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 year ended March 31, 2001

                                       OR

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

           For the transition period from ___________ to _____________

                         Commission file number: 0-20058


                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.

                              California 33-0316953
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)



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

                                 (714) 662-5565

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

                                      NONE

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

                      UNITS OF LIMITED PARTNERSHIP INTEREST

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

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>


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

                                  INAPPLICABLE


                       DOCUMENTS INCORPORATED BY REFERENCE

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

                                      NONE




















                                       2
<PAGE>



PART I.

Item 1.  Business

Organization

WNC California Housing Tax Credits, L.P. ("CHTC" or the "Partnership") is a
California Limited Partnership formed under the laws of the State of California
on September 15, 1988. The Partnership was formed to acquire limited partnership
interests in other limited partnerships or limited liability companies ("Local
Limited Partnerships") which own multifamily housing complexes that are eligible
for low-income housing federal and, in certain cases, California income tax
credits ("Low Income Housing Credits").

The  general  partners  of  the  Partnership  are  WNC &  Associates,  Inc.
("Associates") and Wilfred N. Cooper, Sr. (collectively,  the "General Partner"
or "General  Partners"). Wilfred N. Cooper,  Sr., through the Cooper Revocable
Trust,  owns 66.8% of the outstanding stock of Associates. John B. Lester,  Jr.
was the original limited partner of the Partnership and owns, through the Lester
Family Trust,  28.6% of the outstanding stock of Associates.  Wilfred N. Cooper,
Jr., President of Associates, owns 2.1% of the outstanding stock of Associates.
The business of the Partnership is conducted primarily through  Associates,  as
the Partnership has no employees of its own.

Pursuant to a registration statement filed with the Securities and Exchange
Commission, on March 16, 1989, the Partnership commenced a public offering of
10,000 Units of Limited Partnership Interest ("Units") at a price of $1,000 per
Unit. As of the close of the public offering on October 31, 1990, a total of
7,450 Units representing $7,450,000 had been sold. Holders of Units are referred
to herein as "Limited Partners".

Description of Business

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

In general, in order to avoid recapture of Low Income Housing Credits, the
Partnership does not expect that it will dispose of its interests in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited Partnership of its Housing Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Housing
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the ability of government
lenders to disapprove of transfer, it is not possible at this time to predict
whether the liquidation of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership, as amended by Supplement No. 1 through Supplement No. 9 thereto
(the "Partnership Agreement"), will be able to be accomplished promptly at the
end of the 15-year period. If a Local Limited Partnership is unable to sell its
Housing Complex, it is anticipated that the local general partner ("Local
General Partner") will either continue to operate such Housing Complex or take
such other actions as the Local General Partner believes to be in the best
interest of the Local Limited Partnership. Notwithstanding the preceding,
circumstances beyond the control of the General Partner or the Local General
Partners may occur during the Compliance Period, which would require the
Partnership to approve the disposition of a Housing Complex prior to the end
thereof, possibly resulting in recapture of Low Income Housing Credits.

As of March 31, 2001, the Partnership had invested in eleven Local Limited
Partnerships. Each of these Local Limited Partnerships owns a Housing Complex

                                       3
<PAGE>


that is eligible for the federal Low Income Housing Credit and eight of them
were eligible for the California Low Income Housing Credit. Certain Local
Limited Partnerships may also benefit from government programs promoting low- or
moderate-income housing.

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

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

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

Item 2. Properties

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







                                       4
<PAGE>


<TABLE>
<CAPTION>

                                                   ----------------------------   --------------------------------------------------
                                                       As of March 31, 2001                  As of December 31, 2000
                                                   ----------------------------   --------------------------------------------------
                                                    Partnership's                                                       Encumbrances
                                                  Total Investment   Amount of    Number             Estimated Low       of Local
                               General Partner    in Local Limited   Investment     of               Income Housing      Limited
Partnership Name  Location     Name                 Partnerships    Paid to Date  Units  Occupancy      Credits         Partnerships
------------------------------------------------------------------------------------------------------------------------------------
   <S>              <C>            <C>                 <C>              <C>        <C>      <C>           <C>               <C>
                               Philip R. Hammond,
Alta Vista        Orosi,       Jr. and Diane M.
Investors         California   Hammond              $  583,000      $ 583,000       42     95%      $   1,274,000     $  1,432,000

BCA               Anderson,    Douglas W.
Associates        California   Young                   514,000        514,000       40    100%          1,105,000        1,421,000

                               David J. Michael,
                               Patrick R.
                               Sabelhaus and
Cloverdale                     Professional
Garden            Cloverdale,  Apartment
Apartments        California   Management              617,000        617,000       34    100%          1,387,000        1,634,000

                               Philip R. Hammond,
Countryway        Mendota,     Jr. and Diane M.
Associates        California   Hammond                 571,000        571,000       41     90%          1,162,000        1,473,000

                               David J. Michael
                               and Professional
East Garden       Jamestown,   Apartment
Apartments        California   Management              770,000        770,000       51    100%          1,772,000        2,150,000


HPA               Shafter,     Douglas W.
                  California   Young                   538,000        538,000       42     93%          1,223,000        1,508,000

Knights           Knights      Douglas W.
Landing           Landing,     Young
Harbor            California   and Diane L. Young      275,000        275,000       25     92%            446,000          981,000

</TABLE>


                                                                      5
<PAGE>


<TABLE>
<CAPTION>

                                                   ----------------------------   --------------------------------------------------
                                                       As of March 31, 2001                  As of December 31, 2000
                                                   ----------------------------   --------------------------------------------------
                                                    Partnership's                                                       Encumbrances
                                                  Total Investment   Amount of    Number             Estimated Low       of Local
                               General Partner    in Local Limited   Investment     of               Income Housing      Limited
Partnership Name  Location     Name                 Partnerships    Paid to Date  Units  Occupancy      Credits         Partnerships
------------------------------------------------------------------------------------------------------------------------------------
   <S>              <C>            <C>                 <C>              <C>        <C>      <C>           <C>               <C>

                               Philip R. Hammond,
Midland Manor     Mendota,     Jr. and Diane M.
Associates        California   Hammond                 383,000        383,000      40       90%           668,000         1,425,000


                               Richard Parasol
San Jacinto       San Jacinto, and Richard A.
Associates        California   Gullota                 469,000        469,000      38       97%           830,000         1,781,000


                               William H. Larson
                               Thomas G. Larson,
Woodlake          Woodlake,    and Raymond L.
Manor             California   Tetzlaff                545,000        545,000      44       91%         1,146,000         1,452,000


Yreka Investment  Yreka,       Ronald D.
Group             California   Bettencourt             538,000        538,000      36       100%         1,174,000         1,467,000
                                                   ------------   -----------  -------    -------    --------------    -------------

                                                   $ 5,803,000    $ 5,803,000     433        95%     $  12,187,000     $  16,724,000
                                                   ============   ============ =======    =======    ==============    =============
</TABLE>


                                                                      6
<PAGE>




                              ---------------------------
                                   For the Year Ended
                                   December 31, 2000
                              ---------------------------
                              ---------------------------
                                                              Low Income Housing
                                                              Credits Allocated
        Partnership Name       Rental Income    Net Loss      to Partnership
---------------------------------------------------------     ------------------

Alta Vista Investors           $ 160,000      $ (48,000)            99%

BCA Associates                   145,000        (45,000)            99%

Cloverdale Garden Apartments     190,000        (20,000)            99%

Countryway Associates            151,000        (56,000)            99%

East Garden Apartments           229,000        (34,000)            99%

HPA Investors                    155,000        (59,000)            99%

Knights Landing Harbor           124,000         (5,000)            99%

Midland Manor Associates         143,000        (51,000)            99%

San Jacinto Associates           164,000        (54,000)            99%

Woodlake Manor                   183,000        (63,000)            99%

Yreka Investment Group           155,000        (31,000)            99%
                             ------------    ------------

                             $ 1,799,000     $ (466,000)
                             ============    ============




                                       7
<PAGE>


Item 3.  Legal Proceedings

NONE

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

NONE

PART II.

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

Item 5a.

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

(b)  At March 31, 2001, there were 687 Limited Partners.

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

(d)  No unregistered securities were sold by the Partnership during the year
     ended March 31, 2001.

Item 5b.

NOT APPLICABLE

Item 6.  Selected Financial Data

Selected balance sheet information for the Partnership is as follows:

<TABLE>
<CAPTION>
                                   March 31                                 December 31
                           -------------------------   ------------------------------------------------------
                                 2001          2000           1999          1998          1997          1996
                           -----------   -----------   ------------   -----------   -----------   -----------
<S>                             <C>           <C>            <C>           <C>           <C>           <C>

ASSETS
Cash and cash
  equivalents              $   44,172    $   47,877    $    61,123    $   66,028    $   78,109    $   83,943
Investments in limited
  partnerships, net           809,249     1,187,690      1,508,351     1,595,464     2,001,822     2,442,547
                           -----------   -----------   ------------   -----------   -----------   -----------
                           $  853,421    $1,235,567    $ 1,569,474    $1,661,492    $2,079,931    $2,526,490
                           ===========   ===========   ============   ===========   ===========   ===========

LIABILITIES
Accrued fees and
  expenses due to
  general partner and
  affiliates               $1,080,521    $  957,395    $   848,503    $  820,365    $  705,925    $  594,248

PARTNERS' EQUITY
(DEFICIT)                    (227,100)      278,172        720,971       841,127     1,374,006     1,932,242
                           -----------   -----------   ------------   -----------   -----------   -----------
                           $  853,421     1,235,567    $ 1,569,474    $1,661,492    $2,079,931    $2,526,490
                           ===========   ===========   ============   ===========   ===========   ===========
</TABLE>

