UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 
 Washington,
D.C. 20549
 
 FORM
10-K
 
 (Mark
One)
 
 S       ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 ACT OF
1934
 
 For the
fiscal year ended March 31, 2010
 
 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.
 (Exact
name of registrant as specified in its charter)
 
 California
              33-0316953(State
      or other jurisdiction of
              (I.R.S.
      Employerincorporation
      or organization)
              Identification
      No.)17782
      Sky Park Circle 92614-6404
              92614-6404Irvine,
      CA
              (Zip
      Code)(Address
      of principal executive offices
 
 (714)
662-5565
 (Telephone
number)
 
 
 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
 (Title of
Class)
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act
 Yes_____
No___X__
 
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
 Yes_____
No___X__
  
  
 
 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 whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
 Yes    No
X
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (229.405 of this chapter) 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
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
 Large
accelerated filer___ Accelerated filer___ Non-accelerated filer___X__Smaller
reporting company_____
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
 Yes____
No__X__
 
 
 State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter.
 
 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
  PART
I.
 
 Item
1.  Business
 
 Organization
 
 WNC
California Housing Tax Credits, L.P. (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 ("Local Limited Partnerships") which own
multi-family or senior housing complexes (“Housing Complexes”) that are eligible
for Federal low income housing tax credits (“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. Each Local Limited Partnership is
governed by its agreement of limited partnership or operating agreement (the
“Local Limited Partnership Agreement”).
 
 The
general partners of the Partnership are WNC & Associates, Inc.
("Associates") and Wilfred N. Cooper, Sr. (collectively, the "General Partner"
or “General Partners”).  The chairman and president of Associates own
substantially all 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 ("Partnership Units") at a price of $1,000 per
Partnership Unit.  As of the close of the public offering on October
31, 1990, a total of 7,450 Partnership Units representing $7,450,000 had been
sold.  Holders of Partnership Units are referred to herein as “Limited
Partners.”
 
 The
Partnership shall continue in full force and effect until December 31, 2037
unless terminated prior to that date pursuant to the Partnership Agreement (as
defined below) or law.
 
 Description
of Business
 
 The
Partnership's principal business objective was to provide its Limited Partners
with Low Income Housing Tax Credits.  The Partnership's principal
business therefore consisted of investing as a limited partner or non-managing
member in Local Limited Partnerships each of which owned and operated a Housing
Complex which qualified for the Low Income Housing Tax Credits.  In
general, under Section 42 of the Internal Revenue Code, an owner of low income
housing can receive the Low Income Housing Tax Credits to be used to reduce
Federal taxes otherwise due in each year of a ten-year credit period. Each
Housing Complex is subject to a 15-year compliance period (the “Compliance
Period”), and under state law may have to be maintained as low income housing
for 30 or more years.
 
 As a
consequence of the provisions of tax law in effect for dispositions of buildings
prior to August 2008, in order to avoid recapture of Low Income Housing Credits,
the Partnership expected that it would not 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. That provision of law was amended in 2008
(i) to provide that there would be no recapture on sale of a Low Income
Housing Tax Credit building during the Compliance Period if it were reasonable
to expect at the time of sale that the building would continue to be operated as
qualified low income housing (see “Exit Strategy” below) and (ii) to
eliminate the possibility of posting a bond against potential
recapture.  The Partnership is seeking to sell its Local Limited
Partnership Interests.  Nonetheless, because of (i) the nature of the
Housing Complexes and the Local Limited Partnership Interests, (ii) the
difficulty of predicting the resale market for low-income housing, (iii) the
current economy, and (iv) the ability of 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 dated September 15, 1988
(the "Partnership Agreement"), will be accomplished in the near term.
Furthermore, the recent codification of the economic substance doctrine as part
of 2010 legislation
  3
  has
created some uncertainty about the deductibility of losses from low income
housing that is not generating Low Income Housing Tax Credits, and this could
have an adverse effect on the resale market for Housing Complexes and Local
Limited Partnership Interests.  If a Local Limited Partnership
Interest or the related Housing Complex is not sold, it is anticipated that the
Local General Partner would continue to operate such Housing
Complexes.
 
 The
Partnership originally invested in eleven Local Limited Partnerships Interests,
seven of which have been sold or otherwise disposed of as of March 31,
2010.  Each of these Local Limited Partnerships owns or did own a
Housing Complex that was eligible for the Low Income Housing Tax Credit, and
eight of them were eligible for the California Low Income Housing Tax
Credit.  Certain Local Limited Partnerships may also benefit or have
benefited from additional government programs promoting low-income
housing.
 
 Exit
Strategy
 
 The
Compliance Period for a Housing Complex is generally 15 years following
construction or rehabilitation completion. Associates was one of the first in
the industry to offer syndicated investments in Low Income Housing Tax
Credits.  The initial programs have completed their Compliance
Periods.
 
 Upon the
sale of a Local Limited Partnership Interest or Housing Complex after the end of
the Compliance Period, there would be no recapture of Low Income Housing Tax
Credits.  All Local Limited Partnerships have completed their 15-year
Compliance Period.
 
 With that
in mind, the General Partner is continuing its review of the Housing
Complexes.  The review considers many factors, including extended use
requirements (such as those due to mortgage restrictions or state compliance
agreements), the condition of the Housing Complexes, and the tax consequences to
the Limited Partners from the sale of the Housing Complexes.
 
 Upon
identifying those Housing Complexes with the highest potential for a successful
sale, refinancing or re-syndication, the Partnership expects to proceed with
efforts to liquidate them. The objective is to wind down the Partnership as Low
Income Housing Tax Credits are no longer available.  Local Limited
Partnership Interests may be disposed of any time by the General Partner in its
discretion. While liquidation of the Housing Complexes continues to be
evaluated, the dissolution of the Partnership was not imminent as of March 31,
2010.
 
 As of
March 31, 2009 the Partnership had sold the Housing Complexes of BCA Associates
and Woodlake Manor.  Further, the Partnership had also sold its Local
Limited Partnership Interests in Yreka Investment Group and Countryway
Associates.  Each of the Local Limited Partnerships had completed its
Compliance Period.
 
 During
the year ended March 31, 2010, the Partnership sold its Limited Partnership
Interest in San Jacinto Associates (“San
Jacinto”), Cloverdale Garden Apartments, LP (“Cloverdale”) and East Garden
Apartments (“East Garden”).  San Jacinto was appraised with a value of
$1,360,000 and as of December 31, 2008 the outstanding mortgage debt was
$1,723,404.  The Limited Partnership Interest was sold on August 17,
2009 to the Local General Partner.  The 15-year compliance period
expired in 2004, therefore there will be no recapture of Low Income Housing Tax
Credits.  Although the appraised value was less than the outstanding
mortgage the Partnership received $40,000 for its Limited Partnership Interest
in this Local Limited Partnership. The $40,000 was kept in the Partnership’s
reserves and was used to pay the costs incurred related to the disposition and
other operating expenses of the Partnership.  As the investment
balance was zero, the Partnership recorded a gain on the sale of the Local
Limited Partnership interest for the year ended March 31,
2010.  Cloverdale and East Garden were appraised with values of
$1,530,000 and $1,710,000, respectively, as of December 31,
2009.   The outstanding debt for Cloverdale and East Garden was
$1,575,425 and $2,073,079, respectively as of December 31,
2009.  Although, both appraised amounts were less than the debt
outstanding, the Partnership received $49,445 and $49,444, respectively for each
of the Limited Partnership Interests in these two Local Limited
Partnerships.  $94,760 of the proceeds was used to reimburse the
General Partner or an affiliate for operating expenses that were paid on the
Partnerships behalf.  The remaining $4,129 remains in the reserves for
future Partnership expenses.  Each of these Local Limited Partnerships
had completed the Compliance Period therefore, there is no risk of
recapture.
  4
  During
the year ended March 31. 2010, the Partnership identified one Local Limited
Partnership, HPA Investors, (“HPA”) for disposition.  HPA owns the
Hudson Park Apartments, II, located in Shafter, California (the
“Property”).  Consistent with the investment objectives of the
Partnership, the Property qualified for Federal Low Income Housing Tax Credits
under the Internal Revenue Code for a 10-year period.  The credit
period has expired, and no further credits are being generated by the
Property.  The 15-year Federal Compliance Period has also expired, so
there will be no credit recapture upon the transfer of the
Property.  On October 5, 2009, the Partnership filed a proxy with the
Securities and Exchange Commission (“SEC”) for the written consent of the
Limited Partners for the commencement of disposition.  Definitive
materials were filed on November 10, 2009 which extended the deadline for
submitting ballots.  As of November 16, 2009 the Partnership achieved
the 51% approval necessary for the disposition.
 
 On May
20, 2010, the sale of HPA Investors closed. The total sales price including
replacement reserves was  $1,707,000 which was disbursed as
follows:  the General Partner of HPA was paid approximately $104,000
in sales preparation and refinancing fees and repayment of loans previously
made, $1,452,000 paid down the outstanding mortgages and approximately $8,000 in
selling costs were paid.  The remaining $143,000 was distributed to
the Partnership.  The Partnership’s investment balance is zero at
March 31, 2010. Accordingly, a gain of $143,000 will be recorded in the quarter
ended June 30, 2010. The $143,000 in cash proceeds was used to fund the
Partnership’s reserves.  $71,000 of the cash received paid accrued
asset management fees, $2,000 paid the General Partner of the Partnership for
operating expenses paid on its behalf and the remaining $70,000 will remain the
Partnership reserves to fund future asset management fees and reimbursements to
the General Partner or an affiliate. No funds will be distributed to the Limited
Partners.
 
 Item
1A.  Risk Factors
 
 Set forth
below are the risks the Partnership believes are the most significant to the
Limited Partners.  The Partnership and the Local Limited Partnerships
operate in a continually changing business environment and, therefore, new risks
emerge from time to time.  This section contains some forward-looking
statements.  For an explanation of the qualifications and limitations
on forward-looking statements, see Item 7.
  a.
              Risks
      arising from the Internal Revenue Code rules governing Low Income Housing
      Tax Credits
 
 Sales of Housing Complexes are
subject to limitations which may impact a Local Limited Partnership’s ability to
sell its Housing Complex.  Each Local Limited Partnership
executes an extended low income housing commitment with the state in which the
Housing Complex is located.  The extended low income housing
commitment states the number of years that the Local Limited Partnership and any
subsequent owners must rent the Housing Complex as low income
housing.  Under Federal law, the commitment must be for at least 30
years.  The commitment, actually agreed to, may be significantly
longer than 30 years.  In prioritizing applicants for Low Income
Housing Tax Credits, most states give additional points for commitment periods
in excess of 30 years.  On any sale of the Housing Complex during the
commitment period, the purchaser would have to agree to continue to rent the
Housing Complex as low income housing for the duration of the commitment
period.  This requirement reduces the potential market, and possibly
the sales price, for the Housing Complexes.  The sale of a Housing
Complex may be subject to other restrictions.  For example, Federal
lenders or subsidizers may have the right to approve or disapprove a purchase of
a Housing Complex.  Accordingly, there can be no assurance that a
Local Limited Partnership will be able to sell its Housing
Complex.  Even if it does so, there can be no assurance that any
amount of cash will be distributed to the Limited Partners.  The
Partnership would first use sale proceeds to pay obligations of the
Partnership.  As a result, a material portion of the Low Income
Housing Tax Credits may represent a return of the money originally invested in
the Partnership.
 
 As part
of the recently enacted health care legislation, Congress has codified the
economic substance doctrine. Because of its recent enactment, the full reach of
this provision is unclear.  Inasmuch as Housing Complexes might offer
no benefit to a purchaser other than tax benefits, it is possible that the
economic substance doctrine could be interpreted to limit the deduction of tax
losses from Housing Complexes, which would be expected to have a significant
adverse effect on the sales value of the Housing Complexes and the Local Limited
Partnership Interests.
  5
  
 b.
              Risks
      related to investment in Local Limited Partnerships and Housing
      Complexes
 
 Because the Partnership has few
investments, each investment will have a great impact on the Partnership’s
results of operations.  Any single Housing Complex experiencing
poor operating performance, or impairment of value will have a significant
impact upon the Partnership as a whole.
 
 The failure to pay mortgage debt
could result in a forced sale of a Housing Complex. Each Local Limited
Partnership leverages the Partnership’s investment therein by incurring mortgage
debt.  A Local Limited Partnership’s revenues could be less than its
debt payments and taxes and other operating costs.  If so, the Local
Limited Partnership would have to use working capital reserves, seek additional
funds, or suffer a forced sale of its Housing Complex, which could include a
foreclosure.  The same results could occur if government subsidies
ceased.  Foreclosure would result in a loss of the Partnership’s
capital invested in the Housing Complex.  If the Housing Complex is
highly-leveraged, a relatively slight decrease in the rental revenues could
adversely affect the Local Limited Partnership’s ability to pay its debt service
requirements. Mortgage debt may be repayable in a self-amortizing series of
equal installments or with a large balloon final payment.  Balloon
payments maturing prior to the end of the anticipated holding period for the
Housing Complex create the risk of a forced sale if the debt cannot be
refinanced. There can be no assurance that additional funds will be available to
any Local Limited Partnership if needed on acceptable terms or at
all.
 
 The Partnership does not control the
Local Limited Partnerships and must rely on the Local General Partners.
The Local General Partners will make all management decisions for the Local
Limited Partnerships and the Housing Complexes.  The Partnership has
very limited rights with respect to management of the Local Limited
Partnerships. The Partnership will not be able to exercise any control with
respect to Local Limited Partnership business decisions and operations.
Consequently, the success of the Partnership will depend on the abilities of the
Local General Partners.
 
 Housing Complexes subsidized by
other government programs are subject to additional rules which may make it
difficult to operate and sell Housing Complexes.  Some or all
of the Housing Complexes receive or may receive government financing or
operating subsidies in addition to Low Income Housing Tax
Credits.  The following are risks associated with some such subsidy
programs:
 
 ·
              Obtaining
      tenants for the Housing Complexes.  Government regulations limit
      the types of people who can rent subsidized housing. These regulations may
      make it more difficult to rent the residential units in the Housing
      Complexes.
 ·
              Obtaining
      rent increases.  In many cases rents can only be increased with
      the prior approval of the subsidizing
agency.
 ·
              Limitations
      on cash distributions.  The amount of cash that may be
      distributed to owners of subsidized Housing Complexes is less than the
      amount that could be earned by the owners of non-subsidized Housing
      Complexes.
 ·
              Limitations
      on sale or refinancing of the Housing Complexes.  A Local
      Limited Partnership may be unable to sell its Housing Complex or to
      refinance its mortgage loan without the prior approval of the lender. The
      lender may withhold such approval in the discretion of the lender.
      Approval may be subject to conditions, including the condition that the
      purchaser continues to operate the property as affordable housing for
      terms which could be as long as 30 years or more. In addition, any
      prepayment of a mortgage may result in the assessment of a prepayment
      penalty.
 ·
              Limitations
      on transfers of interests in Local Limited Partnerships.  The
      Partnership may be unable to sell its interest in a Local Limited
      Partnership without the prior approval of the lender.  The
      lender may withhold such approval in the discretion of the
      lender.  Approval may be subject to
  conditions.
 ·
              Limitations
      on removal and admission of Local General Partners.  The
      Partnership may be unable to remove a Local General Partner from a Local
      Limited Partnership except for cause, such as the violation of the rules
      of the lender or state allocating authority.  Regulations may
      prohibit the removal of a Local General Partner or permit removal only
      with the prior approval of the lender.  Regulations may also
      require
  6
  ·
              approval
      of the admission of a successor Local General Partner even upon the death
      or other disability of a Local General
Partner.
 ·
              Limitations
      on subsidy payments. Subsidy payments may be fixed in amount and subject
      to annual legislative appropriations. The rental revenues of a Housing
      Complex, when combined with the maximum committed subsidy, may be
      insufficient to meet obligations. Congress or the state legislature, as
      the case may be, may fail to appropriate or increase the necessary
      subsidy.  In those events, the mortgage lender could foreclose
      on the Housing Complex unless a workout arrangement could be
      negotiated.
 ·
              Possible
      changes in applicable regulations.  Legislation may be enacted
      which adversely revises provisions of outstanding mortgage
      loans.  Such legislation has been enacted in the
      past.
 ·
              Limited
      Partners may not receive distributions if Housing Complexes are
      sold.  There is no assurance that Limited Partners will receive
      any cash distributions from the sale or refinancing of a Housing
      Complex.  The price at which a Housing Complex is sold may not
      be high enough to pay the mortgage and other expenses at the Local Limited
      Partnership and Partnership levels which must be paid at such
      time.  If that happens, a Limited Partner’s return would be
      derived only from the Low Income Housing Tax Credits and tax
      losses.
 
 Uninsured casualties could result in
losses and recapture. There are casualties which are either uninsurable
or not economically insurable.  These include earthquakes, floods,
wars and losses relating to hazardous materials or environmental
matters.  If a Housing Complex experienced an uninsured casualty, the
Partnership could lose both its invested capital and anticipated profits in such
property.  Even if the casualty were an insured loss, the Local
Limited Partnership might be unable to rebuild the destroyed
property.  A portion of prior tax credits could be recaptured and
future tax credits could be lost if the Housing Complex were not restored within
a reasonable period of time.  And liability judgments against the
Local Limited Partnership could exceed available insurance proceeds or otherwise
materially and adversely affect the Local Limited Partnership. The cost of
liability and casualty insurance has increased in recent
years.  Casualty insurance has become more difficult to obtain and may
require large deductible amounts.
 
 Housing Complexes without financing
or operating subsidies may be unable to pay operating expenses. If a
Local Limited Partnership were unable to pay operating expenses, one result
could be a forced sale of its Housing Complex.  In this regard, some
of the Local Limited Partnerships may own Housing Complexes which have no
subsidies other than Low Income Housing Tax Credits.  Those Housing
Complexes do not have the benefit of below-market-interest-rate financing or
operating subsidies which often are important to the feasibility of low income
housing.  Those Housing Complexes rely solely on rents to pay
expenses. However, in order for any Housing Complex to be eligible for Low
Income Housing Tax Credits, it must restrict the rent which may be charged to
tenants.  Over time, the expenses of a Housing Complex will
increase.  If a Local Limited Partnership cannot increase its rents,
it may be unable to pay increased operating expenses.
 
