UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-K
 (Mark
One)
 xANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
 OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the
fiscal year ended March 30,
2010
 
 OR
 
  ̈TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
 OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the
transition period from _________ to _________
 
 0-19217
 (Commission
File Number)
 
 American Tax Credit
Properties III L.P.
 (Exact
Name of Registrant as Specified in its Governing Instruments)
 
 Delaware
                  
                  13-3545006(State
      or Other Jurisdiction of Organization)
                  
                  (I.R.S.
      Employer Identification No.)Richman
      Tax Credit Properties III L.P.340
      Pemberwick RoadGreenwich,
      Connecticut
                  
                  06831(Address
      of Principal Executive Offices)
                  
                  (Zip
      Code)Registrant's
      Telephone Number, Including Area Code:
                  
                  (203) 869-0900Securities
      Registered Pursuant to Section 12(b) of the Act:None
                  
                  None(Title
      of Each Class)
                  
                  (Name
      of Each Exchange on Which Registered)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 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 requirement for
the past 90 days.  Yes   x  No   ̈
 
 Indicate
by check mark whether the Registrant has submitted electronically and posted on
its corporate Web site, 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   ̈
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of Registrant's knowledge, in a 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 the definitions of “accelerated filer,” large
accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange
Act.
 
 Large
Accelerated Filer   ̈  Accelerated
Filer   ̈  Non-Accelerated
Filer   ̈  Smaller
Reporting Company  x
 
 Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  Yes  ̈  No x
 
 Registrant
has no voting common equity.  There is no established public trading
market for Registrant’s Units.  Accordingly, accurate information as
to the market value of a Unit at any given date is not available.  As
of June 25, 2010, there are 35,883 units outstanding.  The aggregate
sales price for such units was $35,883,000.
 
 Documents
incorporated by reference:
 Pages 14
through 19, 20 through 31, 44 through 71 and 78 through 80 of the Registrant’s
prospectus dated February 7, 1990, as supplemented by Supplement No. 1,
Supplement No. 2, Supplement No. 3, Supplement No. 4, Supplement No. 5 and
Supplement No. 6 dated June 6, 1990, November 21, 1990, December 20, 1990,
October 30, 1991, December 26, 1991 and January 15, 1992, respectively, filed
pursuant to Rule 424(b)(3) under the Securities Act of 1933, and filed as
Exhibits hereto, are incorporated by reference into Part I of this Annual
Report.
  
  .PART I
 
 Item
      1.
              Business.
 
 General Development of
Business and Narrative Description of Business
 
 American
Tax Credit Properties III L.P. (the "Registrant"), a Delaware limited
partnership, was formed on September 21, 1989 to invest primarily in leveraged
low-income multifamily residential complexes (the “Property” or “Properties”)
that qualified for the low-income tax credit in accordance with Section 42 of
the Internal Revenue Code (the "Low-income Tax Credit"), through the acquisition
of limited partner equity interests (the “Local Partnership Interests”) in
partnerships (the "Local Partnership" or "Local Partnerships") that are the
owners of the Properties.  The Local Partnerships hold their
respective Properties in fee.  Registrant considers its activity to
constitute a single industry segment.
 
 Richman
Tax Credit Properties III L.P. (the "General Partner"), a Delaware limited
partnership, was formed on September 21, 1989 to act as the General Partner of
Registrant.  The general partner of the General Partner is Richman
Housing Credits Inc. ("Richman Housing"), a Delaware corporation that is wholly
owned by Richard Paul Richman.  Richman Housing is an affiliate of The
Richman Group, Inc. ("Richman Group"), a Delaware corporation founded by Richard
Paul Richman in 1988.
 
 The
Amendment No. 2 to the Registration Statement on Form S-11 was filed with the
Securities and Exchange Commission (the "SEC") on February 1, 1990 pursuant to
the Securities Act of 1933 under Registration Statement File No. 33-31390 and
was declared effective on February 2, 1990.  Reference is made to the
prospectus dated February 7, 1990, as supplemented by Supplement No. 1,
Supplement No. 2, Supplement No. 3, Supplement No. 4, Supplement No. 5 and
Supplement No. 6 dated June 6, 1990, November 21, 1990, December 20, 1990,
October 30, 1991, December 26, 1991 and January 15, 1992, respectively, filed
with the SEC pursuant to Rule 424(b)(3) under the Securities Act of 1933 (the
"Prospectus").  Pursuant to Rule 12b-23 of the SEC's General Rules and
Regulations promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the description of Registrant's business set forth under
the heading "Investment Objectives and Policies" at pages 44 through 66 of the
Prospectus is hereby incorporated into this Annual Report by
reference.
 
 On March
12, 1990, Registrant commenced, through Merrill Lynch, Pierce, Fenner &
Smith Incorporated (“Merrill Lynch”), the offering of up to 150,000 units of
limited partnership interest (the "Units") at $1,000 per Unit to investors (the
“Limited Partners”).  On June 13, 1990, December 27, 1990, December
31, 1991 and January 23, 1992 the closings for 19,730, 9,622, 5,227 and 1,304
Units, respectively, took place, amounting to aggregate Limited Partners’
capital contributions of $35,883,000.
 
 Registrant's
primary objective, to provide Low-income Tax Credits to the Limited Partners,
has been completed.  The relevant state tax credit agency allocated
each of the Local Partnerships an amount of Low-income Tax Credits, which are
generally available for a ten year period from the year the Property is placed
in service (the “Ten Year Credit Period”).  The Ten Year Credit Period
was fully exhausted with respect to all of the Properties as of December 31,
2003.  The required holding period of each Property, in order to avoid
Low-income Tax Credit recapture, is fifteen years from the year in which the
Low-income Tax Credits commence on the last building of the Property (the
"Compliance Period").  The Compliance Period of all of the Local
Partnerships had expired as of December 31, 2007.  In addition,
certain of the Local Partnerships entered into agreements with the relevant
state tax credit agencies whereby the Local Partnerships must maintain the
low-income nature of the Properties for a period which exceeds the Compliance
Period (in certain circumstances, up to 50 years from when the Property is
placed in service, but commonly 30 years from the date any such Property is
placed in service), regardless of a sale of the Properties by the Local
Partnerships after the Compliance Period (the “Extended Use
Provisions”).  Note that the existence of Extended Use Provisions does
not extend the Compliance Period of the respective Local
Partnerships.  However, such provisions may limit the number and
availability of potential purchasers of the Properties.  Accordingly,
a sale of a Property may happen well after the expiration of the Compliance
Period and/or may be significantly discounted.
 
 Disposal of Local
Partnership Interests
 
 Registrant
is in the process of disposing of its Local Partnership Interests.  As
of March 30, 2010, Registrant owns thirty-nine of the forty-three Local
Partnership Interests originally acquired.  Registrant has served a
demand on the local general partners (the “Local General Partners”) of all
remaining Local Partnerships to commence a sale process to dispose of the
Properties.  In the event a sale cannot be consummated, it is the
General Partner’s intention to sell or assign Registrant’s Local Partnership
Interests.  Following the final disposition of its Local Partnership
Interests, Registrant intends to dissolve.  It is uncertain as to the
amount, if any, that Registrant will receive with respect to each specific
Property from such sales or assignments. There can be no assurance as to when
Registrant will dispose of its remaining Local Partnership
Interests.
  2
  Item
1.  Business
(Continued).
 
 Financial Information About
Industry Segments
 
 Registrant
is engaged solely in the business of owning a Local Partnership Interest in each
of the Local Partnerships.  A presentation of information regarding
industry segments is not applicable and would not be material to an
understanding of Registrant’s business taken as a whole.  See Item 8
below for a summary of Registrant's operations.
 
 Competition
 
 Pursuant
to Rule 12b-23 of the SEC's General Rules and Regulations promulgated under the
Exchange Act, the description of Registrant's competition, general risks, tax
risks and partnership risks set forth under the heading "Risk Factors" at pages
20 through 31 of the Prospectus is hereby incorporated into this Annual Report
by reference.
 
 Employees of
Registrant
 
 Registrant
employs no personnel and incurs no payroll costs.  All management
activities of Registrant are conducted by the General Partner.  An
affiliate of the General Partner employs individuals who perform the management
activities of Registrant.  This entity also performs similar services
for other affiliates of the General Partner.
 
 Regulation
 
 The
following is a brief summary of certain regulations applicable to Registrant and
is not, nor should it be considered, a full summary of the law or all related
issues.  Other than as set forth above and below, Registrant is not
aware of any existing or probable federal, state or local governmental
regulations, or any recent changes to such governmental regulations, which would
have an effect on Registrant’s business.
 
 Virtually
all of the Properties owned by the Local Partnerships have some form of a
government funded rental subsidy that affords the low-income tenants the ability
to reside at the Properties.  During the period that a subsidy
agreement between the United States Department of Housing and Urban Development
(“HUD”) and a Local Partnership is in existence, the Local Partnership Interest
of such Local Partnership may not be sold, and the Property may not be
transferred by the Local Partnership to another entity, without HUD’s approval,
which may be subject to various conditions.  In particular, the
transfer of title of the Properties by the Local Partnerships is expected to be
required to be closed in escrow pending HUD approval.  In addition, as
a condition to certain disposals, Registrant anticipates that HUD will require
the Local Partnerships to dedicate resources to maintenance in order to correct
deficiencies in the physical condition of the Properties. Correction of such
deficiencies will probably require expenditures of significant amounts of funds,
thus effectively reducing the amount of any net proceeds from the sale of the
Property.  There can be no assurance that the required governmental
agencies will approve any of the requested transfers, that such approvals will
be received in a timely manner or that other conditions will not be imposed for
such approvals. The failure to obtain or a delay in obtaining any required
approvals would have adverse consequences to the Limited Partners.
 
 In the
case of certain of the Local Partnerships, the local housing authority has the
right, for a period of time, to find a purchaser for the Property prior to the
Local General Partner beginning its own efforts to sell the
Property.  There can be no assurance that the local housing
authorities will be successful in finding purchasers for such Properties, which
may adversely impact the timing of Property sales.
 
 Certain
of the Local Partnerships are subject to restrictions on the amount of annual
cash distributions to partners under the terms of such Local Partnerships’ loan,
regulatory or other agreements.
 
 Registrant
is not aware of any non-compliance by the Local Partnerships with respect to
federal, state and local provisions regulating the discharge of material into
the environment or otherwise relating to the protection of the environment, and
is not aware of any condition that would have a material effect on the capital
expenditures or competitive position of Registrant.
  3
  Item
1A.  Risk
Factors.
 
 Risks Relating to
Registrant’s Business and Industry
 
 There
is no guarantee that the Properties will be sold or, if sold, that Registrant
would receive any proceeds.
 
 As noted
above in Item 1 - Business, Registrant
has served a demand on the Local General Partners of all remaining Local
Partnerships to commence a sale process to dispose of the
Properties.  However, the market of interested buyers of the
Properties is limited.  Some of the factors which negatively impact
the marketability of the Properties, or equivalently, the Local Partnership
Interests, include:
 
 ·
              the
      Extended Use Provisions;
 
 ·
              the
      substantial remaining mortgage balances on the Properties, which are
      typically very near the initial balances as a result of the heavily
      subsidized debt of the Local Partnership and the lengthy (usually near
      40-year) amortization period of the debt;
and
 
 ·
              poor
      economic conditions.
 
 It is
generally expected, therefore, that in the event a sale of a Property by a Local
Partnership can be consummated, the net proceeds of such sale, after repayment
of any outstanding debt and other liabilities, are not likely to be
significant.  Moreover, a portion of the net proceeds from the sale of
a Property by a Local Partnership may be payable to the Local General Partner
for prior operating advances and deferred fees.  As such, there will
likely not be significant proceeds, if any, upon a sale of a Property that will
be available for distribution by the Local Partnership to
Registrant.  In the event a sale cannot be consummated, it is the
General Partner’s intention to sell or assign Registrant’s Local Partnership
Interests.  However, it is not possible to ascertain the amount, if
any, that Registrant will receive with respect to each specific Property from
such sales or assignments.
 
 The
Local Partnerships may be required to continue to maintain the low-income nature
of the Properties beyond the Compliance Period under agreements with state tax
credit agencies.
 
 As noted
above in Item 1 - Business, certain of
the Local Partnerships entered into agreements containing Extended Use
Provisions with the relevant state tax credit agencies whereby the Local
Partnerships must maintain the low-income nature of the Properties for a period
which exceeds the Compliance Period (in certain circumstances, up to 50 years
from when the Property is placed in service, but commonly 30 years from the date
any such Property is placed in service), regardless of a sale of the Properties
by the Local Partnerships after the Compliance Period.  Although the
Extended Use Provisions do not extend the Compliance Period of the respective
Local Partnerships, such provisions may limit the number and availability of
potential purchasers of the Properties.  Accordingly, a sale of a
Property may happen well after the expiration of the Compliance Period and/or
may be significantly discounted.
 
 Properties
owned by the Local Partnerships are subject to certain risks relating to the
real estate industry in general that are outside of the control of the Local
Partnerships or Registrant and that may have an adverse affect on Registrant’s
investment in such Local Partnerships.
 
 Registrant’s
investment in the Local Partnerships is subject to the risks associated with
multi-family rental property and real estate in general, including retail,
commercial and residential real estate.  Such risks, which are subject
to change and are not in the control of Registrant, include risks related
to:
  ·
              the
      adverse use of adjacent or neighborhood real
  estate;
  ·
              regulated
      rents, which may adversely impact rent
  increases;
  ·
              utility
      allowances, which may adversely impact rents charged to tenants from year
      to year in certain locations;
  ·
              the
      inability of tenants to pay rent in light of current market
      conditions;
  ·
              changes
      in the demand for or supply of competing
  properties;
  ·
              changes
      in state or local tax rates and
assessments;
 4
  Item
1A.  Risk
Factors (Continued).
  ·
              increases
      in utility charges;
  ·
              unexpected
      expenditures for repairs and
maintenance;
  ·
              the
      discovery of previously undetected environmentally hazardous
      conditions;
  ·
              costs
      associated with complying with the Americans with Disabilities
      Act;
  ·
              uninsured
      losses relating to real property or excessively expensive premiums for
      insurance coverage;
  ·
              lawsuits
      from tenants or guests in connection with injuries that occur on the
      Properties;
  ·
              changes
      in local economic conditions; and
  ·
              changes
      in interest rates and the availability of financing (including changes
      resulting from current market
conditions).
  The
occurrence of any of the above risks could have a negative impact on the
operating results of such Properties and the respective Local Partnerships and,
in turn, may render the sale or refinancing of the Properties difficult or
unattractive, which could adversely affect Registrant’s investment in such Local
Partnerships.
 
 The
modification or elimination of government rental subsidies on which the Local
Partnerships rely would require the Local Partnerships to use existing funds or
obtain additional funds to continue to operate the respective
Properties.  Because Registrant’s investments in the Local
Partnerships are highly leveraged, it would be highly difficult to obtain such
additional funds.
 