                                                           8
<PAGE>


Selected results of operations, cash flows and other information for the
Partnership are as follows for the periods indicated:
<TABLE>
<CAPTION>
                             For the Years Ended         For the Three Months                 For the Years Ended
                                   March 31                 Ended March 31                        December 31
                            ------------------------   -------------------------   -----------------------------------------
                              2001          2000          1999          1998           1998           1997          1996
                            -----------  -----------   -----------   -----------   -----------    -----------    -----------
     <S>                        <C>          <C>           <C>           <C>           <C>            <C>           <C>
                                                                     (Unaudited)
Loss from operations        $(146,597)   $(142,543)    $ (37,519)    $ (32,603)    $(144,721)     $(137,368)     $(135,167)
Equity in loss from
  limited partnerships       (358,675)    (300,256)      (82,637)     (104,625)     (388,158)      (420,868)      (476,567)
                            -----------  -----------   -----------   -----------   -----------    -----------    -----------
Net loss                    $(505,272)   $(442,799)    $(120,156)    $(137,228)    $(532,879)     $(558,236)     $(611,734)
                            ===========  ===========   ===========   ===========   ===========    ===========    ===========
Net loss allocated to:
   General partners         $  (5,053)   $  (4,428)    $  (1,202)    $  (1,372)    $  (5,329)     $  (5,582)     $  (6,117)
                            ===========  ===========   ===========   ===========   ===========    ===========    ===========
   Limited partners         $(500,219)   $(438,371)    $(118,954)    $(135,856)    $(527,550)     $(552,654)     $(605,617)
                            ===========  ===========   ===========   ===========   ===========    ===========    ===========
Net loss per limited
  partner unit              $  (67.14)   $  (58.84)    $  (15.97)    $  (18.24)    $  (70.81)     $  (74.18)       (81.29 )
                            ===========  ===========   ===========   ===========   ===========    ===========    ===========
Outstanding weighted
  limited partner units         7,450        7,450         7,450         7,450         7,450          7,450          7,450
                            ===========  ===========   ===========   ===========   ===========    ===========    ===========

                             For the Years Ended           For the Three Months                For the Years Ended
                                   March 31                   Ended March 31                       December 31
                           ------------------------   -------------------------   -----------------------------------------
                              2001          2000          1999           1998           1998          1997           1996
                           -----------  -----------   -----------   -----------   -----------    -----------    -----------
                                                                    (Unaudited)
Net cash provided by
 (used in):
   Operating activities    $  (8,569)   $ (18,747)    $  (5,655)    $     546     $ (15,377)     $ (10,787) $      (9,595)
   Investing activities        4,864        5,501           750           535         3,296          4,953          9,034
                           -----------  -----------   -----------   -----------   -----------    -----------    -----------

Net change in cash and
  cash equivalents            (3,705)     (13,246)       (4,905)        1,081       (12,081)        (5,834)          (561)

Cash and cash
  equivalents,
  beginning of period         47,877       61,123        66,028        78,109        78,109         83,943         84,504
                           -----------  -----------   -----------   -----------   -----------    -----------    -----------
Cash and cash
  equivalents, end of
  period                   $  44,172    $  47,877     $  61,123     $  79,190     $  66,028      $  78,109      $  83,943
                           ===========  ===========   ===========   ===========   ===========    ===========    ===========

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

                                         2000          1999          1998          1997           1996
                                     -----------   -----------   -----------   -----------    -----------

 Federal                             $     59      $       99            99    $       99     $       99

 State                                      -               -             -             -              -
                                     -----------   -----------   -----------   -----------    -----------
 Total                               $     59      $       99    $       99  $         99     $       99
                                     ===========   ===========   ===========   ===========    ===========
</TABLE>
                                                       9
<PAGE>


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

Financial Condition

The Partnership's assets at March 31, 2001 consisted primarily of $44,000 in
cash and aggregate investments in the eleven Local Limited Partnerships of
$809,000. Liabilities at March 31, 2001 primarily consisted of $1,081,000 of
accrued annual management fees due to the General Partners.

Results of Operations

Year Ended March 31, 2001 Compared to Year Ended March 31, 2000. The
Partnership's net loss for the year ended March 31, 2001 was $(505,000),
reflecting an increase of $62,000 from the net loss experienced for the year
ended March 31, 2000. The increase in net loss is primarily due to equity in
losses from limited partnerships which increased by $59,000 to $(359,000) for
the year ended March 31, 2001 from $(300,000) for the year ended March 31, 2000.
Equity in losses of limited partnerships increased due to the reduction of the
net acquisition fee component of investments in Local Limited Partnerships to
zero for those Local Limited Partnerships which would otherwise be below a zero
balance.

Year Ended March 31, 2000 Compared to Year Ended December 31, 1998. The
Partnership's net loss for the year ended March 31, 2000 was $(443,000),
reflecting a decrease of $90,000 from the net loss experienced for the year
ended December 31, 1998. The decline in net loss is primarily due to equity in
losses from limited partnerships which declined by $88,000 to $(300,000) for the
year ended March 31, 2000 from $(388,000) for the year ended December 31, 1998.
This decrease was a result of the Partnership not recognizing certain losses of
the Local Limited Partnerships. The investments in such Local Limited
Partnerships had reached $0 at March 31, 2000. Since the Partnership's liability
with respect to its investments is limited, losses in excess of investment are
not recognized.

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.
The Partnership's net loss for the three months ended March 31, 1999 was
$(120,000), reflecting a decrease of $17,000 from the net loss experienced for
the three months ended March 31, 1998. The decline in net loss is primarily due
to equity in losses from limited partnerships which declined by $22,000 to
$(83,000) for the three months ended March 31, 1999 from $(105,000) for the
three months ended March 31, 1998. This decrease was a result of the Partnership
not recognizing certain losses of the Local Limited Partnerships. The
investments in such Local Limited Partnerships had reached $0 at March 31, 1999.
Since the Partnership's liability with respect to its investments is limited,
losses in excess of investment are not recognized. The reduction in equity
losses recognized was partially offset by an increase in loss from operations of
$5,000 for the three months ended March 31, 1999 to $(37,000), from $(32,000)
for the three months ended March 31, 1998, due to a comparable increase in
operating expense allocations.

Cash Flows

Year Ended March 31, 2001 Compared to Year Ended March 31, 2000. Net cash used
during the year ended March 31, 2001 was $(4,000), compared to net cash used for
the year ended March 31, 2000 of $(13,000). The net cash used primarily
represents cash used for operating expenses net of minimal cash distributions
from Local Limited Partnerships.

Year Ended March 31, 2000 Compared to Year Ended December 31, 1998. Net cash
used during the year ended March 31, 2000 was $(13,000), compared to net cash
used for the year ended December 31, 1998 of $(12,000). The net cash used
primarily represents cash used for operating expenses net of minimal cash
distributions from Local Limited Partnerships.

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.
Net cash used during the three months ended March 31, 1999 was $(5,000),
compared to a net increase in cash for the three months ended March 31, 1998 of
$1,000. The change was due primarily to an increase in operating costs paid to
third parties.

During the years ended March 31, 2001 and 2000 and the three months ended March
31, 1999, accrued payables, which consist primarily of related party management
fees due to the General Partner, increased by $123,000, $109,000 and $28,000,

                                       10
<PAGE>

respectively. The General Partner does not anticipate that these accrued fees
will be paid until such time as capital reserves are in excess of future
foreseeable working capital requirements of the partnership.

The Partnership expects its future cash flows, together with its net available
assets at March 31, 2001, to be sufficient to meet all currently foreseeable
future cash requirements.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

NOT APPLICABLE

Item 8.  Financial Statements and Supplementary Data



























                                       11
<PAGE>






               Report of Independent Certified Public Accountants


To the Partners
WNC California Housing Tax Credits, L.P.



We have audited the accompanying balance sheets of WNC California Housing Tax
Credits, L.P. (a California Limited Partnership) (the "Partnership") as of March
31, 2001 and 2000, and the related statements of operations, partners' equity
(deficit) and cash flows for the years ended March 31, 2001 and 2000, the three
months ended March 31, 1999 and the year ended December 31, 1998. 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. A significant portion of the financial statements of the limited
partnerships in which the Partnership is a limited partner were audited by other
auditors whose reports have been furnished to us. As discussed in Note 2 to the
financial statements, the Partnership accounts for its investments in limited
partnerships using the equity method. The portion of the Partnership's
investment in limited partnerships audited by other auditors represented 78% and
77% of the total assets of the Partnership at March 31, 2001 and 2000,
respectively. Our opinion, insofar as it relates to the amounts included in the
financial statements for the limited partnerships which were audited by others,
is based solely on the reports of the other auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 California Housing Tax Credits, L.P. (A California
Limited Partnership) as of March 31, 2001 and 2000, and the results of its
operations and its cash flows for the years ended March 31, 2001 and 2000, the
three months ended March 31, 1999 and the year ended December 31, 1998 in
conformity with accounting principles generally accepted in the United States of
America.




                                                 /s/ BDO SEIDMAN, LLP
                                                     BDO SEIDMAN, LLP
Orange County, California
July 9, 2001






                                       12
<PAGE>


                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                                 BALANCE SHEETS


                                                    March 31
                                          ------------------------------
                                              2001             2000
                                          --------------   -------------
ASSETS

Cash and cash equivalents                 $      44,172    $     47,877
Investments in limited partnerships,
     net (Notes 2 and 3)                        809,249       1,187,690
                                          --------------   -------------

                                          $     853,421    $  1,235,567
                                          ==============   =============

LIABILITIES AND PARTNERS' EQUITY
   (DEFICIT)

Liabilities:
   Accrued fees and expenses due to
     General Partner and
     affiliates (Note 3)                  $   1,080,521     $   957,395

Commitments and contingencies

Partners' equity (deficit):
    General partners                            (67,112)        (62,059)
    Limited partners (10,000 units
      authorized; 7,450 units
      issued and outstanding)                  (159,988)        340,231
                                          --------------   -------------

      Total partners' equity (deficit)         (227,100)        278,172
                                          --------------   -------------

                                          $     853,421    $  1,235,567
                                          ==============   =============






                 See accompanying notes to financial statements
                                       13
<PAGE>


                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                          For the Three    For the Year
                                          For the Years Ended March       Months Ended        Ended
                                                     31                     March 31       December 31
                                         -----------------------------    -------------    -------------

                                             2001            2000             1999              1998
                                         -------------   -------------    -------------    -------------
     <S>                                     <C>              <C>              <C>               <C>
Interest income                          $      1,836    $     1,817      $        465     $      2,166
Distribution income                             1,584              -                 -                -
                                         -------------   -------------    -------------    -------------
Total income                                    3,420          1,817               465            2,166

