FORM 10-K/A
                                 AMENDMENT NO. 2

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   (Mark One)

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

                   For the fiscal year ended December 31, 1998

                                       OR

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

             For the transition period from ________ to ___________

                         Commission file number: 0-20058


                    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 X No___

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

                                       1

<PAGE>


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

                                  INAPPLICABLE


                       DOCUMENTS INCORPORATED BY REFERENCE

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

                                      NONE













                                       2

<PAGE>

PART I.

Item 1.  Business

Organization

WNC 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.  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 thru  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 an Housing Complex prior to the end thereof, possibly
resulting in recapture of Low Income Housing Credits.

As of December 31, 1998,  the  Partnership  had invested in eleven Local Limited
Partnerships.  Each of these Local Limited  Partnerships  owns a Housing Complex
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.

                                       3
<PAGE>

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

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

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

Item 2. Properties

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



                                       4
<PAGE>

<TABLE>
<CAPTION>

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

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

Alta Vista Investors     Orosi,        Philip R. Hammond,
                         California    Jr. and Diane M.
                                       Hammond              42     98%   $ 583,000        $ 583,000      $  1,274,000   $ 1,440,000


BCA Associates           Anderson,     Douglas W. Young     40    100%     514,000          514,000         1,105,000     1,429,000
                         California

Cloverdale Garden        Cloverdale,   David J. Michael,
Apartments               California    Patrick R.
                                       Sabelhaus and
                                       Professional
                                       Apartment
                                       Management           34    100%     617,000          617,000         1,387,000     1,642,000

Countryway Associates    Mendota,      Philip R. Hammond,
                         California    Jr. and Diane M.
                                       Hammond              41     95%     571,000          571,000         1,162,000     1,481,000

East Garden Apartments   Jamestown,    David J. Michael
                         California    and Professional
                                       Apartment
                                       Management           51    100%     770,000          770,000         1,772,000     2,161,000

HPA                      Shafter,      Douglas W. Young     42     98%     538,000          538,000         1,223,000     1,516,000
                         California

Knights Landing Harbor   Knights       Douglas W. Young
                         Landing,      and Diane L. Young   25     96%     275,000          275,000           446,000       986,000
                         California


</TABLE>
                                       5
<PAGE>
<TABLE>
<CAPTION>

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


Midland Manor Associates Mendota,      Philip R. Hammond,
                         California    Jr. and Diane M.
                                       Hammond              40     98%   $ 383,000        $ 383,000       $  668,000   $  1,431,000

San Jacinto Associates   San Jacinto,  Richard Parasol
                         California    and Richard A.
                                       Gullota              38     74%     469,000          469,000          830,000      1,790,000

Woodlake Manor           Woodlake,     Thomas G. Larson,
                         California    William H. Larson
                                       and Raymond L.
                                       Tetzlaff             44     93%     545,000          545,000        1,146,000      1,460,000

Yreka Investment Group   Yreka,        Ronald D.
                         California    Bettencourt          36    100%     538,000          538,000        1,174,000      1,475,000
                                                           ---   ----   ----------        ---------      -----------    -----------
                                                           433     96%   5,803,000        5,803,000     $ 12,187,000   $ 16,811,000
                                                           ===   ====   ==========        =========      ===========    ===========

</TABLE>


                                       6



<PAGE>


<TABLE>
<CAPTION>


                   ------------------------------------------
                      For the year ended December 31, 1998
                   ------------------------------------------

                                                     Low Income Housing Credits
Partnership Name      Rental Income    Net Loss      Allocated to Partnership
-------------------------------------------------------------------------------
<S>                   <C>              <C>                       <C>

Alta Vista
Investors             $ 153,000        $ (47,000)                99%

BCA Associates          151,000          (16,000)                99%

Cloverdale
Garden Apartments       176,000          (25,000)                99%

Countryway
Associates              167,000          (34,000)                99%

East Garden
Apartments              218,000          (42,000)                99%

HPA Investors           161,000          (63,000)                99%

Knights
Landing Harbor          118,000          (21,000)                99%

Midland Manor
Associates              151,000          (45,000)                99%

San Jacinto
Associates              118,000          (80,000)                99%

Woodlake Manor          170,000          (45,000)                99%

Yreka Investment
Group                   154,000           (7,000)                99%
                      ---------         --------
                    $ 1,737,000         (425,000)
                      =========         ========

</TABLE>
                                       7


<PAGE>

Item 3.  Legal Proceedings

NONE

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

NONE

PART II.