 Virtually
all of the Properties owned by the Local Partnerships have some form of a
government funded rental subsidy, which affords the low-income tenants the
ability to reside at the Properties.  The Local Partnerships are
extremely reliant on such subsidies.  If the respective rental subsidy
programs were to be materially modified or eliminated, the Local Partnerships’
rental revenue would likely be significantly reduced.  To the extent
that revenues are not sufficient to meet operating expenses and service the
respective mortgages of the Properties, such Local Partnership would be required
to use reserves and any other funds available to avoid foreclosure of the
subject Property.  Registrant’s investments in the Local Partnerships
are highly leveraged, and there can be no assurance that additional funds would
be available to any Local Partnership or Registrant, if needed.  In
addition, there can be no assurance that, when a Property is sold, the proceeds
from a sale will be sufficient to pay the balance due on the mortgage loans or
any other outstanding indebtedness to which the Local Partnership is
subject.
 
 Limited
Partners may not be able to use all of the carried forward Low-income Tax
Credits.
 
 While a
limited exception is provided for Low-income Tax Credits in the case of
individuals, tax losses and credits allocated to a Limited Partner who is an
individual, trust, estate or personal service corporation generally may be used
to reduce the Limited Partner’s tax liability only to the extent that such
liability arises from passive activities.  Therefore, tax losses and
credits allocated to such a Limited Partner are not expected to be available to
offset tax liabilities that arise from salaries, dividends and interest and
other forms of income.  In addition, Low-income Tax Credits cannot be
used to offset alternative minimum tax.  Accordingly, there is no
guarantee that Limited Partners will be able to utilize all of the carried
forward Low-income Tax Credits.
 
 Risks Relating to Ownership
of Units of Limited Partnership Interest of Registrant
 
 There
is no existing market for the Units.
 
 There is
no trading market for Units and there are no assurances that any market will
develop.  In addition, the Units may be transferred only if certain
requirements are satisfied, including requirements that such transfer would not
impair Registrant’s tax status for federal income tax purposes and would not be
a violation of federal or state securities laws.  Accordingly, Limited
Partners may not be able to sell their Units promptly and bear the economic risk
of their investment for an indefinite period of time.
  5
  Item
1A.  Risk
Factors (Continued).
 
 Under
certain circumstances, Limited Partners of Registrant may incur out-of-pocket
tax costs.
 
 At some
point, Registrant’s operations (including the sale or refinancing of the
Properties owned by the Local Partnerships) may generate less cash flow than
taxable income, and the income, as well as the income taxes payable with respect
to Registrant’s taxable income, may exceed cash flow available for distribution
to the Limited Partners in such years.  This may result in an
out-of-pocket tax cost to the Limited Partners.  In addition, a
Limited Partner may experience taxable gain on disposition of Units or upon a
disposition of the Local Partnership Interests or of the Properties even though
no cash is realized on the disposition; in such circumstances, the Limited
Partners may experience an out-of-pocket tax cost.
 
 Limited
Partners of Registrant may not receive a return of any portion of their original
capital investment in Registrant.
 
 To date,
the Limited Partners of Registrant have not received a return of any portion of
their original capital.  Accordingly, the only benefit of this
investment may be the Low-income Tax Credits.
 
 Item
1B.  Unresolved Staff
Comments.
 
 Not
applicable.
 
 Item
2.   Properties.
 
 The
executive offices of Registrant and the General Partner are located at 340
Pemberwick Road, Greenwich, Connecticut 06831. Registrant does not own or lease
any properties.  Registrant pays no rent; all charges for leased space
are borne by an affiliate of the General Partner.
 
 Registrant
originally acquired Local Partnership Interests in forty-three Local
Partnerships.  As discussed above in Item 1 - Business,the Compliance
Period of all of the Local Partnerships expired as of December 31, 2007 and,
accordingly, Registrant is in the process of disposing of its Local Partnership
Interests.  As of March 30, 2010, Registrant owns thirty-nine of the
forty-three Local Partnership Interests originally
acquired.  Registrant has served a demand on the Local General
Partners of all remaining Local Partnerships to commence a sale process to
dispose of the Properties, which Registrant intends will result in a termination
of Registrant’s Local Partnership Interests and ultimately the dissolution of
Registrant.
 
 During
the year ended March 30, 2010, Registrant withdrew from Westminster Apartments
Limited Partnership (“Westminster”), assigned one-half of its 99% Local
Partnership Interest in Sydney Engel Associates L.P. (“Sydney Engel”) to an
affiliate of the Local General Partner of Sydney Engel and sold its Local
Partnership Interest in Justin Associates (“Justin”) to an affiliate of the
Local General Partner of Justin.  Registrant received $10 in
connection with Westminster; there were no other proceeds in connection with
these transactions.  See further discussion in Part II, Item 7 - Management’s Discussion and
Analysis of Financial Condition and Results of Operations
herein.
 
 In the
event a sale of the remaining Properties cannot be consummated, it is the
General Partner’s intention to sell or assign Registrant’s Local Partnership
Interests.  It is not possible to ascertain the amount, if any, that
Registrant will receive with respect to each specific Property from such sales
or assignments.  In addition, certain of the Local Partnerships
entered into agreements with Extended Use Provisions with the relevant state tax
credit agencies whereby the Local Partnerships must maintain the low-income
nature of the Properties for a period which exceeds the Compliance Period (in
certain circumstances, up to 50 years from when the Property is placed in
service, but commonly 30 years from the date any such Property is placed in
service), regardless of a sale of the Properties by the Local Partnerships after
the Compliance Period.  While the Extended Use Provisions do not
extend the Compliance Period of the respective Local Partnerships, such
provisions may limit the number and availability of potential purchasers of the
Properties.  Accordingly, a sale of a Property may happen well after
the expiration of the Compliance Period and/or may be significantly
discounted.  There can be no assurance as to when the Local
Partnerships will dispose of the Properties, when Registrant will dispose of the
Local Partnership Interests or the amount of proceeds which may be received in
such dispositions.  In addition to amounts that remain outstanding under
the terms of the debt structure of the respective Local Partnerships, certain
Local Partnerships have outstanding obligations to the Local General Partners
and/or affiliates thereof for operating advances made over the years and for
certain fees that were deferred.
  6
  Item
2.   Properties
(Continued).
 
 The Local
Partnership Interests were acquired by Registrant from 1990 through
1992.  Although Registrant generally owns a 98.9% - 99% Local
Partnership Interest in the Local Partnerships, Registrant and American Tax
Credit Properties II L.P. ("ATCP II"), a Delaware limited partnership whose
general partner is affiliated with the General Partner, together, in the
aggregate, own a 99% Local Partnership Interest in the following Local
Partnerships:
 
 Registrant
                    
                    ATCP
      IIBatesville
      Family, L.P.
                    
                    
                    61.75
                    %
                    
                    
                    37.25
                    %Bruce
      Housing Associates, L.P.
                    
                    
                    61.75
                    
                    
                    
                    37.25Ivy
      Family, L.P.
                    
                    
                    61.75
                    
                    
                    
                    37.25Lawrence
      Road Properties, Ltd.
                    
                    
                    61.75
                    
                    
                    
                    37.25Mirador
      del Toa Limited Partnership
                    
                    
                    59.06
                    
                    
                    
                    39.94Purvis
      Heights Properties, L.P.
                    
                    
                    61.75
                    
                    
                    
                    37.25Queen
      Lane Investors
                    
                    
                    48.50
                    
                    
                    
                    50.50
 
 Many of
the Local Partnerships receive rental subsidy payments, including payments under
Section 8 of Title II of the Housing and Community Development Act of 1974
("Section 8") (see descriptions of the subsidies below).  The subsidy
agreements expire at various times.  Since October 1997, HUD has
issued a series of directives related to project based Section 8 contracts that
define owners’ notification responsibilities, advise owners of project based
Section 8 properties of what their options are regarding the renewal of Section
8 contracts, provide guidance and procedures to owners, management agents,
contract administrators and HUD staff concerning renewal of Section 8 contracts,
provide policies and procedures on setting renewal rents and handling renewal
rent adjustments and provide the requirements and procedures for opting-out of a
Section 8 project based contract.  Registrant cannot reasonably
predict legislative initiatives and governmental budget negotiations, the
outcome of which could result in a reduction in funds available for the various
federal and state administered housing programs including the Section 8
program.  Such changes could adversely affect the future net operating
income before debt service (“NOI”) and debt structure of any or all Local
Partnerships currently receiving such subsidy or similar
subsidies.  Two Local Partnerships’ Section 8 contracts are currently
subject to renewal under applicable HUD guidelines.
  7
  Item
2.  Properties
(Continued).
 
 MortgageName
      of Local Partnership
                                                                                    
                                                                                    Number
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    loans
      payable as of
                                                                                    
                                                                                    
                                                                                    SubsidyName
      of apartment complex
                                                                                    
                                                                                    of
      rental
                                                                                    
                                                                                    
                                                                                    Capital
                                                                                    
                                                                                    
                                                                                    December
      31,
                                                                                    
                                                                                    
                                                                                    (seeApartment
      complex location
                                                                                    
                                                                                    units
                                                                                    
                                                                                    
                                                                                    contribution
                                                                                    
                                                                                    
                                                                                    2009
                                                                                    
                                                                                    
                                                                                    footnotes)April
      Gardens Apartments II Limited PartnershipApril
      Gardens ApartmentsLas
      Piedras, Puerto Rico
                                                                                    
                                                                                    
                                                                                    48
                                                                                    
                                                                                    
                                                                                    $
                                                                                    485,581
                                                                                    
                                                                                    
                                                                                    $
                                                                                    1,919,017
                                                                                    
                                                                                    
                                                                                    (1b&c)Ashland
      Park Apartments, L.P. (4), (6)Ashland
      Park ApartmentsAshland,
      Nebraska
                                                                                    
                                                                                    
                                                                                    24
                                                                                    
                                                                                    
                                                                                    
                                                                                    235,732
                                                                                    
                                                                                    
                                                                                    
                                                                                    —
                                                                                    (4)Auburn
      Family, L.P.Auburn
      ApartmentsLouisville,
      Mississippi
                                                                                    
                                                                                    
                                                                                    16
                                                                                    
                                                                                    
                                                                                    
                                                                                    95,412
                                                                                    
                                                                                    
                                                                                    
                                                                                    435,391
                                                                                    
                                                                                    
                                                                                    (1b&c)Batesville
      Family, L.P.Westridge
      ApartmentsBatesville,
      Mississippi
                                                                                    
                                                                                    
                                                                                    48
                                                                                    
                                                                                    
                                                                                    
                                                                                    239,716
                                                                                    (2)
                                                                                    
                                                                                    
                                                                                    1,388,997
                                                                                    
                                                                                    
                                                                                    
                                                                                    (1b)Bay
      Springs Elderly, L.P.Bay
      Springs ManorBay
      Springs, Mississippi
                                                                                    
                                                                                    
                                                                                    24
                                                                                    
                                                                                    
                                                                                    
                                                                                    208,820
                                                                                    
                                                                                    
                                                                                    
                                                                                    650,941
                                                                                    
                                                                                    
                                                                                    (1b&c)Brisas
      del Mar Apartments Limited PartnershipBrisas
      del Mar ApartmentsHatillo,
      Puerto Rico
                                                                                    
                                                                                    
                                                                                    66
                                                                                    
                                                                                    
                                                                                    
                                                                                    668,172
                                                                                    
                                                                                    
                                                                                    
                                                                                    2,539,009
                                                                                    
                                                                                    
                                                                                    (1b&c)Bruce
      Housing Associates, L.P.Bruce
      Family ApartmentsBruce,
      Mississippi
                                                                                    
                                                                                    
                                                                                    40
                                                                                    
                                                                                    
                                                                                    
                                                                                    183,155
                                                                                    (2)
                                                                                    
                                                                                    
                                                                                    1,058,397
                                                                                    
                                                                                    
                                                                                    (1b&c)Carrington
      Limited Dividend Housing Association Limited Partnership (3),
      (5)Carrington
      PlaceFarmington
      Hills, Michigan
                                                                                    
                                                                                    
                                                                                    100
                                                                                    
                                                                                    
                                                                                    
                                                                                    2,174,720
                                                                                    (2)
                                                                                    
                                                                                    
                                                                                    —
                                                                                    (3)Chestnut
      Park Associates, L.P.Chestnut
      Park ApartmentsEast
      Orange, New Jersey
                                                                                    
                                                                                    
                                                                                    59
                                                                                    
                                                                                    
                                                                                    
                                                                                    4,204,576
                                                                                    
                                                                                    
                                                                                    
                                                                                    4,201,606
                                                                                    
                                                                                    
                                                                                    (1a&f)Chowan
      Senior Manor Associates Limited PartnershipAzalea
      Garden Senior Manor ApartmentsMurfreesboro,
      North Carolina
                                                                                    
                                                                                    
                                                                                    33
                                                                                    
                                                                                    
                                                                                    
                                                                                    278,405
                                                                                    
                                                                                    
                                                                                    
                                                                                    1,183,484
                                                                                    
                                                                                    
                                                                                    (1b&c)Christian
      Street Commons AssociatesChristian
      Street Commons ApartmentsPhiladelphia,
      Pennsylvania
                                                                                    
                                                                                    
                                                                                    18
                                                                                    
                                                                                    
                                                                                    
                                                                                    581,645
                                                                                    
                                                                                    
                                                                                    
                                                                                    507,616
                                                                                    
                                                                                    
                                                                                    
                                                                                    (1b)
  8
  Item
2.   Properties
(Continued).
 