 The Partnership’s investment
protection policies will be worthless if the net worth of the Local General
Partners is not sufficient to satisfy their obligations.  There
is a risk that the Local General Partners will be unable to perform their
financial obligations to the Partnership.  The General Partner has not
established a minimum net worth requirement for the Local General
Partners.  Rather, each Local General Partner demonstrates a net worth
which the General Partner believes is appropriate under the circumstances. The
assets of the Local General Partners are likely to consist primarily of real
estate holdings and similar assets. The fair market value of these types of
assets is difficult to estimate. These types of assets cannot be readily
liquidated to satisfy the financial guarantees and commitments which the Local
General Partners make to the Partnership.  Moreover, other creditors
may have claims on these assets. No escrow accounts or other security
arrangements will be established to ensure performance of a Local General
Partner’s obligations. The cost to enforce a Local General Partner’s obligations
may be high. If a Local General Partner does not satisfy its obligations the
Partnership may have no remedy, or the remedy may be limited to removing the
Local General Partner as general partner of the Local Limited
Partnership.
 
 Fluctuating economic conditions can
reduce the value of real estate.  The Partnership’s principal
business objective is providing its Limited Partners with low income housing tax
credits, not the generation of gains from the appreciation of real estate held
by the Local Limited Partnerships.    In its financial
statements, the Partnership has carried its investments in Local Limited
Partnerships at values reflecting the sum of the total amount of
the
  7
  remaining future low income housing tax
credits estimated to be allocated to the Partnership and the estimated residual
value to the Partnership of its interests in the Local Limited
Partnerships.  As of the beginning of the first year covered by this
report, the Partnership had reduced the carrying amount to $0 with respect to
all of its investments.
 
 Any
investment in real estate is subject to risks from fluctuating economic
conditions. These conditions can adversely affect the ability to realize a
profit or even to recover invested capital. Among these conditions
are:
 
 ·
              the
      general and local job market,
 ·
              the
      availability and cost of mortgage
financing,
 ·
              monetary
      inflation,
 ·
              tax,
      environmental, land use and zoning
policies,
 ·
              the
      supply of and demand for similar
properties,
 ·
              neighborhood
      conditions,
 ·
              the
      availability and cost of utilities and
water.
 
 c.
              Tax
      risks other than those relating to tax
credits
 
 In
addition to the risks pertaining specifically to Low Income Housing Tax Credits,
there are other Federal income tax risks.  Additional Federal income
tax risks associated with the ownership of Partnership Units and the operations
of the Partnership and the Local Limited Partnerships include, but are not
limited to, the following:
 
 No opinion of counsel as to certain
matters.  No legal opinion is obtained regarding
matters:
 
 ·
              the
      determination of which depends on future factual
      circumstances,
 ·
              which
      are peculiar to individual Limited Partners,
or
 ·
              which
      are not customarily the subject of an
opinion.
 
 The more
significant of these matters include:
 
 ·
              allocating
      purchase price among components of a property, particularly as between
      buildings and fixtures, the cost of which is depreciable, and the
      underlying land, the cost of which is not
  depreciable,
 ·
              characterizing
      expenses and payments made to or by the Partnership or a Local Limited
      Partnership,
 ·
              identifying
      the portion of the costs of any Housing Complex which qualify for historic
      and other tax credits, and
 ·
              applying
      to any specific Limited Partner the limitation on the use of tax credits
      and tax losses.  Limited Partners must determine for themselves
      the extent to which they can use tax credits and tax
    losses.
 
 There can
be no assurance, therefore, that the IRS will not challenge some of the tax
positions adopted by the Partnership.  The courts could sustain an IRS
challenge.  An IRS challenge, if successful, could have a detrimental
effect on the Partnership’s ability to realize its investment
objectives.
 
 Passive activity rules will limit
deduction of the Partnership’s losses and impose tax on interest income.  The Internal Revenue Code imposes limits on the ability of
most investors to claim losses from investments in real estate.  An
individual may claim these so-called passive losses only as an offset to income
from investments in real estate or rental activities.  An individual
may not claim passive losses as an offset against other types of income, such as
salaries, wages, dividends and interest.  These passive activity rules
will restrict the ability of most Limited Partners to use losses from the
Partnership as an offset of non-passive income.
 
 The Partnership may earn interest
income on its reserves and loans.  The passive activity rules
generally will categorize interest as portfolio income, and not passive income.
Passive losses cannot be used as an offset to portfolio
income.  Consequently, a Limited Partner could pay tax liability on
portfolio income from the Partnership.
  8
  
 At risk rules might limit deduction
of the Partnership’s losses.  If a significant portion of the
financing used to purchase Housing Complexes does not consist of qualified
nonrecourse financing, the “at risk” rules will limit a Limited Partner’s
ability to claim Partnership losses to the amount the Limited Partner invests in
the Partnership.  The “at risk” rules of the Internal Revenue Code
generally limit a Limited Partner’s ability to deduct Partnership losses to the
sum of:
 
 ·
              the
      amount of cash the Limited Partner invests in the Partnership,
      and
 ·
              the
      Limited Partner’s share of Partnership qualified nonrecourse
      financing.
 
 Qualified
nonrecourse financing is non-convertible, nonrecourse debt which is borrowed
from a government, or with exceptions, any person actively and regularly engaged
in the business of lending money.
 
 Tax liability on sale of Housing
Complex or Local Limited Partnership Interest may exceed the cash available from
the sale.  When a Local Limited Partnership sells a Housing
Complex it will recognize gain. Such gain is equal to the difference
between:
 
 ·
              the
      sales proceeds plus the amount of indebtedness secured by the Housing
      Complex, and
 ·
              the
      adjusted basis for the Housing Complex. The adjusted basis for a Housing
      Complex is its original cost, plus capital expenditures, minus
      depreciation.
 
 Similarly,
when the Partnership sells an interest in a Local Limited Partnership the
Partnership will recognize gain. Such gain is equal to the difference
between:
 
 ·
              the
      sales proceeds plus the Partnership’s share of the amount of indebtedness
      secured by the Housing Complex, and
 ·
              the
      adjusted basis for the interest.  The adjusted basis for an
      interest in a Local Limited Partnership is the amount paid for the
      interest, plus income allocations and cash distributions, less loss
      allocations.
 
 Accordingly,
gain will be increased by the depreciation deductions taken during the holding
period for the Housing Complex.  In some cases, a Limited Partner
could have a tax liability from a sale greater than the cash distributed to the
Limited Partner from the sale.
 
 IRS could audit the returns of the
Partnership, the Local Limited Partnerships or the Limited Partners. The
IRS can audit the Partnership or a Local Limited Partnership at the entity level
with regard to issues affecting the entity.  The IRS does not have to
audit each Limited Partner in order to challenge a position taken by the
Partnership or a Local Limited Partnership.  Similarly, only one
judicial proceeding can be filed to contest an IRS determination.  A
contest by the Partnership of any IRS determination might result in high legal
fees.
 
 An audit of the Partnership or a
Local Limited Partnership also could result in an audit of a Limited
Partner.  An audit of a Limited Partner’s tax returns could
result in adjustments both to items that are related to the Partnership and to
unrelated items.  The Limited Partner could then be required to file
amended tax returns and pay additional tax plus interest and
penalties.
 
 A successful IRS challenge to tax
allocations of the Partnership or a Local Limited Partnership would reduce the
tax benefits of an investment in the Partnership.Under the
Internal Revenue Code, a partnership’s allocation of income, gains, deductions,
losses and tax credits must have substantial economic
effect.  Substantial economic effect is a highly-technical
concept.  The fundamental principle is two-fold.  If a
partner will benefit economically from an item of partnership income or gain,
that item must be allocated to him so that he bears the correlative tax
burden.  Conversely, if a partner will suffer economically from an
item of partnership deduction or loss, that item must be allocated to him so
that he bears the correlative tax benefit.  If a partnership’s
allocations do not have substantial economic effect, then the partnership’s tax
items are allocated in accordance with each partner’s interest in the
partnership. The IRS might challenge the allocations made by the
Partnership:
  9
  
 ·
              between
      the Limited Partners and the General
Partner,
 ·
              among
      the Limited Partners, or
 ·
              between
      the Partnership and a Local General
Partner.
 
 If any
allocations were successfully challenged, a greater share of the income or gain
or a lesser share of the losses or tax credits might be allocated to the Limited
Partners.  This would increase the tax liability or reduce the tax
benefits to the Limited Partners.
 
 Tax liabilities could arise in later
years of the Partnership.  After a period of years following
commencement of operations by a Local Limited Partnership, the Local Limited
Partnership may generate profits rather than losses.  A Limited
Partner would have tax liability on his share of such profits unless he could
offset the income with:
 
 ·
              unused
      passive losses from the Partnership or other investments,
    or
 ·
              current
      passive losses from other
investments.
 
 In such
circumstances, the Limited Partner would not receive a cash distribution from
the Partnership with which to pay any tax liability.
 
 IRS challenge to tax treatment of
expenditures could reduce losses. The IRS may contend that fees and
payments of the Partnership or a Local Limited Partnership:
 
 ·
              should
      be deductible over a longer period of time or in a later
    year,
 ·
              are
      excessive and may not be capitalized or deducted in
  full,
 ·
              should
      be capitalized and not deducted, or
 ·
              may
      not be included as part of the basis for computing tax
      credits.
 
 Any such
contention by the IRS could adversely impact, among other things:
 
 ·
              the
      eligible basis of a Housing Complex used to compute Low Income Housing Tax
      Credits,
 ·
              the
      adjusted basis of a Housing Complex used to compute
      depreciation,
 ·
              the
      correct deduction of fees,
 ·
              the
      amortization of organization and offering expenses and start-up
      expenditures.
 
 If the
IRS were successful in any such contention, the anticipated Low Income Housing
Tax Credits and losses of the Partnership would be reduced, perhaps
substantially.
 
 Changes in tax law might reduce the
value of Low Income Housing Tax Credits. Although all Low Income Housing
Tax Credits are allocated to a Housing Complex at commencement of the 10-year
credit period, there can be no assurance that future legislation may not
adversely affect an investment in the Partnership. For example, legislation
could reduce or eliminate the value of Low Income Housing Tax
Credits.  In this regard, before 1986, the principal tax benefit of an
investment in low income housing was tax losses.  These tax losses
generally were used to reduce an investor’s income from all sources on a
dollar-for-dollar basis.  Investments in low income housing were made
in reliance on the availability of such tax benefits.  However, tax
legislation enacted in 1986 severely curtailed deduction of such
losses.
 
 New administrative or judicial
interpretations of the law might reduce the value of Low Income Housing Tax
Credits.  Many of the provisions of the Internal Revenue Code
related to low income housing and real estate investments have not been
interpreted by the IRS in regulations, rulings or public announcements, or by
the courts.  In the future, these provisions may be interpreted or
clarified by the IRS or the courts in a manner adverse to the Partnership or the
Local Limited Partnerships.  The IRS constantly reviews the Federal
tax rules, and can revise its interpretations of established
concepts.  Any such revisions could reduce or eliminate tax benefits
associated with an investment in the Partnership.
  10
  
 State income tax laws may adversely
affect the Limited Partners.  A Limited Partner may be required
to file income tax returns and be subject to tax and withholding in each state
or local taxing jurisdiction in which: a Housing Complex is located, the
Partnership or a Local Limited Partnership engages in business activities, or
the Limited Partner is a resident.  Corporate Limited Partners may be
required to pay state franchise taxes.
 
 The tax treatment of particular
items under state or local income tax laws may vary materially from the Federal
income tax treatment of such items.  Nonetheless, many of the
Federal income tax risks associated with an investment in the Partnership may
also apply under state or local income tax law.  The Partnership may
be required to withhold state taxes from distributions or income allocations to
Limited Partners in some instances.
 
 d.
              Risks
      related to the Partnership and the Partnership
  Agreement
 
 The Partnership may be unable to
timely provide financial reports to the Limited Partners which would adversely
affect their ability to monitor Partnership operations.Historically, the
Partnership has been unable to timely file and provide investors with all of its
required periodic reports.  In some instances, the delay has been
substantial. Each
Local General Partner is required to retain independent public accountants and
to report financial information to the Partnership in a timely
manner.  There cannot be any assurance that the Local General Partners
will satisfy these obligations.  If not, the Partnership would be
unable to provide to the Limited Partners in a timely manner its financial
statements and other reports.  That would impact the Limited Partners’
ability to monitor Partnership operations.  The Partnership’s failure
to meet its filing requirements under the Securities Exchange Act of 1934 could
reduce the liquidity for the Partnership Units due to the unavailability of
public information concerning the Partnership.  The failure to file
could also result in sanctions imposed by the SEC.  Any defense
mounted by the Partnership in the face of such sanctions could entail legal and
other fees, which would diminish cash reserves.
 
 Lack of liquidity of
investment.  There is no public market for the purchase and
sale of  Partnership Units, and it is unlikely that one will
develop.  Accordingly, Limited Partners may not be able to sell their
Partnership Units promptly or at a reasonable price.  Partnership
Units should be considered as a long-term investment because the Partnership is
unlikely to sell any Local Limited Partnership Interests for at least 15
years.  Partnership Units cannot be transferred to tax-exempt or
foreign entities, or through a secondary market.  The General Partner
can deny effectiveness of a transfer if necessary to avoid adverse tax
consequences from the transfer.  The General Partner does not
anticipate that any Partnership Units will be redeemed by the
Partnership.
 
 The Limited Partners will not
control the Partnership and must rely totally on the General
Partner.  The General Partner will make all management
decisions for the Partnership.  Management decisions include
exercising powers granted to the Partnership by a Local Limited
Partnership.  Limited Partners have no right or power to take part in
Partnership management.
 
 Individual
Limited Partners will have no recourse if they disagree with actions authorized
by a vote of the majority.  The Partnership Agreement grants to
Limited Partners owning more than 50% of the Partnership Units the right
to:
 
 ·
              remove
      the General Partner and elect a replacement general
    partner,
 ·
              amend
      the Partnership Agreement,
 ·
              terminate
      the Partnership.
 
 Accordingly,
a majority-in-interest of the Limited Partners could cause any such events to
occur, even if Limited Partners owning 49% of the Partnership Units opposed such
action.
 
 Limitations on liability of the
General Partner to the Partnership.  The ability of Limited
Partners to sue the General Partner and it affiliates is subject to
limitations.  The Partnership Agreement limits the liability of the
General Partner and it affiliates to the Limited Partners.  The
General Partner and it affiliates will not be liable to the Limited Partners for
acts and omissions: performed or omitted in good faith, and performed or omitted
in a manner which the General Partner reasonably believed to be within the scope
of its authority and in the best interest of the Limited Partners, provided such
conduct did not constitute negligence or misconduct.
  11
  
 Therefore,
Limited Partners may be less able to sue the General Partner and it affiliates
than would be the case if such provisions were not included in the Partnership
Agreement.
 
 Associates and its affiliates are
serving as the general partners of many other
partnerships.  Depending on their corporate area of
responsibility, the officers of Associates initially devote approximately 5% to
50% of their time to the Partnership.  These individuals spend
significantly less time devoted to the Partnership after the investment of the
Partnership’s capital in Local Limited Partnerships.
 
 The interests of Limited Partners
may conflict with the interests of the General Partner and its
affiliates.  The General Partner and its affiliates are
committed to the management of more than 100 other limited partnerships that
have investments similar to those of the Partnership.  The General
Partner and its affiliates receive substantial compensation from the
Partnership.  The General Partner decides how the Partnership’s
investments in Housing Complexes are managed, and when the investments will be
sold. The General Partner may face a conflict in these circumstances because the
General Partner’s share of fees and cash distributions from the transaction may
be more or less than their expected share of fees if a Housing Complex was not
sold. The result of these conflicts could be that a Series may make investments
which are less desirable, or on terms which are less favorable, to the Series
than might otherwise be the case. The Partnership has not developed any formal
process for resolving conflicts of interest. However, the General Partner is
subject to a fiduciary duty to exercise good faith and integrity in handling the
affairs of the Partnership, and that duty will govern its actions in all such
matters. Furthermore, the manner in which the Partnership can operate and sell
investments is subject to substantial restrictions as outlined in the
Partnership Agreement.
 
 Anticipated
future and existing cash resources of the Partnership are not sufficient to pay
existing liabilities of the Partnership.   However, substantially
all of the existing liabilities of the Partnership are payable to the General
Partner and/or its affiliates.
 
 The
Partnership’s accrued payables consist primarily of the asset management fees
payable to the General Partner.  These accrued payables increased by
approximately $60,000, $7,000 and $94,000 for the years ended March 31, 2010,
2009 and 2008, respectively.  The Partnership’s future contractual
cash obligations consist solely of its obligations to pay future annual asset
management fees.  These will equal approximately $26,000 per year
through the termination of the Partnership, which must occur no later than
December 31, 2037.  Though the amounts payable to the General Partner
and/or its affiliates are contractually  currently
payable,  the Partnership  anticipates that the General
Partner and/or its affiliates will not require the payment of these
contractual  obligations until capital reserves are in excess of the
aggregate of the
existing  contractual  obligations  and
anticipated future foreseeable  obligations of the
Partnership.  The Partnership would be adversely affected should the
General Partner and/or its affiliates demand current payment of the existing
contractual obligations and or suspend services for this or any other
reason.
 
 Associates
agreed to continue providing advances sufficient enough to fund the operations
and working capital requirements of the Partnership through June 30,
2011.
 