Operating expenses:
   Amortization (Note 2)                       14,902         14,904             3,726           14,904
   Asset management fees (Note 3)             111,856        111,855            27,923          111,691
   Legal and accounting                        17,995         12,807             4,553            4,000
   Office                                       5,264          4,794             1,782           16,292
                                         -------------   -------------    -------------    -------------
    Total operating expenses                  150,017        144,360            37,984          146,887
                                         -------------   -------------    -------------    -------------
Loss from operations                         (146,597)      (142,543)          (37,519)        (144,721)

Equity in losses of limited
    partnerships (Note 2)                    (358,675)      (300,256)          (82,637)        (388,158)
                                         -------------   -------------    -------------    -------------
Net loss                                 $   (505,272)   $  (442,799)     $   (120,156)    $   (532,879)
                                         =============   =============    =============    =============
Net loss allocated to:
   General partners                      $     (5,053)   $    (4,428)     $     (1,202)    $     (5,329)
                                         =============   =============    =============    =============
   Limited partners                      $   (500,219)   $   (438,371)    $   (118,954)    $   (527,550)
                                         =============   =============    =============    =============
Net loss per limited
   partnership unit                      $     (67.14)   $    (58.84)     $     (15.97)    $     (70.81)
                                         =============   =============    =============    =============
Outstanding weighted
   limited partner units                        7,450          7,450             7,450            7,450
                                         =============   =============    =============    =============
</TABLE>



                         See accompanying notes to financial statements
                                               14
<PAGE>


                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

                  For The Years Ended March 31, 2001 and 2000,
                  For The Three Months Ended March 31, 1999 and
                      For The Year Ended December 31, 1998

<TABLE>
<CAPTION>

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

Partners' equity (deficit) at January 1, 1998               $      (51,100)     $    1,425,106     $    1,374,006

Net loss                                                            (5,329)           (527,550)          (532,879)
                                                            ---------------     ---------------    ---------------
Partners' equity (deficit) at December 31, 1998                    (56,429)            897,556            841,127

Net loss                                                            (1,202)           (118,954)          (120,156)
                                                            ---------------     ---------------    ---------------
Partners' equity (deficit) at March 31, 1999                       (57,631)            778,602            720,971

Net loss                                                            (4,428)           (438,371)          (442,799)
                                                            ---------------     ---------------    ---------------
Partners' equity (deficit) at March 31, 2000                       (62,059)            340,231            278,172

Net loss                                                            (5,053)           (500,219)         (505,272)
                                                            ---------------     ---------------    --- ------------
Partners' deficit at March 31, 2001                         $      (67,112)     $     (159,988)    $    (227,100)
                                                            ===============     ===============    ===============
</TABLE>




                         See accompanying notes to financial statements
                                               15
<PAGE>


                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                          For the Three    For the Year
                                                             For the Years Ended          Months Ended        Ended
                                                                   March 31                  March 31      December 31
                                                         -----------------------------    -------------    -------------

                                                             2001            2000             1999              1998
                                                         -------------   -------------    -------------    -------------
     <S>                                                     <C>              <C>             <C>               <C>
Cash flows from operating activities:
   Net loss                                              $   (505,272)   $   (442,799)    $   (120,156)    $   (532,879)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
       Amortization                                            14,902          14,904            3,726           14,904
       Equity in losses of limited partnerships               358,675         300,256           82,637          388,158
       Change in accrued fees and expenses due to
          General Partner and affiliates                      123,126         108,892           28,138          114,440
                                                         -------------   -------------    -------------    -------------
Net cash used in operating activities                          (8,569)        (18,747)          (5,655)         (15,377)
                                                         -------------   -------------    -------------    -------------

Cash flows provided by investing activities:
   Distributions from limited partnerships                      4,864           5,501              750            3,296
                                                         -------------   -------------    -------------    -------------
Net decrease in cash and cash equivalents                      (3,705)        (13,246)          (4,905)         (12,081)

Cash and cash equivalents, beginning of period                 47,877          61,123           66,028           78,109
                                                         -------------   -------------    -------------    -------------
Cash and cash equivalents, end of period                 $     44,172    $     47,877     $     61,123     $     66,028
                                                         =============   =============    =============    =============

SUPPLEMENTAL DISCLOSURE OF
     CASH FLOW INFORMATION:
    Taxes paid                                           $        800    $        800     $          -     $        800
                                                         =============   =============    =============    =============
</TABLE>




                           See accompanying notes to financial statements
                                                 16
<PAGE>


                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  For The Years Ended March 31, 2001 and 2000,
                  For The Three Months Ended March 31, 1999 and
                      For The Year Ended December 31, 1998


                                       24
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

WNC California Housing Tax Credits, L.P., a California Limited Partnership (the
"Partnership"), was formed on September 15, 1988 under the laws of the State of
California. The Partnership was formed to invest primarily in other limited
partnerships (the "Local Limited Partnerships") which own and operate
multi-family housing complexes (the "Housing Complex") that are eligible for low
income housing tax credits. The local general partners (the "Local General
Partners") of each Local Limited Partnership retain responsibility for
maintaining, operating and managing the Housing Complex.

WNC & Associates,  Inc., a California  corporation  ("WNC"), and Wilfred N.
Cooper, Sr., are general partners of the Partnership (the "General Partners").
Wilfred N. Cooper, Sr., through the Cooper Revocable Trust owns 66.8% of the
outstanding stock of WNC. John B. Lester,  Jr. was the original limited partner
of the Partnership  and owns, through the Lester  Family  Trust,  28.6% of the
outstanding stock of WNC. Wilfred N. Cooper, Jr., President of WNC, owns 2.1% of
the outstanding stock of WNC.

The Partnership shall continue to be in full force and effect until December 31,
2037 unless terminated prior to that date pursuant to the partnership agreement
or law.

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

The Partnership Agreement authorized the sale of up to 10,000 units at $1,000
per Unit ("Units"). The offering of Units concluded in October 1990 at which
time 7,450 Units representing subscriptions in the amount of $7,450,000, had
been accepted. The General Partners have a 1% interest in operating profits and
losses, taxable income and losses, in cash available for distribution from the
Partnership and tax credits of 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 Partners have received proceeds
equal to their capital contributions from the remainder, any additional sale or
refinancing proceeds will be distributed 99% to the limited partners (in
proportion to their respective investments) and 1% to the General Partners.

Change in Reporting Year End

In 1999, the Partnership elected to change its year end for financial reporting
purposes from December 31 to March 31. All financial information reflected in
the financial statements and related footnotes has been adjusted for this change
in year end except for the combined condensed financial information relating to
the Local Limited Partnerships included in Note 2.



                                       17
<PAGE>


                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  For The Years Ended March 31, 2001 and 2000,
                  For The Three Months Ended March 31, 1999 and
                      For The Year Ended December 31, 1998


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

Risks and Uncertainties

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

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

Method of Accounting For Investments in Limited Partnerships

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

Losses from limited partnerships for the year ended December 31, 1998 have been
recorded by the Partnership based on reported results provided by the Local
Limited Partnerships. Losses from limited partnerships for the three months
ended March 31, 1999 have been estimated by management of the Partnership.
Losses from Local Limited Partnerships for the years ended March 31, 2001 and
2000 have been recorded by the Partnership based on nine months of reported
results provided by the Local Limited Partnerships and on three months of
results estimated by management of the Partnership. Losses from limited
partnerships allocated to the Partnership are not recognized to the extent that
the investment balance would be adjusted below zero.


                                       18
<PAGE>
                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  For The Years Ended March 31, 2001 and 2000,
                  For The Three Months Ended March 31, 1999 and
                      For The Year Ended December 31, 1998

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

Offering Expenses

Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred with selling limited
partnership interests in the Partnership. WNC is obligated to pay all offering
and organization costs in excess of 15% (including sales commissions) of the
total offering proceeds. Offering expenses are reflected as a reduction of
limited partners' capital and amounted to $946,704 at the end of all periods
presented.

Use of Estimates

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

Cash and Cash Equivalents

The Partnership considers all highly liquid investments with remaining
maturities of three months or less when purchased to be cash equivalents. As of
March 31, 2001 and 2000, the Partnership had no cash equivalents.

Net Loss Per Limited Partner Unit

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

Reporting Comprehensive Income

In June 1997, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 130, Reporting Comprehensive Income. This statement establishes
standards for reporting the components of comprehensive income and requires that
all items that are required to be recognized under accounting standards as
components of comprehensive income be included in a financial statement that is
displayed with the same prominence as other financial statements. Comprehensive
income includes net income as well as certain items that are reported directly
within a separate component of Partners' equity and bypass net income. The
Partnership adopted the provisions of this statement in 1998. For the periods
presented, the Partnership has no elements of other comprehensive income, as
defined by SFAS No. 130.






                                       19
<PAGE>
                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  For The Years Ended March 31, 2001 and 2000,
                  For The Three Months Ended March 31, 1999 and
                      For The Year Ended December 31, 1998

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS

As of the periods presented, the Partnership has acquired limited partnership
interests in eleven Local Limited Partnerships each of which owns one Housing
Complex consisting of an aggregate of 433 apartment units. The respective
general partners of the Local Limited Partnerships manage the day to day
operations of the entities. Significant Local Limited Partnership business
decisions require approval from the Partnership. The Partnership, as a limited
partner, is generally entitled to 99%, as specified in the Local Limited
Partnership agreements, of the operating profits and losses, taxable income and
losses, and tax credits of the Local Limited Partnerships.

The Partnership's investments in Local Limited Partnerships as shown in the
balance sheets at March 31, 2001 and 2000, are approximately $298,000 and
$208,000, respectively, greater than the Partnership's equity at the preceding
December 31 as shown in the Local Limited Partnerships' combined financial
statements presented below. This difference is primarily due to unrecorded
losses as discussed below, and acquisition, selection and other costs related to
the acquisition of the investments which have been capitalized in the
Partnership's investment account. The Partnership's investment is also lower
than the Partnership's equity as shown in the Local Limited Partnership's
combined financial statements due to the estimated losses recorded by the
Partnership for the three month period ended March 31.

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

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

At March 31, 2001 and 2000, the investment accounts in certain Local Limited
Partnerships have reached a zero balance. Consequently, a portion of the
Partnership's estimate of its share of losses for the years ended March 31, 2001
and 2000 and the three month period ended March 31, 1999, amounting to
approximately $116,000, $103,000 and $23,000, respectively, have not been
recognized. The Partnership's share of losses for the year ended December 31,
1998 amounting to approximately $32,000 have not been recognized. As of March
31, 2001, the aggregate share of net losses not recognized by the Partnership
amounted to $274,000.