 MortgageName
      of Local Partnership
                                                                                                
                                                                                                Number
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                loans
      payable as of
                                                                                                
                                                                                                
                                                                                                SubsidyName
      of apartment complex
                                                                                                
                                                                                                of
      rental
                                                                                                
                                                                                                
                                                                                                Capital
                                                                                                
                                                                                                
                                                                                                December
      31,
                                                                                                
                                                                                                
                                                                                                (seeApartment
      complex location
                                                                                                
                                                                                                units
                                                                                                
                                                                                                
                                                                                                contribution
                                                                                                
                                                                                                
                                                                                                2009
                                                                                                
                                                                                                
                                                                                                footnotes)Country
      View ApartmentsCountry
      View ApartmentsPembroke,
      Maine
                                                                                                
                                                                                                
                                                                                                16
                                                                                                
                                                                                                
                                                                                                $
                                                                                                279,183
                                                                                                
                                                                                                
                                                                                                $
                                                                                                900,561
                                                                                                
                                                                                                
                                                                                                (1b&c)Desarrollos
      de Belen Limited PartnershipVista
      de Jagueyes II ApartmentsAguas
      Buenas, Puerto Rico
                                                                                                
                                                                                                
                                                                                                41
                                                                                                
                                                                                                
                                                                                                
                                                                                                422,929
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,807,250
                                                                                                
                                                                                                
                                                                                                (1b&c)Desarrollos
      de Emaus Limited PartnershipHucares
      II ApartmentsNaguabo,
      Puerto Rico
                                                                                                
                                                                                                
                                                                                                72
                                                                                                
                                                                                                
                                                                                                
                                                                                                631,404
                                                                                                
                                                                                                
                                                                                                
                                                                                                3,071,495
                                                                                                
                                                                                                
                                                                                                (1b&c)Ellinwood
      Heights Apartments, L.P.Ellinwood
      Heights ApartmentsEllinwood,
      Kansas
                                                                                                
                                                                                                
                                                                                                24
                                                                                                
                                                                                                
                                                                                                
                                                                                                156,261
                                                                                                
                                                                                                
                                                                                                
                                                                                                661,047
                                                                                                
                                                                                                
                                                                                                (1b&c)Fulton
      Street Houses Limited PartnershipFulton
      Street Townhouse ApartmentsNew
      York, New York
                                                                                                
                                                                                                
                                                                                                35
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,948,081
                                                                                                
                                                                                                
                                                                                                
                                                                                                3,869,930
                                                                                                
                                                                                                
                                                                                                
                                                                                                (1b)Hayes
      Run Limited PartnershipMashburn
      Gap ApartmentsMarshall,
      North Carolina
                                                                                                
                                                                                                
                                                                                                34
                                                                                                
                                                                                                
                                                                                                
                                                                                                322,074
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,370,693
                                                                                                
                                                                                                
                                                                                                (1b&c)Howard
      L. Miller Sallisaw Apartments II, L.P.Sallisaw
      II ApartmentsSallisaw,
      Oklahoma
                                                                                                
                                                                                                
                                                                                                24
                                                                                                
                                                                                                
                                                                                                
                                                                                                130,158
                                                                                                
                                                                                                
                                                                                                
                                                                                                592,943
                                                                                                
                                                                                                
                                                                                                (1b&c)Hurlock
      Meadow Limited PartnershipHurlock
      Meadow ApartmentsHurlock,
      Maryland
                                                                                                
                                                                                                
                                                                                                30
                                                                                                
                                                                                                
                                                                                                
                                                                                                284,218
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,218,066
                                                                                                
                                                                                                
                                                                                                (1b&c)Ivy
      Family, L.P.Ivy
      ApartmentsLouisville,
      Mississippi
                                                                                                
                                                                                                
                                                                                                32
                                                                                                
                                                                                                
                                                                                                
                                                                                                135,528
                                                                                                (2)
                                                                                                
                                                                                                
                                                                                                722,550
                                                                                                
                                                                                                
                                                                                                (1b&c)Justin
      Associates (9)Locust
      Tower ApartmentsPhiladelphia,
      Pennsylvania
                                                                                                
                                                                                                
                                                                                                40
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,809,723
                                                                                                
                                                                                                
                                                                                                
                                                                                                2,070,292LaBelle
      Commons, Ltd.LaBelle
      CommonsLaBelle,
      Florida
                                                                                                
                                                                                                
                                                                                                32
                                                                                                
                                                                                                
                                                                                                
                                                                                                253,580
                                                                                                
                                                                                                
                                                                                                
                                                                                                972,598
                                                                                                
                                                                                                
                                                                                                (1b&c)Lawrence
      Road Properties, Ltd.Hillcrest
      ApartmentsNewton,
      Mississippi
                                                                                                
                                                                                                
                                                                                                24
                                                                                                
                                                                                                
                                                                                                
                                                                                                123,799
                                                                                                (2)
                                                                                                
                                                                                                
                                                                                                729,334
                                                                                                
                                                                                                
                                                                                                (1b&c)
  9
  Item
2.  Properties
(Continued).
 
 MortgageName
      of Local Partnership
                                                                                                  
                                                                                                  Number
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  loans
      payable as of
                                                                                                  
                                                                                                  
                                                                                                  SubsidyName
      of apartment complex
                                                                                                  
                                                                                                  of
      rental
                                                                                                  
                                                                                                  
                                                                                                  Capital
                                                                                                  
                                                                                                  
                                                                                                  December
      31,
                                                                                                  
                                                                                                  
                                                                                                  (seeApartment
      complex location
                                                                                                  
                                                                                                  units
                                                                                                  
                                                                                                  
                                                                                                  contribution
                                                                                                  
                                                                                                  
                                                                                                  2009
                                                                                                  
                                                                                                  
                                                                                                  footnotes)Loma
      Del Norte Limited PartnershipLoma
      Del Norte ApartmentsAnthony,
      New Mexico
                                                                                                  
                                                                                                  
                                                                                                  40
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  314,865
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  1,384,131
                                                                                                  
                                                                                                  
                                                                                                  (1b&c)Long
      Reach Associates Limited PartnershipOak
      Ridge ApartmentsBath,
      Maine
                                                                                                  
                                                                                                  
                                                                                                  30
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  448,922
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  1,422,983
                                                                                                  
                                                                                                  
                                                                                                  (1b&c)Mirador
      del Toa Limited PartnershipMirador
      del Toa ApartmentsToa
      Alta, Puerto Rico
                                                                                                  
                                                                                                  
                                                                                                  48
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  284,847
                                                                                                  (2)
                                                                                                  
                                                                                                  
                                                                                                  1,799,524
                                                                                                  
                                                                                                  
                                                                                                  (1b&c)Moore
      Haven Commons, Ltd.Moore
      Haven CommonsMoore
      Haven, Florida
                                                                                                  
                                                                                                  
                                                                                                  28
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  213,402
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  891,738
                                                                                                  
                                                                                                  
                                                                                                  (1b&c)NP-89
      Limited Dividend Housing Association Limited PartnershipNewport
      ApartmentsClinton
      Township, Michigan
                                                                                                  
                                                                                                  
                                                                                                  168
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  2,372,292
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  2,678,344
                                                                                                  
                                                                                                  
                                                                                                  (1a,b&f)Nash
      Hill Associates, Limited PartnershipNash
      Hill PlaceWilliamsburg,
      Massachusetts
                                                                                                  
                                                                                                  
                                                                                                  28
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  302,575
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  1,411,518
                                                                                                  
                                                                                                  
                                                                                                  (1b,c&d)North
      Calhoun City, L.P.North
      Calhoun City ApartmentsCalhoun
      City, Mississippi
                                                                                                  
                                                                                                  
                                                                                                  18
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  146,565
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  442,614
                                                                                                  
                                                                                                  
                                                                                                  (1b&c)Orange
      City Plaza, Limited Partnership (10)Orange
      City Plaza ApartmentsOrange
      City, Iowa
                                                                                                  
                                                                                                  
                                                                                                  32
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  576,580
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  361,020
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (1e)Puerta
      del Mar Limited PartnershipPuerta
      del Mar ApartmentsHatillo,
      Puerto Rico
                                                                                                  
                                                                                                  
                                                                                                  66
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  630,570
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  2,417,459
                                                                                                  
                                                                                                  
                                                                                                  (1b&c)Purvis
      Heights Properties, L.P.Pineview
      ApartmentsPurvis,
      Mississippi
                                                                                                  
                                                                                                  
                                                                                                  40
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  191,512
                                                                                                  (2)
                                                                                                  
                                                                                                  
                                                                                                  1,103,621
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (1b)Queen
      Lane InvestorsQueen's
      RowPhiladelphia,
      Pennsylvania
                                                                                                  
                                                                                                  
                                                                                                  29
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  597,050
                                                                                                  (2)
                                                                                                  
                                                                                                  
                                                                                                  1,955,583
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (1b)Somerset
      Manor, Ltd.Somerset
      ManorCentral
      City, Pennsylvania
                                                                                                  
                                                                                                  
                                                                                                  24
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  208,465
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  864,146
                                                                                                  
                                                                                                  
                                                                                                  (1b&c)Sugar
      Cane Villas, Ltd.Sugar
      Cane VillasPahokee,
      Florida
                                                                                                  
                                                                                                  
                                                                                                  87
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  751,560
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  3,182,404
                                                                                                  
                                                                                                  
                                                                                                  (1b&c)
  10
  Item
2.  Properties
(Continued).
 
 MortgageName
      of Local Partnership
                                                                          
                                                                          Number
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          loans
      payable as of
                                                                          
                                                                          
                                                                          SubsidyName
      of apartment complex
                                                                          
                                                                          of
      rental
                                                                          
                                                                          
                                                                          Capital
                                                                          
                                                                          
                                                                          December
      31,
                                                                          
                                                                          
                                                                          (seeApartment
      complex location
                                                                          
                                                                          units
                                                                          
                                                                          
                                                                          contribution
                                                                          
                                                                          
                                                                          2009
                                                                          
                                                                          
                                                                          footnotes)Summerfield
      Apartments Limited PartnershipSummerfield
      ApartmentsCharlotte,
      North Carolina
                                                                          
                                                                          
                                                                          52
                                                                          
                                                                          
                                                                          $
                                                                          1,088,667
                                                                          
                                                                          
                                                                          $
                                                                          1,393,021
                                                                          
                                                                          
                                                                          
                                                                          (1b)Sydney
      Engel Associates L.P.(formerly
      known as Sydney Engel Associates) (8)The
      CastleNew
      York, New York
                                                                          
                                                                          
                                                                          224
                                                                          
                                                                          
                                                                          
                                                                          3,201,874
                                                                          
                                                                          
                                                                          
                                                                          16,403,175
                                                                          
                                                                          
                                                                          
                                                                          (1b)Union
      Valley Associates Limited PartnershipUnion
      Valley ApartmentsUnion
      Township, Pennsylvania
                                                                          
                                                                          
                                                                          36
                                                                          
                                                                          
                                                                          
                                                                          371,589
                                                                          
                                                                          
                                                                          
                                                                          1,392,677
                                                                          
                                                                          
                                                                          
                                                                          (1b)Walnut
      Grove Family, L.P.Walnut
      Grove ApartmentsWalnut
      Grove, Mississippi
                                                                          
                                                                          
                                                                          24
                                                                          
                                                                          
                                                                          
                                                                          191,695
                                                                          
                                                                          
                                                                          
                                                                          817,729
                                                                          
                                                                          
                                                                          (1b&c)Waynesboro
      Apartments Limited PartnershipWaynesboro
      ApartmentsWaynesboro,
      Pennsylvania
                                                                          
                                                                          
                                                                          36
                                                                          
                                                                          
                                                                          
                                                                          360,859
                                                                          
                                                                          
                                                                          
                                                                          1,424,179
                                                                          
                                                                          
                                                                          
                                                                          (1b)West
      Calhoun City, L.P.West
      Calhoun City ApartmentsCalhoun
      City, Mississippi
                                                                          
                                                                          
                                                                          28
                                                                          
                                                                          
                                                                          
                                                                          230,212
                                                                          
                                                                          
                                                                          
                                                                          657,902
                                                                          
                                                                          
                                                                          (1b&c)Westminster
      Apartments Limited Partnership (4), (7)Westminster
      ApartmentsPhiladelphia,
      Pennsylvania
                                                                          
                                                                          
                                                                          42
                                                                          
                                                                          
                                                                          
                                                                          1,047,993
                                                                          
                                                                          
                                                                          
                                                                          —
                                                                          (4)$
                                                                          29,384,966
                                                                          
                                                                          
                                                                          $
                                                                          73,874,985
 
 (1)
              Description
      of subsidies:
 
 (a)
              Section
      8 of Title II of the Housing and Community Development Act of 1974 allows
      qualified low-income tenants to pay thirty percent of their monthly income
      as rent with the balance paid by the federal
  government.
 
 (b)
              The
      Local Partnership’s debt structure includes a principal or interest
      payment subsidy.
 
 (c)
              The
      Rural Housing Service (formerly the Farmers Home Administration) of the
      United States Department of Agriculture Rental Assistance Program allows
      qualified low-income tenants to receive rental
  subsidies.
 
 (d)
              The
      Commonwealth of Massachusetts participates in a rental assistance
      program.
 
 (e)
              The
      Northwest Regional Housing Authority provides qualified tenants with a
      rental subsidy.
 
 (f)
              The
      Local Partnerships’ Section 8 contracts are currently subject to renewal
      under applicable HUD guidelines.
 
 (2)
              Reflects
      amount attributable to Registrant
only.
  11
  Item
2.   Properties
(Continued).
 
 (3)
              The
      Local Partnership Interest is no longer owned by Registrant; there are no
      assets or liabilities related to such Local Partnership included in the
      combined balance sheets of the Local Partnerships as of December 31, 2009
      and 2008 in Note 6 to the accompanying financial
    statements.
 
 (4)
              The
      Local Partnership Interest is no longer owned by Registrant; there are no
      assets or liabilities related to such Local Partnership included in the
      combined balance sheet of the Local Partnerships as of December 31, 2009
      in Note 6 to the accompanying financial
  statements.
 
 (5)
              Registrant
      assigned its Local Partnership Interest to one of the Local General
      Partners in February 2007.  The combined statement of operations
      of the Local Partnerships for the year ended December 31, 2007 included in
      Note 6 to the accompanying financial statements does not include any
      results of operations for such Local
  Partnership.
 
 (6)
              Registrant
      withdrew from the Local Partnership in February 2009.  The
      combined statement of operations of the Local Partnerships for the year
      ended December 31, 2009 included in Note 6 to the accompanying financial
      statements does not include any results of operations for such Local
      Partnership.
 
 (7)
              Registrant
      withdrew from the Local Partnership in July 2009.  The combined
      statement of operations of the Local Partnerships for the year ended
      December 31, 2009 included in Note 6 to the accompanying financial
      statements includes results of operations for such Local Partnership
      through the date of withdrawal (see Part II, Item 7 - Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations, herein).
 
 (8)
              Registrant
      assigned one-half of its 99% Local Partnership Interest to an affiliate of
      the Local General Partner in December 2009 (see Part II, Item 7 - Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations, herein).
 
 (9)
              Registrant
      sold its Local Partnership Interest to an affiliate of the Local General
      Partner in March 2010 (see Part II, Item 7 - Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations, herein).
 
 (10)
              Capital
      contribution includes voluntary advances made to the Local
      Partnership.
 
 Item
      3.
              Legal
      Proceedings.
 
 None.
 
 Item
      4.
              Reserved.
  12
  PART
II
 
 Item
      5.
              Market for
      Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity
Securities.
 
 Market Information and
Holders
 
 There is
no established public trading market for the Units.  Accordingly,
accurate information as to the market value of a Unit at any given date is not
available.  The number of record holders of Units as of approximately
June 15, 2010 was approximately 1,390, holding an aggregate of 35,883
Units.
 
 Merrill
Lynch follows internal guidelines for providing estimated values of limited
partnerships and other direct investments reported on client account
statements.  Pursuant to such guidelines, estimated values for limited
partnership interests reported on Merrill Lynch client account statements (such
as Registrant’s Units) are provided to Merrill Lynch by independent valuation
services, whose estimated values are based on financial and other information
available to them.  In addition, Registrant may provide an estimate of
value to Unit holders from time to time in Registrant's reports to Limited
Partners.  The estimated values provided by the independent services
and Registrant, which may differ, are not market values and Unit holders may not
be able to sell their Units or realize either amount upon a sale of their
Units.  Unit holders may not realize such estimated values upon the
liquidation of Registrant.
 
 Distributions
 
 Registrant
owns a Local Partnership Interest in Local Partnerships that are the owners of
Properties that are leveraged and receive government assistance in various forms
of rental and debt service subsidies.  The distribution of cash flow
generated by the Local Partnerships may be restricted, as determined by each
Local Partnership's financing and subsidy agreements.  Accordingly,
Registrant does not anticipate that it will provide significant cash
distributions to its Limited Partners in the future.  There were no
cash distributions to the Limited Partners during the years ended March 30, 2010
and 2009.
 