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

Item 5a.

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

(b)  At December 31, 1998, there were 681 Limited Partners.

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

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

Item 5b.

NOT APPLICABLE

Item 6.  Selected Financial Data

Selected  balance  sheet  information  for the  Partnership  is as follows as of
December 31:


                          1998        1997        1996       1995         1994
                          ----        ----        ----       ----         ----
ASSETS
Cash and cash
 equivalents         $   66,028  $   78,109  $   83,943  $   84,504  $   93,726
Investments in
 limited
 partnerships, net    1,595,464   2,001,822   2,442,547   2,943,052   3,376,715
Other assets                  -           -           -         358          74
                      ---------   ---------   ---------   ---------   ---------
                     $1,661,492  $2,079,931  $2,526,490  $3,027,914  $3,470,515
                      =========   =========   =========   =========   =========

LIABILITIES
Accrued fees and
 expenses due to
 general partner
 and affiliates      $  820,365  $  705,925  $  594,248  $  483,938  $  372,353

PARTNERS' EQUITY        841,127   1,374,006   1,932,242   2,543,976   3,098,162
                      ---------   ---------   ---------   ---------   ---------
                     $1,661,492  $2,079,931  $2,526,490  $3,027,914  $3,470,515
                      =========   =========   =========   =========   =========

                                       8
<PAGE>
<TABLE>
<CAPTION>
Selected  results  of  operations,  cash  flows  and other  information  for the
Partnership are as follows for the years ended December 31:

                                            1998            1997             1996            1995             1994
                                            ----            ----             ----            ----             ----
<S>                                  <C>             <C>              <C>             <C>              <C>
Loss from operations                 $  (144,721)    $  (137,368)     $  (135,167)    $  (141,895)     $  (142,872)
Equity in loss from limited
partnerships                            (388,158)       (420,868)        (476,567)       (412,291)        (437,264)
                                       ---------       ---------        ---------       ---------        ---------
Net loss                             $  (532,879)    $  (558,236)     $  (611,734)    $  (554,186)     $  (580,136)
                                       =========       =========        =========       =========        =========

Net loss allocated to:
        General partner              $    (5,329)    $    (5,582)     $    (6,117)    $    (5,542)     $    (5,801)
                                       =========       =========        =========       =========        =========
        Limited partners             $  (527,550)    $  (552,654)     $  (605,617)    $  (548,644)     $  (574,335)
                                       =========       =========        =========       =========        =========
Net loss per limited partner unit    $    (70.81)    $    (74.18)     $    (81.29)    $    (73.64)     $    (77.09)
                                       =========       =========        =========       =========        =========
Outstanding weighted limited
partner units                              7,450           7,450            7,450           7,450            7,450
                                       =========       =========        =========       =========        =========

                                            1998            1997             1996            1995             1994
                                            ----            ----             ----            ----             ----
Net cash provided by (used in):
     Operating activities            $   (15,377)     $  (10,787)      $   (9,595)     $  (14,624)      $  (11,490)
     Investing activities                  3,296           4,953            9,034           5,402            7,402
                                       ---------       ---------        ---------       ---------        ---------
Net change in cash and cash
equivalents                              (12,081)         (5,834)            (561)         (9,222)          (4,088)
Cash and cash equivalents,
beginning of period                       78,109          83,943           84,504          93,726           97,814
                                       ---------       ---------        ---------       ---------        ---------
Cash and cash equivalents, end of
period                               $    66,028      $   78,109       $   83,943      $   84,504       $   93,726
                                       =========       =========        =========       =========        =========