The following is a summary of the equity method activity of the investments in
Local Limited Partnerships for the periods presented:
<TABLE>
<CAPTION>
                                                                                          For the Three    For the Year
                                                             For the Years Ended          Months Ended        Ended
                                                                   March 31                  March 31      December 31
                                                         -----------------------------    -------------    -------------
                                                             2001            2000             1999              1998
                                                         -------------   -------------    -------------    -------------
     <S>                                                     <C>              <C>             <C>               <C>
Investments per balance sheet, beginning of period       $  1,187,690    $  1,508,351     $  1,595,464     $  2,001,822
Equity in losses of limited partnerships                     (358,675)       (300,256)         (82,637)        (388,158)
Distributions received                                         (4,864)         (5,501)            (750)          (3,296)
Amortization of paid acquisition fees and costs               (14,902)        (14,904)          (3,726)         (14,904)
                                                         -------------   -------------    -------------    -------------

Investments per balance sheet, end of period             $    809,249    $  1,187,690     $  1,508,351     $  1,595,464
                                                         =============   =============    =============    =============
</TABLE>


                                                            20
<PAGE>
                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  For The Years Ended March 31, 2001 and 2000,
                  For The Three Months Ended March 31, 1999 and
                      For The Year Ended December 31, 1998

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

The financial information from the individual financial statements of the Local
Limited Partnerships include rental and interest subsidies. Rental subsidies are
included in total revenues and interest subsidies are generally netted against
interest expense. Approximate combined condensed financial information from the
individual financial statements of the Local Limited Partnerships as of December
31 and for the years then ended is as follows:

                        COMBINED CONDENSED BALANCE SHEETS

                                                        2000            1999
                                                 --------------- ---------------

ASSETS

Buildings and improvements (net of accumulated
   depreciation for 2000 and 1999 of $6,668,000
   and $6,043,000, respectively)                 $   14,964,000  $   15,564,000
Land                                                  1,484,000       1,484,000
Other assets                                          1,606,000       1,510,000
                                                 --------------- ---------------

                                                 $   18,054,000  $   18,558,000
                                                 =============== ===============

LIABILITIES

Mortgage loans payable                           $   16,724,000  $   16,769,000
Due to related parties                                  373,000         347,000
Other liabilities                                       165,000         163,000
                                                 --------------- ---------------

                                                     17,262,000      17,279,000
                                                 --------------- ---------------

PARTNERS' CAPITAL

WNC California Housing Tax Credits, L.P.                511,000         980,000
Other partners                                          281,000         299,000
                                                 --------------- ---------------

                                                        792,000       1,279,000
                                                 --------------- ---------------

                                                 $   18,054,000  $   18,558,000
                                                 =============== ===============


                                       21
<PAGE>

                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  For The Years Ended March 31, 2001 and 2000,
                  For The Three Months Ended March 31, 1999 and
                      For The Year Ended December 31, 1998


NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

                                  2000              1999              1998
                           ---------------    ---------------   ---------------
Revenues                   $    1,891,000     $    1,849,000    $    1,828,000
                           ---------------    ---------------   ---------------
Expenses:
  Operating expenses            1,336,000          1,237,000         1,251,000
  Interest expense                396,000            401,000           400,000
  Depreciation and
     amortization                 625,000            622,000           602,000
                           ---------------    ---------------   ---------------
   Total expenses               2,357,000          2,260,000         2,253,000
                           ---------------    ---------------   ---------------
Net loss                   $     (466,000)    $     (411,000)   $     (425,000)
                           ===============    ===============   ===============
Net loss allocable
     to the Partnership    $     (461,000)    $     (407,000)   $     (420,000)
                           ===============    ===============   ===============
Net loss recorded
     by the Partnership          (359,000)     $    (300,000)   $     (388,000)
                           ===============    ===============   ===============

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

NOTE 3 - RELATED PARTY TRANSACTIONS

Under the terms of the Partnership Agreement, the Partnership has paid or is
obligated to the General Partners or their affiliates for the following items:

          Acquisition fees equal to 6% of the gross proceeds from the sale of
          Units as compensation for services rendered in connection with the
          acquisition of Local Limited Partnerships. As of the end of all
          periods presented, the Partnership incurred acquisition fees of
          $447,060. Accumulated amortization of these capitalized costs was
          $300,629 and $205,587, as of March 31, 2001 and 2000, respectively. Of
          the accumulated amortization recorded on the balance sheet at March
          31, 2001 $80,140 of the related expense was reflected as equity in
          losses of limited partnerships on the statement of operations during
          the fourth quarter of the year ended March 31, 2001 to reduce the
          respective net acquisition fee component of investments in local
          limited partnerships to zero for those Local Limited Partnerships
          which would otherwise be below a zero balance.

          Reimbursement of costs incurred by the General Partners or an
          affiliate in connection with the acquisition of the Local Limited
          Partnerships. These reimbursements have not exceeded 3% of the gross
          proceeds. As of the end of all periods presented, the Partnership
          incurred acquisition costs of $32,018 which have been included in
          investments in limited partnerships. Such costs were fully amortized
          at December 31, 1997.

          An annual management fee equal to 0.5% of the invested assets of the
          Local Limited Partnerships, including the Partnerships allocable share
          of the mortgages. Management fees of $111,856 and $111,855 were
          incurred during the years ended March 31, 2001 and 2000, respectively,
          and $27,923 during the three months ended March 31, 1999, and $111,691
          were incurred for 1998, of which $0 was paid during the years ended
          March 31, 2001 and 2000, the three months ended March 31, 1999 and the
          year ended December 31, 1998.

                                       22
<PAGE>
                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  For The Years Ended March 31, 2001 and 2000,
                  For The Three Months Ended March 31, 1999 and
                      For The Year Ended December 31, 1998

NOTE 3 - RELATED PARTY TRANSACTIONS, continued

The accrued fees and expenses due to the General Partners and affiliates consist
of the following as of the dates indicated:

                                                           March 31
                                                 -----------------------------
                                                    2001            2000
                                                 ------------   --------------
Reimbursement for expenses
     paid by the General Partners
     or an affiliate                             $    11,271    $           -

Asset management fee payable                       1,069,250          957,395
                                                 ------------   --------------
Total                                            $ 1,080,521    $     957,395
                                                 ============   ==============

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

NOTE 4 - INCOME TAXES

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

NOTE 5 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the quarterly operations for the years ended March
31, 2001 and 2000 (in thousands, except for per share data).

                      June 30       September 30    December 31      March 31
                  --------------  --------------  --------------  --------------

      2001

Income             $          -   $       1,000   $           -   $       2,000

Operating
   expenses             (35,000)        (36,000)        (33,000)        (46,000)

Equity in
   losses of
   limited
   partnerships         (64,000)        (63,000)        (63,000)       (168,000)

Net loss                (99,000)        (98,000)        (96,000)       (212,000)

Loss available
   to limited
   partner              (98,000)        (97,000)        (95,000)       (210,000)

Loss per limited
   partner unit             (13)            (13)            (13)            (28)


                                       23
<PAGE>
                    WNC CALIFORNIA HOUSING TAX CREDITS, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  For The Years Ended March 31, 2001 and 2000,
                  For The Three Months Ended March 31, 1999 and
                      For The Year Ended December 31, 1998


NOTE 5 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED), continued

                      June 30       September 30    December 31      March 31
                  --------------  --------------  --------------  --------------
    2000

Income            $           -   $       1,000   $           -   $       1,000

Operating
   expenses             (38,000)        (36,000)        (36,000)        (34,000)

Equity in
   losses of
   limited
   partnerships         (83,000)        (82,000)        (73,000)        (62,000)

Net loss               (121,000)       (118,000)       (108,000)        (96,000)

Loss available
   to limited
   partner             (120,000)       (116,000)       (107,000)        (95,000)

Loss per limited
   partner unit             (16)            (16)            (14)            (13)





















                                       24
<PAGE>

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

NOT APPLICABLE

PART III.

Item 10. Directors and Executive Officers of the Registrant

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

Directors and Executive Officers of WNC & Associates, Inc.

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

Wilfred N. Cooper, Sr., age 70, is the founder, Chief Executive Officer,
Chairman and a Director of WNC & Associates, Inc., a Director of WNC Capital
Corporation, and a general partner in some of the programs previously sponsored
by the Sponsor. Mr. Cooper has been involved in real estate investment and
acquisition activities since 1968. Previously, during 1970 and 1971, he was
founder and principal of Creative Equity Development Corporation, a predecessor
of WNC & Associates, Inc., and of Creative Equity Corporation, a real estate
investment firm. For 12 years prior to that, Mr. Cooper was employed by Rockwell
International Corporation, last serving as its manager of housing and urban
developments where he had responsibility for factory-built housing evaluation
and project management in urban planning and development. Mr. Cooper is a
Director of the National Association of Home Builders (NAHB) and a National
Trustee for NAHB's Political Action Committee, a Director of the National
Housing Conference (NHC) and a member of NHC's Executive Committee and a
Director of the National Multi-Housing Council (NMHC). Mr. Cooper graduated from
Pomona College in 1956 with a Bachelor of Arts degree.

John B. Lester, Jr., age 67, is Vice Chairman, a Director,  Secretary and a
member of the Acquisition Committee of WNC & Associates, Inc., and a Director of
WNC Capital Corporation. Mr. Lester has 27 years of experience in  engineering
and construction and has been involved in real estate investment and acquisition
activities since 1986 when he joined the Sponsor. Previously, he was Chairman of
the Board and Vice President or President of E & L Associates, Inc., a provider
of engineering and construction services to the oil refinery and petrochemical
industries, which he co-founded  in  1973. Mr. Lester  graduated  from  the
University of Southern California in 1956 with a Bachelor of Science degree in
Mechanical Engineering.

Wilfred N. Cooper, Jr., age 38, is President, Chief Operating Officer, a
Director and a member of the Acquisition Committee of WNC & Associates, Inc. He
is President of, and a registered principal with, WNC Capital Corporation, a
member firm of the NASD, and is a Director of WNC Management, Inc. He has been
involved in investment and acquisition activities with respect to real estate
since he joined the Sponsor in 1988. Prior to this, he served as Government
Affairs Assistant with Honda North America in Washington, D.C. Mr. Cooper is a
member of the Advisory Board for LIHC Monthly Report, a Director of NMHC and an
Alternate Director of NAHB. He graduated from The American University in 1985
with a Bachelor of Arts degree.