 Low-income
Tax Credits, which are subject to various limitations, may be used by the
Limited Partners to offset federal income tax liabilities.  Registrant
generated total Low-income Tax Credits from investments in Local Partnerships of
approximately $1,559 per Unit.  The Ten Year Credit Period with
respect to the Properties was fully exhausted as of December 31, 2003 and the
Compliance Periods of the Local Partnerships had expired as of December 31,
2007.  Registrant has served a demand on the Local General Partners of
all remaining Local Partnerships to commence a sale process to dispose of the
Properties.  In the event a sale cannot be consummated, it is the
General Partner’s intention to sell or assign Registrant’s Local Partnership
Interests.  It is not possible to ascertain the amount, if any, that
Registrant will receive with respect to each specific Property from such sales
or assignments.
 
 Recent Sales of Unregistered
Securities
 
 None.
 
 Item
      6.
              Selected Financial
      Data.
 
 Registrant
is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and
is not required to provide the information required under this
Item.
 
 Item
7.  Management's Discussion and
Analysis of Financial Condition and Results of Operations.
 
 Capital Resources and
Liquidity
 
 Registrant
admitted limited partners (the “Limited Partners”) in four closings with
aggregate Limited Partners’ capital contributions of $35,883,000.  In
connection with the offering of the sale of units (the “Units”), Registrant
incurred organization and offering costs of approximately $4,419,000 and
established a working capital reserve of approximately
$2,153,000.  The remaining net proceeds of approximately $29,311,000
(the “Net Proceeds”) were available to be applied to the acquisition of limited
partner interests (the “Local Partnership Interests”) in partnerships (the
“Local Partnerships”) that own low-income multifamily residential complexes (the
“Property” or “Properties”) that qualified for the low-income tax credit in
accordance with Section 42 of the Internal Revenue Code (the “Low-income Tax
Credit”).  The Net Proceeds were utilized in acquiring a Local
Partnership Interest in forty-three Local Partnerships.
  13
  Item
7.  Management's Discussion and
Analysis of Financial Condition and Results of Operations
(Continued).
 
 As of
March 30, 2010, Registrant has cash and cash equivalents and investment in
mutual fund totaling $825,089, which is available for operating expenses of
Registrant and circumstances which may arise in connection with the Local
Partnerships.  Future sources of Registrant funds are expected to be
primarily from interest earned on working capital and limited cash distributions
from Local Partnerships.  In addition, although it is not possible to
ascertain the amount, if any, that Registrant will receive with respect to each
specific Property, Registrant may be entitled to sales proceeds of certain Local
Partnerships’ Properties.
 
 During
the year ended March 30, 2010, Registrant received cash from interest revenue
and distributions from Local Partnerships and utilized cash for operating
expenses.  Cash and cash equivalents and investment in mutual fund
decreased, in the aggregate, by approximately $122,000 during the year ended
March 30, 2010.
 
 During
the year ended March 30, 2010, the investment in local partnerships decreased as
a result of cash distributions received from Local Partnerships of $20,000
(excluding $53,075 of distributions classified as other income from local
partnerships), partially offset by Registrant’s equity in the Local
Partnerships’ net income for the year ended December 31, 2009 of
$6,193.  Accounts payable and accrued expenses and payable to general
partner and affiliates in the accompanying balance sheet as of March 30, 2010
include cumulative deferred administration fees and management fees of
$3,657,862.
 
 Results of
Operations
 
 Registrant’s
operating results are dependent, in part, upon the operating results of the
Local Partnerships and are impacted by the Local Partnerships’
policies.  In addition, the operating results herein are not
necessarily the same for tax reporting.  Registrant accounts for its
investment in local partnerships in accordance with the equity method of
accounting.  Accordingly, the investment is carried at cost and is
adjusted for Registrant’s share of each Local Partnership’s results of
operations and by cash distributions received.  In the event the
operations of a Local Partnership result in a loss, equity in loss of each
investment in Local Partnership allocated to Registrant is recognized to the
extent of Registrant’s investment balance in each Local
Partnership.  Equity in loss in excess of Registrant’s investment
balance in a Local Partnership is allocated to other partners’ capital in any
such Local Partnership.  The combined statements of operations of the
Local Partnerships reflected in Note 6 to Registrant’s financial statements
include the operating results of all Local Partnerships, irrespective of
Registrant’s investment balances.
 
 Cumulative
losses and cash distributions in excess of investment in local partnerships may
result from a variety of circumstances, including a Local Partnership's
accounting policies, subsidy structure, debt structure and operating deficits,
among other things.  In addition, the book value of Registrant’s
investment in each Local Partnership (the “Local Partnership Carrying Value”)
may be reduced if the Local Partnership Carrying Value is considered to exceed
the estimated value derived by management.  Accordingly, cumulative
losses and cash distributions in excess of the investment or an adjustment to a
Local Partnership’s Carrying Value are not necessarily indicative of adverse
operating results of a Local Partnership.
 
 Registrant’s
operations for the years ended March 30, 2010, 2009, and 2008 resulted in net
losses of $413,184, $474,101, and $551,682, respectively.  The
decrease in net loss from fiscal 2009 to fiscal 2010 is primarily attributable
to a decrease in  administration and management fees in the cumulative
amount of approximately $93,000 as a result of Registrant’s disposal of its
Local Partnership Interests in Westminster Apartments Limited Partnership
(“Westminster”) and Justin Associates (“Justin”) and one-half of its Local
Partnership Interest in Sydney Engel Associates L.P. (“Sydney Engel”) (see
discussion below under Local Partnership
Matters), partially offset by a decrease in equity in income of
investment in local partnerships of approximately $19,000, which decrease is
attributable to a decrease in the net operating income of the Local Partnership
in which Registrant continues to have an investment balance.  The
decrease in net loss from fiscal 2008 to fiscal 2009 is primarily attributable
to a decrease in equity in loss of investment in local partnerships of
approximately $93,000, which decrease is primarily the result of a decrease in
the net operating loss of the Local Partnership in which Registrant continues to
have an investment balance.
 
 The Local
Partnerships’ net loss of approximately $2,151,000 for the year ended December
31, 2009 includes depreciation and amortization expense of approximately
$3,835,000 and interest on non-mandatory debt of approximately $351,000, and
does not include required principal payments on permanent mortgages of
approximately $897,000.  The Local Partnerships’ net loss of
approximately $2,394,000 for the year ended December 31, 2008 includes
depreciation and amortization expense of approximately $3,880,000 and interest
on non-mandatory debt of approximately $375,000, and does not include required
principal payments on permanent mortgages of approximately
$882,000.  The Local Partnerships’ net loss of approximately
$2,712,000 for the year ended December 31, 2007 includes depreciation and
amortization expense of approximately $3,938,000 and interest on non-mandatory
debt of approximately $392,000, and does not include required principal payments
on permanent mortgages of approximately $826,000.  The results of
operations of the Local Partnerships for the year ended December 31, 2009 are
not necessarily indicative of the results that may be expected in future
periods.
  14
  Item
7.  Management's Discussion and
Analysis of Financial Condition and Results of Operations
(Continued).
 
 Local Partnership
Matters
 
 Registrant's
primary objective, to provide Low-income Tax Credits to its Limited Partners,
has been completed.  The relevant state tax credit agency allocated
each of the Local Partnerships an amount of Low-income Tax Credits, which are
generally available for a ten year period from the year the Property is placed
in service (the “Ten Year Credit Period”).  The Ten Year Credit Period
was fully exhausted with respect to all of the Properties as of December 31,
2003.  The required holding period of each Property, in order to avoid
Low-income Tax Credit recapture, is fifteen years from the year in which the
Low-income Tax Credits commence on the last building of the Property (the
"Compliance Period").  The Compliance Period of all of the Local
Partnerships had expired as of December 31, 2007.  In addition,
certain of the Local Partnerships entered into agreements with the relevant
state tax credit agencies whereby the Local Partnerships must maintain the
low-income nature of the Properties for a period which exceeds the Compliance
Period (in certain circumstances, up to 50 years from when the Property is
placed in service, but commonly 30 years from the date any such Property is
placed in service), regardless of a sale of the Properties by the Local
Partnerships after the Compliance Period (the “Extended Use
Provisions”).  Although the Extended Use Provisions do not extend the
Compliance Period of the respective Local Partnerships, such provisions limit
the number and availability of potential purchasers of the
Properties.  Accordingly, a sale of a Property may happen well after
the expiration of the Compliance Period and/or may be significantly
discounted.  Registrant is in the process of disposing of its Local
Partnership Interests.  As of March 30, 2010, Registrant owns
thirty-nine of the forty-three Local Partnership Interests originally
acquired.  Registrant has served a demand on the local general
partners (the “Local General Partners”) of all remaining Local Partnerships to
commence a sale process to dispose of the Properties.  In the event a
sale cannot be consummated, it is the General Partner’s intention to sell or
assign Registrant’s Local Partnership Interests.  Following the final
disposition of its Local Partnership Interests, Registrant intends to
dissolve.  It is uncertain as to the amount, if any, that Registrant
will receive with respect to each specific Property from such sales or
assignments.  There can be no assurance as to when Registrant will
dispose of its remaining Local Partnership Interests.
 
 The
Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico.  Many of the Local Partnerships receive rental subsidy
payments, including payments under Section 8 of Title II of the Housing and
Community Development Act of 1974 ("Section 8").  The subsidy
agreements expire at various times.  Since October 1997, the United
States Department of Housing and Urban Development (“HUD”) has issued a series
of directives related to project based Section 8 contracts that define owners’
notification responsibilities, advise owners of project based Section 8
properties of what their options are regarding the renewal of Section 8
contracts, provide guidance and procedures to owners, management agents,
contract administrators and HUD staff concerning renewal of Section 8 contracts,
provide policies and procedures on setting renewal rents and handling renewal
rent adjustments and provide the requirements and procedures for opting-out of a
Section 8 project based contract.  Registrant cannot reasonably
predict legislative initiatives and governmental budget negotiations, the
outcome of which could result in a reduction in funds available for the various
federal and state administered housing programs including the Section 8
program.  Such changes could adversely affect the future net operating
income (“NOI”) before debt service and debt structure of any or all Local
Partnerships currently receiving such subsidy or similar
subsidies.  Two Local Partnerships’ Section 8 contracts are currently
subject to renewal under applicable HUD guidelines.
 
 The Local
Partnerships have various financing structures which include (i) required debt
service payments ("Mandatory Debt Service") and (ii) debt service payments which
are payable only from available cash flow subject to the terms and conditions of
the notes, which may be subject to specific laws, regulations and agreements
with appropriate federal and state agencies ("Non-Mandatory Debt Service or
Interest").  Registrant has no legal obligation to fund any operating
deficits of the Local Partnerships.
 
 In July
2009, Registrant withdrew from Westminster, in connection with which Registrant
received $10.  Such amount is reflected as gain on sale of limited
partner interests/local partnership properties in the accompanying unaudited
statement of operations for the year ended March 30,
2010.  Registrant’s investment balance in Westminster, after
cumulative equity losses, became zero during the year ended March 30,
1999.
 
 In
December 2009, Registrant assigned one-half of its 99% Local Partnership
Interest in Sydney Engel to an affiliate of the Local General Partner of Sydney
Engel.  Registrant did not receive any proceeds in connection with the
assignment.  Registrant’s investment balance in Sydney Engel, after
cumulative equity losses, became zero during the year ended March 30,
1997.
 
 In March
2010, Registrant sold its Local Partnership Interest in Justin to an affiliate
of the Local General Partner of Justin.  Registrant did not receive
any proceeds in connection with the sale.  Registrant’s investment
balance in Justin, after cumulative equity losses, became zero during the year
ended March 30, 2002.
  15
  Item
7.   Management's Discussion and
Analysis of Financial Condition and Results of Operations
(Continued).
 
 The Local
General Partner of Queen Lane Investors (“Queen Lane”) represents that, as a
result of a dispute between the local housing agency (the “Agency”) and the
Local General Partner of Queen Lane regarding the adequacy of certain unit
repairs mandated by the Agency, the Local General Partner of Queen Lane
requested that the Agency cancel the Section 8 voucher contract in connection
with the Property.  As a result, the Property has been vacant since
October 2007.  Two of Queen Lane’s mortgages matured in 2007 but have
not been repaid or formally extended, representing principal and accrued
interest of approximately $2,015,000 as of June 2010.  The Local
General Partner of Queen Lane further represents that the lender has not issued
a notice of default and that real estate taxes are in arrears approximately
$19,000 as of June 2010.  The Local General Partner of Queen Lane is
attempting to refinance the mortgages and make the necessary repairs to the
Property.  Registrant’s investment balance in Queen Lane, after
cumulative equity losses, became zero during the year ended March 30,
2001.
 
 Inflation
 
 Inflation
is not expected to have a material adverse impact on Registrant’s
operations.
 
 Contractual
Obligations
 
 Registrant
is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and
is not required to provide the information required under this
Item.
 
 Off - Balance Sheet
Arrangements
 
 Registrant
does not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on Registrant’s financial condition,
changes in financial condition, revenue or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
investors.
 
 Critical Accounting Policies
and Estimates
 
 The
accompanying financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”), which
requires Registrant to make certain estimates and assumptions.  A
summary of significant accounting policies is provided in Note 1 to the
accompanying financial statements.  The following section is a summary
of certain aspects of those accounting policies that may require subjective or
complex judgments and are most important to the portrayal of Registrant’s
financial condition and results of operations.  Registrant believes
that there is a low probability that the use of different estimates or
assumptions in making these judgments would result in materially different
amounts being reported in the accompanying financial statements.
 
 ·
              Registrant
      accounts for its investment in local partnerships in accordance with the
      equity method of accounting.
 
 ·
              If
      the book value of Registrant’s investment in a Local Partnership exceeds
      the estimated value derived by management, Registrant reduces its
      investment in any such Local Partnership and includes such reduction in
      equity in loss of investment in local partnerships.  Registrant
      makes such assessment at least annually in the fourth quarter of its
      fiscal year or whenever there are indications that a permanent impairment
      may have occurred.  A loss in value of an investment in a Local
      Partnership other than a temporary decline would be recorded as an
      impairment loss.  Impairment is measured by comparing the
      investment carrying amount to the estimated residual value of the
      investment.
 
 ·
              Registrant
      does not consolidate the accounts and activities of the Local
      Partnerships, which are considered Variable Interest Entities as defined
      by Financial Accounting Standards Board (“FASB”) Accounting Standards
      Codification (“ASC”) Topic 810; Subtopic 10, because Registrant is not
      considered the primary beneficiary.  Registrant’s balance in
      investment in local partnerships represents the maximum exposure to loss
      in connection with such investments.  Registrant’s exposure to
      loss on the Local Partnerships is mitigated by the condition and financial
      performance of the underlying Properties as well as the financial strength
      of the Local General Partners.
  16


Item
      7.
              Management's
      Discussion and Analysis of Financial Condition and Results of Operations
      (Continued).
 
 Recent Accounting
Pronouncements
 
 ASC Topic
740; Subtopic 10 requires all taxpayers to analyze all material positions they
have taken or plan to take in all tax returns that have been filed or should
have been filed with all taxing authorities for all years still subject to
challenge by those taxing authorities.  If the position taken is
“more-likely-than-not” to be sustained by the taxing authority on its technical
merits and if there is more than a 50% likelihood that the position would be
sustained if challenged and considered by the highest court in the relevant
jurisdiction, the tax consequences of that position should be reflected in the
taxpayer’s GAAP financial statements.  Because Registrant is a
pass-through entity and is not required to pay income taxes, ASC Topic 740;
Subtopic 10 does not currently have any impact on its financial
statements.
 