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

                                            1998            1997             1996            1995             1994
                                            ----            ----             ----            ----             ----
 Federal                                      99              99               99              99              118
 State                                         -               -                -               -                -
                                       ---------       ---------        ---------       ---------        ---------
 Total                               $        99      $       99       $       99      $       99       $      118
                                       =========       =========        =========       =========        =========
</TABLE>

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

Financial Condition

The Partnership's  assets at December 31, 1998 consisted primarily of $66,000 in
cash and  aggregate  investments  in the eleven Local  Limited  Partnerships  of
$1,595,000.  Liabilities at December 31, 1998 primarily consisted of $820,000 of
accrued annual management fees due to the General Partners.

Results of Operations

Year Ended  December 31, 1998  Compared to Year Ended  December  31,  1997.  The
Partnership's net loss for 1998 was $(533,000), reflecting a decrease of $25,000
from the net loss  experienced in 1997. The decline in net loss is primarily due
to equity in losses from limited  partnerships  which  declined to $(388,000) in
1998 from  $(421,000) in 1997. This decrease was a result of the Partnership not
recognizing certain losses of the Local Limited Partnerships. The investments in
such Local Limited  Partnerships reached $0 during 1998. 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 $(8,000) in 1998 to
$(145,000),  from $(137,000) in 1997, due to a comparable  increase in operating
expense allocations.

                                       9
<PAGE>

Year Ended  December 31, 1997  Compared to Year Ended  December  31,  1996.  The
Partnership's net loss for 1997 was $(558,000), reflecting a decrease of $54,000
from the net loss  experienced in 1996. The decline in net loss is primarily due
to equity in losses from limited  partnerships  which  declined to $(421,000) in
1997 from  $(477,000) in 1996,  because the investments in certain Local Limited
Partnerships  reached $0 during 1997.  Losses from operations  were  essentially
unchanged between years.

Cash Flows

Year Ended  December 31, 1998 Compared to Year Ended December 31, 1997. Net cash
used in 1998 was $(12,000),  compared to net cash used in 1997 of $(6,000).  The
change was due primarily to an increase in operating costs paid to third parties
and a decline in distributions from Local Limited Partnerships.

Year Ended  December 31, 1997 Compared to Year Ended December 31, 1996. Net cash
used in 1997 was  $(6,000),  compared to  $(1,000)  in  1996. The change was due
primarily to a decrease in distributions from limited partnerships.

During 1998 accrued payables, which consist of related party management fees due
to the General  Partner,  increased by $(115,000).  The General Partner does not
anticipate  that  these  accrued  fees will be paid  until  such time as capital
reserves are in excess of future forseeable working capital  requirements of the
partnership,

The Partnership  expects its future cash flows,  together with its net available
assets at December 31, 1998, to be  sufficient to meet all currently  forseeable
future cash requirements.

Impact of Year 2000 Issue

The General  Partner has assessed the  Partnership's  exposure to date sensitive
computer  systems that may not be operative  subsequent  to 1999. As a result of
this  assessment,  the  General  Partner  has  executed a plan to  minimize  the
Partnership's  exposure to financial loss and/or  disruption of normal  business
operations  that may  occur  as a result  of Year  2000  non-compliant  computer
systems.

Business Computer Systems

These systems include both computer hardware and software  applications relating
to operations such as financial reporting. The Partnership does not maintain its
own systems and thus utilizes the computer systems of the General  Partner.  The
General Partner  developed a compliance  plan for each of its business  computer
systems,  with  particular  attention  given to  critical  systems.  The General
Partner  contracted  with an outside  vendor to  evaluate,  test and repair such
systems.  The assessment  consisted of determining the compliance with Year 2000
of critical  computer hardware and software.  Incidences of non-compliance  were
found with respect to computer  software  applications  and were corrected.  The
vendor found no instances of non-compliance  with respect to computer  hardware.
The amount expended and to be expended by the General Partner is nominal.