 Item
1B.  Unresolved Staff Comments
 
 Not
Applicable
 
 Item
2. Properties
 
 Through
its investments in Local Limited Partnerships, the Partnership holds indirect
ownership interests in the Housing Complexes.  The following table
reflects the status of the six Housing Complexes for which the Partnership had
ownership during the year, as of the dates or for the periods
indicated:
 
  12
  As
      of March 31, 2010
              
              
              As
      of December 31, 2009Local
      Limited
                Partnership
      Name
              Location
              General
      Partner Name
              
              Partnership’s
      Total Investment in Local Limited Partnerships
              
              
              Amount
      of Investment Paid to Date
              
              
              Number
      of Units
              
              
              Estimated
      Aggregate Low Income Housing Tax Credits (2)
              
              
              Mortgage
      Balances of Local Limited PartnershipAlta
      Vista Investors
              Orosi,
      California
              Philip
      R. Hammond, Jr. and Diane M. Hammond
              
              $
              583,000
              
              
              $
              583,000
              
              
              
              42
              
              
              $
              1,274,000
              
              
              $
              1,375,000Cloverdale
      Garden Apartments
              Cloverdale,
      California
              David
      J. Michael, Patrick R. Sabelhaus and Professional Apartment
      Management
              
              
              *
              
              
              
              *
              
              
              
              34
              
              
              
              1,387,000
              
              
              
              1,575,000East
      Garden Apartments
              Jamestown,
      California
              David
      J. Michael and Professional Apartment Management
              
              
              *
              
              
              
              *
              
              
              
              51
              
              
              
              1,772,000
              
              
              
              2,073,000HPA
      Investors (1)
              Shafter,
      California
              Douglas
      W. Young
              
              
              538,000
              
              
              
              538,000
              
              
              
              42
              
              
              
              1,223,000
              
              
              
              1,454,000Knights
      Landing Harbor
              Knights
      Landing, California
              Douglas
      W. Young and Diane L. Young
              
              
              275,000
              
              
              
              275,000
              
              
              
              25
              
              
              
              446,000
              
              
              
              941,000Midland
      Manor Associates
              Mendota,
      California
              Philip
      R. Hammond, Jr. and Diane M. HammondAlta
      Vista Investors
              Orosi,
      California
              Philip
      R. Hammond, Jr. and Diane M. Hammond
              
              
              383,000
              
              
              
              383,000
              
              
              
              40
              
              
              
              668,000
              
              
              
              1,374,000$
              1,779,000
              
              
              $
              1,779,000
              
              
              
              234
              
              
              $
              6,770,000
              
              
              $
              8,792,000
 
 (1)
              The
      Local Limited Partnership was sold subsequent to March 31, 2010. The
      transaction was approved by the Limited Partners and closed on May 20,
      2010.
 
 *      The
Local Limited Partnership Interest was sold subsequent to December 31, 2009 and
prior to March 31, 2010.
 
 Note: San
Jacinto was sold August 17, 2009.
  13
  For
      the Year Ended December 31, 2009Local
      Limited
                Partnership
      Name
              
              Rental
      Income
              
              
              Net
      Income (Loss)
              
              
              Low
      Income Housing Tax Credits Allocated to PartnershipAlta
      Vista Investors
              
              $
              212,000
              
              
              $
              (83,000
              )
              
              
              N/ACloverdale
      Garden Apartments
              
              
              265,000
              
              
              
              (12,000
              )
              
              
              N/AEast
      Garden Apartments
              
              
              320,000
              
              
              
              (63,000
              )
              
              
              N/AHPA
      Investors
              
              
              239,000
              
              
              
              (23,000
              )
              
              
              N/AKnights
      Landing Harbor
              
              
              180,000
              
              
              
              2,000
              
              
              
              N/AMidland
      Manor Associates
              
              
              201,000
              
              
              
              (49,000
              )
              
              
              N/ATotal
              
              $
              1,417,000
              
              
              $
              (228,000
              )
 
 N/A – All
of the Low Income Housing Tax Credits have been allocated to the Partnership and
there are no future Low Income Housing Tax Credits expected to be
received.
 
 (1) The
Local Limited Partnership was sold subsequent to March 31, 2010.  The
transaction was approved by the Limited Partners and was closed on May 20,
2010.
  14
  WNC
      California Housing Tax Credits, L.P.March
      31, 2010Occupancy
      RatesAs
      of December 31,Local
      Limited
                Partnership
      Name
              Location
              General
      Partner Name
              2009
              2008
              2007
              2006
              2005Alta
      Vista Investors
              Orosi,
      California
              Philip
      R. Hammond, Jr. and Diane M. Hammond
              98%
              93%
              93%
              100%
              100%BCA
      Associates
              Anderson,
      California
              Douglas
      W. Young
              N/A
              N/A
              N/A
              100%
              100%Cloverdale
      Garden Apartments
              Cloverdale,
      California
              David
      J. Michael, Patrick R. Sabelhaus and Professional Apartment
      Management
              100%
              100%
              100%
              97%
              100%Countryway
      Associates
              Mendota,
      California
              Philip
      R. Hammond, Jr. and Diane M. Hammond
              N/A
              N/A
              85%
              88%
              66%East
      Garden Apartments
              Jamestown,
      California
              David
      J. Michael and Professional Apartment Management
              100%
              100%
              100%
              98%
              100%HPA
      Investors
              Shafter,
      California
              Douglas
      W. Young
              90%
              81%
              90%
              90%
              95%Knights
      Landing Harbor
              Knights
      Landing, California
              Douglas
      W. Young and Diane L. Young
              100%
              100%
              96%
              100%
              100%Midland
      Manor Associates
              Mendota,
      California
              Philip
      R. Hammond, Jr. and Diane M. Hammond
              80%
              88%
              88%
              88%
              95%San
      Jacinto Associates
              San
      Jacinto, California
              Richard
      Parasol and Richard A. Gullota
              N/A
              95%
              97%
              97%
              95%
  15
  WNC
      California Housing Tax Credits, L.P.March
      31, 2010Occupancy
      RatesAs
      of December 31,Local
      Limited
                Partnership
      Name
              Location
              General
      Partner Name
              2009
              2008
              2007
              2006
              2005Woodlake
      Manor
              Woodlake,
      California
              Thomas
      G. Larson, William H. Larson and Raymond L. Tetzlaff
              N/A
              N/A
              98%
              93%
              93%Yreka
      Investment Group
              Yreka,
      California
              Ronald
      D. Bettencourt
              N/A
              N/A
              97%
              94%
              97%94%
              94%
              94%
              95%
              94%
 
 
 N/A –
Local Limited Partnership was sold prior to the respective year
end.
 
 
  16
  Item
3.  Legal Proceedings
 
 NONE
 
 Item
4.  (Removed and Reserved)
 
 PART
II.
 
 Item
5.  Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
 
 Item
5a.
 
 (a)
              The
      Partnership 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 Partnership
      Units and none exists. Partnership Units can be assigned or otherwise
      transferred only if certain requirements in the Partnership Agreement are
      satisfied.
 
 (b)
              At
      March 31, 2010, there were 655 Limited Partners and 0 assignees of
      Partnership Units who were not admitted as Limited
    Partners.
 
 (c)
              The
      Partnership was not designed to provide operating cash distributions to
      Limited Partners.  It is possible that the Partnership could
      make distributions from sale proceeds, if the Partnership is able to sell
      its Local Limited Partnership Interests or Housing Complexes for more than
      the related closing costs and any then accrued obligations of the
      Partnership.  There can be no assurance in this
      regard.  Any distributions would be made in accordance with the
      terms of the Partnership Agreement.  During the years ended
      March 31, 2010, 2009 and 2008, the Partnership made cash distributions to
      the Limited Partners of $0, $0 and $370,260 which equated to $0, $0 and
      $49.70 per Partnership Unit, respectively.  All such
      distributions were made from sale
proceeds.
 
 (d)
              No
      securities are authorized for issuance by the Partnership under equity
      compensation plans.
 
 (e)
              The
      Partnership does not issue common
stock
 
 (f)
              No
      unregistered securities were sold by the Partnership during the year ended
      March 31, 2010.
 
 Item
5b. Use of Proceeds
 
 NOT
APPLICABLE
 
 Item
5c. Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
 
 NONE
  17
  Item
6.  Selected Financial Data
 
 Selected
balance sheet information for the Partnership is as follows:
 For
      the Years Ended March 31,2010
              
              
              2009
              
              
              2008
              
              
              2007
              
              
              2006ASSETSCash
              
              $
              42,834
              
              
              $
              49,488
              
              
              $
              209,252
              
              
              $
              38,742
              
              
              $
              26,987Investments
      in Local Limited Partnerships, net
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Prepaid
      expenses
              
              
              3,051
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Due
      from the General Partner or an affiliate
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,773
              
              
              
              -Due
      from Local Limited Partnership
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              24,700
              
              
              
              -Total
      Assets
              
              $
              45,885
              
              
              $
              49,488
              
              
              $
              209,252
              
              
              $
              66,215
              
              
              $
              26,987LIABILITIESAccrued
      fees and expenses due to General Partner and affiliates
              
              $
              1,898,495
              
              
              $
              1,895,560
              
              
              $
              1,987,676
              
              
              $
              1,858,649
              
              
              $
              1,709,640Accounts
      payable
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,000
              
              
              
              -Total
      Liabilities
              
              
              1,898,495
              
              
              
              1,895,560
              
              
              
              1,987,676
              
              
              
              1,859,649
              
              
              
              1,709,640PARTNERS'
      DEFICIT
              
              
              (1,852,610
              )
              
              
              (1,846,072
              )
              
              
              (1,778,424
              )
              
              
              (1,793,434
              )
              
              
              (1,682,653
              )Total Liabilities and Partners’ Deficit
              
              $
              45,885
              
              
              $
              49,488
              
              
              $
              209,252
              
              
              $
              66,215
              
              
              $
              26,987
 
 
  18
  Selected
results of operations, cash flows and other information for the Partnership are
as follows:
 
 For
      the Years Ended
                March
      31,2010
              
              
              2009
              
              
              2008
              
              
              2007
              
              
              2006Loss  from
      operations
              
              $
              (143,637
              )
              
              $
              (112,965
              )
              
              $
              (124,134
              )
              
              $
              (138,411
              )
              
              $
              (133,498
              )Gain
      on sale of Local       Limited
      Partnerships
              
              
              137,083
              
              
              
              45,000
              
              
              
              512,673
              
              
              
              302,020
              
              
              
              -Interest
      income
              
              
              16
              
              
              
              317
              
              
              
              100
              
              
              
              157
              
              
              
              114Net
      income (loss)
              
              $
              (6,538
              )
              
              $
              (67,648
              )
              
              $
              388,639
              
              
              $
              163,766
              
              
              $
              (133,384
              )Net
      income (loss) allocated to:General
      Partners
              
              $
              (65
              )
              
              $
              (676
              )
              
              $
              3,886
              
              
              $
              1,638
              
              
              $
              (1,334
              )Limited
      Partners
              
              $
              (6,473
              )
              
              $
              (66,972
              )
              
              $
              384,753
              
              
              $
              162,128
              
              
              $
              (132,050
              )Net
      income (loss) per Partnership Unit
              
              $
              (.87
              )
              
              $
              (8.99
              )
              
              $
              51.64
              
              
              $
              21.76
              
              
              $
              (17.72
              )Outstanding
      weighted Partnership Units
              
              
              7,450
              
              
              
              7,450
              
              
              
              7,450
              
              
              
              7,450
              
              
              
              7,450
 
 
 For
      the Years Ended March 31,2010
              
              
              2009
              
              
              2008
              
              
              2007
              
              
              2006Net
      cash provided by
                (used
      in):Operating
    activities
              
              $
              (143,737
              )
              
              $
              (204,764
              )
              
              $
              31,466
              
              
              $
              8,982
              
              
              $
              7,862Investing
    activities
              
              
              137,083
              
              
              
              45,000
              
              
              
              512,673
              
              
              
              277,320
              
              
              
              -Financing
      activities
              
              
              -
              
              
              
              -
              
              
              
              (373,629
              )
              
              
              (274,547
              )
              
              
              -Net
      change in cash
              
              
              (6,654
              )
              
              
              (159,764
              )
              
              
              170,510
              
              
              
              11,755
              
              
              
              7,862Cash,
      beginning of period
              
              
              49,488
              
              
              
              209,252
              
              
              
              38,742
              
              
              
              26,987
              
              
              
              19,125Cash,
      end of period
              
              $
              42,834
              
              
              $
              49,488
              
              
              $
              209,252
              
              
              $
              38,742
              
              
              $
              26,987
 
 
 Low
Income Housing Tax Credits per Partnership Unit were as follows for the years
ended December 31:
 2009
              
              
              2008
              
              
              2007
              
              
              2006
              
              
              2005Federal
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              
              -State
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Total
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
 
 
 
  19
  Item
7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations
 
 Forward
Looking Statements
 
 With the
exception of the discussion regarding historical information, this “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
other discussions elsewhere in this Form 10-K contain forward looking
statements.  Such statements are based on current expectations subject
to uncertainties and other factors which may involve known and unknown risks
that could cause actual results of operations to differ materially from those
projected or implied.  Further, certain forward-looking statements are
based upon assumptions about future events which may not prove to be
accurate.
 
 Risks and
uncertainties inherent in forward looking statements include, but are not
limited to, the Partnerhip’s future cash flows and ability to obtain sufficient
financing, level of operating expenses, conditions in the Low Income Housing Tax
Credits property market and the economy in general, changes in law rules and
regulations, and legal proceedings.  Historical results are not
necessarily indicative of the operating results for any future
period.
 
 Subsequent
written and oral forward looking statements attributable to the Partnership or
persons acting on its behalf are expressly qualified in their entirety by
cautionary statements in this Form 10-K and in other reports filed with the
Securities and Exchange Commission.  The following discussion should
be read in conjunction with the Financial Statements and the Notes thereto
included elsewhere in this filing.
 
 Critical
Accounting Policies and Certain Risks and Uncertainties
 
 The
Partnership believes that the following discussion addresses the Partnership’s
most significant accounting policies, which are the most critical to aid in
fully understanding and evaluating the Partnership’s reported financial results,
and certain of the Partnership’s risks and uncertainties.
 
 Use
of Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.
 
 Method
of Accounting for Investments in Local Limited Partnerships
 
 The
Partnership accounts for its investments in Local Limited Partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnerships’ results of operations
and for any contributions made and distributions received. The Partnership
reviews the carrying amount of an individual investment in a Local Limited
Partnership for possible impairment whenever events or changes in circumstances
indicate that the carrying amount of such investment may not be
recoverable.  Recoverability of such investment is measured by the
estimated value derived by management, generally consisting of the product of
the remaining future Low Income Housing Tax Credits estimated to be allocable to
the Partnership and the estimated residual value to the
Partnership.  If an investment is considered to be impaired, the
Partnership reduces the carrying value of its investment in any such Local
Limited Partnership. The accounting policies of the Local Limited Partnerships,
generally, are expected to be consistent with those of the Partnership. Costs
incurred by the Partnership in acquiring the investments are capitalized as part
of the investment account and are being amortized over 27.5 years. (See Notes 2
and 3 to the financial statements.)
 
 “Equity
in losses of Local Limited Partnerships” for each year ended March 31 have been
recorded by the Partnership based on the twelve months of reported results
provided by the Local Limited Partnerships for each year ended December 31.
Equity in losses from the Local Limited Partnerships allocated to the
Partnership is not recognized to the extent that the investment balance would be
adjusted below zero.
 
 Distributions
received from the Local Limited Partnerships are accounted for as a reduction of
the investment balance.  Distributions received after the investment
has reached zero are recognized as distribution income.  If the Local
Limited Partnerships report net income in future years, the Partnership will
resume applying the equity
  20
  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.
 
 In
accordance with the accounting guidance for the consolidation of variable
interest entities, the Partnership determines when it should include the assets,
liabilities, and activities of a variable interest entity (VIE) in its financial
statements, and when it should disclose information about its relationship with
a VIE. A VIE is a legal structure used to conduct activities or hold assets,
which must be consolidated by a company if it is the primary beneficiary because
it absorbs the majority of the entity's expected losses, the majority of the
expected returns, or both. Based on this guidance, the Local Limited
Partnerships in which the Partnership invests meet the definition of a
VIE.  However, management does not consolidate the Partnership’s
interests in these VIEs under this guidance, as it is not considered to be the
primary beneficiary.  The Partnership currently records the amount of
its investment in these partnerships as an asset on its balance sheet,
recognizes its share of partnership income or losses in the statements of
operations, and discloses how it accounts for material types of these
investments in its financial statements. The Partnership’s balance in investment
in Local Limited Partnerships, plus the risk of recapture of tax credits
previously recognized on these investments, represents its maximum exposure to
loss.  The Partnership’s exposure to loss on these partnerships is
mitigated by the condition and financial performance of the underlying
properties as well as the strength of the local general partners and their
guarantee against credit recapture.
 
 Income
Taxes
 
 The
Partnership has elected to be treated as a pass-through entity for income tax
purposes and, as such, is not subject to income taxes. Rather, all items of
taxable income, deductions and tax credits are passed through to and are
reported by its owners on their respective income tax returns.  The
Partnership’s federal tax status as a pass-through entity is based on its legal
status as a partnership. Accordingly, the Partnership is not required to take
any tax positions in order to qualify as a pass-through entity. The Partnership
is required to file and does file tax returns with the Internal Revenue Service
and other taxing authorities. Accordingly, these financial statements do not
reflect a provision for income taxes and the Partnership has no other tax
positions which must be considered for disclosure.
 
 Impact
of Recent Accounting Pronouncements
 
 In
September 2006, the Financial Accounting Standards Board (FASB) issued
accounting guidance for Fair Value Measurements, which defines fair value,
establishes a framework for measuring fair value and expands disclosure about
fair value measurements. This guidance is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and shall be applied
prospectively except for very limited transactions.  In February 2008,
the FASB delayed for one year implementation of the guidance as it pertains to
certain non-financial assets and liabilities. The Partnership adopted GAAP for
Fair Value Measurements effective April 1, 2008, except as it applies to those
non-financial assets and liabilities, for which the effective date was April 1,
2009. The Partnership has determined that adoption of this guidance has no
material impact on the Partnership’s financial statements.
 
 In
February 2007, the FASB issued accounting guidance for The Fair Value Option for
Financial Assets and Financial Liabilities. This guidance permits entities to
choose to measure many financial instruments and certain other items at fair
value.  The fair value election is designed to improve financial
reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions. It is effective for
fiscal years beginning after November 15, 2007.  On April 1,
2008, the Partnership adopted GAAP for The Fair Value Option for Financial
Assets and Financial Liabilities and elected not to apply the provisions to its
eligible financial assets and financial liabilities on the date of adoption.
Accordingly, the initial application of the guidance had no effect on the
Partnership.
 
 In
November 2008, the FASB issued accounting guidance on Equity Method Investment
Accounting Considerations that addresses how the initial carrying value of an
equity method investment should be determined, how an impairment assessment of
an underlying indefinite-lived intangible asset of an equity method investment
should be performed, how an equity method investee’s issuance of shares should
be accounted for, and how to account for a change in an investment from the
equity method to the cost method. This guidance is effective in fiscal years
beginning on or after December 15, 2008, and interim periods within
those fiscal years. The Partnership adopted the guidance for the interim
quarterly period beginning April 1, 2009. The impact of adopting it does not
have a material impact on the Partnership’s financial condition or results of
operations.
 