David N. Shafer, age 49, is Executive Vice President, a Director, General
Counsel, and a member of the Acquisition Committee of WNC & Associates, Inc.,
and a Director and Secretary of WNC Management, Inc. Mr. Shafer has been
involved in real estate investment and acquisition activities since 1984. Prior
to joining the Sponsor in 1990, he was practicing law with a specialty in real
estate and taxation. Mr. Shafer is a Director and President of the California
Council of Affordable Housing and a member of the State Bar of California. Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts degree, from the New England School of Law in 1983 with a
Juris Doctor degree (cum laude) and from the University of San Diego in 1986
with a Master of Law degree in Taxation.

                                       25
<PAGE>


Thomas J. Riha, age 46, became Chief Financial Officer effective January 2001.
Prior to his appointment as Chief Financial Officer he was Vice President -
Asset Management and a member of the Acquisition Committee of WNC & Associates,
Inc. and a Director and Chief Executive Officer of WNC Management, Inc. Mr. Riha
has been involved in acquisition and investment activities with respect to real
estate since 1979. Prior to joining the Sponsor in 1994, Mr. Riha was employed
by Trust Realty Advisor, a real estate acquisition and management company, last
serving as Vice President - Operations. Mr. Riha graduated from the California
State University, Fullerton in 1977 with a Bachelor of Arts degree (cum laude)
in Business Administration with a concentration in Accounting and is a Certified
Public Accountant and a member of the American Institute of Certified Public
Accountants.

Sy P. Garban, age  55,  is  Vice  President  -  National  Sales  of WNC &
Associates, Inc. and has been employed by the Sponsor since 1989. Mr. Garban has
been involved in real estate investment activities since 1978. Prior to joining
the Sponsor he served as Executive Vice President of MRW, Inc., a real estate
development and management firm. Mr. Garban is a member of the  International
Association of Financial Planners. He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.

N. Paul Buckland, age 38, is Vice President - Acquisitions and a member of the
Acquisition Committee of WNC & Associates, Inc. He has been involved in real
estate acquisitions and investments since 1986 and has been employed with WNC &
Associates, Inc. since 1994. Prior to that, he served on the development team of
the Bixby Ranch that constructed apartment units and Class A office space in
California and neighboring states, and as a land acquisition coordinator with
Lincoln Property Company where he identified and analyzed multi-family
developments. Mr. Buckland graduated from California State University, Fullerton
in 1992 with a Bachelor of Science degree in Business Finance.

David Turek, age 46, is Vice President - Originations of WNC & Associates, Inc.
He has been involved with real estate investment and finance activities since
1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995 to
1996, Mr. Turek served as a consultant for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties. From 1990 to 1995, he was involved in the development of
conventional and tax credit multi-family housing. He is a Director with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.

Kay L. Cooper, age 64, is a Director of WNC & Associates,  Inc. Mrs. Cooper
was the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr.,  the mother of Wilfred  N. Cooper, Jr. and the sister of John B.
Lester, Jr. Ms. Cooper graduated from the University of Southern California in
1958 with a Bachelor of Science degree.

Item 11.  Executive Compensation

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

(a)  Annual Asset Management Fee. An annual asset management fee in an amount
     equal to 0.5% of the Invested Assets of the Partnership, as defined.
     "Invested Assets" means the sum of the Partnership's investment in Local
     Limited Partnerships and the Partnership's allocable share of the amount of
     the mortgage loans on and other debts related to the Housing Complexes
     owned by such Local Limited Partnerships. Fees of $112,000, $112,000,
     $28,000 and $112,000 were incurred during the years and three months ended
     March 31, 2001 and 2000 and 1999, and the year ended December 31, 1998,
     respectively. The Partnership paid the General Partners and or their
     affiliates $0 of those fees during the years ended March 31, 2001 and 2000,
     the three months ended March 31, 1999, and the year ended December 31,
     1998.

(b)  Operating Expense. The Partnership reimbursed the General Partner or its
     affiliates for operating expenses of approximately $4,000, $7,000, $6,000
     and $3,000 during the years ended March 31, 2001 and 2000, the three months
     ended March 31, 1999, and the year ended December 31, 1998, respectively.

                                       26
<PAGE>

(c)  Interest  in  Partnership.   The  General   Partners   receive  1%  of  the
     Partnership's  allocated Low Income  Housing  Credits,  which  approximated
     $3,800,  $6,700 and $6,700 for Associates  and $420,  $750 and $750 for Mr.
     Cooper for the  calendar  years ended  December  31,  2000,  1999 and 1998,
     respectively.  The General Partners are also entitled to receive 1% of cash
     distributions.  There were no distributions of cash to the General Partners
     during the years ended March 31, 2001 and 2000 and the three  months  ended
     March 31, 1999, and the year ended December 31, 1998.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

(a)  Security Ownership of Certain Beneficial Owners

     No person is known to the General Partners to own beneficially in excess of
5% of the outstanding Units.

(b)  Security Ownership of Management

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

(c)  Changes in Control

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

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

Item 13.  Certain Relationships and Related Transactions

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










                                       27
<PAGE>


PART IV.

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

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

         Report of Independent Certified Public Accountants
         Balance Sheets, March 31, 2001 and 2000
         Statements of Operations for the years ended March 31, 2001 and 2000,
           the three months ended March 31, 1999 and the year ended December 31,
           1998
         Statements of Partners' Equity for the years ended March 31, 2001 and
           2000, the three months ended March 31, 1999 and the year ended
           December 31, 1998
         Statements of Cash Flows for the years ended March 31, 2001 and 2000,
           the three months ended March 31, 1999 and the year ended December 31,
           1998
         Notes to Financial Statements

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

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

(b)      Reports on Form 8-K.

1.       NONE.

(c)      Exhibits.

3.1      Agreement of Limited Partnership dated September 15, 1988; included as
         Exhibit B to the Prospectus, which was filed as Exhibit 28.1 to Form
         10-K for the year ended December 31, 1992 is hereby incorporated herein
         as Exhibit 3.1.

10.1     Amended and Restated  Agreement  of Limited  Partnership  of Countryway
         Associates  filed as exhibit 10.1 on Form 10-K dated December 31, 1992
         is hereby incorporated herein as exhibit 10.1.

10.2     Amended and  Restated  Agreement  of Limited  Partnership of Alta Vista
         Investors  filed as exhibit  10.2 on Form 10-K dated December 31, 1992
         is hereby incorporated herein as exhibit 10.2.

10.3     Amended and  Restated  Agreement of Limited  Partnership  of Yreka
         Investment  Group filed as exhibit 10.3 on Form 10-K dated December 31,
         1992 is hereby incorporated herein as exhibit 10.3.

10.4     Amended and Restated Agreement of Limited Partnership of BCA Associates
         filed as exhibit 10.7 on Form 10-K dated December 31, 1992 is hereby
         incorporated herein as exhibit 10.4.

10.5     Amended and Restated Agreement of Limited  Partnership of HPA Investors
         filed as exhibit 10.8 on Form 10-K dated December 31, 1992 is hereby
         incorporated herein as exhibit 10.5.

10.6     Amended and Restated  Agreement of Limited  Partnership of Cloverdale
         Garden  Apartments  filed as exhibit 10.11 on Form 10-K dated December
         31, 1992 is hereby incorporated herein as exhibit 10.6.

10.7     Amended and Restated Agreement of Limited Partnership of Knights
         Landing  Harbor filed as exhibit 10.13 on Form 10-K dated December 31,
         1992 is hereby incorporated herein as exhibit 10.7.

10.8     Amended and Restated Agreement of Limited Partnership of Woodlake Manor
         filed as exhibit 10.16 on Form 10-K dated December 31, 1992 is hereby
         incorporated herein as exhibit 10.8.

                                       28
<PAGE>

10.9     Amended and Restated  Agreement of Limited  Partnership  of East Garden
         Apartments  filed as exhibit 10.18 on Form 10-K dated December 31, 1992
         is hereby incorporated herein as exhibit 10.9.

10.10    Amended and Restated Agreement of Limited  Partnership of Midland Manor
         Associates filed as exhibit 10.26 on Form 10-K dated December 31, 1992
         is hereby incorporated herein as exhibit 10.10.

10.11    Amended and Restated  Agreement of Limited  Partnership  of San Jacinto
         Associates  filed as exhibit 10.27 on Form 10-K dated December 31, 1992
         is hereby incorporated herein as exhibit 10.11.

21.1     Financial  Statements of Yreka  Investment  Group,  for the years ended
         December 31, 1999 and 1998 together with  Independent Auditors' Report
         Thereon; a significant subsidiary of the Partnership.

21.2     Financial  Statements of Yreka  Investment  Group,  for the years ended
         December 31, 2000 and 1999 together with  Independent Auditors' Report
         Thereon; a significant subsidiary of the Partnership.

(d)      Financial statement schedules follow, as set forth in subsection (a)(2)
         hereof.
















                                       29
<PAGE>


               Report of Independent Certified Public Accountants
                        on Financial Statement Schedule






To the Partners
California Housing Tax Credits, L.P.


The audits referred to in our report dated July 9, 2001, relating to the 2001,
2000, 1999 and 1998 financial statements of WNC California Housing Tax Credits,
L.P. (the "Partnership"), which are contained in Item 8 of this Form 10-K,
included the audit of the accompanying financial statement schedules. The
financial statement schedules are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statement schedules based upon our audits.