The Local General Partners or property  managers  maintain the business computer
systems that relate to the  operations  of the Local Limited  Partnerships.  The
General  Partner is in the process of obtaining  completed  questionnaires  from
such Local General  Partners and property  management  companies to assess their
respective  Year 2000  readiness.  The General Partner intends to identify those
Local  General  Partners and  property  management  companies  that have systems
critical to the operations of the Local Limited  Partnerships  that are not Year
2000  compliant.  For those  Local  General  Partners  and  property  management
companies  which  have  business  computer  systems  which will not be Year 2000
compliant  prior  to the Year  2000 and  where  the lack of such  compliance  is
determined to have a potential  material effect on the  Partnership's  financial
condition  and results of  operations,  the General  Partner  intends to develop
contingency plans which may include changing property management companies.

                                       10

<PAGE>


Outside Vendors

The General  Partner has obtained  assurances  from its  suppliers of electrical
power and banking and telecommunication services that their critical systems are
all Year 2000 compliant.  There exists,  however,  inherent uncertainty that all
systems of outside vendors or other third parties on which the General  Partner,
and thus the Partnership, and the Local General Partners and property management
companies,  and thus the  Local  Limited  Partnerships  rely  will be Year  2000
compliant. Therefore, the Partnership remains susceptible to the consequences of
third party critical computer systems being non-compliant.

Personal Computers

The General  Partner has  determined  that its  personal  computers  and related
software critical to the operations of the Partnership are Year 2000 compliant.

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 sheet of WNC  California  Housing Tax
Credits,  L.P. (a California  Limited  Partnership)  (the  "Partnership")  as of
December 31, 1998, and the related  statements of operations,  partners'  equity
(deficit) and cash flows for the year then ended. These financial statements are
the  responsibility of the Partnership's  management.  Our  responsibility is to
express an opinion on these financial  statements based on our audit. A
significant portion of the financial  statements of the limited  partnerships in
which the  Partnership is a limited partner were audited by other auditors whose
reports  have been  furnished  to us. As  discussed  in Note 2 to the  financial
statements, the Partnership accounts for its investments in limited partnerships
using the equity method. The portion of the Partnership's  investment in limited
partnerships  audited by other auditors  represented  80% of the total assets of
the Partnership at December 31, 1998. Our opinion,  insofar as it relates to the
amounts included in the financial  statements for the limited partnerships which
were audited by others, is based solely on the reports of the other auditors.

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

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




                                               BDO SEIDMAN, LLP

Orange County, California
March 31, 1999











                                       12

<PAGE>








                          INDEPENDENT AUDITORS' REPORT



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


We have audited the  accompanying  balance sheet of WNC  California  Housing Tax
Credits,  L.P. ( a California  Limited  Partnership)  (the  "Partnership") as of
December 31, 1997, and the related  statements of operations,  partners'  equity
(deficit)  and cash  flows for each of the years in the  two-year  period  ended
December 31, 1997.  These  financial  statements are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial  statements  based  on our  audit.  We did  not  audit  the  financial
statements  of the  limited  partnerships  in which WNC  California  Housing Tax
Credits, L.P. is a limited partner. These investments, as discussed in Note 2 to
the  financial  statements,   are  accounted  for  by  the  equity  method.  The
investments in these limited partnerships represented 96% of the total assets of
WNC  California  Housing Tax Credits,  L.P. at December 31, 1997.  The financial
statements  of the limited  partnerships  were audited by other  auditors  whose
reports have been furnished to us, and our opinion, insofar as it relates to the
amounts included for these limited partnerships,  is based solely on the reports
of the other auditors.