  21
  In April
2009, the FASB issued accounting guidance for Interim Disclosures about Fair
Value of Financial Instruments.  This requires disclosure about the
method and significant assumptions used to establish the fair value of financial
instruments for interim reporting periods as well as annual
statements.  It became effective for as of and for the interim period
ended June 30, 2009 and has no impact on the Partnership’s financial condition
or results of operations.
 
 In May
2009, the FASB issued guidance regarding subsequent events, which was
subsequently updated in February 2010. This guidance established general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. In particular, this guidance sets forth the period after the
balance sheet date during which management of a reporting entity should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements, and the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. This guidance
was effective for financial statements issued for fiscal years and interim
periods ending after June 15, 2009, and was therefore adopted by the
Partnership for the quarter ended June 30, 2009. The adoption did not have a
significant impact on the subsequent events that the Partnership reports, either
through recognition or disclosure, in the financial statements. In February
2010, the FASB amended its guidance on subsequent events to remove the
requirement to disclose the date through which an entity has evaluated
subsequent events, alleviating conflicts with current SEC guidance. This
amendment was effective immediately and therefore the Company did not include
the disclosure in this Form 10-K.
 
 In June
2009, the FASB issued an amendment to the accounting and disclosure requirements
for the consolidation of variable interest entities (VIEs).  The amended
guidance modifies the consolidation model to one based on control and economics,
and replaces the current quantitative primary beneficiary analysis with a
qualitative analysis. The primary beneficiary of a VIE will be the entity that
has (1) the power to direct the activities of the VIE that most
significantly impact the VIE’s economic performance and (2) the obligation
to absorb losses or receive benefits that could potentially be significant to
the VIE.  If multiple unrelated parties share such power, as defined, no
party will be required to consolidate the VIE. Further, the amended guidance
requires continual reconsideration of the primary beneficiary of a VIE and adds
an additional reconsideration event for determination of whether an entity is a
VIE.  Additionally, the amendment requires enhanced and expanded
disclosures around VIEs.  This amendment is effective for fiscal years
beginning after November 15, 2009.  The adoption of this guidance on
April 1, 2010 is not expected to have a material effect on the Partnership’s
financial statements.
 
 In June
2009, the FASB issued the Accounting Standards Codification
(Codification).  Effective July 1, 2009, the Codification is the
single source of authoritative accounting principles recognized by the FASB to
be applied by non-governmental entities in the preparation of financial
statements in conformity with GAAP.  The Codification is intended to
reorganize, rather than change, existing GAAP.  Accordingly, all
references to currently existing GAAP have been removed and have been replaced
with plain English explanations of the Partnership’s accounting
policies.  The adoption of the Codification did not have a material
impact on the Partnership’s financial position or results of
operations.
 
 Certain
Risks and Uncertainties
 
 See Item
1A for a discussion of risks regarding the Partnership.
 
 All of
the Low Income Tax Housing Credits anticipated to be realized from the Local
Limited Partnerships have been realized. The Partnership does not anticipate
being allocated a significant amount of Low Income Housing Tax Credits from the
Local Limited Partnerships in thefuture.  Until
all Local Limited Partnerships have completed theCompliance Period, risks
exist for potential recapture of prior Low Income Housing Tax
Credits.
 
 To date,
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 the operations of such Local Limited
Partnerships.  If additional capital contributions are not made when
they are required, the Partnership’s investment in certain of such Local Limited
Partnerships could be lost, and the loss and recapture of the related Low Income
Housing Tax Credits could occur.
 
 Anticipated
future and existing cash resources of the Partnership are not sufficient to pay
existing liabilities of the Partnership.  However, substantially all
of the existing liabilities of the Partnership are payable to the
General
  22
  Partner
and/or its affiliates.  Though the amounts payable to the General
Partner and/or its affiliates are contractually currently payable, the
Partnership anticipates that the General Partner and/or its affiliates will not
require the payment of these contractual obligations until capital reserves are
in excess of the aggregate of then existing contractual obligations and then
anticipated future foreseeable obligations of the Partnership.  The
Partnership would be adversely affected should the General Partner and/or its
affiliates demand current payment of the existing contractual obligations and or
suspend services for this or any other reason.
 
 Financial
Condition
 
 The
Partnership’s assets at March 31, 2010 consisted of $43,000 in cash and $3,000
in prepaid expenses.  Liabilities at March 31, 2010 consisted of
$1,898,000 of accrued fees and expenses due to  General Partner and
affiliates. (See “Future Contractual Cash Obligations” below).
 
 Results
of Operations
 
 Year Ended March 31, 2010 Compared to
Year Ended March 31, 2009The Partnership’s net loss for the
year ended March 31, 2010 was $(7,000), reflecting a change of $61,000 from the
net loss of $(68,000) experienced for the year ended March 31,
2009.  The change is primarily due to an increase of $92,000 in the
gain on sale of Local Limited Partnerships.   For the year ended
March 31, 2009 there was a $45,000 gain on disposal from the sale of two Housing
Complexes, compared to a $137,000 gain on the sale of three Local Limited
Partnerships for the year ended March 31, 2010.  The gains recorded by
the Partnership can vary depending on the sales prices and values of the Housing
Complexes or Local Limited Partnerships that are being sold.  For the
year ended March 31, 2010 there was a $24,000 decrease in asset management fees
from the year ended March 31, 2009.  This decrease is due to the fact
that the fees are calculated based on the value of the invested assets, which
decreased due to the sale of Limited Partnership interests in three additional
Local Limited Partnerships during the current year. Legal and accounting
expenses increased by $(59,000), due to the timing of the accounting work being
performed and legal fees related to the sold properties.  For the year
ended March 31, 2009 the Partnership incurred $(11,000) in appraisal expenses
compared to none during 2010. These costs were incurred related to the sale of
the two Local Limited Partnerships sold during 2009.  Appraisal costs
related to Limited Partnership interests that were sold during the year ended
March 31, 2010 were netted with the gross proceeds received as a result of the
dispositions. Lastly, the total income decreased by $(4,000). Distribution
income and reporting fees are expected to vary as payments are only made when
the Local Limited Partnerships have available cash flows. Also, as three
additional Local Limited Partnerships were sold during 2010, fewer distributions
and reporting fees were available to be collected.
 
 Year Ended March 31, 2009 Compared to
Year Ended March 31, 2008The Partnership’s net loss for the
year ended March 31, 2009 was $(68,000), reflecting a change of $(457,000) from
the net income of $389,000 experienced for the year ended March 31,
2008.  The change is primarily due to a decrease of $(468,000) in the
gain on sale of Local Limited Partnerships.   For the year ended
March 31, 2008 there was a $513,000 gain on disposal from the sale of one
Housing Complex, compared to a $45,000 gain on the sale of two Local Limited
Partnerships for the year ended March 31, 2009.  The gains recorded by
the Partnership will vary depending on the sales prices and basis of the Housing
Complexes that are being sold.  For the year ended March 31, 2009
there was a $9,000 decrease in asset management fees from the expense recorded
for the year ended March 31, 2008.  This decrease is due to the fact
that the fees are calculated based on the value of the invested assets, which
decreased due to the sale of two Local Limited Partnership Interests during the
year. Legal and accounting expenses decreased by $12,000, due to the timing of
the accounting work being performed.  For the year ended March 31,
2009 the Partnership incurred $(11,000) in appraisal expenses compared to none
in the prior year. These costs were incurred related to the sale of the two
Local Limited Partnerships sold in the current year.  Appraisal costs
related to the prior year sale were paid through the closing of the escrow
therefore no expense was recorded by the Partnership. Lastly, the distribution
income increased by $1,000. Distribution income is expected to vary as payments
are only made when the Local Limited Partnership has available cash
flows.
 
 Liquidity
and Capital Resources
 
 Year Ended March 31, 2010 Compared to
Year Ended March 31, 2009   The net decrease in cash
during the year ended March 31, 2010 was $(7,000) compared to the net decrease
in cash for the year ended March 31, 2009 of $(160,000).  The decrease
in net change in cash of $153,000 is largely due to the increase in proceeds
from the sale of Local Limited Partnerships of $92,000, which, as explained
above, can vary depending on the value of the Local Limited Partnership being
sold.  The increase in proceeds received was partially offset by the
Partnership paying the
   23
  General
Partner or an affiliate $(3,000) in accrued asset management fees compared to
$(80,000) paid during the year ended March 31, 2009.  During the year
ended March 31, 2010 the Partnership also paid $(148,000) to the General Partner
or an affiliate for reimbursements of operating expenses that were paid on
behalf of the Partnership compared to $(130,000) in reimbursements being paid
during the year ended March 31, 2009.   The higher amount paid
during 2009 for accrued management fees and operating expense reimbursements was
due to the fact that the Partnership received cash proceeds from dispositions in
2008 that were sitting in reserves until it was decided during the year ended
March 31, 2009 that the advances would be reimbursed.
  Year Ended March 31, 2009 Compared to
Year Ended March 31, 2008   The net decrease in cash
during the year ended March 31, 2009 was $(160,000) compared to the net increase
in cash for the year ended March 31, 2008 of $171,000.  The decrease
in net change in cash of $(331,000) is largely due to the decrease in proceeds
from the sale of Local Limited Partnerships of $(468,000), which, as explained
above, can vary depending on the value of the Local Limited Partnership being
sold.  The decrease in proceeds received was partially offset by a
$374,000 decrease in distributions to Limited Partners and General
Partners.  During the year ended March 31, 2009 the Partnership paid
the General Partner or an affiliate $(80,000) in accrued asset management fees
compared to $(3,000) paid during the year ended March 31, 2008, a net decease in
cash of $(77,000).  During the year ended March 31, 2009 the
Partnership also paid $(130,000) to the General Partner or an affiliate for
reimbursements of operating expenses that were paid on behalf of the Partnership
compared to no reimbursements being paid during the year ended March 31, 2008.
The Partnership received $25,000 from a Local Limited Partnership during the
year ended March 31, 2008, which was the remaining cash proceeds from a
disposition from a prior period, along with $2,000 from an affiliate, which made
up $(27,000) of the cash decrease.
  Accrued
payables, which consist primarily of related party management fees due to the
General Partner, increased (decreased) by approximately $3,000, $(92,000) and
$129,000 for the years ended March 31, 2010, 2009 and 2008, respectively. The
General Partner does not anticipate that these accrued fees will be paid until
such time as capital reserves are in excess of future foreseeable working
capital requirements of the Partnership.
  The
Partnership currently has insufficient working capital to fund its operations.
Associates has agreed to continue providing advances sufficient enough to fund
the operations and working capital requirements of the Partnership through June
30, 2011.
 
 Future
Contractual Cash Obligations
 
 The
following table summarizes the Partnership’s future contractual cash obligations
as of March 31, 2010:
 
 2011
              
              
              2012
              
              
              2013
              
              
              2014
              
              
              2015
              
              
              Thereafter
              
              
              TotalAsset
      management fees (1)
              
              $
              1,924,322
              
              
              $
              25,827
              
              
              $
              25,827
              
              
              $
              25,827
              
              
              $
              25,827
              
              
              $
              568,194
              
              
              $
              2,595,824Total
      contractual cash obligations
              
              $
              1,924,322
              
              
              $
              25,827
              
              
              $
              25,827
              
              
              $
              25,827
              
              
              $
              25,827
              
              
              $
              568,194
              
              
              $
              2,595,824
 
 (1)
              Asset
      Management Fees are payable annually until termination of the Partnership,
      which is to occur no later than 2037. The estimate of the fees payable
      included herein assumes the retention of the Partnership’s interest in all
      Housing Complexes until 2037. HPA Investors was sold on May 20, 2010 and
      therefore has been excluded. Amounts due to the General Partner as of
      March 31, 2010 have been included in the 2011 column. The General Partner
      does not anticipate that these fees will be paid until such time as
      capital reserves are in excess of the aggregate of the existing
      contractual obligations and the anticipated future foreseeable obligations
      of the Partnership.
 
 For
additional information regarding asset management fees, see Note 3 to the
financial statements included elsewhere herein.
 
 Off-Balance
Sheet Arrangements
 
 The
Partnerships has no off-balance sheet arrangements.
 
  24
  Exit
Strategy
 
 See Item
1 for information in this regard.
 
 Impact
of New Accounting Pronouncements
 
 See
footnote 1 to the financial statements.
 
 Item
7A.  Quantitative and Qualitative Disclosures about Market
Risk
 
 NOT
APPLICABLE
 
 Item
8.  Financial Statements and Supplementary Data
 
  25
   REPORT OF
INDEPENDENT REGISTERED PUBLIC
  ACCOUNTING
FIRM
  To the
Partners
 WNC
California Housing Tax Credits, L.P
  We have
audited the accompanying balance sheets of WNC California Housing Tax Credits,
L.P  (a California Limited Partnership) (the Partnership) as of March
31, 2010 and 2009, and the related statements of operations, partners’ deficit
and cash flows for each of the years in the three-year period ended March 31,
2010.  The Partnership’s management is responsible for these financial
statements. Our responsibility is to express an opinion on these financial
statements based on our audits.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  The Partnership is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting. Accordingly, we express no such opinion.  An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of WNC California Housing Tax Credits,
L.P as of March 31, 2010 and 2009, and the results of its operations and its
cash flows for each of the years in the three-year period ended March 31, 2010,
in conformity with accounting principles generally accepted in the United States
of America.
  Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The schedules listed under
Item 15(a)(2) in the index related to years above are presented for the purpose
of complying with the Securities and Exchange Commission’s rules and are not
part of the basic financial statements. These schedules have been subjected to
the auditing procedures applied to the audits of the basic financial statements
and, in our opinion, fairly state in all material respects the financial
statement data required to be set forth therein in relation to the basic
financial statements taken as a whole.
  
 /s/Reznick Group, P.C.
 
 Bethesda,
Maryland
 June 29,
2010  26
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 BALANCE
SHEETS
 March
      31,2010
              
              
              2009ASSETSCash
              
              $
              42,834
              
              
              $
              49,488Investments
      in Local Limited Partnerships, net (Notes 2 and 3)
              
              
              -
              
              
              
              -Prepaid
      expenses
              
              
              3,051
              
              
              
              -Total
      Assets
              
              $
              45,885
              
              
              $
              49,488LIABILITIES
      AND PARTNERS’ DEFICITLiabilities:Accrued fees and expenses due to
      General Partner and affiliates (Note 3)
              
              $
              1,898,495
              
              
              $
              1,895,560Partners’
      Deficit:General
Partners
              
              
              (80,254
              )
              
              
              (80,189
              )Limited Partners (10,000
      Partnership Units authorized; 7,450 Partnership Units issued and
      outstanding)
              
              
              (1,772,356
              )
              
              
              (1,765,883
              )Total Partners’
      Deficit
              
              
              (1,852,610
              )
              
              
              (1,846,072
              )Total
      Liabilities and Partners’ Deficit
              
              $
              45,885
              
              
              $
              49,488
 
 
  See
accompanying notes to financial statements
 27
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 STATEMENTS
OF OPERATIONS
  
 For
      the Years Ended March 31,2010
              
              
              2009
              
              
              2008Distribution
      income
              
              $
              2,617
              
              
              $
              7,426
              
              
              $
              6,393Reporting
      fees
              
              
              1,050
              
              
              
              -
              
              
              
              -Total
      income
              
              
              3,667
              
              
              
              7,426
              
              
              
              6,393Operating
      expenses:Asset management fees (Note
      3)
              
              
              62,328
              
              
              
              86,804
              
              
              
              96,261Legal and
    accounting
              
              
              78,402
              
              
              
              19,221
              
              
              
              31,188Appraisal
      expenses
              
              
              -
              
              
              
              11,250
              
              
              
              -Other
              
              
              6,574
              
              
              
              3,116
              
              
              
              3,078Total operating
      expenses
              
              
              147,304
              
              
              
              120,391
              
              
              
              130,527Loss
      from operations
              
              
              (143,637
              )
              
              
              (112,965
              )
              
              
              (124,134
              )Gain
      on sale of Local Limited Partnerships
              
              
              137,083
              
              
              
              45,000
              
              
              
              512,673Interest
      income
              
              
              16
              
              
              
              317
              
              
              
              100Net
      income (loss)
              
              $
              (6,538
              )
              
              $
              (67,648
              )
              
              $
              388,639Net
      income (loss) allocated to:General Partners
              
              $
              (65
              )
              
              $
              (676
              )
              
              $
              3,886Limited Partners
              
              $
              (6,473
              )
              
              $
              (66,972
              )
              
              $
              384,753Net
      income (loss) per Partnership Unit
              
              $
              (.87
              )
              
              $
              (8.99
              )
              
              $
              51.64Outstanding
      weighted Partnership Units
              
              
              7,450
              
              
              
              7,450
              
              
              
              7,450
  See
accompanying notes to financial statements
 28
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 STATEMENTS
OF PARTNERS’ DEFICIT
 
 For
The Years Ended March 31, 2010, 2009, and 2008
  General
      Partners
              
              
              Limited
      Partners
              
              
              TotalPartners’
      deficit at March 31, 2007
              
              $
              (80,030
              )
              
              $
              (1,713,404
              )
              
              $
              (1,793,434
              )Net
      income
              
              
              3,886
              
              
              
              384,753
              
              
              
              388,639Distributions
              
              
              (3,369
              )
              
              
              (370,260
              )
              
              
              (373,629
              )Partners’
      deficit at March 31, 2008
              
              
              (79,513
              )
              
              
              (1,698,911
              )
              
              
              (1,778,424
              )Net
      loss
              
              
              (676
              )
              
              
              (66,972
              )
              
              
              (67,648
              )Partners’
      deficit at March 31, 2009
              
              
              (80,189
              )
              
              
              (1,765,883
              )
              
              
              (1,846,072
              )Net
      loss
              
              
              (65
              )
              
              
              (6,473
              )
              
              
              (6,538
              )Partners’
      deficit at March 31, 2010
              
              $
              (80,254
              )
              
              $
              (1,772,356
              )
              
              $
              (1,852,610
              )
 
 
 
  See
accompanying notes to financial statements
 29
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 STATEMENTS
OF CASH FLOWS
  For
      the Years Ended March 31,2010
              
              
              2009
              
              
              2008Cash
      flows from operating activities:Net
      income (loss)
              
              $
              (6,538
              )
              
              $
              (67,648
              )
              
              $
              388,639Adjustments
      to reconcile net income (loss) to
                net
      cash provided by (used in) operating activities:Change
      in due from an affiliate
              
              
              -
              
              
              
              -
              
              
              
              2,773Change
      in due from Local Limited Partnership
              
              
              -
              
              
              
              -
              
              
              
              24,700Change
      in prepaid expenses
              
              
              (3,051
              )
              
              
              -
              
              
              
              -Change
      in accrued fees and expenses due to
                General
      Partner and affiliates
              
              
              2,935
              
              
              
              (92,116
              )
              
              
              129,027Change
      in accounts payable
              
              
              -
              
              
              
              -
              
              
              
              (1,000
              )Gain
      on sale of Local Limited
                Partnerships
              
              
              (137,083
              )
              
              
              (45,000
              ))
              
              
              (512,673
              )Net
      cash provided by (used in) operating activities
              
              
              (143,737
              )
              
              
              (204,764
              )
              
              
              31,466Cash
      flows provided by investing activities:Proceeds from sale of Local
      Limited
                Partnerships
              
              
              137,083
              
              
              
              45,000
              
              
              
              512,673Net
      cash provided by investing activities
              
              
              137,083
              
              
              
              45,000
              
              
              
              512,673Cash
      flows used in financing activities:Distributions
      to Limited Partners
              
              
              -
              
              
              
              -
              
              
              
              (370,260
              )Distributions
      to General Partners
              
              
              -
              
              
              
              -
              
              
              
              (3,369
              )Net
      cash used in financing activities
              
              
              -
              
              
              
              -
              
              
              
              (373,629
              )Net
      increase (decrease) in cash
              
              
              (6,654
              )
              
              
              (159,764
              )
              
              
              170,510Cash,
      beginning of period
              
              
              49,488
              
              
              
              209,252
              
              
              
              38,742Cash,
      end of period
              
              $
              42,834
              
              
              $
              49,488
              
              
              $
              209,252SUPPLEMENTAL
      DISCLOSURE OF
                CASH FLOW
      INFORMATION:Taxes paid
              
              $
              800
              
              
              
              800
              
              
              $
              800
 
 
  See
accompanying notes to financial statements
 30
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS
 
 For
the Years Ended March 31, 2010, 2009, and 2008
  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 acquire limited partnership interests
in other limited partnerships ("Local Limited Partnerships") which own
multi-family or senior housing complexes (“Housing Complexes”) that are eligible
for Federal low income housing tax credits (“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. Each Local Limited Partnership is
governed by its agreement of limited partnership or operating agreement (the
“Local Limited Partnership Agreement”).
 