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



                                         /s/  BDO SEIDMAN, LLP
                                              BDO SEIDMAN, LLP
Orange County, California
July 9, 2001























                                       30
<PAGE>


WNC California Housing Tax Credits, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
<TABLE>
<CAPTION>

                                     -------------------------------------   -------------------------------------------------------
                                                As of March 31, 2001                           As of December 31, 2000
                                     -------------------------------------   -------------------------------------------------------
                                     Partnership's Total      Amount of     Encumbrances of
                                     Investment in Local   Investment Paid  Local Limited    Property and   Accumulated    Net Book
 Partnership Name       Location     Limited Partnerships     to Date       Partnerships       Equipment    Depreciation    Value
------------------------------------------------------------------------------------------------------------------------------------
     <S>                 <C>                 <C>                 <C>            <C>               <C>            <C>         <C>

Alta Vista Investors    Orosi,
                        California      $  583,000         $  583,000       $ 1,432,000     $ 2,044,000    $  782,000   $ 1,262,000

BCA Associates          Anderson,
                        California         514,000            514,000         1,421,000       2,025,000       563,000     1,462,000

Cloverdale Garden       Cloverdale,
Apartments              California         617,000            617,000         1,634,000       2,155,000       484,000     1,671,000

Countryway Associates   Mendota,
                        California         571,000            571,000         1,473,000       2,090,000       814,000     1,276,000

East Garden Apartments  Jamestown,
                        California         770,000            770,000         2,150,000       2,901,000       647,000     2,254,000

HPA Investors           Shafter,
                        California         538,000            538,000         1,508,000       2,196,000       597,000     1,599,000

Knights Landing Harbor  Knights
                        Landing,
                        California         275,000            275,000           981,000       1,351,000       374,000       977,000

Midland Manor           Mendota,
Associates              California         383,000            383,000         1,425,000       1,824,000       640,000     1,184,000

San Jacinto Associates  San Jacinto,
                        California         469,000            469,000         1,781,000       2,349,000       459,000     1,890,000

Woodlake Manor          Woodlake,
                        California         545,000            545,000         1,452,000       2,137,000       817,000     1,320,000

Yreka Investment Group  Yreka,
                        California         538,000            538,000         1,467,000       2,044,000       491,000     1,553,000
                                      -------------     --------------     -------------   ------------- ------------- -------------

                                       $ 5,803,000        $ 5,803,000      $ 16,724,000    $ 23,116,000   $ 6,668,000  $ 16,448,000
                                      =============     ==============     =============   ============= ============= =============
</TABLE>


                                                                      31
<PAGE>


WNC California Housing Tax Credits, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
<TABLE>
<CAPTION>
                                         -------------------------------------------------------------------------------------------
                                                                  For the year ended December 31, 2000
                                         -------------------------------------------------------------------------------------------
                                                                                Year Investment                     Estimated Useful
   Partnership Name                      Rental Income       Net Loss              Acquired         Status             Life (Years)
------------------------------------------------------------------------------------------------------------------------------------
     <S>                                      <C>               <C>                   <C>             <C>                      <C>
Alta Vista Investors                       $ 160,000        $ (48,000)                1989         Completed                   27.5

BCA Associates                               145,000          (45,000)                1989         Completed                     40

Cloverdale Garden Apartments                 190,000          (20,000)                1989         Completed                     40

Countryway Associates                        151,000          (56,000)                1989         Completed                   27.5

East Garden Apartments                       229,000          (34,000)                1989         Completed                     40

HPA Investors                                155,000          (59,000)                1989         Completed                     40

Knights Landing Harbor                       124,000           (5,000)                1989         Completed                     40

Midland Manor Associates                     143,000          (51,000)                1990         Completed                   27.5

San Jacinto Associates                       164,000          (54,000)                1990         Completed                     50

Woodlake Manor                               183,000          (63,000)                1989         Completed                     30

Yreka Investment Group                       155,000          (31,000)                1989         Completed                     50
                                          -----------       -----------

                                          $1,799,000        $(466,000)
                                          ===========       ===========
</TABLE>




                                                                      32
<PAGE>


WNC California Housing Tax Credits, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
<TABLE>
<CAPTION>

                                     -------------------------------------   -------------------------------------------------------
                                                As of March 31, 2000                           As of December 31, 1999
                                     -------------------------------------   -------------------------------------------------------
                                     Partnership's Total      Amount of     Encumbrances of
                                     Investment in Local   Investment Paid  Local Limited    Property and   Accumulated    Net Book
 Partnership Name       Location     Limited Partnerships     to Date       Partnerships       Equipment    Depreciation    Value
------------------------------------------------------------------------------------------------------------------------------------
     <S>                 <C>                 <C>                 <C>            <C>               <C>            <C>         <C>
Alta Vista Investors    Orosi,
                        California      $  583,000          $ 583,000       $ 1,436,000     $ 2,044,000     $ 709,000   $ 1,335,000

BCA Associates          Anderson,
                        California         514,000            514,000         1,425,000       2,017,000       517,000     1,500,000

Cloverdale Garden       Cloverdale,
Apartments              California         617,000            617,000         1,638,000       2,154,000       428,000     1,726,000

Countryway Associates   Mendota,
                        California         571,000            571,000         1,478,000       2,085,000       741,000     1,344,000

East Garden Apartments  Jamestown,
                        California         770,000            770,000         2,156,000       2,901,000       573,000     2,328,000

HPA Investors           Shafter,
                        California         538,000            538,000         1,511,000       2,186,000       542,000     1,644,000

Knights Landing Harbor  Knights
                        Landing,
                        California         275,000            275,000           984,000       1,350,000       343,000     1,007,000

Midland Manor           Mendota,
Associates              California         383,000            383,000         1,428,000       1,824,000       575,000     1,249,000

San Jacinto Associates  San Jacinto,
                        California         469,000            469,000         1,786,000       2,349,000       417,000     1,932,000

Woodlake Manor          Woodlake,
                        California         545,000            545,000         1,456,000       2,137,000       744,000     1,393,000

Yreka Investment Group  Yreka,
                        California        538,000             538,000         1,471,000       2,044,000       454,000     1,590,000
                                      -------------     --------------     -------------   ------------- ------------- -------------
                                      $ 5,803,000         $ 5,803,000      $ 16,769,000    $ 23,091,000   $ 6,043,000  $ 17,048,000
                                      =============     ==============     =============   ============= ============= =============
</TABLE>

                                                                      33
<PAGE>


WNC California Housing Tax Credits, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
<TABLE>
<CAPTION>
                                         -------------------------------------------------------------------------------------------
                                                                  For the year ended December 31, 1999
                                         -------------------------------------------------------------------------------------------
                                                                                Year Investment                     Estimated Useful
   Partnership Name                      Rental Income       Net Loss              Acquired         Status             Life (Years)
------------------------------------------------------------------------------------------------------------------------------------
     <S>                                      <C>               <C>                   <C>             <C>                      <C>

Alta Vista Investors                      $ 161,000        $ (36,000)                1989         Completed                     27.5

BCA Associates                              150,000          (32,000)                1989         Completed                     40

Cloverdale Garden Apartments                181,000          (30,000)                1989         Completed                     40

Countryway Associates                       165,000          (49,000)                1989         Completed                     27.5

East Garden Apartments                      227,000          (29,000)                1989         Completed                     40

HPA Investors                               158,000          (40,000)                1989         Completed                     40

Knights Landing Harbor                      120,000          (13,000)                1989         Completed                     40

Midland Manor Associates                    147,000          (44,000)                1990         Completed                     27.5

San Jacinto Associates                      130,000          (55,000)                1990         Completed                     50

Woodlake Manor                              178,000          (57,000)                1989         Completed                     30

Yreka Investment Group                      155,000          (26,000)                1989         Completed                     50
                                         ------------     ------------
                                         $ 1,772,000       $ (411,000)
                                         ============     ============
</TABLE>




                                                                      34
<PAGE>


WNC California Housing Tax Credits, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999
<TABLE>
<CAPTION>

                                     -------------------------------------   -------------------------------------------------------
                                                As of March 31, 1999                           As of December 31, 1998
                                     -------------------------------------   -------------------------------------------------------
                                     Partnership's Total      Amount of     Encumbrances of
                                     Investment in Local   Investment Paid  Local Limited    Property and   Accumulated    Net Book
 Partnership Name       Location     Limited Partnerships     to Date       Partnerships       Equipment    Depreciation    Value
------------------------------------------------------------------------------------------------------------------------------------
     <S>                 <C>                 <C>                 <C>            <C>               <C>            <C>         <C>
Alta Vista Investors     Orosi,
                         California      $ 583,000          $ 583,000         $ 1,440,000    $ 2,038,000     $ 636,000   $ 1,402,000

BCA Associates           Anderson,
                         California        514,000            514,000           1,429,000      2,014,000       471,000     1,543,000

Cloverdale Garden        Cloverdale,
Apartments,              California        617,000            617,000           1,642,000      2,136,000       375,000     1,761,000

Countryway Associates    Mendota,
                         California        571,000            571,000           1,481,000      2,085,000       668,000     1,417,000

East Garden Apartments,  Jamestown,
                         California        770,000            770,000           2,161,000      2,886,000       499,000     2,387,000

HPA Investors            Shafter,
                         California        538,000            538,000           1,516,000      2,158,000       489,000     1,669,000

Knights Landing Harbor,  Knights
                         Landing,
                         California        275,000            275,000             986,000      1,345,000       312,000     1,033,000

Midland Manor            Mendota,
Associates               California        383,000            383,000           1,431,000      1,821,000       512,000     1,309,000

San Jacinto Associates   San Jacinto,
                         California        469,000            469,000           1,790,000      2,349,000       374,000     1,975,000

Woodlake Manor           Woodlake,
                         California        545,000            545,000           1,460,000      2,108,000       667,000     1,441,000

Yreka Investment Group   Yreka,
                         California        538,000            538,000           1,475,000      2,043,000       417,000     1,626,000
                                      -------------     --------------       -------------  -------------  ------------ ------------

                                      $  5,803,000       $  5,803,000         $16,811,000    $22,983,000   $ 5,420,000  $ 17,563,000
                                      =============     ==============       =============  =============  ============ ============
</TABLE>

                                                                      35
<PAGE>

WNC California Housing Tax Credits, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999

<TABLE>
<CAPTION>
                                         -------------------------------------------------------------------------------------------
                                                                  For the year ended December 31, 1998
                                         -------------------------------------------------------------------------------------------
                                                                                Year Investment                     Estimated Useful
   Partnership Name                      Rental Income       Net Loss              Acquired         Status             Life (Years)
------------------------------------------------------------------------------------------------------------------------------------
     <S>                                      <C>               <C>                   <C>             <C>                      <C>

Alta Vista Investors                      $ 153,000       $  (47,000)                1989         Completed                     27.5

BCA Associates                              151,000          (16,000)                1989         Completed                     40

Cloverdale Garden Apartments                176,000          (25,000)                1989         Completed                     40

Countryway Associates                       167,000          (34,000)                1989         Completed                     27.5

East Garden Apartments                      218,000          (42,000)                1989         Completed                     40

HPA Investors                               161,000          (63,000)                1989         Completed                     40

Knights Landing Harbor                      118,000          (21,000)                1989         Completed                     40

Midland Manor Associates                    151,000          (45,000)                1990         Completed                     27.5

San Jacinto Associates                      118,000          (80,000)                1990         Completed                     50

Woodlake Manor                              170,000          (45,000)                1989         Completed                     30

Yreka Investment Group                      153,000           (7,000)                1989         Completed                     50
                                         ------------     ------------
                                       $  1,736,000       $ (425,000)
                                         ============     ============
</TABLE>

                                                                      36
<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 CALIFORNIA HOUSING TAX CREDITS, L.P.