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

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



                                                     CORBIN & WERTZ

Irvine, California
March 18, 1998











                                       13
<PAGE>


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

                                 BALANCE SHEETS

                           December 31, 1998 and 1997




                                                1998                     1997
                                                ----                     ----
ASSETS

Cash and cash equivalents           $         66,028        $          78,109

Investments in limited
partnerships, net (Note 2)                 1,595,464                2,001,822
                                     ---------------         ----------------

                                    $      1,661,492        $       2,079,931
                                     ===============         ================

LIABILITIES AND PARTNERS'
EQUITY (DEFICIT)

Liabilities:
 Accrued fees and expenses
  due to General Partner and
  affiliates (Note 3)               $        820,365        $         705,925
                                     ---------------         ----------------

Commitments and contingencies

Partners' equity (deficit):
 General partners                            (56,429)                 (51,100)
 Limited partners; (10,000 units
  authorized; 7,450 units
  issued and outstanding
  at December 31, 1998 and 1997)             897,556                1,425,106
                                     ---------------         ----------------

         Total partners' equity              841,127                1,374,006
                                     ---------------         ----------------

                                    $      1,661,492        $       2,079,931
                                     ===============         ================










                 See accompanying notes to financial statements
                                       14

<PAGE>


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

                            STATEMENTS OF OPERATIONS

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



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

Interest income                $        2,166   $        2,227   $        3,549
                                -------------    -------------    -------------

Operating expenses:
 Amortization (Note 2)                 14,904           14,904           14,904
 Partnership management
  fees (Note 3)                       111,691          111,691          111,691
 Legal and accounting                   4,000            5,339            5,175
 Office                                16,292            7,661            6,946
                                -------------    -------------    -------------

   Total operating expenses           146,887          139,595          138,716
                                -------------    -------------    -------------

Loss from operations                 (144,721)        (137,368)        (135,167)

Equity in losses from limited
 partnerships (Note 2)               (388,158)        (420,868)        (476,567)
                                -------------    -------------    -------------

Net loss                       $     (532,879)  $     (558,236)  $     (611,734)
                                =============    =============    =============
Net loss allocated to:
   General partners            $       (5,329)  $       (5,582)  $       (6,117)
                                =============    =============    =============

   Limited partners            $     (527,550)  $     (552,654)  $     (605,617)
                                =============    =============    =============
Net loss per limited
 partnership unit              $       (70.81)  $       (74.18)  $       (81.29)
                                =============     ============    =============

Outstanding weighted
 limited partner units                  7,450            7,450            7,450
                                =============    =============    =============



                 See accompanying notes to financial statements
                                       15
<PAGE>


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

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

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



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

Partners' equity (deficit)
 at January 1, 1996          $   (39,401)     $    2,583,377     $    2,543,976

Net loss                          (6,117)           (605,617)          (611,734)
                              ----------          ----------         ----------

Partners' equity (deficit)
 at December 31, 1996            (45,518)          1,977,760          1,932,242

Net loss                          (5,582)           (552,654)          (558,236)
                              ----------          ----------         ----------

Partners' equity (deficit)
 at December 31, 1997            (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
                              ==========          ==========         ==========








                 See accompanying notes to financial statements
                                       16


<PAGE>


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

                            STATEMENTS OF CASH FLOWS

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



                                       1998             1997           1996
                                       ----             ----           ----
Cash flows from operating
 activities:
  Net loss                     $    (532,879)   $    (558,236)  $    (611,734)
  Adjustments to reconcile
   net loss to net cash used
   in operating activities:
    Amortization                      14,904           14,904          14,904
    Equity in losses of
     limited partnerships            388,158          420,868         476,567
    Change in other assets                 -                -             358
    Change in accrued fees
     and expenses due to
     General Partner and
     affiliates                      114,440          111,677         110,310
                                  ----------       ----------      ----------

   Net cash used in operating
    activities                       (15,377)         (10,787)         (9,595)
                                  ----------       ----------      ----------

Cash flows provided by
 investing activities:
   Distributions from
    limited partnerships               3,296            4,953           9,034
                                  ----------       ----------      ----------

Net decrease in cash
 and cash equivalents                (12,081)          (5,834)           (561)

Cash and cash equivalents,
 beginning of year                    78,109           83,943          84,504
                                  ----------       ----------      ----------

Cash and cash equivalents,
 end of year                  $       66,028   $       78,109  $       83,943
                                  ==========      ===========      ==========


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



                 See accompanying notes to financial statements
                                       17

<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

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




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.