 WNC &
Associates, Inc., a California corporation (“Associates”), and Wilfred N.
Cooper, Sr., are general partners of the Partnership (collectively, the “General
Partner” or "General Partners").  The chairman and president own
substantially all 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.
 
 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 interest (“Partnership Units”) at $1,000 per Partnership Unit. The
offering of Partnership Units concluded in October 1990 at which time 7,450
Partnership Units representing subscriptions in the amount of $7,450,000, had
been accepted.  The General Partners have a 1% interest in operating
profits and losses, taxable income and losses, in cash available for
distribution from the Partnership and Low Income Housing Tax Credits of the
Partnership.  The investors in the Partnership (“Limited Partners”)
will be allocated the remaining 99% of these items in proportion to their
respective investments.
 
 The
proceeds from the disposition of any of the Local Limited Partnership properties
will be used first to pay debts and other obligations per the respective Local
Limited Partnership Agreement.  Any remaining proceeds will then be
paid to the Partnership.  The sale of a Housing Complex may be subject
to other restrictions and obligations.  Accordingly, there can be no
assurance that a Local Limited Partnership will be able to sell its Housing
Complex.  Even if it does so, there can be no assurance that any
significant amounts of cash will be distributed to the
Partnership.  Should such distributions occur, the Limited Partners
will be entitled to receive distributions equal to their capital contributions
and their return on investment (as defined in the Partnership Agreement) and the
General Partners would then be entitled to receive proceeds equal to their
capital contributions from the remainder.  Any additional sale or
refinancing proceeds will be distributed 99% to the Limited Partners (in
proportion to their respective investments) and 1% to the General
Partners.
 
 Risks and
Uncertainties
 
 An
investment in the Partnership and the Partnership’s investments in Local Limited
Partnerships and their Housing Complexes are subject to risks.  These
risks may impact the tax benefits of an investment in the Partnership, and the
amount of proceeds available for distribution to the Limited Partners, if any,
on liquidation of the Partnership’s investments.  Some of those risks
include the following:
 
  31
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  NOTE 1 -
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
 
 The Low
Income Housing Tax Credit rules are extremely complicated. Noncompliance with
these rules results in the loss of future Low Income Housing Tax Credits and the
fractional recapture of Low Income Housing Tax Credits already taken. In most
cases the annual amount of Low Income Housing Tax Credits that an individual can
use is limited to the tax liability due on the person’s last $25,000 of taxable
income. The Local Limited Partnerships may be unable to sell the Housing
Complexes at a price which would result in the Partnership realizing cash
distributions or proceeds from the transaction.  Accordingly, the
Partnership may be unable to distribute any cash to its Limited
Partners.  Low Income Housing Tax Credits may be the only benefit from
an investment in the Partnership.
 
 The
Partnership has invested in a limited number of Local Limited Partnerships. Such
limited diversity means that the results of operation of each single Housing
Complex will have a greater impact on the Partnership. With limited diversity,
poor performance of one Housing Complex could impair the Partnership’s ability
to satisfy its investment objectives.  Each Housing Complex is subject
to mortgage indebtedness. If a Local Limited Partnership failed to pay its
mortgage, it could lose its Housing Complex in foreclosure. If foreclosure were
to occur during the first 15 years, the loss of any remaining future Low Income
Housing Tax Credits, a fractional recapture of prior Low Income Housing Tax
Credits, and a loss of the Partnership’s investment in the Housing Complex would
occur. The Partnership is a limited partner or non-managing member of each Local
Limited Partnership. Accordingly, the Partnership will have very limited rights
with respect to management of the Local Limited Partnerships. The Partnership
will rely totally on the Local General Partners. Neither the Partnership’s
investments in Local Limited Partnerships, nor the Local Limited Partnerships’
investments in Housing Complexes, are 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 interests in Local Limited
Partnerships; limitations on removal of Local General Partners; limitations on
subsidy programs; and possible changes in applicable
regulations.  Uninsured casualties could result in loss of property
and Low Income Housing Tax Credits and recapture of Low Income Housing Tax
Credits previously taken. The value of real estate is subject to risks from
fluctuating economic conditions, including employment rates, inflation, tax,
environmental, land use and zoning policies, supply and demand of similar
properties, and neighborhood conditions, among others.
 
 The
ability of Limited Partners to claim tax losses from the Partnership is limited.
The IRS may audit the Partnership or a Local Limited Partnership and challenge
the tax treatment of tax items. The amount of Low Income Housing Tax Credits and
tax losses allocable to the Limited Partners could be reduced if the IRS were
successful in such a challenge.  The alternative minimum tax could
reduce tax benefits from an investment in the Partnership.  Changes in
tax laws could also impact the tax benefits from an investment in the
Partnership and/or the value of the Housing Complexes.
 
 All of
the Low Income Housing Tax Credits anticipated to be realized from the Local
Limited Partnerships have been realized. The Partnership does not anticipate
being allocated any Low Income Housing Tax Credits from the Local Limited
Partnerships in the future.
 
 Anticipated
future and existing cash resources of the Partnership are not sufficient to pay
existing liabilities of the Partnership.  However, substantially all
of the existing liabilities of the Partnership are payable to the General
Partner and/or their affiliates.  Though the amounts payable to the
General Partner and/or its affiliates are contractually currently payable, the
Partnership anticipates that the General Partner and/or its affiliates will not
require the payment of these contractual obligations until capital reserves are
in excess of the aggregate of then existing contractual obligations and then
anticipated future foreseeable obligations of the Partnership.  The
Partnership would be adversely affected should the General Partner and/or its
affiliates demand current payment of the existing contractual obligations and or
suspend services for this or any other reason.
 
  32
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 The
Partnership currently has insufficient working capital to fund its operations.
Associates has agreed to continue providing advances sufficient enough to fund
the operations and working capital requirements of the Partnership through June
30, 2011.
 
 No
trading market for the Partnership Units exists or is expected to develop.
Limited Partners may be unable to sell their Partnership Units except at a
discount and should consider their Partnership Units to be a long-term
investment. Individual Limited Partners will have no recourse if they disagree
with actions authorized by a vote of the majority of Limited
Partners.
 
 Exit
Strategy
 
 The
Compliance Period for a Housing Complex is generally 15 years following
construction or rehabilitation completion. Associates was one of the first in
the industry to offer syndicated investments in Low Income Housing Tax
Credits.  The initial programs have completed their Compliance
Periods.
 
 Upon the
sale of a Local Limited Partnership Interest or Housing Complex after the end of
the Compliance Period, there would be no recapture of Low Income Housing Tax
Credits.  All Local Limited Partnerships have completed their 15-year
Compliance Period.
  With that
in mind, the General Partner is continuing its review of the Housing
Complexes.  The review considers many factors, including extended use
requirements (such as those due to mortgage restrictions or state compliance
agreements), the condition of the Housing Complexes, and the tax consequences to
the Limited Partners from the sale of the Housing Complexes.
 
 Upon
identifying those Housing Complexes with the highest potential for a successful
sale, refinancing or re-syndication, the Partnership expects to proceed with
efforts to liquidate them. The objective is to wind down the Partnership as Low
Income Housing Tax Credits are no longer available.  Local Limited
Partnership Interests may be disposed of any time by the General Partner in its
discretion. While liquidation of the Housing Complexes continues to be
evaluated, the dissolution of the Partnership was not imminent as of March 31,
2010.
 
 As of
March 31, 2009 the Partnership had sold the Housing Complexes of BCA Associates
and Woodlake Manor.  Further, the Partnership also sold its Limited
Partnership Interests in Yreka Investment Group and Countryway
Associates.  Each of the Local Limited Partnerships had completed its
Compliance Period.
 
 During
the year ended March 31, 2010, the Partnership sold its Limited Partnership
Interest in San Jacinto Associates (“San
Jacinto”), Cloverdale Garden Apartments, LP (“Cloverdale”) and East Garden
Apartments (“East Garden”).  San Jacinto was appraised with a value of
$1,360,000 and as of December 31, 2008 the outstanding mortgage debt was
$1,723,404.  The Limited Partnership Interest was sold on August 17,
2009 to the Local General Partner.  The 15-year compliance period
expired in 2004, therefore there will be no recapture of Low Income Housing Tax
Credits.  Although the appraised value was less than the outstanding
mortgage the Partnership received $40,000 for its Limited Partnership Interest
in this Local Limited Partnership. The $40,000 was kept in the Partnership’s
reserves and was used to pay the costs incurred related to the disposition and
other operating expenses of the Partnership.  As the investment
balance was zero, the Partnership recorded a gain on the sale of the Local
Limited Partnership interest for the year ended March 31,
2010.  Cloverdale and East Garden were appraised with values of
$1,530,000 and $1,710,000, respectively, as of December 31,
2009.   The outstanding debt for Cloverdale and East Garden was
$1,575,425 and $2,073,079, respectively as of December 31,
2009.  Although, both appraised
  33
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 amounts
were less than the debt outstanding, the Partnership received $49,445 and
$49,444, respectively for each of the Limited Partnership Interests in these two
Local Limited Partnerships.  $94,760 of the proceeds was used to
reimburse the General Partner or an affiliate for operating expenses that were
paid on the Partnerships behalf.  The remaining $4,129 remains in the
reserves for future Partnership expenses.  Each of these Local Limited
Partnerships had completed the Compliance Period therefore, there is no risk of
recapture.
 
 During
the year ended March 31. 2010, the Partnership identified one Local Limited
Partnership, HPA Investors, (“HPA”) for disposition.  HPA owns the
Hudson Park Apartments, II, located in Shafter, California (the
“Property”).  Consistent with the investment objectives of the
Partnership, the Property qualified for Federal Low Income Housing Tax Credits
under the Internal Revenue Code for a 10-year period.  The credit
period has expired, and no further credits are being generated by the
Property.  The 15-year Federal Compliance Period has also expired, so
there will be no credit recapture upon the transfer of the
Property.  On October 5, 2009, the Partnership filed a proxy with the
Securities and Exchange Commission (“SEC”) for the written consent of the
Limited Partners for the commencement of disposition.  Definitive
materials were filed on November 10, 2009 which extended the deadline for
submitting ballots.  As of November 16, 2009 the Partnership achieved
the 51% approval necessary for the disposition.
 
 On May
20, 2010, the sale of HPA Investors closed. The total sales price including
replacement reserves was  $1,707,000 which was disbursed as
follows:  the General Partner of HPA was paid approximately $104,000
in sales preparation and refinancing fees and repayment of loans previously
made, $1,452,000 paid down the outstanding mortgages and approximately $8,000 in
selling costs were paid.  The remaining $143,000 was distributed to
the Partnership.  The Partnership’s investment balance is zero at
March 31, 2010. Accordingly, a gain of $143,000 will be recorded in the quarter
ended June 30, 2010. The $143,000 in cash proceeds was used to fund the
Partnership’s reserves.  $71,000 of the cash received paid accrued
asset management fees, $2,000 paid the General Partner of the Partnership for
operating expenses paid on its behalf and the remaining $70,000 will remain the
Partnership reserves to fund future asset management fees and reimbursements to
the General Partner or an affiliate. No funds will be distributed to the Limited
Partners.
 
 Method of Accounting For
Investments in Local Limited Partnerships
 
 The
Partnership accounts for its investments in Local Limited Partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnerships’ results of operations
and for any contributions made and distributions received. The Partnership
reviews the carrying amount of an individual investment in a Local Limited
Partnership for possible impairment whenever events or changes in circumstances
indicate that the carrying amount of such investment may not be
recoverable.  Recoverability of such investment is measured by the
estimated value derived by management, generally consisting of the sum of the
remaining future Low Income Housing Tax Credits estimated to be allocated to the
Partnership and the estimated residual value to the Partnership.  If
an investment is considered to be impaired, the Partnership reduces the carrying
value of its investment in any such Local Limited Partnership.  The
accounting policies of the Local Limited Partnerships, generally, are expected
to be 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 27.5 years. (See Notes 2 and
3)
 
 “Equity
in losses of Local Limited Partnerships” for each year ended March 31 have been
recorded by the Partnership based on the twelve months of reported results
provided by the Local Limited Partnerships for each year ended December 31.
Equity in losses from the Local Limited Partnerships allocated to the
Partnership is not
  34
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 recognized
to the extent that the investment balance would be adjusted below
zero.  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.
 
 In
accordance with the accounting guidance for the consolidation of variable
interest entities, the Partnership determines when it should include the assets,
liabilities, and activities of a variable interest entity (VIE) in its financial
statements, and when it should disclose information about its relationship with
a VIE. A VIE is a legal structure used to conduct activities or hold assets,
which must be consolidated by a company if it is the primary beneficiary because
it absorbs the majority of the entity's expected losses, the majority of the
expected returns, or both. Based on this guidance, the Local Limited
Partnerships in which the Partnership invests meet the definition of a
VIE.  However, management does not consolidate the Partnership’s
interests in these VIEs under this guidance, as it is not considered to be the
primary beneficiary.  The Partnership currently records the amount of
its investment in these partnerships as an asset on its balance sheet,
recognizes its share of partnership income or losses in the statements of
operations, and discloses how it accounts for material types of these
investments in its financial statements. The Partnership’s balance in investment
in Local Limited Partnerships, plus the risk of recapture of tax credits
previously recognized on these investments, represents its maximum exposure to
loss.  The Partnership’s exposure to loss on these partnerships is
mitigated by the condition and financial performance of the underlying
properties as well as the strength of the local general partners and their
guarantee against credit recapture.
 
 Distributions
received from the Local Limited Partnerships are accounted for as a reduction of
the investment balance.  Distributions received after the investment
has reached zero are recognized as distribution income.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 original maturities of
three months or less when purchased to be cash equivalents.  As of
March 31, 2010 and 2009, the Partnership had no cash equivalents.
 
 Reporting Comprehensive
Income
 
 The
Partnership had no items of other comprehensive income for the periods
presented.
 
 Net Loss Per Partnership
Unit
 
 Net loss
per Partnership Unit includes no dilution and is computed by dividing loss
available to Limited Partners by the weighted average number of Partnership
Units outstanding during the period.  Calculation of diluted
net
  35
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 loss per
Partnership Unit is not required.
 
 Income
Taxes
 
 The
Partnership has elected to be treated as a pass-through entity for income tax
purposes and, as such, is not subject to income taxes. Rather, all items of
taxable income, deductions and tax credits are passed through to and are
reported by its owners on their respective income tax returns.  The
Partnership’s federal tax status as a pass-through entity is based on its legal
status as a partnership. Accordingly, the Partnership is not required to take
any tax positions in order to qualify as a pass-through entity. The Partnership
is required to file and does file tax returns with the Internal Revenue Service
and other taxing authorities. Accordingly, these financial statements do not
reflect a provision for income taxes and the Partnership has no other tax
positions which must be considered for disclosure.
 
 Revenue
Recognition
 
 The
Partnership is entitled to receive reporting fees from the Local Limited
Partnerships.  The intent of the reporting fees is to offset (in part)
administrative costs incurred by the Partnership in corresponding with the Local
Limited Partnerships.  Due to the uncertainty of the collection of
these fees, the Partnership recognizes reporting fees as collections are
made.
 
 Impact of Recent Accounting
Pronouncements
 
 In
September 2006, the Financial Accounting Standards Board (FASB) issued
accounting guidance for Fair Value Measurements, which defines fair value,
establishes a framework for measuring fair value and expands disclosure about
fair value measurements. This guidance is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and shall be applied
prospectively except for very limited transactions.  In February 2008,
the FASB delayed for one year implementation of the guidance as it pertains to
certain non-financial assets and liabilities. The Partnership adopted GAAP for
Fair Value Measurements effective April 1, 2008, except as it applies to those
non-financial assets and liabilities, for which the effective date was April 1,
2009. The Partnership has determined that adoption of this guidance has no
material impact on the Partnership’s financial statements.
 