By:  WNC & Associates, Inc., General Partner


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

Date:  July 13, 2001


By:  /s/ Thomas J. Riha
Thomas J. Riha, Vice-President -
Chief Financial Officer of WNC & Associates, Inc.

Date:  July 13, 2001


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

Date:  July 13, 2001

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


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

Date:  July 13, 2001



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

Date:  July 13, 2001


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

Date:  July 13, 2001



                                       37

<PAGE>






                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                              FINANCIAL STATEMENTS
                           December 31, 2000 and 1999




<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership


                                    CONTENTS




                                                                          Page
INDEPENDENT AUDITORS' REPORT ON THE
  FINANCIAL STATEMENTS                                                        1


FINANCIAL STATEMENTS
  Balance Sheets                                                              2
  Statements of Operations                                               3 -  5
  Statements of Changes in Partners' Capital                                  6
  Statements of Cash Flows                                               7 -  8
  Notes to Financial Statements                                          9 - 14


INDEPENDENT AUDITORS' REPORT ON THE
  SUPPORTING DATA REQUIRED BY USDA/RD                                        15


SUPPORTING DATA REQUIRED BY USDA/RD                                     16 - 24


INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON
  INTERNAL CONTROL OVER FINANCIAL REPORTING BASED
  ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
  ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS                         25 - 26


<PAGE>


                          INDEPENDENT AUDITORS' REPORT



To the Partners
Yreka Investment Group
A California Limited Partnership

         We have audited the accompanying balance sheets of Yreka Investment
Group, a California Limited Partnership, as of December 31, 2000 and 1999, and
the related statements of operations, changes in partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

         We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. 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 provide a reasonable basis for our
opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Yreka Investment
Group as of December 31, 2000 and 1999, and the results of its operations and
its cash flows for the years then ended, in conformity with generally accepted
accounting principles.

         In accordance with Government Auditing Standards, we have also issued a
report dated January 12, 2001, on our consideration of Yreka Investment Group's
internal control over financial reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts and grants.



                                         /s/ Tate, Propp, Beggs & Sugimoto
                                                An Accountancy Corporation


January 12, 2001
Sacramento, California


<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                                 BALANCE SHEETS
                           December 31, 2000 and 1999



                          ASSETS

                                                     2000               1999
                                                -------------     --------------
Current Project Assets:
   Cash                                          $     8,830       $        696
   Restricted cash:
     Tenant security deposits - Note 2                 8,750              8,750
     Taxes and insurance - Note 3                      8,662             21,361
     USDA/RD reserve - Note 4                        133,138            124,813
   Accounts receivable                                 2,022              4,861
   Prepaid expenses                                    2,388              2,280
                                                -------------      -------------

       Total current project assets                  163,790            162,761

Property and equipment - Note 5                    1,552,817          1,589,673
                                                -------------      -------------

         Total Assets                            $ 1,716,607        $ 1,752,434
                                                =============      =============

           LIABILITIES AND PARTNERS' CAPITAL

Current Project Liabilities:
   Tenant security deposits - Note 2             $     8,750        $     8,750
   Note payable, current portion - Note 6              4,718              4,324
                                                -------------      -------------

       Total current project liabilities              13,468             13,074

Long-Term Project Liabilities:
   Note payable, less current portion - Note 6     1,462,080          1,466,798

Non-Project Liabilities
   Due to related parties - Note 7                     2,400              2,400
                                                -------------      -------------

       Total liabilities                           1,477,948          1,482,272

Partners' Capital                                    238,659            270,162
                                                -------------      -------------

      Total Liabilities and Partners' Capital    $ 1,716,607        $ 1,752,434
                                                =============      =============

                  The accompanying notes are an integral part
                          of these financial statements
                                        2
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                            STATEMENTS OF OPERATIONS
                 For the Years Ended December 31, 2000 and 1999

                                                     2000               1999
                                                -------------     --------------
Project Operating Income:
   Gross rent                                    $    61,426       $     69,801
   Rental assistance                                  96,308             86,951
   Less vacancies                                     (2,462)            (1,567)
                                                -------------     --------------
   Net rent                                          155,272            155,185
   Other project income:
      Late charges                                       245                218
      Laundry income                                   2,292              1,991
      Tenant damages                                   1,866              2,241
   Interest income                                     4,438              4,115
   Miscellaneous income                                  114                  -
                                                -------------     --------------

       Total project operating income                164,227            163,750
                                                -------------     --------------

Project Operating Expenses:
   Maintenance and operating:
      Caretaker                                        7,384              5,561
      Supplies                                         2,802              4,981
      Painting and decorating                            665                402
      General maintenance and repairs                  3,563              2,624
      Snow removal                                        25               (400)
      Elevator maintenance                                 -                  -
      Grounds maintenance                              1,608              2,204
      Services                                           429                484
      Furniture and furnishings replacement            2,578              3,208
      Other operating expenses                             -                  -
                                                -------------     --------------
       Total maintenance and operating                19,054             19,064
                                                -------------     --------------
   Utilities:
      Electricity                                      1,548              1,205
      Water                                            8,228              5,183
      Sewer                                            7,074              6,534
      Heating fuel/other                               2,983              3,837
      Garbage and trash removal                        3,434              3,307
                                                -------------     --------------
       Total utilities                                23,267              20,066
                                                -------------     --------------

                  The accompanying notes are an integral part
                          of these financial statements
                                        3

<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                      STATEMENTS OF OPERATIONS (CONTINUED)
                 For the Years Ended December 31, 2000 and 1999


                                                     2000               1999
                                                -------------     --------------
Project Operating Expenses (Continued):
   Administrative:
     Manager                                     $    11,628       $     11,465
     Management fees                                  17,064             17,712
     Accounting/auditing                               4,000              3,880
     Bookkeeping                                         864                216
     Legal                                             1,685                  -
     Advertising                                         352                931
     Telephone                                           978              1,047
     Office supplies                                   2,547              2,442
     Office furniture and equipment                      428                300
     Training expense                                    467                231
     Health insurance                                  2,073              1,508
     Payroll taxes                                     1,712              1,712
     Workers' compensation insurance                   2,297              1,799
     Other administrative expenses                       938              1,332
                                                -------------     --------------

       Total administrative                           47,033             44,575
                                                -------------     --------------

   Taxes and Insurance:
     Real estate taxes                                14,539             14,775
     Special assessments                                   -                  -
     Other taxes, fees and permits                       905                910
     Property insurance                                4,174              4,494
     Other insurance                                     493                  -
                                                -------------     --------------
       Total taxes and insurance                      20,111             20,179
                                                -------------     --------------
       Total project operating expenses              109,465            103,884
                                                -------------     --------------

                  The accompanying notes are an integral part
                          of these financial statements
                                        4
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                      STATEMENTS OF OPERATIONS (CONTINUED)
                 For the Years Ended December 31, 2000 and 1999


                                                     2000               1999
                                                -------------     --------------
Other Project Income (Expenses)
   Interest subsidy - PASS Credit                $    94,672       $     94,672
   Depreciation and amortization                     (36,856)           (36,855)
   Interest expense:
     USDA/RD 1% interest                             (33,881)           (34,242)
     Interest subsidy                                (94,672)           (94,672)
   Authorized capital improvements
        from USDA/RD reserve                         (11,832)            (6,804)
   Authorized capital improvements
        from unrestricted cash                             -             (4,864)
                                                -------------     --------------
      Total other project income (expenses)          (82,569)           (82,765)
                                                -------------     --------------
Non-Project Expenses:
   Partnership administration fee                      2,400              2,400
   Tax administration fee                                800                800
                                                -------------     --------------
         Total non-project expenses                    3,200              3,200
                                                -------------     --------------
         Net loss                                $   (31,007)      $    (26,099)
                                                =============     ==============








                  The accompanying notes are an integral part
                          of these financial statements
                                        5
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                 For the Years Ended December 31, 2000 and 1999

                         General              Limited
                         Partner              Partner
                    -----------------    -------------------

                                                     WNC
                                                  California
                                  Ronald D.         Housing
                                 Bettencourt      Tax Credits        Total
                               ---------------  ---------------  ---------------

Balance, December 31, 1998       $      1,781     $    294,976     $    296,757

Return on investment - Note 8              (5)            (491)            (496)

Net loss                                 (261)         (25,838)         (26,099)
                               ---------------  ---------------  ---------------
Balance, December 31, 1999              1,515          268,647          270,162

Return on investment - Note 8              (5)            (491)            (496)

Net loss                                 (310)         (30,697)         (31,007)
                               ---------------  ---------------  ---------------
Balance, December 31, 2000       $      1,200      $   237,459     $    238,659
                               ===============  ===============  ===============













                  The accompanying notes are an integral part
                          of these financial statements
                                        6
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                            STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2000 and 1999
                           Increase (Decrease) in Cash



                                                     2000               1999
                                                -------------     --------------
Cash Flows From Operating Activities:
   Cash received from tenants for rent           $   158,111       $    155,471
   Cash paid to tenants for security deposits              -                  -
   Miscellaneous cash received                         8,955              8,565
   Cash paid to suppliers and employees and
     for other restricted cash                      (111,106)          (122,678)
   Mortgage interest paid                            (33,881)           (34,242)
   Limited partnership tax                              (800)              (800)
                                                -------------     --------------
     Net cash provided by operating activities        21,279              6,316
                                                -------------     --------------
Cash Flows From Investing Activities:
  Deposits to the USDA/RD reserve                    (24,311)           (21,622)
  Withdrawals from the USDA/RD reserve                15,986             10,426
                                                -------------     --------------
       Net cash used by investing activities          (8,325)           (11,196)
                                                -------------     --------------
Cash Flows From Financing Activities:
    Principal payments on note payable                (4,324)            (3,963)
    Return on investment                                (496)              (496)
                                                -------------     --------------
          Net cash used by financing activities       (4,820)            (4,459)
                                                -------------     --------------