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 of Limited
Partnership  Interests  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 of the  Partnership.  The  limited
partners  will be allocated  the  remaining  99% interest in proportion to their
respective investments.

After the limited  partners  have received  proceeds from a sale or  refinancing
equal to their capital  contributions and their return on investment (as defined
in the Partnership  Agreement) 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.

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

                                       18
<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

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


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



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 makes its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex  and low  income  housing  credits.  As a limited  partner  of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local  Limited  Partnerships,  and will rely totally on the
Local General  Partners of the Local Limited  Partnerships for management of the
Local Limited Partnerships.  The value of the Partnership's  investments will be
subject  to  changes  in  national  and  local  economic  conditions,  including
unemployment  conditions,  which could adversely  impact vacancy levels,  rental
payment  defaults and operating  expenses.  This, in turn,  could  substantially
increase  the  risk of  operating  losses  for  the  Housing  Complexes  and the
Partnership.  In addition,  each Local Limited  Partnership  is subject to risks
relating  to  environmental   hazards  and  natural  disasters  which  might  be
uninsurable. Because the Partnership's operations will depend on these and other
factors  beyond  the  control  of the  General  Partner  and the  Local  General
Partners,  there can be no assurance  that the  anticipated  low income  housing
credits will be available to Limited Partners.

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

Method of Accounting For Investments in Limited Partnerships

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

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

                                       19

<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

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


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 December  31, 1998 and
1997.

Use of Estimates

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

Cash and Cash Equivalents

The  Partnership   considers  all  highly  liquid   investments  with  remaining
maturities of three months or less when purchased to be 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  income  (loss)  available  to
limited partners by the weighted average number of units outstanding  during the
period. Calculation of diluted net income per unit is not required.

Reporting Comprehensive Income

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

Reclassifications

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

                                       20
<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS

As of  December  31,  1998  and  1997,  the  Partnership  has  acquired  limited
partnership  interests  in eleven  Local  Limited  Partnerships  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 of the Local Limited
Partnerships.

The  Partnership's  investments  in Local Limited  Partnerships  as shown in the
balance  sheets at December 31, 1998 and 1997,  are  approximately  $205,000 and
$208,000,  respectively,  greater than the Partnership's  equity as shown in the
Local Limited Partnerships'  financial statements.  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,   and  to  capital
contributions  payable to the limited  partnerships  which were  netted  against
partner capital in the limited partnerships' financial statements (see Note 3).

Equity  in  losses  of  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  December  31,  1998,  the  investment  accounts  in  certain  Local  Limited
Partnerships have reached a zero balance.  Consequently, the Partnership's share
of losses  during the year ended  December 31, 1998  amounting to  approximately
$32,000 have not been recognized.

Following is a summary of the equity method activity of the investments in Local
Limited Partnerships for the years ended December 31:

                                              1998                     1997
                                              ----                     ----

Investments per balance sheet,
 beginning of year                $      2,001,822        $       2,442,547

Equity in losses of limited
 partnerships                             (388,158)                (420,868)

Distributions paid                          (3,296)                  (4,953)

Amortization of acquisition
 fees and costs                            (14,904)                 (14,904)
                                   ---------------         ----------------

Investments per balance sheet,
 end of year                      $      1,595,464        $       2,001,822
                                   ===============         ================


                                       21

<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

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


NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

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

                        COMBINED CONDENSED BALANCE SHEETS

                                        1998                   1997
                                        ----                   ----
ASSETS

Buildings and improvements,
 (net of accumulated
 depreciation for 1998 and
 1997 of $5,420,000 and
 $4,818,000, respectively)     $     16,079,000        $      16,617,000
Land                                  1,484,000                1,484,000
Other assets                          1,465,000                1,387,000
                                ---------------         ----------------