 In
February 2007, the FASB issued accounting guidance for The Fair Value Option for
Financial Assets and Financial Liabilities. This guidance permits entities to
choose to measure many financial instruments and certain other items at fair
value.  The fair value election is designed to improve financial
reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions. It is effective for
fiscal years beginning after November 15, 2007.  On April 1,
2008, the Partnership adopted GAAP for The Fair Value Option for Financial
Assets and Financial Liabilities and elected not to apply the provisions to its
eligible financial assets and financial liabilities on the date of adoption.
Accordingly, the initial application of the guidance had no effect on the
Partnership.
 
 In
November 2008, the FASB issued accounting guidance on Equity Method Investment
Accounting Considerations that addresses how the initial carrying value of an
equity method investment should be determined, how an impairment assessment of
an underlying indefinite-lived intangible asset of an equity method investment
should be performed, how an equity method investee’s issuance of shares should
be accounted for, and how to account for a change in an investment from the
equity method to the cost method. This guidance is effective in fiscal years
beginning on or after December 15, 2008, and interim periods within
those fiscal years. The Partnership adopted the guidance for the interim
quarterly period beginning April 1, 2009. The impact of adopting it does not
have a material impact on the Partnership’s financial condition or results of
operations.
  36
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  
 In April
2009, the FASB issued accounting guidance for Interim Disclosures about Fair
Value of Financial Instruments.  This requires disclosure about the
method and significant assumptions used to establish the fair value of financial
instruments for interim reporting periods as well as annual
statements.  It became effective for as of and for the interim period
ended June 30, 2009 and has no impact on the Partnership’s financial condition
or results of operations.
 
 In May
2009, the FASB issued guidance regarding subsequent events, which was
subsequently updated in February 2010. This guidance established general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. In particular, this guidance sets forth the period after the
balance sheet date during which management of a reporting entity should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements, and the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. This guidance
was effective for financial statements issued for fiscal years and interim
periods ending after June 15, 2009, and was therefore adopted by the
Partnership for the quarter ended June 30, 2009. The adoption did not have a
significant impact on the subsequent events that the Partnership reports, either
through recognition or disclosure, in the financial statements. In February
2010, the FASB amended its guidance on subsequent events to remove the
requirement to disclose the date through which an entity has evaluated
subsequent events, alleviating conflicts with current SEC guidance. This
amendment was effective immediately and therefore the Company did not include
the disclosure in this Form 10-K.
 
 In June
2009, the FASB issued an amendment to the accounting and disclosure requirements
for the consolidation of variable interest entities (VIEs).  The amended
guidance modifies the consolidation model to one based on control and economics,
and replaces the current quantitative primary beneficiary analysis with a
qualitative analysis. The primary beneficiary of a VIE will be the entity that
has (1) the power to direct the activities of the VIE that most
significantly impact the VIE’s economic performance and (2) the obligation
to absorb losses or receive benefits that could potentially be significant to
the VIE.  If multiple unrelated parties share such power, as defined, no
party will be required to consolidate the VIE. Further, the amended guidance
requires continual reconsideration of the primary beneficiary of a VIE and adds
an additional reconsideration event for determination of whether an entity is a
VIE.  Additionally, the amendment requires enhanced and expanded
disclosures around VIEs.  This amendment is effective for fiscal years
beginning after November 15, 2009.  The adoption of this guidance on
April 1, 2010 is not expected to have a material effect on the Partnership’s
financial statements.
 
 In June
2009, the FASB issued the Accounting Standards Codification
(Codification).  Effective July 1, 2009, the Codification is the
single source of authoritative accounting principles recognized by the FASB to
be applied by non-governmental entities in the preparation of financial
statements in conformity with GAAP.  The Codification is intended to
reorganize, rather than change, existing GAAP.  Accordingly, all
references to currently existing GAAP have been removed and have been replaced
with plain English explanations of the Partnership’s accounting
policies.  The adoption of the Codification did not have a material
impact on the Partnership’s financial position or results of
operations.
 
 NOTE 2 - INVESTMENTS IN
LOCAL LIMITED PARTNERSHIPS
 
 As of
March 31, 2010 and 2009, the Partnership owns Local Limited Partnership
interests in 4 and 7 Local Limited Partnerships, respectively. As of March 31,
2010 and 2009, these Local Limited Partnerships each own one Housing Complex
consisting of an aggregate of 149 and 272 apartment units, respectively. The
respective Local General Partners of the Local Limited Partnerships manage the
day to day operations of the entities. Significant Local Limited Partnership
business decisions require approval from the Partnership.  The
Partnership, as a limited partner, is generally entitled to 99%, as specified in
the Local Limited Partnership agreements, of the operating profits and losses,
taxable income and losses, and Low Income Housing Tax Credits of the Local
Limited Partnerships.
  37
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  NOTE 2 - INVESTMENTS IN
LOCAL LIMITED PARTNERSHIPS, continued
 
 The
Partnership's investments in Local Limited Partnerships as shown in the balance
sheets at March 31, 2010 and 2009, are approximately $1,214,000 and $1,076,000,
respectively, greater than the Partnership's equity at the preceding
December 31 as shown in the Local Limited Partnerships’ combined financial
statements presented below.  This difference is primarily due to
unrecorded losses as discussed below, and acquisition, selection and other costs
related to the acquisition of the investments which have been capitalized in the
Partnership's investment account along with impairment losses recorded in the
Partnership’s investment account.
 
 At March
31, 2010 and 2009, the investment accounts in all of Local Limited Partnerships
have reached a zero balance. Consequently, all of the Partnerships estimate of
its share of losses for the years ended March 31, 2010, 2009 and 2008, amounting
to approximately $226,000, $210,000 and $342,000, respectively, have not been
recognized.  As of March 31, 2010, the aggregate share of net losses
not recognized by the Partnership amounted to $1,026,000.
 
 The
financial information from the individual financial statements of the Local
Limited Partnerships includes rental and interest subsidies. Rental subsidies
are included in total revenues and interest subsidies are generally netted
against interest expense. Approximate combined condensed financial information
from the individual financial statements of the Local Limited Partnerships as of
December 31 and for the years then ended is as follows:
 
 COMBINED
CONDENSED BALANCE SHEETS
 
 2009
              
              
              2008ASSETSBuildings
      and improvements (net of accumulated depreciation for 2009 and 2008 of
      $7,009,000 and $7,385,000, respectively)
              
              $
              5,685,000
              
              
              $
              7,342,000Land
              
              
              720,000
              
              
              
              943,000Other
      assets
              
              
              1,614,000
              
              
              
              1,753,000Total
      assets
              
              $
              8,019,000
              
              
              $
              10,038,000LIABILITIESMortgage
      loans payable
              
              $
              8,792,000
              
              
              $
              10,568,000Due
      to related parties
              
              
              239,000
              
              
              
              282,000Other
      liabilities
              
              
              134,000
              
              
              
              153,000Total
      liabilities
              
              
              9,165,000
              
              
              
              11,003,000PARTNERS’
      EQUITY (DEFICIT)WNC
      California Housing Tax Credits, L.P.
              
              
              (1,214,000
              )
              
              
              (1,076,000
              )Other
      partners
              
              
              68,000
              
              
              
              111,000Total
      partners’ equity (deficit)
              
              
              (1,146,000
              )
              
              
              (965,000
              )Total
      liabilities and partners’ equity (deficit)
              
              $
              8,019,000
              
              
              $
              10,038,000
 
  38
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  
 NOTE 2 - INVESTMENTS IN
LOCAL LIMITED PARTNERSHIPS, continued
 
 COMBINED
CONDENSED STATEMENTS OF OPERATIONS
 
 2009
              
              
              2008
              
              
              2007Revenues
              
              $
              1,457,000
              
              
              $
              1,772,000
              
              
              $
              2,441,000Expenses:Operating
    expenses
              
              
              1,071,000
              
              
              
              1,274,000
              
              
              
              1,800,000Interest expense
              
              
              187,000
              
              
              
              227,000
              
              
              
              328,000Depreciation and
      amortization
              
              
              427,000
              
              
              
              483,000
              
              
              
              658,000Total expenses
              
              
              1,685,000
              
              
              
              1,984,000
              
              
              
              2,786,000Net
      operating  loss
              
              $
              (228,000
              )
              
              $
              (212,000
              )
              
              $
              (345,000
              )Net
      income (loss) allocable to the Partnership
              
              $
              (226,000
              )
              
              $
              (210,000
              )
              
              $
              (342,000
              )Net
      income recorded by the Partnership
              
              $
              -
              
              
              $
              -
              
              
              $
              -
 
 The
financial information for December 31, 2009 and 2008 does not include financial
information for Countryway Associates, Woodlake Manor and Yreka Investment
Group.  The partnership sold its interest in these three Local Limited
Partnerships as of the year ended December 31, 2008, but the financial
information for the year ended December 31, 2007 does include financial
information for those three Local Limited Partnerships.  Additionally,
the financial information for December 31, 2009 does not include information for
San Jacinto Associates since the Partnership sold its Limited Partnership
Interest in that particular Local Limited Partnership as of December 31,
2009.   The December 31, 2008 and 2007 financial information
above does include San Jacinto Associates.
 
 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 Partnership Units
      as compensation for services rendered in connection with the acquisition
      of Local Limited Partnerships.  At the end of all periods
      presented, the Partnership incurred acquisition fees of
      $447,060.  Accumulated amortization of these capitalized costs
      was $447,060 for all periods
presented.
 
 Reimbursement
      of costs incurred by the General Partners or an affiliate in connection
      with the acquisition of the Local Limited Partnerships.  These
      reimbursements have not exceeded 3% of the gross proceeds. As of the end
      of all periods presented, the Partnership had incurred acquisition costs
      of $32,018 which have been included in investments in Local Limited
      Partnerships.  Accumulated amortization of the acquisition costs
      was $32,018 for all periods
presented.
  39
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  
 NOTE 3 – RELATED PARTY
TRANSACTIONS, continued
 
 An
      annual asset management fee 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 Partnership interests and the
      Partnership’s allocable share of mortgage loans on and other debts related
      to the Housing Complexes owned by such Local Limited Partnerships.
      Management fees of $62,328, $86,804 and $96,261 were incurred during the
      years ended March 31, 2010, 2009 and 2008, respectively of which $2,500,
      $79,850 and  $2,500 was paid during the years ended March 31,
      2010, 2009 and  2008,
respectively.
 
 The
      Partnership reimbursed the General Partner or its affiliates for operating
      expenses incurred by the Partnership and paid for by the General Partner
      or its affiliates on behalf of the Partnership.  Operating
      expense reimbursements were $148,433, $130,158 and $0 during the years
      ended March 31, 2010, 2009 and 2008,
  respectively.
 
 The
accrued fees and expenses due to General Partner and affiliates consist of the
following at:
 
 March
      31,2009
              
              
              2009Expenses
      paid by the General Partners or an affiliate on behalf of the
      Partnership
              
              $
              -
              
              
              $
              56,893Asset
      management fee payable
              
              
              1,898,495
              
              
              
              1,838,667Total
              
              $
              1,898,495
              
              
              $
              1,895,560
 
 The
General Partners and/or its affiliates do not anticipate that these accrued fees
will be paid until such time as capital reserves are in excess of the future
foreseeable working capital requirements of the Partnership.
 
  40
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  
 NOTE 4 – QUARTERLY RESULTS
OF OPERATIONS (UNAUDITED)
 
 The
following is a summary of the quarterly operations for the years ended March
31:
 
 June
      30
              
              
              September
      30
              
              
              December
      31
              
              
              March
      312010Income
              
              $
              1,000
              
              
              $
              -
              
              
              $
              -
              
              
              $
              3,000Operating
      expenses
              
              
              (33,000
              )
              
              
              (84,000
              )
              
              
              (20,000
              )
              
              
              (11,000
              )Loss
      from operations
              
              
              (32,000
              )
              
              
              (84,000
              )
              
              
              (20,000
              )
              
              
              (8,000
              )Gain
      on sale of Local Limited
                Partnerships
              
              
              -
              
              
              
              40,000
              
              
              
              -
              
              
              
              97,000Net
      income (loss)
              
              
              (32,000
              )
              
              
              (44,000
              )
              
              
              (20,000
              )
              
              
              89,000Net
      income (loss) available to Limited Partners
              
              
              (31,000
              )
              
              
              (43,000
              )
              
              
              (20,000
              )
              
              
              88,000Net
      income (loss) per Partnership Unit
              
              
              (4
              )
              
              
              (6
              )
              
              
              (3
              )
              
              
              12
 
 June
      30
              
              
              September
      30
              
              
              December
      31
              
              
              March
      312009Income
              
              $
              1,000
              
              
              $
              4,000
              
              
              $
              1,000
              
              
              $
              1,000Operating
      expenses
              
              
              (31,000
              )
              
              
              (30,000
              )
              
              
              (28,000
              )
              
              
              (31,000
              )Loss
      from operations
              
              
              (30,000
              )
              
              
              (26,000
              )
              
              
              (27,000
              )
              
              
              (30,000
              )Gain
      on sale of Local Limited
                Partnerships
              
              
              -
              
              
              
              -
              
              
              
              45,000
              
              
              
              -Net
      income (loss)
              
              
              (30,000
              )
              
              
              (26,000
              )
              
              
              18,000
              
              
              
              (30,000
              )Net
      income (loss) available to Limited Partners
              
              
              (30,000
              )
              
              
              (26,000
              )
              
              
              18,000
              
              
              
              (29,000
              )Net
      income (loss) per Partnership Unit
              
              
              (4
              )
              
              
              (3
              )
              
              
              2
              
              
              
              (4
              )
 
  41
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 (A
California Limited Partnership)
 
 NOTES
TO FINANCIAL STATEMENTS – CONTINUED
 
 For
the Years Ended March 31, 2010, 2009 and 2008
  
 NOTE 4 – QUARTERLY RESULTS
OF OPERATIONS (UNAUDITED)
 
 June
      30
              
              
              September
      30
              
              
              December
      31
              
              
              March
      312008Income
              
              $
              3,000
              
              
              $
              3,000
              
              
              $
              -
              
              
              $
              -Operating
      expenses
              
              
              (29,000
              )
              
              
              (33,000
              )
              
              
              (52,000
              )
              
              
              (17,000
              )Loss
      from operations
              
              
              (26,000
              )
              
              
              (30,000
              )
              
              
              (52,000
              )
              
              
              (17,000
              )Gain
      on sale of Local Limited Partnerships
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              513,000Net
      income (loss)
              
              
              (26,000
              )
              
              
              (30,000
              )
              
              
              (52,000
              )
              
              
              496,000Net
      income (loss) available to Limited Partners
              
              
              (25,000
              )
              
              
              (30,000
              )
              
              
              (51,000
              )
              
              
              491,000Net
      income (loss) per Partnership Unit
              
              
              (3
              )
              
              
              (4
              )
              
              
              (7
              )
              
              
              66
 
 NOTE 5 - SUBSEQUENT
EVENTS
 
 On May
20, 2010, the sale of HPA Investors closed. The total sales price including
replacement reserves was  $1,707,000 which was disbursed as
follows:  the General Partner of HPA was paid approximately $104,000
in sales preparation and refinancing fees and repayment of loans previously
made, $1,452,000 paid down the outstanding mortgages and approximately $8,000 in
selling costs were paid.  The remaining $143,000 was distributed to
the Partnership.  The Partnership’s investment balance is zero at
March 31, 2010. Accordingly, a gain of $143,000 will be recorded in the quarter
ended June 30, 2010. The $143,000 in cash proceeds was used to fund the
Partnership’s reserves.  $71,000 of the cash received paid accrued
asset management fees, $2,000 paid the General Partner of the Partnership for
operating expenses paid on its behalf and the remaining $70,000 will remain the
Partnership reserves to fund future asset management fees and reimbursements to
the General Partner or an affiliate. No funds will be distributed to the Limited
Partners.
 
 
 
  42
  
 
 Item
9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
 
 NONE
 
 Item
9A(T). Controls and Procedures
 
 (a)           Evaluation
of disclosure controls and procedures
 
 As of the
end of the period covered by this report, the Partnership’s General Partner,
under the supervision and with the participation of the Chief Executive Officer
and Chief Financial Officer of Associates, carried out an evaluation of the
effectiveness of the Partnership’s “disclosure controls and procedures” as
defined in Securities Exchange Act of 1934 Rules 13a-15 and 15d-15. Based on
that evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that, as of the end of the period covered by this report, the
Partnership’s disclosure controls and procedures were not effective to ensure
that material information required to be disclosed in the Partnership’s periodic
report filings with SEC is recorded, processed, summarized and reported within
the time period specified by the SEC’s rules and forms, consistent with the
definition of “disclosure controls and procedures” under the Securities Exchange
Act of 1934.
 
 The
Partnership must rely on the Local Limited Partnerships to provide the
Partnership with certain information necessary to the timely filing of the
Partnership’s periodic reports. Factors in the accounting at the Local Limited
Partnerships have caused delays in the provision of such information during past
reporting periods, and resulted in the Partnership’s inability to file its
periodic reports in a timely manner.
 
 Once the
Partnership has received the necessary information from the Local Limited
Partnerships, the Chief Executive Officer and the Chief Financial Officer of
Associates believe that the material information required to be disclosed in the
Partnership’s periodic report filings with SEC is effectively recorded,
processed, summarized and reported, albeit not in a timely manner. Going
forward, the Partnership will use the means reasonably within its power to
impose procedures designed to obtain from the Local Limited Partnerships the
information necessary to the timely filing of the Partnership’s periodic
reports.
 
 (b)           Management’s annual report
on internal control over financial reporting
 
 The
management of Associates is responsible for establishing and maintaining for the
Partnership adequate internal control over financial reporting as that term is
defined in Securities Exchange Act of 1934 Rules 13a-15(f) and 15d-15(f), and
for performing an assessment of the effectiveness of internal control over
financial reporting as of March 31, 2010. The internal control process of
Associates, as it is applicable to the Partnership, was designed to provide
reasonable assurance to Associates regarding the preparation and fair
presentation of published financial statements, and includes those policies and
procedures that:
 
 (1)
              Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Partnership;
 (2)
              Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles in the United States, and that the Partnership’s
      receipts and expenditures are being made only in accordance with
      authorization of the management of Associates;
  and
 (3)
              Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Partnership’s assets
      that could have a material effect on the financial
    statements.
 
  43
  All
internal control processes, no matter how well designed, have inherent
limitations. Therefore, even those processes determined to be effective can
provide only reasonable assurance with respect to the reliability of financial
statement preparation and presentation. Further, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions or that the degree of
compliance with the policies or procedures may deteriorate.
 