 ASC Topic
820 defines fair value, establishes a framework for measuring fair value in
accordance with GAAP and expands disclosures about fair value
measurements.  ASC Topic 820 applies to other accounting
pronouncements that require or permit fair value measurements. Accordingly, ASC
Topic 820 does not require any new fair value measurements.  ASC Topic
820 is effective for fiscal years beginning after November 15,
2007.  Registrant adopted ASC Topic 820 effective March 31,
2008.  On February 6, 2008 FASB deferred the effective date of ASC
Topic 820 by one year for nonfinancial assets and liabilities that are
recognized or disclosed at fair value in the financial statements on a
nonrecurring basis.  The partial adoption of ASC Topic 820 for
financial assets and liabilities did not have a material impact on Registrant’s
financial position, results of operations or cash flows.  Registrant
adopted ASC Topic 820 as of March 31, 2008, with the exception of the
application of this topic to nonrecurring nonfinancial assets and nonfinancial
liabilities.  Nonrecurring nonfinancial assets and liabilities for
which Registrant had not applied the provisions of ASC Topic 820 to include
investment in local partnerships, which is accounted for under the equity method
of accounting.  Registrant’s full adoption of ASC Topic 820 as of
March 31, 2009 did not have an impact on its financial statements.
 
 ASC Topic
825; Subtopic 10 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.  ASC Topic 825; Subtopic 10 is effective for
fiscal years beginning after November 15, 2007.  On March 31, 2008,
Registrant adopted ASC Topic 825; Subtopic 10 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 ASC Topic
825; Subtopic 10 had no effect on Registrant’s financial
statements.
 
 ASC Topic
825; Subtopic 10 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.  ASC Topic
825; Subtopic 10 is effective for Registrant as of June 30, 2009 and its
adoption did not impact Registrant’s financial condition or results of
operations.  Registrant had no financial instruments during any
interim reporting period during the year ended March 30, 2010.
 
 In May
2009, FASB issued guidance regarding subsequent events, which
was subsequently updated in February 2010. This guidance established general
guidelines 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
Registrant for the quarter ended June 29, 2009. The adoption did not have a
significant impact on the subsequent events that Registrant reports, either
through recognition or disclosure, in the financial statements.  In
February 2010, 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 Registrant did not include the
disclosure in the notes to the accompanying financial
statements.
 
 ASC Topic
810; Subtopic 10 amends existing consolidation guidance for variable interest
entities, requires ongoing reassessment to determine whether a variable interest
entity must be consolidated, and requires additional disclosures regarding
involvement with variable interest entities and any significant changes in risk
exposure due to that involvement.  ASC Topic 810; Subtopic 10 is
effective for Registrant’s fiscal year beginning March 31, 2010 and its adoption
did not have an impact on Registrant’s  financial
statements.
  17
  Item
      7.
              Management's
      Discussion and Analysis of Financial Condition and Results of Operations
      (Continued).
 
 In
January 2010, ASC Topic 820 was amended to increase disclosure requirements
regarding recurring and nonrecurring fair value
measurements.  Registrant adopted ASC 820, as amended, for the period
ending March 30, 2010, except for the disclosures about activity in Level 3 fair
value measurements which are effective for Registrant’s fiscal year beginning
March 31, 2010.  The initial adoption of ASC Topic 820 and the full
implementation thereof did not have a material impact on Registrant’s financial
statements.
 
 Forward-Looking
Information
 
 As a
cautionary note, with the exception of historical facts, the matters discussed
in this annual report on Form 10-K are “forward-looking” statements within the
meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform
Act”).  Forward-looking statements may relate to, among other things,
current expectations, forecasts of future events, future actions, future
performance generally, business development activities, capital expenditures,
strategies, the outcome of contingencies, future financial results, financing
sources and availability and the effects of regulation and
competition.  Words such as “anticipate,” “expect,” “intend,” “plan,”
“seek,” “estimate” and other words and terms of similar meaning in connection
with discussions of future operating or financial performance signify
forward-looking statements.  Registrant may also provide written
forward-looking statements in other materials released to the
public.  Such statements are made in good faith by Registrant pursuant
to the “Safe Harbor” provisions of the Reform Act.  Registrant
undertakes no obligation to update publicly or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.  Such forward-looking statements involve known risks,
uncertainties and other factors that may cause Registrant’s actual results of
operations or actions to be materially different from future results of
operations or actions expressed or implied by the forward-looking
statements.
 
 Item
7a.  Quantitative and Qualitative
Disclosure About Market Risk.
 
 Registrant’s
investment in mutual fund (the “Fund”) is subject to certain
risk.  The fixed income securities in which the Fund invests are
subject to interest rate risk, credit risk, prepayment risk, counterparty risk,
municipal securities risk, liquidity risk, management risk, government security
risk and valuation risk.  Typically, when interest rates rise, the
market prices of fixed income securities go down.  The Fund is
classified as “non-diversified,” and thus may invest most of its assets in
securities issued by or representing a small number of issuers.  As a
result, the Fund may be more susceptible to the risks associated with these
particular issuers, or to a single economic, political or regulatory occurrence
affecting these issuers.  These risks could adversely affect the
Fund’s net asset value (“NAV”), yield and total return.
  18
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 
 Item
      8.
              Financial Statements
      and Supplementary Data.
 
 Table of
Contents
 
 PageReport
      of Independent Registered Public Accounting Firm
                20Balance
      Sheets
                21Statements
      of Operations
                22Statements
      of Changes in Partners' Equity (Deficit)
                23Statements
      of Cash Flows
                24Notes
      to Financial Statements
                26
 
 No
financial statement schedules are included because of the absence of the
conditions under which they are required or because the information is included
in the financial statements or the notes thereto.
  19
  REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 American
Tax Credit Properties III L.P.
 
 We have
audited the accompanying balance sheets of American Tax Credit Properties III
L.P. (the “Partnership”) as of March 30, 2010 and 2009, and the related
statements of operations, changes in partners' equity (deficit) and cash flows
for the years ended March 30, 2010, 2009 and 2008.  These financial
statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.  As of and for the years
ended March 30, 2010, 2009 and 2008, we did not audit the financial statements
of certain investee partnerships, which investments represent $516,163 and
$529,970, respectively, in total assets as of March 30, 2010 and 2009, and
$6,193, $25,363 and $(52,205), respectively, of total income (losses) for the
years ended March 30, 2010, 2009 and 2008.  Those statements were
audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to those investee partnerships, is based solely
on the reports of the other auditors.
 
 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 audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audits 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.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits, and the reports of the other auditors, provide a reasonable
basis for our opinion.
 
 In our
opinion, based on our audits and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of American Tax Credit Properties III L.P. as of March
30, 2010 and 2009, and the results of its operations, changes in partners’
equity (deficit) and its cash flows for the years ended March 30, 2010, 2009 and
2008, in conformity with accounting principles generally accepted in the United
States of America.
 
 /s/Reznick Group, P.C.Sacramento,
      CaliforniaJune
      25, 2010
  20
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 BALANCE
SHEETS
 MARCH
30, 2010 AND 2009
 
 2010
                
                
                2009ASSETSCash
      and cash equivalents
                
                $
                312,127
                
                
                $
                946,612Investment
      in mutual fund
                
                
                512,962Investment
      in local partnerships
                
                
                516,163
                
                
                
                529,970$
                1,341,252
                
                
                $
                1,476,582LIABILITIES
      AND PARTNERS' DEFICITLiabilitiesAccounts
      payable and accrued expenses
                
                $
                518,831
                
                
                $
                523,447Payable
      to general partner and affiliates
                
                
                3,217,189
                
                
                
                2,934,7193,736,020
                
                
                
                3,458,166Commitments
      and contingenciesPartners'
      deficitGeneral
      partner
                
                
                (2,394,768
                )
                
                
                (1,981,584
                )Limited
      partners (35,883 units of limited partnership interest
      outstanding)
                
                
                —
                
                
                
                —(2,394,768
                )
                
                
                (1,981,584
                )$
                1,341,252
                
                
                $
                1,476,582
 
 See Notes
to Financial Statements.
  21
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 STATEMENTS
OF OPERATIONS
 YEARS
ENDED MARCH 30, 2010, 2009 AND 2008
 
 2010
                
                
                2009
                
                
                2008REVENUEInterest
                
                $
                2,430
                
                
                $
                14,626
                
                
                $
                56,703Other
      income from local partnerships
                
                
                53,075
                
                
                
                46,186
                
                
                
                26,118TOTAL
      REVENUE
                
                
                55,505
                
                
                
                60,812
                
                
                
                82,821EXPENSESAdministration
      fees - affiliate
                
                
                174,361
                
                
                
                220,825
                
                
                
                221,540Management
      fees - affiliate
                
                
                174,361
                
                
                
                220,825
                
                
                
                221,540Professional
      fees
                
                
                98,004
                
                
                
                96,342
                
                
                
                80,084State
      of New Jersey filing fees
                
                
                12,939
                
                
                
                19,969
                
                
                
                21,412Printing,
      postage and other
                
                
                15,227
                
                
                
                5,815
                
                
                
                22,543TOTAL
      EXPENSES
                
                
                474,892
                
                
                
                563,776
                
                
                
                567,119(419,387
                )
                
                
                (502,964
                )
                
                
                (484,298
                )Equity
      in income (loss) of investment in local partnerships
                
                
                6,193
                
                
                
                25,363
                
                
                
                (67,384
                )Loss
      prior to gain on sale of limited partner interests/local partnership
      properties
                
                
                (413,194
                )
                
                
                (477,601
                )
                
                
                (551,682
                )Gain
      on sale of limited partner interests/local partnership
      properties
                
                
                10
                
                
                
                3,500NET
      LOSS
                
                
                (413,184
                )
                
                
                (474,101
                )
                
                
                (551,682
                )Other
      comprehensive income (loss), net
                
                
                
                
                
                
                (3,426
                )
                
                
                5,104COMPREHENSIVE
      LOSS
                
                $
                (413,184
                )
                
                $
                (477,527
                )
                
                $
                (546,578
                )NET
      LOSS ATTRIBUTABLE TOGeneral
      partner
                
                $
                (413,184
                )
                
                $
                (474,101
                )
                
                $
                (551,682
                )Limited
      partners
                
                
                —
                
                
                
                —
                
                
                
                —$
                (413,184
                )
                
                $
                (474,101
                )
                
                $
                (551,682
                )NET LOSSper unit of
      limited partnershipinterest (35,883
      units of limited partnership interest)
                
                $
                —
                
                
                $
                —
                
                
                $
                —
 
 See Notes
to Financial Statements.
  22
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 STATEMENTS
OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
 YEARS
ENDED MARCH 30, 2010, 2009 AND 2008
 
 General
                  
                  
                  Limited
                  
                  
                  Accumulated Other
                    ComprehensivePartner
                  
                  
                  Partners
                  
                  
                  Income (Loss), Net
                  
                  
                  TotalPartners'
      deficit, March 30, 2007
                  
                  $
                  (955,801
                  )
                  
                  $
                  —
                  
                  
                  $
                  (1,678
                  )
                  
                  $
                  (957,479
                  )Net
      loss
                  
                  
                  (551,682
                  )
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (551,682
                  )Other
      comprehensive income, net
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  5,104
                  
                  
                  
                  5,104Partners'
      equity (deficit), March 30, 2008
                  
                  
                  (1,507,483
                  )
                  
                  
                  —
                  
                  
                  
                  3,426
                  
                  
                  
                  (1,504,057
                  )Net
      loss
                  
                  
                  (474,101
                  )
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (474,101
                  )Other
      comprehensive loss, net
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (3,426
                  )
                  
                  
                  (3,426
                  )Partners'
      deficit, March 30, 2009
                  
                  
                  (1,981,584
                  )
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  (1,981,584
                  )Net
      loss
                  
                  
                  (413,184
                  )
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (413,184
                  )Partners'
      deficit, March 30, 2010
                  
                  $
                  (2,394,768
                  )
                  
                  $
                  —
                  
                  
                  $
                  —
                  
                  
                  $
                  (2,394,768
                  )
 
 See Notes
to Financial Statements.
  23
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 STATEMENTS
OF CASH FLOWS
 YEARS
ENDED MARCH 30, 2010, 2009 AND 2008
 
 2010
                
                
                2009
                
                
                2008CASH
      FLOWS FROM OPERATING ACTIVITIESInterest
      received
                
                $
                2,430
                
                
                $
                9,796
                
                
                $
                8,385Cash
      paid forAdministration
      fees
                
                
                (16,252
                )
                
                
                (14,226
                )
                
                
                (15,517
                )Management
      fees
                
                
                (50,000
                )
                
                
                (214,000
                )
                
                
                (100,000
                )Professional
      fees
                
                
                (101,402
                )
                
                
                (90,178
                )
                
                
                (89,880
                )State
      of New Jersey filing fees
                
                
                (16,369
                )
                
                
                (20,412
                )
                
                
                (22,369
                )Printing,
      postage and other expenses
                
                
                (13,015
                )
                
                
                (26,714
                )
                
                
                (3,972
                )Net
      cash used in operating activities
                
                
                (194,608
                )
                
                
                (355,734
                )
                
                
                (223,353
                )CASH
      FLOWS FROM INVESTING ACTIVITIESInvestments
      in mutual fund
                
                
                (513,281
                )Redemptions
      from mutual fund
                
                
                319Proceeds
      in connection with sale of limited partner interests/local partnership
      properties
                
                
                10
                
                
                
                3,500Voluntary
      advances to local partnerships
                
                
                
                
                
                
                
                
                
                
                (15,179
                )Distributions
      received from local partnerships
                
                
                73,075
                
                
                
                46,186
                
                
                
                46,118Maturities/redemptions
      and sales of bonds
                
                
                
                
                
                
                872,000
                
                
                
                409,061Net
      cash provided by (used in) investing activities
                
                
                (439,877
                )
                
                
                921,686
                
                
                
                440,000Net
      increase (decrease) in cash and cash equivalents
                
                
                (634,485
                )
                
                
                565,952
                
                
                
                216,647Cash
      and cash equivalents at beginning of year
                
                
                946,612
                
                
                
                380,660
                
                
                
                164,013CASH
      AND CASH EQUIVALENTS AT END OF YEAR
                
                $
                312,127
                
                
                $
                946,612
                
                
                $
                380,660SIGNIFICANT
      NON-CASH INVESTING ACTIVITIESUnrealized
      gain (loss) on investments in bonds, net
                
                
                
                
                
                $
                (3,426
                )
                
                $
                5,104
 See
reconciliation of net loss to net cash used in operating activities on page
25.
 
