of the registrant as of, and for, the periods presented in this      report;  |
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| 4. | The      registrant’s other certifying officer and I are responsible for      establishing and maintaining disclosure controls and procedures (as      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal      control over financial reporting (as defined in Exchange Act Rules      13a-15(f) and 15d-15(f)) for the registrant and  have: |
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|   | (a) | Designed such disclosure controls and procedures,      or caused such disclosure controls and procedures to be designed under our      supervision, to ensure that material information relating to the      registrant, including its consolidated subsidiaries, is made known to us      by others within those entities, particularly during the period in which      this report is beingprepared; |
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|   | (b) | Designed      such internal control over financial reporting, or caused such internal      control over financial reporting to be designed under our supervision, to      provide reasonable assurance regarding the reliability of financial      reporting and the preparation of financial statements for external      purposes in accordance with generally accepted accounting      principles; |
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|   | (c) | Evaluated the effectiveness of the registrant’s      disclosure controls and procedures and presented in this report our      conclusions about the effectiveness of the disclosure controls and      procedures as of the end of the period covered by this report based on      such evaluation; and |
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|   | (d) | Disclosed in this report any change in the      registrant’s internal control over financial reporting that occurred      during the registrant’s most recent fiscal quarter (the registrant’s      fourth fiscal quarter in the case of our annual report) that has      materially affected, or is reasonably likely to materially affect, the      registrant’s internal control over financial reporting;      and  |
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| 5. | The registrant’s other certifying officer and I      have disclosed, based on our most recent evaluation of internal control      over financial reporting, to the registrant’s auditors and the audit      committee of the registrant’s board of directors (or persons performing      the equivalent functions): |
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|   | (a) | All significant deficiencies and material      weaknesses in the design or operation of internal control over financial      reporting which are reasonably likely to adversely affect the registrant’s      ability to record, process, summarize and report financial information;      and |
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|   | (b) | Any fraud, whether or not material, that involves      management or other employees who have a significant role in the      registrant’s internal control over financialreporting.   |
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