                               $     19,028,000        $      19,488,000
                                ===============         ================

LIABILITIES

Mortgage loans payable         $     16,811,000        $      16,854,000
Other liabilities                       506,000                  483,000
                                ---------------         ----------------
                                     17,317,000               17,337,000
                                ---------------         ----------------

PARTNERS' CAPITAL

WNC California Housing
 Tax Credits, L.P.                    1,390,000                1,794,000
Other partners                          321,000                  357,000
                                ---------------         ----------------
                                      1,711,000                2,151,000
                                ---------------         ----------------

                               $     19,028,000        $      19,488,000
                                ===============         ================

                                       22

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

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

Revenues                 $    1,828,000      $    1,802,000     $    1,771,000
                          -------------       -------------      -------------

Expenses:
  Operating expenses          1,251,000           1,199,000          1,236,000
  Interest expense              400,000             410,000            406,000
  Depreciation and
   amortization                 602,000             618,000            611,000
                          -------------       -------------      -------------

     Total expenses           2,253,000           2,227,000          2,253,000
                          -------------       -------------      -------------

Net loss                 $     (425,000)     $     (425,000)    $     (482,000)
                          =============       =============      =============

Net loss allocable
 to the Partnership      $     (420,000)     $     (421,000)    $     (477,000)
                          =============       =============      =============

Net loss recorded
 by the Partnership      $     (388,000)     $     (421,000)    $     (477,000)
                          =============       =============      =============

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.

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 December 31, 1998 and
          1997,  the  Partnership   incurred   acquisition   fees  of  $447,060.
          Accumulated  amortization of these  capitalized costs was $186,957 and
          $172,053 as of December 31, 1998 and 1997, respectively.

          Reimbursement  of costs  incurred by an affiliate of WNC in connection
          with  the  acquisition  of  the  Local  Limited  Partnerships.   These
          reimbursements  have not  exceeded  3% of the  gross  proceeds.  As of
          December 31, 1998 and 1997, 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, 1998 and
          1997.

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

NOTE 3 - RELATED PARTY TRANSACTIONS, continued

          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 $111,691 were incurred for 1998,
          1997 and 1996. No fees were paid during 1998, 1997 or 1996.

The accrued fees and expenses due to the General Partners and affiliates consist
of the following at December 31:

                                          1998                   1997
                                          ----                   ----

Reimbursement for expenses
 paid by an affiliate
 of the General Partner          $          2,748        $               -

Asset management fee payable              817,617                  705,925
                                  ---------------         ----------------

Total                            $        820,365        $         705,925
                                  ===============         ================

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.

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.






                                       24

<PAGE>

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

(a)(1)

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

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

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

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

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

(a)(2)

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

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 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.

                                       25
<PAGE>

Wilfred N. Cooper,  Sr., age 68, is the founder,  Chief Executive  Officer and a
Director of WNC & Associates, Inc., a Director of WNC Capital Corporation, and a
general partner in some of the programs previously sponsored by the Sponsor. Mr.
Cooper has been involved in real estate  investment and  acquisition  activities
since 1968.  Previously,  during 1970 and 1971,  he was founder and principal of
Creative  Equity  Development  Corporation,  a predecessor  of WNC & Associates,
Inc., and of Creative Equity Corporation,  a real estate investment firm. For 12
years  prior  to  that,  Mr.  Cooper  was  employed  by  Rockwell  International
Corporation, last serving as its manager of housing and urban developments where
he  had  responsibility   for  factory-built   housing  evaluation  and  project
management in urban  planning and  development.  Mr. Cooper is a Director of the
National  Association of Home Builders (NAHB) and a National  Trustee for NAHB's
Political Action Committee,  a Director of the National Housing Conference (NHC)
and a  member  of NHC's  Executive  Committee  and a  Director  of the  National
Multi-Housing  Council (NMHC).  Mr. Cooper graduated from Pomona College in 1956
with a Bachelor of Arts degree.