 See Notes
to Financial Statements.
  24
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 STATEMENTS
OF CASH FLOWS - CONTINUED
 YEARS
ENDED MARCH 30, 2010, 2009 AND 2008
 
 2010
                
                
                2009
                
                
                2008RECONCILIATION
      OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIESNet
      loss
                
                $
                (413,184
                )
                
                $
                (474,101
                )
                
                $
                (551,682
                )Adjustments
      to reconcile net loss to net cash used in operating
    activitiesEquity
      in loss (income) of investment in local partnerships
                
                
                (6,193
                )
                
                
                (25,363
                )
                
                
                67,384Gain
      on sale of limited partner interests/local partnership
      properties
                
                
                (10
                )
                
                
                (3,500
                )Other
      income from local partnerships
                
                
                (53,075
                )
                
                
                (46,186
                )
                
                
                (26,118
                )Accretion
      of zero coupon bonds
                
                
                
                
                
                
                (4,830
                )
                
                
                (48,318
                )Increase
      in payable to general partner and affiliates
                
                
                282,470
                
                
                
                213,424
                
                
                
                327,563Increase
      (decrease) in accounts payable and accrued expenses
                
                
                (4,616
                )
                
                
                (15,178
                )
                
                
                7,818NET
      CASH USED IN OPERATING ACTIVITIES
                
                $
                (194,608
                )
                
                $
                (355,734
                )
                
                $
                (223,353
                )
 
 See Notes
to Financial Statements.
  25
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS
 MARCH
30, 2010, 2009 AND 2008
 
 1.
              Organization,
      Purpose and Summary of Significant Accounting
  Policies
 
 American
Tax Credit Properties III L.P. (the "Partnership") was formed on September 21,
1989 and the Certificate of Limited Partnership of the Partnership was filed
under the Delaware Revised Uniform Limited Partnership Act.  There was
no operating activity until admission of the limited partners (the “Limited
Partners”) on June 13, 1990.  The Partnership was formed to invest
primarily in leveraged low-income multifamily residential complexes (the
“Property” or “Properties”) that qualified for the low-income tax credit in
accordance with Section 42 of the Internal Revenue Code (the “Low-income Tax
Credit”), through the acquisition of limited partner equity interests (the
"Local Partnership Interests") in partnerships (the "Local Partnership" or
"Local Partnerships") that are the owners of the Properties.  Richman
Tax Credit Properties III L.P. (the "General Partner") was formed on September
21, 1989 to act as the General Partner of the Partnership.
 
 Basis of Accounting and
Fiscal Year
 
 The
Partnership's records are maintained on the accrual basis of accounting for both
financial reporting and tax purposes.  For financial reporting
purposes, the Partnership's fiscal year ends March 30 and its quarterly periods
end June 29, September 29 and December 30.  The Local Partnerships
have a calendar year for financial reporting purposes.  The
Partnership and the Local Partnerships each have a calendar year for income tax
purposes.
 
 Accounting Standards
Codification
 
 In June
2009, the Financial Accounting Standards Board (“FASB”) issued the Accounting
Standards Codification (the “Codification”). Effective July 1, 2009, the
Codification is the single source of authoritative accounting principles
recognized by FASB to be applied by nongovernmental entities in the preparation
of financial statements in conformity with U.S. generally accepted accounting
principles (“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.
 
 Investment in Local
Partnerships
 
 The
Partnership accounts for its investment in local partnerships in accordance with
the equity method of accounting, under which the investment is carried at cost
and is adjusted for the Partnership's share of each Local Partnership’s results
of operations and by cash distributions received.  Equity in loss of
each investment in Local Partnership allocated to the Partnership is recognized
to the extent of the Partnership’s investment balance in each Local
Partnership.  Equity in loss in excess of the Partnership’s investment
balance in a Local Partnership is allocated to other partners’ capital in any
such Local Partnership.  Previously unrecognized equity in loss of any
Local Partnership is recognized in the fiscal year in which equity in income is
earned by such Local Partnership or additional investment is made by the
Partnership.  Distributions received subsequent to the elimination of
an investment balance for any such investment in a Local Partnership are
recorded as other income from local partnerships.
 
 The
Partnership assesses the carrying value of its investment in local partnerships
at least annually in the fourth quarter of its fiscal year or whenever there are
indications that a permanent impairment may have occurred.  If the
carrying value of an investment in a Local Partnership exceeds the estimated
value derived by management, the Partnership reduces its investment in any such
Local Partnership (unless the impairment is considered to be temporary) and
includes such reduction in equity in loss of investment in local
partnerships.  Impairment is measured by comparing the investment
carrying amount to the estimated residual value of the investment.
 
 The
Partnership does not consolidate the accounts and activities of the Local
Partnerships, which are considered Variable Interest Entities as defined by the
Codification, because the Partnership is not considered the primary
beneficiary.  The Partnership's balance in investment in local
partnerships represents the maximum exposure to loss in connection with such
investments.  The Partnership's exposure to loss on the Local
Partnerships is mitigated by the condition and financial performance of the
underlying Properties as well as the financial strength of the local general
partners (the “Local General Partners”).
  26
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 1.
              Organization,
      Purpose and Summary of Significant Accounting Policies
      (Continued)
 
 Advances
and additional capital contributions (collectively the “Advances”) that are not
required under the terms of the Local Partnerships’ partnership agreements but
which are made to the Local Partnerships are recorded as investment in local
partnerships.  Certain Advances are considered by the Partnership to
be voluntary loans to the respective Local Partnerships and the Partnership may
be reimbursed at a future date to the extent such Local Partnerships generate
distributable cash flow or receive proceeds from sale or
refinancing.
 
 Fair Value
Measurement
 
 ASC Topic
820 defines fair value, establishes a framework for measuring fair value in
accordance with GAAP and expands disclosures about fair value
measurements.  ASC Topic 820 applies to other accounting
pronouncements that require or permit fair value measurements. Accordingly, ASC
Topic 820 does not require any new fair value measurements.  ASC Topic
820 is effective for fiscal years beginning after November 15,
2007.  The Partnership adopted ASC Topic 820 effective March 31,
2008.  On February 6, 2008 FASB deferred the effective date of ASC
Topic 820 by one year for nonfinancial assets and liabilities that are
recognized or disclosed at fair value in the financial statements on a
nonrecurring basis.  The partial adoption of ASC Topic 820 for
financial assets and liabilities did not have a material impact on the
Partnership’s financial position, results of operations or cash
flows.  The Partnership adopted ASC Topic 820 as of March 31,
2008, with the exception of the application of this topic to nonrecurring
nonfinancial assets and nonfinancial liabilities.  Nonrecurring
nonfinancial assets and liabilities for which the Partnership had not applied
the provisions of ASC Topic 820 include investment in local partnerships, which
is accounted for under the equity method of accounting.  The
Partnership’s full adoption of ASC Topic 820 as of March 31, 2009 did not have
an impact on its financial statements.
 
 Cash and Cash
Equivalents
 
 The
Partnership considers all highly liquid investments purchased with an original
maturity of three months or less at the date of acquisition to be cash
equivalents.  Cash and cash equivalents are stated at cost, which
approximates market value.
 
 Investment in Mutual
Fund
 
 The
Partnership carries its investment in mutual fund at estimated fair
value.  Capital gains (losses) are included in (offset against)
interest revenue.  Investment in mutual fund is classified as
available-for-sale and unrealized gains or losses are included as items of
comprehensive income (loss) and are reported as a separate component of owners'
equity (deficit).
 
 Investments in
Bonds
 
 Investments
in bonds were classified as available-for-sale and represented investments that
the Partnership intended to hold for an indefinite period of time but not
necessarily to maturity.  Any decision to sell an investment was based
on various factors, including significant movements in interest rates and
liquidity needs.  Investments in bonds were carried at estimated fair
value and unrealized gains or losses are included as items of comprehensive
income (loss) and are reported as a separate component of partners’ equity
(deficit).
 
 Premiums
and discounts on investments in bonds were amortized (accreted) using the
effective yield method over the life of the investment.  Amortized
premiums offset interest revenue, while the accretion of discounts and zero
coupon bonds were included in interest revenue.  Realized gain (loss)
on redemptions or sales of investments in bonds were included in, or offset
against, interest revenue on the basis of the adjusted cost of each specific
investment redeemed or sold.  All such investments had matured and/or
been redeemed or sold as of March 30, 2009.
  27
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 1.
              Organization,
      Purpose and Summary of Significant Accounting Policies
      (Continued)
 
 Income
Taxes
 
 The
Partnership is a pass-through entity for income tax purposes and, as such, is
not subject to income taxes.  Rather, all items of taxable income and
deductions 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.  In accordance with ASC Topic 740; Subtopic 10, the
Partnership has included in Note 8 disclosures related to differences in the
financial and tax bases of accounting.
 
 ASC Topic
740; Subtopic 10 requires all taxpayers to analyze all material positions they
have taken or plan to take in all tax returns that have been filed or should
have been filed with all taxing authorities for all years still subject to
challenge by those taxing authorities.  If the position taken is
“more-likely-than-not” to be sustained by the taxing authority on its technical
merits and if there is more than a 50% likelihood that the position would be
sustained if challenged and considered by the highest court in the relevant
jurisdiction, the tax consequences of that position should be reflected in the
taxpayer’s GAAP financial statements.  Because the Partnership is a
pass-through entity and is not required to pay income taxes, ASC Topic 740;
Subtopic 10 does not currently have any impact on its financial
statements.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date
of the financial statements and the reported amounts of revenue and expenses
during the reporting period.  Actual results could differ from those
estimates.
 
 Recent Accounting
Pronouncements
 
 ASC Topic
825; Subtopic 10 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.  ASC Topic 825; Subtopic 10 is effective for
fiscal years beginning after November 15, 2007.  On March 31, 2008,
the Partnership adopted ASC Topic 825; Subtopic 10 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 ASC Topic
825; Subtopic 10 had no effect on the Partnership’s financial
statements.
 
 ASC Topic
825; Subtopic 10 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.  ASC Topic
825; Subtopic 10 is effective for the Partnership as of June 30, 2009 and its
adoption did not impact the Partnership’s financial condition or results of
operations.  The Partnership had no financial instruments during any
interim reporting period during the year ended March 30, 2010.
 
 In May
2009, FASB issued guidance regarding subsequent events, which was subsequently
updated in February 2010. This guidance established general guidelines 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 29, 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, 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 Partnership did not
include the disclosure in the notes to the accompanying financial
statements.
  28
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 1.
              Organization,
      Purpose and Summary of Significant Accounting Policies
      (Continued)
 
 ASC Topic
810; Subtopic 10 amends existing consolidation guidance for variable interest
entities, requires ongoing reassessment to determine whether a variable interest
entity must be consolidated, and requires additional disclosures regarding
involvement with variable interest entities and any significant changes in risk
exposure due to that involvement.  ASC Topic 810; Subtopic 10 is
effective for the Partnership’s fiscal year beginning March 31, 2010 and its
adoption did not have an impact on the Partnership’s financial
statements.
 
 In
January 2010, ASC Topic 820 was amended to increase disclosure requirements
regarding recurring and nonrecurring fair value measurements.  The
Partnership adopted ASC Topic 820, as amended, for the period ending March 30,
2010, except for the disclosures about activity in Level 3 fair value
measurements which is effective for the Partnership’s fiscal year beginning
March 31, 2010.  The initial adoption of ASC Topic 820 and the full
implementation thereof did not have a material impact on the Partnership’s
financial statements.
 
 Reclassifications
 
 Certain
prior year Local Partnership balances (see Note 6) have been reclassified to
conform to the current year presentation.
 
 2.
              Capital
      Contributions
 
 On March
12, 1990, the Partnership commenced the offering of units (the “Units”) through
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Selling
Agent").  On June 13, 1990, December 27, 1990, December 31, 1991 and
January 23, 1992, under the terms of the Amended and Restated Agreement of
Limited Partnership of the Partnership (the "Partnership Agreement"), the
General Partner admitted the Limited Partners to the Partnership in four
closings.  At these closings, subscriptions for a total of 35,883
Units representing $35,883,000 in Limited Partners' capital contributions were
accepted.  In connection with the offering of Units, the Partnership
incurred organization and offering costs of $4,418,530, of which $75,000 was
capitalized as organization costs and $4,343,530 was charged to the Limited
Partners' equity as syndication costs.  The General Partner
contributed $100 to the Partnership.
 
 Net loss
is allocated 99% to the Limited Partners and 1% to the General Partner in
accordance with the Partnership Agreement, until such time as the Limited
Partners' capital reaches zero as a result of loss allocations, after which all
losses are allocated to the General Partner.
 
 3.
              Cash
      and Cash Equivalents
 
 As of
March 30, 2010, the Partnership has $312,127 in cash and cash
equivalents.  Of such amount, $269,120 is held in accounts at two
financial institutions in which the aggregate amount on deposit at each
institution is insured up to $250,000 by the Federal Deposit Insurance
Corporation (“FDIC”).  The entire amount is FDIC insured as of March
30, 2010.  The remaining $43,007 is held in a financial institution in
which such amount is invested in a portfolio of securities that are direct
obligations of the U.S. Treasury and are backed by the full faith and credit of
the United States of America.
 
 4.
              Investment
      in Mutual Fund
 
 The
Partnership carries its investment in mutual fund (the “Fund”) at estimated fair
value.  The Fund is a short duration bond fund organized as a
non-diversified open-end management investment company registered under the
Investment Company Act of 1940, as amended, that seeks maximum current income
consistent with liquidity and stability of principal.  In selecting
portfolio securities for the Fund, the investment advisor of the Fund (the
(“Advisor”) will select investments so that substantially all of the Fund’s
assets will be rated “A” or better by a nationally recognized statistical rating
organization (“NRSRO”) such as Moody’s Investor Services, Inc. (“Moody’s”)
and/or by Standard & Poor’s Financial Services, LLC (“S&P”) or, if a
rating is not available, deemed to be of comparable quality by the
Advisor.  It is anticipated that approximately 90% or more of the
Fund’s assets (excluding floating rate or fixed to float securities issued by
banking institutions having assets in excess of $200 billion) will be rated “AA”
or better by an NRSRO or, if a rating is not available, deemed to be of
comparable quality by the Advisor.  The Fund is valued at $10 per
share in the accompanying balance sheet as of March 30, 2010.
  29
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 4.
              Investment
      in Mutual Fund (Continued)
 
 The
Advisor is an affiliate of the General Partner.  For its services, the
Advisor is entitled to receive an annual advisory fee of 0.50% of the average
daily net assets of the Fund.  The Advisor may, in its discretion,
voluntarily waive its fees or reimburse certain Fund expenses; however, the
Advisor is not required to do so.  The Advisor has waived 60% of its
fee earned through March 30, 2010.
 
 The
Codification clarifies the principle that fair value should be based on the
assumptions that market participants would use when pricing the asset or
liability and establishes the following fair value hierarchy:
 
 Level 1
inputs utilize quoted prices (unadjusted) in active markets for identical assets
or liabilities that the Partnership has the ability to access;
 
 Level 2
inputs may include quoted prices for similar assets and liabilities in active
markets, as well as interest rates and yield curves that are observable at
commonly quoted intervals; and
 
 Level 3
inputs are unobservable inputs for the asset or liability that are typically
based on an entity’s own assumptions as there is little, if any, related market
activity.
 
 For
instances in which the determination of the fair value measurement is based on
inputs from different levels of the fair value hierarchy, the fair value
measurement will fall within the lowest level input that is significant to the
fair value measurement in its entirety.
 
 The fair
value of the Partnership’s investment in mutual fund is classified within
Level 1 of the fair value hierarchy of the guidance on Fair Value
Measurements.  No other assets or liabilities of the Partnership are
measured at fair value under the guidance on Fair Value Measurements as of
March 30, 2010 and 2009.
 