 Management
of Associates assessed the effectiveness of its internal control over financial
reporting, as it is applicable to the Partnership, as of the end of the
Partnership’s most recent fiscal year. In making this assessment, it used the
criteria set forth in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based
on its assessment, management of Associates concluded that, for the reasons set
forth above under “Disclosure controls and procedures,” the internal control
over financial reporting, as it is applicable to the Partnership, was not
effective as of March 31, 2010. This annual report does not include an
attestation report of the Partnership’s independent registered public accounting
firm regarding internal control over financial reporting. Management’s report
was not subject to attestation by the Partnership’s independent registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Partnership to provide only management’s
report in this annual report.
 
 For
purposes of the Securities Exchange Act of 1934, the term “material weakness” is
a deficiency, or a combination of deficiencies, in a reporting company’s
internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of the company's annual or interim
financial statements will not be prevented or detected on a timely
basis.  For the reasons discussed above in this Item 9A, sub-section
(a) under the caption “Disclosure Controls and Procedures,” the Partnership’s
internal control over financial reporting has not been effective in permitting
timely reporting of the Partnership’s financial
information.  Accordingly, the management of Associates believes that
this inability to generate timely reports constitutes a material weakness in its
internal control over financial reporting.
 
 (c)           Changes in internal
controls
 
 There
were no changes in the Partnership’s internal control over financial reporting
that occurred during the year ended March 31, 2010 that materially affected, or
are reasonably likely to materially affect, the Partnership’s internal control
over financial reporting.
 
 Item
      9B. Other Information
 
 NONE
 
 PART
III.
 
 Item
10. Directors, Executive Officers and Corporate Governance
 
 (a)
              Identification of
      Directors, (b) Identification of Executive Officers, (c) Identification of
      Certain Significant Employees, (d) Family Relationships, and (e) Business
      Experience
 
  44
  Neither
the General Partner nor the Partnership has directors, executives officers or
employees of its own.  The business of the Partnership is conducted
primarily through Associates.  Associates is a California corporation
which was organized in 1971.  The following biographical information
is presented for the officers and employees of Associates with principal
responsibility for the Partnership’s affairs.
 
 Wilfred
      N. Cooper, Sr.
              ChairmanWilfred
      N. Cooper, Jr.
              President
      and Chief Executive OfficerDavid
      N. Shafer, Esq.
              Executive
      Vice PresidentMichael
      J. Gaber
              Executive
      Vice PresidentThomas
      J. Riha, CPA
              Senior
      Vice PresidentMelanie
      R. Wenk
              Vice
      President - Chief Financial OfficerDarrick
      Metz
              Senior
      Vice President - OriginationsThomas
      J. Hollingsworth
              Vice
      President – Asset ManagementGregory
      S. Hand
              Vice
      President – AcquisitionsChristine
      A. Cormier
              Vice
      President – Investor RelationsKay
      L. Cooper
              Director
      of WNC & Associates, Inc.Jennifer
      E. Cooper
              Director
      of WNC & Associates, Inc.
 
 In
addition to Wilfred N. Cooper, Sr., the directors of Associates are Wilfred N.
Cooper, Jr., Kay L. Cooper, and Jennifer Cooper. The principal shareholders of
Associates are trusts established by the Coopers.
 
 Wilfred
N. Cooper, Sr., age 79, is the founder and Chairman of the Board of Directors of
Associates, a Director of WNC Capital Corporation, and a general partner in some
of the partnerships previously sponsored by Associates Mr. Cooper has been
actively involved in the affordable housing industry since 1968. Previously,
during 1970 and 1971, he was founder and a principal of Creative Equity
Development Corporation, a predecessor of Associates, and of Creative Equity
Corporation, a real estate investment firm. For 12 years before 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. He
has testified before committees of the U.S. Senate and the U.S. House of
Representatives on matters pertaining to the affordable housing
industry.  Mr. Cooper is a Life Director of the National Association
of Home Builders (“NAHB”), a National Trustee for NAHB’s Political Action
Committee, a Director of Volunteers of America National Services, a subsidiary
of Volunteers of America, Inc. and a past Chairman of NAHB’s Multifamily
Council. He is a Director of the National Housing Conference and a member of
NHC’s Board of Governors, and a founder and Director of the California Housing
Consortium. He is the husband of Kay Cooper and the father of Wilfred N. Cooper,
Jr. Mr. Cooper graduated from Pomona College in 1956 with a Bachelor of Arts
degree.
 
 Wilfred
N. Cooper, Jr., age 46, is President, Chief Executive Officer, Secretary, a
Director and a member of the Acquisition Committee of Associates. He is
President and a Director of, and a registered principal with, WNC Capital
Corporation, and is a Director and Vice President of WNC Management, Inc. He has
been involved in real estate investment and acquisition activities since 1988
when he joined Associates. Previously, he served as a Government Affairs
Assistant with Honda North America in Washington, D.C. Mr. Cooper is a member of
the Editorial Advisory Boards of Affordable Housing
Finance and LIHTC Monthly Report,
a Steering Member of the Housing Credit Group of the National Association of
Home Builders, a member of the Tax Policy Council for the National Trust for
Historical Preservation, a member of the Advisory Board of the New York State
Association for Affordable Housing, a member of the Urban Land Institute and a
member of Vistage International, a global network of business leaders and chief
executives. He is the son of Wilfred Cooper, Sr. and Kay Cooper. Mr. Cooper
graduated from The American University in 1985 with a Bachelor of Arts
degree.
 
 David N.
Shafer, age 57, is an Executive Vice President, and a member of the Acquisition
Committee of Associates, and a Director, Vice President and Secretary of WNC
Management, Inc. Mr. Shafer has been active in the real estate industry since
1984. Before joining Associates in 1990, he was engaged as an attorney in the
private practice of law with a specialty in real estate and taxation. Mr. Shafer
is a Director and past President of the California Council of Affordable
Housing, a Director of the Council for Affordable and Rural Housing and a member
of the State Bar of
  45
  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
J. Gaber, age 43, is an Executive Vice President – Oversees the Syndications
Group, and is a member of the Acquisition Committee of Associates and Vice
President of WNC Management, Inc... Mr. Gaber has been involved in real estate
acquisition, valuation and investment activities since 1989 and has been
associated with Associates since 1997.  Prior to joining Associates,
he was involved in the valuation and classification of major assets,
restructuring of debt and analysis of real estate taxes with H.F. Ahmanson &
Company, parent of Home Savings of America.  Mr. Gaber is a member of
the Housing Credit Group of NAHB and of the National Housing and Rehabilitation
Association. Mr. Gaber graduated from the California State University, Fullerton
in 1991 with a Bachelor of Science degree in Business Administration –
Finance.
 
 Thomas J.
Riha, age 55, is Senior Vice President and a member of the Acquisition Committee
and the Commercial Real Estate Group of Associates and Vice President, Treasurer
and a Director of WNC Management, Inc. He has been involved in real estate
acquisition and investment activities since 1979. Before joining Associates in
1994, Mr. Riha was employed by Trust Realty Advisor, a real estate acquisition
and Management Company, last serving as Vice President - Operations. He is a
founding member of the Housing Credit Certified Professional Board of Governors,
a national professional certification program administered by the NAHB and the
National Affordable Housing Management Association. 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.
 
 Melanie
R. Wenk, CPA, age 42, is Vice President-Chief Financial Officer of
Associates.  She oversees WNC’s corporate and partnership accounting
and the Portfolio Management group, which is responsible for SEC reporting
quarterly and annual investor reports and monitoring investment
returns.  Prior to joining Associates in 2003, Ms. Wenk was associated
as a public accountant with BDO Seidman, LLP. She graduated from the California
Polytechnic State University, Pomona, in 1999 with a Bachelor of Science degree
in accounting.
 
  Darrick
Metz, age 39, is Senior Vice President – Originations of WNC & Associates,
Inc. He has been involved in multifamily property underwriting, acquisition and
investment activities since 1991. Prior to joining WNC in 1999, he was employed
by a Minnesota development company specializing in Tax Credit and market rate
multifamily projects. Mr. Metz also worked with the Minnesota Housing Finance
Agency (“MHFA”), where he held the position of Senior Housing Development
Officer. While at MHFA, he was responsible for the allocation of Tax Credits,
HOME funds and multiple state loan products. Mr. Metz is active in the Qualified
Allocation Plan Tax Credit Advisory Committee for the Wisconsin Housing and
Economic Development Authority, a member of the New York State Association for
Affordable Housing and a member of the Leadership Roundtable for the Association
of Affordable Housing in Michigan. He graduated from St. Cloud State University
in 1993 with a Bachelor of Science degree in finance/economics.
  
 Thomas J.
Hollingsworth, CPA, age 58, is Vice President – Asset Management of WNC &
Associates, Inc. and oversees WNC’s asset management group. Mr. Hollingsworth
has been involved in real estate acquisitions, operations and syndication of
multifamily properties for 28 years. Prior to joining WNC in 2005, he was the
senior workout specialist at Key Corporation Housing Management, Inc., a
division of Key Bank.  He has also been responsible for structuring several
tax sheltered multifamily acquisitions during his career. Mr. Hollingsworth
graduated from the University of Utah in 1973 with a Bachelor of Science degree
(cum laude) in Business Administration.
 
 Gregory
S. Hand, age 46, is Vice President - Acquisitions and a member of the Commercial
Real Estate Group of Associates.  He is responsible for the oversight
of property underwriting.  Mr. Hand has been involved in real estate
analysis, development and management since 1987.  Prior to joining
Associates in 1998, he was a portfolio asset manager with a national tax credit
sponsor with responsibility for the management of $200 million in
assets.  Prior to that, he was a finance manager with The Koll Company
and a financial analyst with The Irvine Company.  Mr. Hand graduated
from Iowa State University in 1987 with a Bachelor of Business Administration
degree in finance.
  46
  Christine
A. Cormier, age 48, is Vice President – Investor Relations of WNC &
Associates, Inc.  Ms. Cormier actsas a liaison for investors throughout the
closing process. Ms. Cormier has been active in the real estate industry since
1985. Prior to joining WNC in 2008, Ms. Cormier was with another major tax
credit syndicator for over 12 years where she was the Managing Director of
investor relations. In her previous position, Ms. Cormier closed between $500
million and $1 billion in equity annually, managing relationships with several
of the nation’s largest banks and insurance companies. Ms. Cormier graduated
from Bentley University in 1982 with a Bachelor of Science degree (summa cum
laude) in accounting and computer science.
 
 Kay L.
Cooper, age 73, is a Director of WNC & Associates, Inc. and has not
otherwise been engaged in business activities during the previous five years.
Kay Cooper was the sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products from 1975 until its sale in 1998. She is the wife of
Wilfred Cooper, Sr. and the mother of Wilfred Cooper, Jr. Ms. Cooper graduated
from the University of Southern California in 1958 with a Bachelor of Science
degree.
 
 Jennifer
E. Cooper, age 47, is a Director of WNC & Associates, Inc. and has not
otherwise been engaged in business activities during the previous five years.
She is the wife of Wilfred Cooper, Jr. and attended the University of Texas from
1981 to 1986.
 
 (f)
              Involvement in Certain
      Legal Proceedings
 
 None.
 
 (g)
              Promoters and Control
      Persons
 
 Inapplicable.
 
 (h)
              Audit Committee
      Financial Expert, and (i) Identification of the Audit
      Committee
 
 Neither
the Partnership nor the General Partners, has an audit committee.
 
 (j)   Changes to Nominating
Procedures
 
 Inapplicable.
 
 (k)  Compliance With Section
16(a) of the Exchange Act
 
 None.
 
 (l)   Code of
Ethics
 
 Associates
has adopted a Code of Ethics which applies to the Chief Executive Officer and
Chief Financial Officer of Associates.  The Code of Ethics will be
provided without charge to any person who requests it.  Such requests
should be directed to:  Investor Relations at (714) 662-5565 extension
187.
 
 Item
11.  Executive Compensation
 
 The
General Partners and their Affiliates are not permitted under Section 5.6 of the
Partnership’s Agreement of Limited Partnership (the “Agreement,” incorporated as
Exhibit 3.1 to this report) to receive any salary, fees, profits, distributions
or allocations from the Partnership or any Local Limited Partnership in which
the Partnership invests except as expressly allowed by the
Agreement.  The compensation and other economic benefits to the
General Partner and its Affiliates provided for in the Agreement are summarized
below.
 
  47
  (a)  Compensation for
Services
 
 For
services rendered by the General Partner or an Affiliate of the General Partner
in connection with the administration of the affairs of the Partnership, the
General Partner or any such Affiliate may receive an annual Asset Management Fee
in an amount equal to 0.5% of Invested Assets in Local Limited Partnerships
which are subsidized under one or more Federal, state or local housing
assistance programs. The Asset Management Fee is payable with respect to the
previous calendar quarter on the first day of each calendar quarter during the
year. Accrued but unpaid Asset Management Fees for any year are deferred without
interest and are payable in subsequent years from any funds available to the
Partnership after payment of all other costs and expenses of the Partnership,
including any capital reserves then determined by the General Partner to no
longer be necessary to be retained by the Partnership, or from the proceeds of a
sale or refinancing of Partnership assets.    Fees of
approximately $62,000, $87,000 and $96,000 were incurred during the years ended
March 31, 2010, 2009 and 2008, respectively. The Partnership paid the General
Partners and or their affiliates $3,000, $80,000 and $3,000 of those fees during
the years ended March 31, 2010, 2009 and 2008, respectively.
 
 Subject
to a number of terms and conditions set forth in the Agreement, the General
Partner and its Affiliates may be entitled to compensation for services actually
rendered or to be rendered in connection with (i) selecting, evaluating,
structuring, negotiating and closing the Partnership's investments in Local
Limited Partnership Interests, (ii) the acquisition or development of Properties
for the Local Limited Partnerships, or (iii) property management services
actually rendered by the General Partners or their Affiliates respecting the
Properties owned by Local Limited Partnerships.  The Partnership has
completed its investment stage, so no compensation for the services in (i) or
(ii) has been paid during the period covered by this report and none will be
paid in the future.  None of the services described in (iii) were
rendered and no such compensation was payable for such services during the
periods covered by this report.
 
 (b)  Operating
Expenses
 
 Reimbursement
to a General Partner or any of its Affiliates of Operating Cash Expenses is
subject to specific restrictions in Section 5.3.4 of the Partnership’s Agreement
of Limited Partnership (the “Agreement,” incorporated as Exhibit 3.1 to this
report).  The Agreement defines “Operating Cash Expenses”
as
 
 “ . . .
the amount of cash disbursed by the Partnership . . . in the ordinary course of
business for the payment of its operating expenses, such as expenses for
advertising and promotion, management, utilities, repair and maintenance,
insurance, investor communications, legal, accounting, statistical and
bookkeeping services, use of computing or accounting equipment, travel and
telephone expenses, salaries and direct expenses of Partnership employees while
engaged in Partnership business, and any other operational and administrative
expenses necessary for the prudent operation of the Partnership. Without
limiting the generality of the foregoing, Operating Cash Expenses shall include
fees paid by the Partnership to any General Partner or any Affiliate of a
General Partner permitted by this Agreement and the actual cost of goods,
materials and administrative services used for or by the Partnership, whether
incurred by a General Partner, an Affiliate of a General Partner or a
non-Affiliated Person in performing the foregoing functions. As used in the
preceding sentence, actual cost of goods and materials means the actual cost of
goods and materials used for or by the Partnership and obtained from entities
not Affiliated with a General Partner, and actual cost of administrative
services means the pro rata cost of personnel (as if such persons were employees
of the Partnership) associated therewith, but in no event to exceed the
Competitive amount.”
 
 The
Agreement provides that no such reimbursement shall be permitted for services
for which a General Partner or any of its Affiliates is entitled to compensation
by way of a separate fee.  Furthermore, no such
  48
  reimbursement
is to be made for (a) rent or depreciation, utilities, capital equipment or
other such administrative items, and (b) salaries, fringe benefits, travel
expenses and other administrative items incurred or allocated to any
"controlling person" of a General Partner or any Affiliate of a General Partner.
For the purposes of Section 5.3.4, "controlling person" includes, but is not
limited to, any person, however titled, who performs functions for a General
Partner or any Affiliate of a General Partner similar to those of: (1) chairman
or member of the board of directors; (2) executive management, such as
president, vice president or senior vice president, corporate secretary or
treasurer; (3) senior management, such as the vice president of an operating
division who reports directly to executive management; or (4) those holding 5%
or more equity interest in such General Partner or any such Affiliate of a
General Partner or a person having the power to direct or cause the direction of
such General Partner or any such Affiliate of a General Partner, whether through
the ownership of voting securities, by contract or otherwise.
 
 The
unpaid operating expenses reimbursable to the General Partner or its affiliates
were $0, $56,893 and $155,963 for the years ended March 31, 2010, 2009 and 2008,
respectively.   The Partnership reimbursed the General Partner or
its affiliates for operating expenses of $148,433, $130,158 and $0 during the
years ended March 31, 2010, 2009 and 2008, respectively.
 
 (c)   Interest
in Partnership
 
 The
General Partner receives 1% of the Partnership’s allocated Low Income Housing
Tax Credits, which approximated $0 for Associates and $0 for the General Partner
in the aggregate for the tax years (calendar
  49
  years)
ended December 31, 2009, 2008 and 2007, respectively. The General Partner is
also entitled to receive 1% of the Partnership’s operating income or losses,
gain or loss from the sale of property and operating cash distributions. There
were no distributions of operating cash to the General Partner during the years
ended March 31, 2010, 2009 and 2008.   The General Partner has an
interest in sale or refinancing proceeds as follows: after the Limited Partners
have received a return of their capital, General Partner may receive an amount
equal to its capital contribution, less any prior distribution of such proceeds,
then the General Partner may receive 1% and the Limited Partners 99% of any
remaining proceeds.  The distributions of cash to the General Partners
during the years ended March 31, 2010, 2009 and 2008 were $0, $0 and $3,369,
respectively.
 
 Item
12.  Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder
Matters
 
 (a)
              Securities Authorized
      for Issuance Under Equity Compensation
  Plans
 
 The
      Partnership has no compensation plans under which interests in the
      Partnership are authorized for
issuance.
 
 (b)
              Security Ownership of
      Certain Beneficial Owners
 
 No
      person is known to own beneficially in excess of 5% of the outstanding
      Partnership Units.
 