Increase (decrease) in cash                            8,134             (9,339)

Cash, beginning of year                                  696             10,035
                                                -------------     --------------
Cash, end of year                                $     8,830       $        696
                                                =============     ==============




                  The accompanying notes are an integral part
                          of these financial statements
                                        7
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 For the Years Ended December 31, 2000 and 1999
                           Increase (Decrease) in Cash



                                                     2000               1999
                                                -------------     --------------
Reconciliation of Net Loss to Net
  Cash Provided By Operating Activities:

Net loss                                         $   (31,007)      $    (26,099)
Adjustments to reconcile net loss to net
   cash provided by operating activities:
      Depreciation and amortization                   36,856             36,855
      Decrease in accounts receivable                  2,839                286
      Increase in prepaid expenses                      (108)               (66)
      Decrease in other restricted cash               12,699              3,290
      Decrease in accounts payable                         -             (7,950)
                                                -------------     --------------

Net cash provided by operating activities        $    21,279       $      6,316
                                                =============     ==============




















                  The accompanying notes are an integral part
                          of these financial statements
                                        8
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 1999



NOTE 1:         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                Yreka Investment Group, a California Limited Partnership, was
                formed in October 1988 for the purpose of constructing and
                operating a 36-unit rural rental housing project located in
                Yreka, California, known as Siskiyou Valley Apartments. Project
                construction began in February 1989 and was completed in
                November 1989. Rental operations commenced in November 1989.

                The major activities of the Project are governed by the
                Partnership agreement and the United States Department of
                Agriculture/Rural Development (USDA/RD) pursuant to Sections 515
                and 521 of the Housing Act of 1949, as amended, which provide
                for interest and rental subsidies, respectively. USDA/RD has
                contracted with the Partnership to make rental assistance
                payments to the Partnership on behalf of qualified tenants. The
                contract terminates upon total disbursement of the assistance
                obligation.

                The following is a summary of significant accounting policies:

                    (a)    The financial statements are prepared on the accrual
                           basis of accounting.

                    (b)    The Partnership is not an income tax paying entity
                           although, as a limited partnership, it is subject to
                           a limited partnership tax. The net income or loss of
                           the Partnership passes through to and is reportable
                           by the partners individually. Therefore, no provision
                           for income taxes is reflected in these financial
                           statements.

                    (c)    Property and equipment is stated at cost. Assets are
                           depreciated over their estimated useful lives using
                           the straight-line method. The estimated useful lives
                           range from 5 to 50 years.

                    (d)    Loan acquisition costs and construction period
                           interest are amortized over 50 years using the
                           straight-line method.

                    (e)    The Partnership maintains its cash balances in
                           institutions where they are insured, up to $100,000,
                           by the Federal Deposit Insurance Corporation (FDIC).





                                       9
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 1999



NOTE 1:         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                    (f)    The presentation 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 differ from those estimates.

NOTE 2:         TENANT SECURITY DEPOSITS

                Tenant security deposits are maintained in a separate account at
                a bank insured by the FDIC.

NOTE 3:         TAXES AND INSURANCE RESERVE

                A separate bank account has been established to accumulate cash
                transfers for the payment of property taxes and insurance.
                During 2000 and 1999, $15,900 and 3,300, respectively, of
                unrestricted cash was transferred from this interest bearing
                account.

NOTE 4:         USDA/RD RESERVE

                An amendment to the loan agreement with USDA/RD requires cash
                transfers to a replacement reserve account each year until
                $201,600 has been accumulated. Withdrawals from the reserve
                account may be made only with the approval and countersignature
                of the USDA/RD.














                                       10
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 1999



NOTE 4:    USDA/RD RESERVE (CONTINUED)

               Changes in the reserve for the years ended December
               31, 2000 and 1999, are as follows:

           Balance, December 31, 1998                        $      113,617

           Deposits                                                  18,000
           Interest earned                                            3,622
           Withdrawals                                               (6,804)
           Interest withdrawn                                        (3,622)
                                                            ----------------
           Balance, December 31, 1999                               124,813

           Deposits                                                  20,160
           Interest earned                                            4,151
           Withdrawals                                              (11,832)
           Interest withdrawn                                        (4,151)
           Bank charges                                                  (3)
                                                            ----------------
           Balance, December 31, 2000                        $      133,138
                                                            ================

           This account was underfunded at December 31, 2000 by $470. The
           underfunding of this account was corrected in 2001.

NOTE 5:    PROPERTY AND EQUIPMENT

               Property and equipment at December 31, 2000 and 1999, was
               comprised of the following:

                                                   2000                1999
                                            ----------------    ----------------

           Land                              $      157,378      $      157,378
           Building                               1,786,004           1,786,004
           Furniture and equipment                  100,405             100,405
                                            ----------------    ----------------
                                                  2,043,787           2,043,787

           Less accumulated
               depreciation and
               amortization                         490,970             454,114
                                            ----------------    ----------------
              Total property and
                 equipment                   $    1,552,817      $    1,589,673
                                            ================    ================






                                       11
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 1999



NOTE 6:   NOTE PAYABLE

          The Partnership has a note payable to USDA/RD in monthly
          installments of $11,073 including interest at 8.75% per annum,
          due January 1, 2039. The note is secured by a deed of trust on
          the apartment project.

          The Partnership has entered into an interest subsidy agreement
          with USDA/RD. USDA/RD provides a monthly interest subsidy in the
          amount of $7,889, which reduces the effective interest rate to
          approximately 1% over the term of the loan. The subsidy is
          credited to subsidy income, and interest at 8.75% is included in
          interest expense. The USDA/RD regulatory agreement provides for
          USDA/RD to establish and control the allowable rents.

          Principal payments for the succeeding five years and thereafter
          are as follows:

                    Year Ending December 31:
                    ------------------------
                             2001                     $          4,718
                             2002                                5,148
                             2003                                5,617
                             2004                                6,128
                             2005                                6,687
                          Thereafter                         1,438,500
                                                      -----------------
                            Total                       $    1,466,798
                                                      =================

NOTE 7:         RELATED PARTY TRANSACTIONS

         Ronald Bettencourt, general partner of the Project, is also a
         shareholder in The CBM Group, Inc. The CBM Group, Inc. provides
         management services to the Project. Other related entities include CBM
         Diversified and Consolidated Building Maintenance, divisions of The CBM
         Group, Inc., and Atlantic Vending Services, a division of Capital
         Resources, Inc. The general partner of the Project is also a
         shareholder in Capital Resources, Inc. Atlantic Vending Services is
         responsible for laundry money collection and laundry facility
         maintenance in accordance with USDA/RD procedures. During 2000, 50% of
         total collections from laundry machines (amounting to $2,292 from
         maintenance and operations were paid) were paid to Atlantic Vending
         Services. Consolidated Building Maintenance was formed to provide
         maintenance services with prior USDA/RD approval. The general partner
         of the Project is also a partner in CBM Management Group.







                                       12
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 1999



NOTE 7:         RELATED PARTY TRANSACTIONS (CONTINUED)

                Partnership Administration Fee

                In accordance with the Partnership agreement, the Partnership
                accrued, as a non-project expense, $2,400 for each of the years
                ended December 31, 2000 and 1999, payable to the general partner
                for services rendered in connection with the administration of
                the business and affairs of the Partnership. At December 31,
                2000 and 1999, $2,400 was payable under this agreement.

                Tax Administration Fee

                During 2000 and 1999, a portion of the 1999 and 1998 earned
                return on investment, $800 each year, was used to pay a
                non-project tax administration fee to The CBM Group, Inc.

                Management Fees

                Management fees paid to The CBM Group, Inc. during 2000 and 1999
                totaled $17,064 and $17,712, respectively. The Project paid The
                CBM Group, Inc. a ten cent per copy fee for bulk copies of forms
                and $864 for automation services. During 2000, The Project paid
                $408 and $988 to CBM Diversified, a division of The CBM Group,
                Inc., for credit checking fees and property tax consulting fees,
                respectively.

                Insurance Premiums

                The general partner also owns a less than 5% interest in the
                surety company which provides the insurance coverage for the
                Project. Insurance premiums paid to the surety company during
                2000 and 1999, totaled $4,282 and $4,078.

NOTE 8:         PARTNERSHIP PROFITS, LOSSES AND DISTRIBUTIONS

                Profits and losses, as adjusted for certain provisions of the
                Partnership agreement, are allocated 1% to the general partner
                and 99% to the limited partner.  Under USDA/RD regulations,
                distributions to partners may be made from project operations
                only to the extent funds exceed the required contributions to
                the cash reserve account. Annual distributions are limited to 8%
                of the Partnership's initial capital investment. If the return
                on investment is not paid in a given year, any unpaid portion
                may be carried forward for one year and paid if earned. During
                2000 and 1999, a portion of the 1999 and 1998 earned return on
                investment, $3,200 each year, was used to pay non-project
                expenses and liabilities.




                                       13
<PAGE>


                             YREKA INVESTMENT GROUP
                        A California Limited Partnership

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 1999



NOTE 9:   TAXABLE LOSS

          A reconciliation of the financial statement net loss to the taxable
loss of the partnership at December 31, 2000 and 1999, is as follows:

                                                   2000                1999
                                            ----------------    ----------------
          Financial statement net loss       $      (31,007)     $      (26,099)

          Adjustments:
            Excess of tax depreciation
              and amortization over financial
              statement depreciation and
              amortization                          (29,609)            (30,628)

            Expenses reported on financial
              statements in excess of tax
              return expenses                             -               7,950
                                            ----------------    ----------------
               Taxable loss                  $      (60,616)     $      (48,777)

                                            ================    ================

NOTE 10: CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS

                The Project's operations are concentrated in the multifamily
                real estate market. In addition, the Project operates in a
                heavily regulated environment. The operations of the Project are
                subject to the administrative directives, rules and regulations
                of federal, state and local regulatory agencies, including, but
                not limited to, USDA/RD. Such administrative directives, rules
                and regulations are subject to change by an act of congress or
                an administrative change mandated by USDA/RD. Such changes may
                occur with little notice or inadequate funding to pay for the
                related cost, including the additional administrative burden, to
                comply with a change.










                                       14