 5.
              Investments
      in Bonds
 
 The
Partnership carried its investments in bonds as available-for-sale because such
investments were used to facilitate and provide flexibility for the
Partnership's obligations, including resolving circumstances that may have
arisen in connection with the Local Partnerships.  All such
investments had matured and/or been redeemed or sold as of March 30,
2009.
  30
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 6.
              Investment
      in Local Partnerships
 
 As of
March 30, 2010, the Partnership owns a Local Partnership Interest in the
following Local Partnerships:
 
 1.
              
              April
      Gardens Apartments II Limited Partnership;2.
              
              Auburn
      Family, L.P.;3.
              
              Batesville
      Family, L.P.;4.
              
              Bay
      Springs Elderly, L.P.;5.
              
              Brisas
      del Mar Apartments Limited Partnership;6.
              
              Bruce
      Housing Associates, L.P.;7.
              
              Chestnut
      Park Associates, L.P. (“Chestnut Park”)*;8.
              
              Chowan
      Senior Manor Associates Limited Partnership;9.
              
              Christian
      Street Commons Associates;10.
              
              Country
      View Apartments;11.
              
              Desarrollos
      de Belen Limited Partnership;12.
              
              Desarrollos
      de Emaus Limited Partnership;13.
              
              Ellinwood
      Heights Apartments, L.P.;14.
              
              Fulton
      Street Houses Limited Partnership;15.
              
              Hayes
      Run Limited Partnership;16.
              
              Howard
      L. Miller Sallisaw Apartments II, L.P.;17.
              
              Hurlock
      Meadow Limited Partnership;18.
              
              Ivy
      Family, L.P.;19.
              
              LaBelle
      Commons, Ltd.;20.
              
              Lawrence
      Road Properties, Ltd.;21.
              
              Loma
      Del Norte Limited Partnership;22.
              
              Long
      Reach Associates Limited Partnership;23.
              
              Mirador
      del Toa Limited Partnership;24.
              
              Moore
      Haven Commons, Ltd.;25.
              
              NP-89
      Limited Dividend Housing Association Limited Partnership
      (“NP-89”);26.
              
              Nash
      Hill Associates, Limited Partnership;27.
              
              North
      Calhoun City, L.P.;28.
              
              Orange
      City Plaza, Limited Partnership (“Orange City”);29.
              
              Puerta
      del Mar Limited Partnership;30.
              
              Purvis
      Heights Properties, L.P.;31.
              
              Queen
      Lane Investors (“Queen Lane”);32.
              
              Somerset
      Manor, Ltd.;33.
              
              Sugar
      Cane Villas, Ltd.;34.
              
              Summerfield
      Apartments Limited Partnership;35.
              
              Sydney
      Engel Associates L.P. (formerly known as Sydney Engel Associates) (“Sydney
      Engel”);36.
              
              Union
      Valley Associates Limited Partnership;37.
              
              Walnut
      Grove Family, L.P.;38.
              
              Waynesboro
      Apartments Limited Partnership; and39.
              
              West
      Calhoun City, L.P.
 
 *Affiliates
      of the General Partner are a general partner of and provide services to
      Chestnut Park.
  31


AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 6.
              Investment in Local
      Partnerships (Continued)
 
 Although
the Partnership generally owns a 98.9% - 99% Local Partnership Interest in the
Local Partnerships, the Partnership and American Tax Credit Properties II L.P.
("ATCP II"), a Delaware limited partnership whose general partner is affiliated
with the General Partner, together, in the aggregate, own a 99% interest in the
following Local Partnerships:
 
 The
                        Partnership
                    
                    ATCP IIBatesville
      Family, L.P.
                    
                    
                    61.75
                    %
                    
                    
                    37.25
                    %Bruce
      Housing Associates, L.P.
                    
                    
                    61.75
                    
                    
                    
                    37.25Ivy
      Family, L.P.
                    
                    
                    61.75
                    
                    
                    
                    37.25Lawrence
      Road Properties, Ltd.
                    
                    
                    61.75
                    
                    
                    
                    37.25Mirador
      del Toa Limited Partnership
                    
                    
                    59.06
                    
                    
                    
                    39.94Purvis
      Heights Properties, L.P.
                    
                    
                    61.75
                    
                    
                    
                    37.25Queen
      Lane Investors
                    
                    
                    48.50
                    
                    
                    
                    50.50
 
 The
Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico.  The required holding period of each Property, in order
to avoid Low-income Tax Credit recapture, is fifteen years from the year in
which the Low-income Tax Credits commence on the last building of the Property
(the "Compliance Period").  The rents of the Properties are controlled
by federal and state agencies pursuant to applicable laws and
regulations.  Under the terms of each of the Local Partnership's
partnership agreements, as of March 30, 2010 the Partnership is committed to
make capital contributions in the aggregate amount of $29,384,966, which
includes Advances made to a certain Local Partnership and all of which has been
paid.  As of December 31, 2010, the Local Partnerships have
outstanding mortgage loans payable totaling approximately $73,875,000 and
accrued interest payable on such loans totaling approximately $5,895,000, which
are secured by security interests and liens common to mortgage loans on the
Local Partnerships' real property and other assets.
 
 Equity in
loss of investment in local partnerships is limited to the Partnership’s
investment balance in each Local Partnership; any excess is applied to other
partners' capital in any such Local Partnership (see Note 1).  The
amount of such excess losses applied to other partners' capital was $2,045,768,
$2,292,014, and $2,461,655 for the years ended December 31, 2009, 2008 and 2007,
respectively, as reflected in the combined statements of operations of the Local
Partnerships herein Note 6.
 
 The
difference between the Partnership’s investment in local partnerships as of
March 30, 2010 and 2009 and the amounts reflected as the Partnership’s
investment balance in the combined balance sheets of the Local Partnerships as
of December 31, 2009 and 2008 herein Note 6 represents cumulative carrying value
adjustments made by the Partnership (see Note 1) in the amount of
$1,540,622.
 
 In July
2009, the Partnership withdrew from Westminster Apartments Limited Partnership
(“Westminster”), in connection with which the Partnership received
$10.  Such amount is reflected as gain on sale of limited partner
interests/local partnership properties in the accompanying statement of
operations of the Partnership for year ended March 30, 2010.  The
Partnership’s investment balance in Westminster, after cumulative equity losses,
became zero during the year ended March 30, 1999.
 
 In
December 2009, the Partnership assigned one-half of its 99% Local Partnership
Interest in Sydney Engel to an affiliate of the Local General Partner of Sydney
Engel.  The Partnership did not receive any proceeds in connection
with the assignment.  The Partnership’s investment balance in Sydney
Engel, after cumulative equity losses, became zero during the year ended March
30, 1997.
 
 In March
2010, the Partnership sold its Local Partnership Interest in Justin Associates
(“Justin”) to an affiliate of the Local General Partner of
Justin.  The Partnership did not receive any proceeds in connection
with the sale.  The Partnership’s investment balance in Justin, after
cumulative equity losses, became zero during the year ended March 30,
2002.
  32
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 6.
              Investment
      in Local Partnerships (Continued)
 
 The Local
General Partner of Queen Lane represents that, as a result of a dispute between
the local housing agency (the “Agency”) and the Local General Partner of Queen
Lane regarding the adequacy of certain unit repairs mandated by the Agency, the
Local General Partner of Queen Lane requested that the Agency cancel the Section
8 voucher contract in connection with the Property.  As a result, the
Property has been vacant since October 2007.  Two of Queen Lane’s
mortgages matured in 2007 but have not been repaid or formally extended,
representing principal and accrued interest of approximately $2,015,000 as of
June 2010.  The Local General Partner of Queen Lane further represents
that the lender has not issued a notice of default and that real estate taxes
are in arrears approximately $19,000 as of June 2010.  The Local
General Partner of Queen Lane is attempting to refinance the mortgages and make
the necessary repairs to the Property.  The Partnership’s investment
balance in Queen Lane, after cumulative equity losses, became zero during the
year ended March 30, 2001.
 
 Effective
February 2009, the Partnership withdrew from Ashland Park Apartments, L.P.
(“Ashland Park”), in connection with which the Partnership received
$3,500.  Such amount is reflected as gain on sale of limited partner
interests/local partnership properties in the accompanying statement of
operations of the Partnership for the year ended March 30, 2009.  The
Partnership’s investment balance in Ashland Park, after cumulative equity
losses, became zero during the year ended March 30, 1999.
 
 The
Partnership made Advances of $15,179 to Orange City for the year ended March 30,
2008 to fund operating deficits.  Cumulative Advances as of March 30,
2010 and 2009 are $120,490.  The Partnership’s investment balance in
Orange City, after cumulative equity losses, became zero during the year ended
March 30, 2002 and Advances made by the Partnership have been recorded as
investment in local partnerships and offset by additional equity in loss of
investment in local partnerships in the accompanying financial
statements.
 
 The
combined balance sheets of the Local Partnerships as of December 31, 2009 and
2008 and the combined statements of operations of the Local Partnerships for the
years ended December 31, 2009, 2008 and 2007 are reflected on pages 34 and 35,
respectively.
  33
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 6.
              Investment
      in Local Partnerships (Continued)
 
 The
combined balance sheets of the Local Partnerships as of December 31, 2009 and
2008 are as follows:
 
 2009
                    
                    
                    2008ASSETSCash
      and cash equivalents
                    
                    $
                    1,745,227
                    
                    
                    $
                    1,685,633Rents
      receivable
                    
                    
                    504,964
                    
                    
                    
                    485,248Escrow
      deposits and reserves
                    
                    
                    5,115,688
                    
                    
                    
                    5,036,286Land
                    
                    
                    3,608,404
                    
                    
                    
                    3,710,215Buildings
      and improvements (net of accumulated depreciation of $68,583,356 and
      $66,823,930)
                    
                    
                    43,096,982
                    
                    
                    
                    45,436,519Intangible
      assets (net of accumulated amortization of $625,138 and
      $601,103)
                    
                    
                    400,175
                    
                    
                    
                    263,106Other
      assets
                    
                    
                    1,379,059
                    
                    
                    
                    1,328,980$
                    55,850,499
                    
                    
                    $
                    57,945,987LIABILITIES
      AND PARTNERS' EQUITY (DEFICIT)LiabilitiesAccounts
      payable and accrued expenses
                    
                    $
                    1,216,538
                    
                    
                    $
                    1,344,773Due
      to related parties
                    
                    
                    5,301,656
                    
                    
                    
                    5,212,785Mortgage
      loans
                    
                    
                    73,874,985
                    
                    
                    
                    75,984,949Accrued
      interest
                    
                    
                    5,895,042
                    
                    
                    
                    6,015,631Other
      liabilities
                    
                    
                    730,814
                    
                    
                    
                    764,52087,019,035
                    
                    
                    
                    89,322,658Partners'
      equity (deficit)American
      Tax Credit Properties III L.P.Capital
      contributions, net of distributions
                    
                    
                    23,922,311
                    
                    
                    
                    26,819,283Cumulative
      loss
                    
                    
                    (21,865,526
                    )
                    
                    
                    (24,748,691
                    )2,056,785
                    
                    
                    
                    2,070,592General
      partners and other limited partnersCapital
      contributions, net of distributions
                    
                    
                    196,361
                    
                    
                    
                    (1,134,122
                    )Cumulative
      loss
                    
                    
                    (33,421,682
                    )
                    
                    
                    (32,313,141
                    )(33,225,321
                    )
                    
                    
                    (33,447,263
                    )(31,168,536
                    )
                    
                    
                    (31,376,671
                    )$
                    55,850,499
                    
                    
                    $
                    57,945,987
  34
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 6.
              Investment
      in Local Partnerships (Continued)
 
 The
combined statements of operations of the Local Partnerships for the years ended
December 31, 2009, 2008 and 2007 are as follows:
 
 2009
                  
                  
                  2008
                  
                  
                  2007REVENUERental
                  
                  $
                  12,346,413
                  
                  
                  $
                  12,349,316
                  
                  
                  $
                  11,813,515Interest
      and other
                  
                  
                  458,431
                  
                  
                  
                  313,636
                  
                  
                  
                  384,392TOTAL
      REVENUE
                  
                  
                  12,804,844
                  
                  
                  
                  12,662,952
                  
                  
                  
                  12,197,907EXPENSESAdministrative
                  
                  
                  2,912,171
                  
                  
                  
                  3,016,090
                  
                  
                  
                  2,684,920Utilities
                  
                  
                  1,653,578
                  
                  
                  
                  1,784,854
                  
                  
                  
                  1,785,113Operating
      and maintenance
                  
                  
                  3,445,870
                  
                  
                  
                  3,029,077
                  
                  
                  
                  3,009,870Taxes
      and insurance
                  
                  
                  1,094,092
                  
                  
                  
                  1,164,195
                  
                  
                  
                  1,232,301Financial
                  
                  
                  2,015,688
                  
                  
                  
                  2,182,047
                  
                  
                  
                  2,260,472Depreciation
      and amortization
                  
                  
                  3,834,817
                  
                  
                  
                  3,880,345
                  
                  
                  
                  3,937,524TOTAL
      EXPENSES
                  
                  
                  14,956,216
                  
                  
                  
                  15,056,608
                  
                  
                  
                  14,910,200NET
      LOSS
                  
                  $
                  (2,151,372
                  )
                  
                  $
                  (2,393,656
                  )
                  
                  $
                  (2,712,293
                  )NET
      INCOME (LOSS) ATTRIBUTABLE TOAmerican
      Tax Credit Properties III L.P.
                  