 (c)
              Security Ownership of
      Management
 
 Neither
the General Partners, Associates, its affiliates, nor any of the officers or
directors of the General Partner, Associates or its affiliates own directly or
beneficially any Partnership Units.
 
 (d)
              Changes in
      Control
 
 The
management and control of the General Partner and of Associates and their
affiliates may be changed at any time in accordance with their respective
organizational documents, without the consent or approval of the Limited
Partners.  In addition, the Partnership Agreement provides for the
admission of one or more additional and successor General Partners in certain
circumstances.
 
 First,
with the consent of any other General Partners and a majority-in-interest of the
Limited Partners, any General Partners 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 Partners of the Partnership and elect a successor General
Partner.
 
 Item
13.  Certain Relationships and Related Transactions, and Director
Independence
 
 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, reimbursement of
expenses, and the General Partner’s interests in the Partnership, as discussed
in Item 11 and in the notes to the Partnership’s financial
statements.
  50
  
 Item
14. Principal Accountant Fees and Services
 
 The
following is a summary of fees paid to the Partnership’s principal independent
registered public accounting firm for the years ended March 31:
 
 2010
              
              
              2009Audit
      Fees
              
              $
              47,620
              
              
              $
              -Audit-related
      Fees
              
              
              -
              
              
              
              -Tax
      Fees
              
              
              3,035
              
              
              
              2,890All
      Other Fees
              
              
              7,595
              
              
              
              -TOTAL
              
              $
              58,250
              
              
              $
              2,890
 
 The
Partnership has no Audit Committee. All audit services and any permitted
non-audit services performed by the Partnership’s independent auditors are
pre-approved by the General Partner.
 
 PART
IV.
 
 Item
15.  Exhibits and Financial Statement Schedules
 
 (a)(1)           List of Financial statements
included in Part II hereof:
 
 Balance
      Sheets, March 31, 2010 and 2009
 Statements
      of Operations for the years ended March 31, 2010, 2009 and
      2008
 Statements
      of Partners’ Deficit for the years ended March 31, 2010, 2009 and
      2008
 Statements
      of Cash Flows for the years ended March 31, 2010, 2009 and
      2008
 Notes
      to Financial Statements
 
 (a)(2)           List of Financial statement
schedules included in Part IV hereof:
 
 Schedule
III - Real Estate Owned by Local Limited Partnerships
 
 (a)(3)           Exhibits.
 
 3.1
              Agreement
      of Limited Partnership dated September 15, 1988 filed as Exhibit 28.1 to
      Form 10-K for the year ended December 31, 1992 is hereby incorporated
      herein by reference as Exhibit 3.1.
 
 31.1
              Certification
      of the Chief Executive Officer pursuant to Rule 13a-14 or
      15d-14.  (filed herewith)
 
 31.2
              Certification
      of the Chief Financial Officer pursuant to Rule 13a-14 or
      15d-14.  (filed herewith)
 
 32.1
              Section
      1350 Certification of the Chief Executive Officer.  (filed
      herewith)
 
 32.2
              Section
      1350 Certification of the Chief Financial Officer.  (filed
      herewith)
 
 99.1
              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 99.1
 
 99.2
              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
99.2.
 
 99.3
              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
99.3.
 
  51
  99.4
              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 99.4.
 
 99.5
              Amended
      and Restated Agreement of Limited Partnership of HPA Investors filed as
      exhibit 10.8on Form 10-K dated December 31, 1992 is hereby incorporated
      herein as exhibit 99.5.
 
 99.6
              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
99.6.
 
 99.7
              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
99.7.
 
 99.8
              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 99.8.
 
 99.9
              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
99.9.
 
 99.10
              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
99.10.
 
 99.11
              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 99.1
 
  52
  Schedule
      IIIReal
      Estate Owned by Local Limited PartnershipsMarch
      31, 2010As
      of March 31, 2010
              
              
              As
      of December 31, 2009Local
      Limited
                Partnership
      Name
              Location
              
              Partnership’s
      Total Investment in Local Limited Partnerships
              
              
              Amount
      of Investment Paid to Date
              
              
              Mortgage
      Balances of Local Limited Partnership
              
              
              Land
              
              
              Buildings
      & Equipment
              
              
              Accumulated
      Depreciation
              
              
              Net
      Book ValueAlta
      Vista Investors
              Orosi,
      California
              
              $
              583,000
              
              
              $
              583,000
              
              
              $
              1,375,000
              
              
              $
              40,000
              
              
              $
              2,389,000
              
              
              $
              1,646,000
              
              
              $
              783,000Cloverdale
      Garden Apartments
              Cloverdale,
      California
              
              
              *
              
              
              
              *
              
              
              
              1,575,000
              
              
              
              182,000
              
              
              
              2,059,000
              
              
              
              1,004,000
              
              
              
              1,237,000East
      Garden Apartments
              Jamestown,
      California
              
              
              *
              
              
              
              *
              
              
              
              2,073,000
              
              
              
              225,000
              
              
              
              2,748,000
              
              
              
              1,338,000
              
              
              
              1,635,000HPA
      Investors (1)
              Shafter,
      California
              
              
              538,000
              
              
              
              538,000
              
              
              
              1,454,000
              
              
              
              93,000
              
              
              
              2,123,000
              
              
              
              1,059,000
              
              
              
              1,157,000Knights
      Landing Harbor
              Knights
      Landing, California
              
              
              275,000
              
              
              
              275,000
              
              
              
              941,000
              
              
              
              100,000
              
              
              
              1,281,000
              
              
              
              648,000
              
              
              
              733,000Midland
      Manor Associates
              Mendota,
      California
              
              
              383,000
              
              
              
              383,000
              
              
              
              1,374,000
              
              
              
              80,000
              
              
              
              2,094,000
              
              
              
              1,314,000
              
              
              
              860,0001,779,000
              
              
              
              1,779,000
              
              
              $
              8,792,000
              
              
              $
              720,000
              
              
              $
              12,694,0000
              
              
              $
              7,009,000
              
              
              $
              6,405,000
 
 (1)      The
Local Limited Partnership was sold subsequent to March 31, 2010. The transaction
was approved by the Limited Partners and closed on May 20, 2010.
 
 *      The
Local Limited Partnership Interest was sold subsequent to December 31, 2009 and
prior to March 31, 2010.
 
 Note: San
Jacinto was sold August 17, 2009.
  53
  WNC
      California Housing Tax Credits, L.P.Schedule
      IIIReal
      Estate Owned by Local Limited PartnershipsMarch
      31, 2010For
      the year ended December 31, 2009Local
      Limited Partnership Name
              
              Rental
      Income
              
              
              Net
      Income (Loss)
              
              
              Year
      Investment Acquired
              
              Status
              
              Estimated
      Useful Life (Years)Alta
      Vista Investors
              
              $
              212,000
              
              
              $
              (83,000
              )
              
              
              1989
              
              Completed
              
              
              27.5Cloverdale
      Garden Apartments
              
              
              265,000
              
              
              
              (12,000
              )
              
              
              1989
              
              Completed
              
              
              40East
      Garden Apartments
              
              
              320,000
              
              
              
              (63,000
              )
              
              
              1989
              
              Completed
              
              
              40HPA
      Investors
              
              
              239,000
              
              
              
              (23,000
              )
              
              
              1989
              
              Completed
              
              
              40Knights
      Landing Harbor
              
              
              180,000
              
              
              
              2,000
              
              
              
              1989
              
              Completed
              
              
              40Midland
      Manor Associates
              
              
              201,000
              
              
              
              (49,000
              )
              
              
              1990
              
              Completed
              
              
              27.5$
              1,417,000
              
              
              $
              (228,000
              )
 
 
 (1) The
Local Limited Partnership was sold subsequent to March 31, 2010. The transaction
was approved by the Limited Partners and closed on May 20, 2010.
 
 
 Note: San
Jacinto was sold August 17, 2009.
  54
  WNC
      California Housing Tax Credits, L.P.Schedule
      IIIReal
      Estate Owned by Local Limited PartnershipsMarch
      31, 2009As
      of March 31, 2009
              
              
              As
      of December 31, 2008Local
      Limited
                Partnership
      Name
              Location
              
              Partnership’s
      Total Investment in Local Limited Partnerships
              
              
              Amount
      of Investment Paid to Date
              
              
              Mortgage
      Balances of Local Limited Partnership
              
              
              Land
              
              
              Buildings
      & Equipment
              
              
              Accumulated
      Depreciation
              
              
              Net
      Book ValueAlta
      Vista Investors
              Orosi,
      California
              
              $
              583,000
              
              
              $
              583,000
              
              
              $
              1,375,000
              
              
              $
              40,000
              
              
              $
              2,389,000
              
              
              $
              1,646,000
              
              
              $
              783,000Cloverdale
      Garden Apartments
              Cloverdale,
      California
              
              
              617,000
              
              
              
              617,000
              
              
              
              1,575,000
              
              
              
              182,000
              
              
              
              2,059,000
              
              
              
              1,004,000
              
              
              
              1,237,000East
      Garden Apartments
              Jamestown,
      California
              
              
              770,000
              
              
              
              770,000
              
              
              
              2,073,000
              
              
              
              225,000
              
              
              
              2,748,000
              
              
              
              1,338,000
              
              
              
              1,635,000HPA
      Investors (1)
              Shafter,
      California
              
              
              538,000
              
              
              
              538,000
              
              
              
              1,454,000
              
              
              
              93,000
              
              
              
              2,123,000
              
              
              
              1,059,000
              
              
              
              1,157,000Knights
      Landing Harbor
              Knights
      Landing, California
              
              
              275,000
              
              
              
              275,000
              
              
              
              941,000
              
              
              
              100,000
              
              
              
              1,281,000
              
              
              
              648,000
              
              
              
              733,000Midland
      Manor Associates
              Mendota,
      California
              
              
              383,000
              
              
              
              383,000
              
              
              
              1,374,000
              
              
              
              80,000
              
              
              
              2,094,000
              
              
              
              1,314,000
              
              
              
              860,000San
      Jacinto Associates
              San
      Jacinto, California
              
              
              469,000
              
              
              
              469,000
              
              
              
              1,723,000
              
              
              
              223,000
              
              
              
              2,142,000
              
              
              
              802,000
              
              
              
              1,563,000$
              3,635,000
              
              
              $
              3,635,000
              
              
              $
              10,568,000
              
              
              $
              943,000
              
              
              $
              14,727,0000
              
              
              $
              7,385,000
              
              
              $
              8,285,000
 
  55
  WNC
      California Housing Tax Credits, L.P.Schedule
      IIIReal
      Estate Owned by Local Limited PartnershipsMarch
      31, 2009For
      the year ended December 31, 2008Local
      Limited Partnership Name
              
              Rental
      Income
              
              
              Net
      Income (Loss)
              
              
              Year
      Investment Acquired
              
              Status
              
              Estimated
      Useful Life (Years)Alta
      Vista Investors
              
              $
              232,000
              
              
              $
              (72,000
              )
              
              
              1989
              
              Completed
              
              
              27.5Cloverdale
      Garden Apartments
              
              
              263,000
              
              
              
              (11,000
              )
              
              
              1989
              
              Completed
              
              
              40East
      Garden Apartments
              
              
              313,000
              
              
              
              (56,000
              )
              
              
              1989
              
              Completed
              
              
              40HPA
      Investors
              
              
              243,000
              
              
              
              -
              
              
              
              1989
              
              Completed
              
              
              40Knights
      Landing Harbor
              
              
              174,000
              
              
              
              1,000
              
              
              
              1989
              
              Completed
              
              
              40Midland
      Manor Associates
              
              
              205,000
              
              
              
              (42,000
              )
              
              
              1990
              
              Completed
              
              
              27.5San
      Jacinto Associates
              
              
              287,000
              
              
              
              (32,000
              )
              
              
              1990
              
              Completed
              
              
              50$
              1,717,000
              
              
              $
              (212,000
              )
  56
  WNC
      California Housing Tax Credits, L.P.Schedule
      IIIReal
      Estate Owned by Local Limited PartnershipsMarch
      31, 2008As
      of March 31, 2008
              
              
              As
      of December 31, 2007Local
      Limited
                Partnership
      Name
              Location
              
              Partnership’s
      Total Investment in Local Limited Partnerships
              
              
              Amount
      of Investment Paid to Date
              
              
              Mortgage
      Balances of Local Limited Partnership
              
              
              Land
              
              
              Buildings
      & Equipment
              
              
              Accumulated
      Depreciation
              
              
              Net
      Book ValueAlta
      Vista Investors
              Orosi,
      California
              
              $
              583,000
              
              
              $
              583,000
              
              
              $
              1,392,000
              
              
              $
              40,000
              
              
              $
              2,319,000
              
              
              $
              1,419,000
              
              
              $
              940,000Cloverdale
      Garden Apartments
              Cloverdale,
      California
              
              
              617,000
              
              
              
              617,000
              
              
              
              1,593,000
              
              
              
              182,000
              
              
              
              2,059,000
              
              
              
              896,000
              
              
              
              1,345,000Countryway
      Associates (2)
              Mendota,
      California
              
              
              571,000
              
              
              
              571,000
              
              
              
              1,430,000
              
              
              
              90,000
              
              
              
              2,200,000
              
              
              
              1,421,000
              
              
              
              869,000East
      Garden Apartments
              Jamestown,
      California
              
              
              770,000
              
              
              
              770,000
              
              
              
              2,096,000
              
              
              
              225,000
              
              
              
              2,656,000
              
              
              
              1,198,000
              
              
              
              1,683,000HPA
      Investors (1)
              Shafter,
      California
              
              
              538,000
              
              
              
              538,000
              
              
              
              1,470,000
              
              
              
              94,000
              
              
              
              2,103,000
              
              
              
              918,000
              
              
              
              1,279,000Knights
      Landing Harbor
              Knights
      Landing, California
              
              
              275,000
              
              
              
              275,000
              
              
              
              953,000
              
              
              
              100,000
              
              
              
              1,254,000
              
              
              
              574,000
              
              
              
              780,000Midland
      Manor Associates
              Mendota,
      California
              
              
              383,000
              
              
              
              383,000
              
              
              
              1,389,000
              
              
              
              80,000
              
              
              
              2,056,000
              
              
              
              1,148,000
              
              
              
              988,000San
      Jacinto Associates
              San
      Jacinto, California
              
              
              469,000
              
              
              
              469,000
              
              
              
              1,733,000
              
              
              
              223,000
              
              
              
              2,142,000
              
              
              
              757,000
              
              
              
              1,608,000Woodlake
      Manor (1)
              Woodlake,
      California
              
              
              -
              
              
              
              -
              
              
              
              1,409,000
              
              
              
              144,000
              
              
              
              2,030,000
              
              
              
              1,324,000
              
              
              
              850,000Yreka
      Investment Group (2)
              Yreka,
      California
              
              
              538,000
              
              
              
              538,000
              
              
              
              1,423,000
              
              
              
              157,000
              
              
              
              1,887,000
              
              
              
              747,000
              
              
              
              1,297,000$
              4,744,000
              
              
              $
              4,744,000
              
              
              $
              14,888,000
              
              
              $
              1,335,000
              
              
              $
              20,706,0000
              
              
              $
              10,402,000
              
              
              $
              11,639,000
 
 (1)
              The
      Partnership disposed of Woodlake Manor on February 13,
    2008.
 
 (2)
              Subsequent
      to year end March 31, 2008 the Partnership sold its Limited Partnership
      interest in this Local Limited
Partnership.
 
  57
  
 WNC
      California Housing Tax Credits, L.P.Schedule
      IIIReal
      Estate Owned by Local Limited PartnershipsMarch
      31, 2008For
      the year ended December 31, 2007Local
      Limited
                Partnership
      Name
              
              Rental
      Income
              
              
              Net
      Income (Loss)
              
              
              Year
      Investment Acquired
              
              Status
              
              Estimated
      Useful Life (Years)Alta
      Vista Investors
              
              $
              225,000
              
              
              $
              (56,000
              )
              
              
              1989
              
              Completed
              
              
              27.5Cloverdale
      Garden Apartments
              
              
              244,000
              
              
              
              (39,000
              )
              
              
              1989
              
              Completed
              
              
              40Countryway
      Associates
              
              
              182,000
              
              
              
              (112,000
              )
              
              
              1989
              
              Completed
              
              
              27.5East
      Garden Apartments
              
              
              315,000
              
              
              
              (26,000
              )
              
              
              1989
              
              Completed
              
              
              40HPA
      Investors
              
              
              212,000
              
              
              
              (29,000
              )
              
              
              1989
              
              Completed
              
              
              40Knights
      Landing Harbor
              
              
              169,000
              
              
              
              5,000
              
              
              
              1989
              
              Completed
              
              
              40Midland
      Manor Associates
              
              
              203,000
              
              
              
              (46,000
              )
              
              
              1990
              
              Completed
              
              
              27.5San
      Jacinto Associates
              
              
              280,000
              
              
              
              (3,000
              )
              
              
              1990
              
              Completed
              
              
              50Woodlake
      Manor
              
              
              280,000
              
              
              
              (42,000
              )
              
              
              1989
              
              Completed
              
              
              30Yreka
      Investment Group
              
              
              255,000
              
              
              
              3,000
              
              
              
              1989
              
              Completed
              
              
              50$
              2,305,000
              
              
              $
              (345,000
              )
 
 
  58
  SIGNATURES
 
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
 
 WNC
CALIFORNIA HOUSING TAX CREDITS, L.P.
 
 By:           WNC
& Associates, Inc.,
 General
Partner
 
 By:           /s/ Wilfred N. Cooper,
Jr.
 Wilfred
N. Cooper, Jr.,
 President
of WNC & Associates, Inc.
 
 Date:
June 29, 2010
 
 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,
Jr.
 Wilfred
N. Cooper, Jr.,
 Chief
Executive Officer, President and Director of WNC & Associates, Inc.
(principal executive officer)
 
 Date:
June 29, 2010
 
 
 By:           /s/ Melanie R.
Wenk
 Melanie
R. Wenk
 Vice-President
- Chief Financial Officer of WNC & Associates, Inc. (principal financial
officer and principal accounting officer)
 
 Date:
June 29, 2010
 
 
 By:           /s/ Wilfred N. Cooper,
Sr.
 Wilfred
N. Cooper, Sr.,
 Chairman
of the Board of WNC & Associates, Inc.
 
 Date:
June 29, 2010
 
 By:           /s/ Kay L.
Cooper
 Kay L.
Cooper
 Director
of WNC & Associates, Inc.
 
 Date:
June 29, 2010