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

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

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

Michael L. Dickenson, age 42, is Vice President and Chief Financial Officer, and
a member of the  Acquisition  Committee  of WNC &  Associates,  Inc.,  and Chief
Financial Officer of WNC Management,  Inc. He has been involved with acquisition
and  investment  activities  with  respect to real estate  since 1985.  Prior to
joining the Sponsor in March 1999, he was the Director of Financial  Services at
TrizecHahn  Centers Inc., a developer  and operator of  commercial  real estate,
from 1995 to 1999,  a Senior  Manager  with E&Y  Kenneth  Leventhal  Real Estate

                                       26
<PAGE>

Group, Ernst & Young, LLP, from 1988 to 1995, and Vice President of Finance with
Great Southwest  Companies,  a commercial and residential real estate developer,
from  1985 to 1988.  Mr.  Dickenson  is a  member  of the  Financial  Accounting
Standards  Committee for the National  Association of Real Estate  Companies and
the  American  Institute  of  Certified  Public  Accountants,  and a Director of
HomeAid  Southern  California,  a charitable  organization  affiliated  with the
building  industry.  He  graduated  from  Texas Tech  University  in 1978 with a
Bachelor of Business  Administration  -  Accounting  degree,  and is a Certified
Public Accountant in California and Texas.

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

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

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

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

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

Item 11.  Executive Compensation

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


                                       27

<PAGE>

(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 indebtedness  related to the Housing  Complexes.  Fees of $112,000 were
     incurred  during  the  year  ended  December  31,  1998.  No  annual  asset
     management fees have been paid during the same period.

(b)  Operating  Expense.  The Partnership  reimbursed the General Partner or its
     affiliates for operating  expenses of approximately  $3,000 during the year
     ended December 31, 1998.

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

Item 12.  Security Ownership of Certain Beneficial Owners and Management

(a)      Security Ownership of Certain Beneficial Owners

         No person  is known to  the  General  Partner  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.

                                       28

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

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

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

(b)    Reports on Form 8-K.

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

(c)    Exhibits.

3.1    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.

                                       29
<PAGE>

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.

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.

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


                                       30

<PAGE>



               Report of Independent Certified Public Accountants
                        on Financial Statement Schedule






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


The audit  referred to in our report dated March 31, 1999,  relating to the 1998
financial   statements  of  WNC  California  Housing  Tax  Credits,   L.P.  (the
"Partnership"),  which is  contained  in Item 8 of this Form 10-K,  included the
audit of the accompanying  financial statement schedule. The financial statement
schedule  is  the   responsibility   of  the   Partnership's   management.   Our
responsibility  is to express an opinion on this  financial  statement  schedule
based upon our audit.

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



                                                          BDO SEIDMAN, LLP


Orange County, California
March 31, 1999





















                                       31

<PAGE>


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


                      --------------------------------------------------------------------------------------------------------------
                                                                 As of December 31, 1998
                      --------------------------------------------------------------------------------------------------------------

                                     Total Investment     Amount of        Encumbrances of
                                     in Local Limited     Investment       Local Limited   Property and    Accumulated     Net Book
Partnership Name    Location         Partnerships         Paid  to Date    Partnerships    Equipment       Depreciation    Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>            <C>               <C>               <C>              <C>             <C>             <C>

Alta Vista          Orosi,
 Investors          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          Mendota,
 Associates         California         571,000            571,000           1,481,000       2,085,000        668,000       1,417,000

East Garden         Jamestown,
 Apartments         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     Knights
 Harbor             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         San Jacinto,
 Associates         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    Yreka,
 Group              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>




                                       32

<PAGE>


<TABLE>
<CAPTION>

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

                               ----------------------------------------------------------------------------------------------------
                                                            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>





                                       33



<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/ John B. Lester, Jr.
John B. Lester, Jr.,
President of WNC & Associates, Inc.

Date: August 23, 1999


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

Date: August 23, 1999


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

Date: August 23, 1999

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


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

Date: August 23, 1999



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

Date: August 23, 1999


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


Date: August 23, 1999







                                       34