                  $
                  6,193
                  
                  
                  $
                  25,363
                  
                  
                  $
                  (67,384
                  )General
      partners and other limited partners (includes $2,045,768, $2,292,014 and
      $2,461,655 of Partnership loss in excess of investment)
                  
                  
                  (2,157,565
                  )
                  
                  
                  (2,419,019
                  )
                  
                  
                  (2,644,909
                  )$
                  (2,151,372
                  )
                  
                  $
                  (2,393,656
                  )
                  
                  $
                  (2,712,293
                  )
  35
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 6.
              Investment
      in Local Partnerships (Continued)
 
 Investment
activity with respect to each Local Partnership for the year ended March 30,
2010 is as follows:
 
 Name of Local Partnership
                                    
                                    Investment
                                      in Local
                                      Partnership
                                      balance as of
                                      March 30,
                                      2009
                                    
                                    
                                    Investments
                                      (voluntary
                                      advances)
                                      during the year
                                      ended
                                      March 30,
                                      2010
                                    
                                    
                                    Partnership's
                                      equity in
                                      income for the
                                      year ended
                                      March 30,
                                      2010
                                    
                                    Adjustment to
                                      carrying value
                                      during the
                                      year ended
                                      March 30,
                                      2010
                                    
                                    Cash
                                      distributions
                                      received
                                      during the
                                      year ended
                                      March 30,
                                      2009 (2)
                                    
                                    Investment
                                      in Local
                                      Partnership
                                      balance as of
                                      March 30,
                                      2010April
      Gardens Apartments II Limited Partnership
                                    
                                    $
                                    —
                                    
                                    
                                    $
                                    —
                                    
                                    
                                    $
                                    —
                                    (1)
                                    $
                                    —
                                    
                                    $
                                    —
                                    
                                    $
                                    —Auburn
      Family, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Batesville
      Family, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Bay
      Springs Elderly, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Brisas
      del Mar Apartments Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Bruce
      Housing Associates, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Chestnut
      Park Associates, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Chowan
      Senior Manor Associates Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Christian
      Street Commons Associates
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Country
      View Apartments
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Desarrollos
      de Belen Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Desarrollos
      de Emaus Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Ellinwood
      Heights Apartments, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Fulton
      Street Houses Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Hayes
      Run Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Howard
      L. Miller Sallisaw Apartments II, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Hurlock
      Meadow Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Ivy
      Family, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Justin
      Associates
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Lawrence
      Road Properties, Ltd.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Labelle
      Commons, Ltd.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Loma
      Del Norte Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Long
      Reach Associates Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Mirador
      del Toa Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Moore
      Haven Commons, Ltd.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —NP-89
      Limited Dividend Housing Association Limited Partnership
                                    
                                    
                                    529,970
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    6,193
                                    
                                    
                                    —
                                    
                                    
                                    (20,000
                                    )
                                    
                                    516,163Nash
      Hill Associates, Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —North
      Calhoun City, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Orange
      City Plaza, Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Puerta
      del Mar Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Purvis
      Heights Properties, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Queen
      Lane Investors
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Somerset
      Manor, Ltd.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Sugar
      Cane Villas, Ltd.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Summerfield
      Apartments Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Sydney
      Engel Associates L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Union
      Valley Associates Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Walnut
      Grove Family, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Waynesboro
      Apartments Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —West
      Calhoun City, L.P.
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —Westminster
      Apartments Limited Partnership
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    (1)
                                    
                                    —
                                    
                                    
                                    —
                                    
                                    
                                    —$
                                    529,970
                                    
                                    
                                    $
                                    —
                                    
                                    
                                    $
                                    6,193
                                    
                                    $
                                    —
                                    
                                    $
                                    (20,000
                                    )
                                    $
                                    516,163
 
 (1)
                Additional
      equity in loss of investment is not allocated to the Partnership until
      equity in income is earned or additional investment is made by the
      Partnership.
 (2)
                The
      total excludes $53,075 of distributions received classified as other
      income from local
partnerships.
  36
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 6.
              Investment
      in Local Partnerships (Continued)
 
 Investment
activity with respect to each Local Partnership for the year ended March 30,
2009 is as follows:
 
 Name of Local Partnership
                          
                          Investment
                            in Local
                            Partnership
                            balance as of
                            March 30,
                            2008
                          
                          
                          Investments
                            (voluntary
                            advances)
                            during the year
                            ended
                            March 30,
                            2009
                          
                          
                          Partnership's
                            equity in
                            income for the
                            year ended
                            March 30,
                            2009
                          
                          
                          Adjustment to
                            carrying value
                            during the
                            year ended
                            March 30,
                            2009
                          
                          
                          Cash
                            distributions
                            received
                            during the
                            year ended
                            March 30,
                            2008 (2)
                          
                          
                          Investment
                            in Local
                            Partnership
                            balance as of
                            March 30,
                            2009April
      Gardens Apartments II Limited Partnership
                          
                          $
                          —
                          
                          
                          $
                          —
                          
                          
                          $
                          —
                          (1)
                          
                          $
                          —
                          
                          
                          $
                          —
                          
                          
                          $
                          —Ashland
      Park Apartments, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Auburn
      Family, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Batesville
      Family, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Bay
      Springs Elderly, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Brisas
      del Mar Apartments Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Bruce
      Housing Associates, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Chestnut
      Park Associates, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Chowan
      Senior Manor Associates Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Christian
      Street Commons Associates
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Country
      View Apartments
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Desarrollos
      de Belen Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Desarrollos
      de Emaus Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Ellinwood
      Heights Apartments, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Fulton
      Street Houses Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Hayes
      Run Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Howard
      L. Miller Sallisaw Apartments II, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Hurlock
      Meadow Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Ivy
      Family, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Justin
      Associates
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Lawrence
      Road Properties, Ltd.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Labelle
      Commons, Ltd.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Loma
      Del Norte Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Long
      Reach Associates Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Mirador
      del Toa Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Moore
      Haven Commons, Ltd.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —NP-89
      Limited Dividend Housing Association Limited Partnership
                          
                          
                          504,607
                          
                          
                          
                          —
                          
                          
                          
                          25,363
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          529,970Nash
      Hill Associates, Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —North
      Calhoun City, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Orange
      City Plaza, Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Puerta
      del Mar Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Purvis
      Heights Properties, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Queen
      Lane Investors
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Somerset
      Manor, Ltd.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Sugar
      Cane Villas, Ltd.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Summerfield
      Apartments Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Sydney
      Engel Associates L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Union
      Valley Associates Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Walnut
      Grove Family, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Waynesboro
      Apartments Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —West
      Calhoun City, L.P.
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —Westminster
      Apartments Limited Partnership
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          (1)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —$
                          504,607
                          
                          
                          $
                          —
                          
                          
                          $
                          25,363
                          
                          
                          $
                          —
                          
                          
                          $
                          —
                          
                          
                          $
                          529,970
 
 (1)
                Additional
      equity in loss of investment is not allocated to the Partnership until
      equity in income is earned or additional investment is made by the
      Partnership.
 (2)
                The
      total excludes $46,186 of distributions received classified as other
      income from local
partnerships.
  37
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 6.
              Investment
      in Local Partnerships (Continued)
 
 Property
information for each Local Partnership as of December 31, 2009 is as
follows:
 
 Name of Local Partnership
                              
                              Mortgage
                                loans payable
                              
                              
                              Land
                              
                              
                              Buildings and
                                improvements
                              
                              
                              Accumulated
                                depreciationApril
      Gardens Apartments II Limited Partnership
                              
                              $
                              1,919,017
                              
                              
                              $
                              39,984
                              
                              
                              $
                              2,571,888
                              
                              
                              $
                              (1,914,383
                              )Auburn
      Family, L.P.
                              
                              
                              435,391
                              
                              
                              
                              20,000
                              
                              
                              
                              700,291
                              
                              
                              
                              (340,469
                              )Batesville
      Family, L.P.
                              
                              
                              1,388,997
                              
                              
                              
                              52,000
                              
                              
                              
                              1,902,733
                              
                              
                              
                              (1,039,102
                              )Bay
      Springs Elderly, L.P.
                              
                              
                              650,941
                              
                              
                              
                              38,000
                              
                              
                              
                              938,296
                              
                              
                              
                              (498,904
                              )Brisas
      del Mar Apartments Limited Partnership
                              
                              
                              2,539,009
                              
                              
                              
                              100,280
                              
                              
                              
                              3,525,312
                              
                              
                              
                              (2,614,962
                              )Bruce
      Housing Associates, L.P.
                              
                              
                              1,058,397
                              
                              
                              
                              16,000
                              
                              
                              
                              1,668,814
                              
                              
                              
                              (1,029,811
                              )Chestnut
      Park Associates, L.P.
                              
                              
                              4,201,606
                              
                              
                              
                              781,700
                              
                              
                              
                              8,715,836
                              
                              
                              
                              (5,890,740
                              )Chowan
      Senior Manor Associates Limited Partnership
                              
                              
                              1,183,484
                              
                              
                              
                              86,101
                              
                              
                              
                              1,620,729
                              
                              
                              
                              (1,075,357
                              )Christian
      Street Commons Associates
                              
                              
                              507,616
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              —Country
      View Apartments
                              
                              
                              900,561
                              
                              
                              
                              35,698
                              
                              
                              
                              1,314,750
                              
                              
                              
                              (597,516
                              )Desarrollos
      de Belen Limited Partnership
                              
                              
                              1,807,250
                              
                              
                              
                              96,190
                              
                              
                              
                              2,519,166
                              
                              
                              
                              (1,455,783
                              )Desarrollos
      de Emaus Limited Partnership
                              
                              
                              3,071,495
                              
                              
                              
                              214,000
                              
                              
                              
                              4,115,793
                              
                              
                              
                              (2,260,523
                              )Ellinwood
      Heights Apartments, L.P.
                              
                              
                              661,047
                              
                              
                              
                              10,000
                              
                              
                              
                              1,039,293
                              
                              
                              
                              (491,959
                              )Fulton
      Street Houses Limited Partnership
                              
                              
                              3,869,930
                              
                              
                              
                              2
                              
                              
                              
                              5,983,089
                              
                              
                              
                              (3,903,811
                              )Hayes
      Run Limited Partnership
                              
                              
                              1,370,693
                              
                              
                              
                              85,060
                              
                              
                              
                              1,714,574
                              
                              
                              
                              (856,803
                              )Howard
      L. Miller Sallisaw Apartments II, L.P.
                              
                              
                              592,943
                              
                              
                              
                              39,000
                              
                              
                              
                              837,234
                              
                              
                              
                              (350,157
                              )Hurlock
      Meadow Limited Partnership
                              
                              
                              1,218,066
                              
                              
                              
                              49,525
                              
                              
                              
                              1,653,890
                              
                              
                              
                              (1,103,083
                              )Ivy
      Family, L.P.
                              
                              
                              722,550
                              
                              
                              
                              11,000
                              
                              
                              
                              1,239,462
                              
                              
                              
                              (762,642
                              )Justin
      Associates
                              
                              
                              2,070,292
                              
                              
                              
                              27,472
                              
                              
                              
                              4,384,882
                              
                              
                              
                              (2,866,978
                              )LaBelle
      Commons, Ltd.
                              
                              
                              972,598
                              
                              
                              
                              98,947
                              
                              
                              
                              1,263,737
                              
                              
                              
                              (781,096
                              )Lawrence
      Road Properties, Ltd.
                              
                              
                              729,334
                              
                              
                              
                              50,000
                              
                              
                              
                              988,256
                              
                              
                              
                              (536,499
                              )Loma
      Del Norte Limited Partnership
                              
                              
                              1,384,131
                              
                              
                              
                              84,874
                              
                              
                              
                              2,057,207
                              
                              
                              
                              (960,503
                              )Long
      Reach Associates Limited Partnership
                              
                              
                              1,422,983
                              
                              
                              
                              118,446
                              
                              
                              
                              1,940,133
                              
                              
                              
                              (968,023
                              )Mirador
      del Toa Limited Partnership
                              
                              
                              1,799,524
                              
                              
                              
                              105,000
                              
                              
                              
                              2,393,997
                              
                              
                              
                              (1,791,380
                              )Moore
      Haven Commons, Ltd.
                              
                              
                              891,738
                              
                              
                              
                              73,645
                              
                              
                              
                              1,199,226
                              
                              
                              
                              (834,425
                              )NP-89
      Limited Dividend Housing Association Limited Partnership
                              
                              
                              2,678,344
                              
                              
                              
                              150,000
                              
                              
                              
                              8,008,425
                              
                              
                              
                              (5,259,302
                              )Nash
      Hill Associates, Limited Partnership
                              
                              
                              1,411,518
                              
                              
                              
                              123,876
                              
                              
                              
                              1,814,111
                              
                              
                              
                              (884,813
                              )North
      Calhoun City, L.P.
                              
                              
                              442,614
                              
                              
                              
                              12,000
                              
                              
                              
                              681,627
                              
                              
                              
                              (374,441
                              )Orange
      City Plaza, Limited Partnership
                              
                              
                              361,020
                              
                              
                              
                              53,904
                              
                              
                              
                              1,051,852
                              
                              
                              
                              (549,917
                              )Puerta
      del Mar Limited Partnership
                              
                              
                              2,417,459
                              
                              
                              
                              115,000
                              
                              
                              
                              3,279,123
                              
                              
                              
                              (2,391,813
                              )Purvis
      Heights Properties, L.P.
                              
                              
                              1,103,621
                              
                              
                              
                              47,000
                              
                              
                              
                              1,616,972
                              
                              
                              
                              (793,650
                              )Queen
      Lane Investors
                              
                              
                              1,955,583
                              
                              
                              
                              60,301
                              
                              
                              
                              2,841,369
                              
                              
                              
                              (1,729,552
                              )Somerset
      Manor, Ltd.
                              
                              
                              864,146
                              
                              
                              
                              53,383
                              
                              
                              
                              1,140,303
                              
                              
                              
                              (777,728
                              )Sugar
      Cane Villas, Ltd.
                              
                              
                              3,182,404
                              
                              
                              
                              58,500
                              
                              
                              
                              4,093,772
                              
                              
                              
                              (2,839,720
                              )Summerfield
      Apartments Limited Partnership
                              
                              
                              1,393,021
                              
                              
                              
                              195,411
                              
                              
                              
                              2,893,128
                              
                              
                              
                              (1,258,715
                              )Sydney
      Engel Associates L.P.
                              
                              
                              16,403,175
                              
                              
                              
                              284,305
                              
                              
                              
                              22,039,952
                              
                              
                              
                              (13,795,998
                              )Union
      Valley Associates Limited Partnership
                              
                              
                              1,392,677
                              
                              
                              
                              97,800
                              
                              
                              
                              1,758,877
                              
                              
                              
                              (842,708
                              )Walnut
      Grove Family, L.P.
                              
                              
                              817,729
                              
                              
                              
                              30,000
                              
                              
                              
                              1,130,022
                              
                              
                              
                              (642,428
                              )Waynesboro
      Apartments Limited Partnership
                              
                              
                              1,424,179
                              
                              
                              
                              76,000
                              
                              
                              
                              1,814,995
                              
                              
                              
                              (882,888
                              )West
      Calhoun City, L.P.
                              
                              
                              657,902
                              
                              
                              
                              18,000
                              
                              
                              
                              1,227,222
                              
                              
                              
                              (634,774
                              )$
                              73,874,985
                              
                              
                              $
                              3,608,404
                              
                              
                              $
                              111,680,338
                              
                              
                              $
                              (68,583,356
                              )
  38
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 6.
              Investment
      in Local Partnerships (Continued)
 
 Property
information for each Local Partnership as of December 31, 2008 is as
follows:
 
 Name of Local Partnership
                        
                        Mortgage
                          loans payable
                        
                        
                        Land
                        
                        
                        Buildings and
                          improvements
                        
                        
                        Accumulated
                          depreciationApril
      Gardens Apartments II Limited Partnership
                        
                        $
                        1,930,431
                        
                        
                        $
                        39,984
                        
                        
                        $
                        2,565,230
                        
                        
                        $
                        (1,812,522
                        )Ashland
      Park Apartments, L.P.
                        
                        
                        1,001,691
                        
                        
                        
                        50,160
                        
                        
                        
                        1,293,736
                        
                        
                        
                        (837,252
                        )Auburn
      Family, L.P.
                        
                        
                        439,806
                        
                        
                        
                        20,000
                        
                        
                        
                        670,068
                        
                        
                        
                        (323,057
                        )Batesville
      Family, L.P.
                        
                        
                        1,396,285
                        
                        
                        
                        52,000
                        
                        
                        
                        1,892,764
                        
                        
                        
                        (989,635
                        )Bay
      Springs Elderly, L.P.
                        
                        
                        654,239
                        
                        
                        
                        38,000
                        
                        
                        
                        938,296
                        
                        
                        
                        (475,388
                        )Brisas
      del Mar Apartments Limited Partnership
                        
                        
                        2,556,919
                        
                        
                        
                        100,280
                        
                        
                        
                        3,505,988
                        
                        
                        
                        (2,457,550
                        )Bruce
      Housing Associates, L.P.
                        
                        
                        1,064,826
                        
                        
                        
                        16,000
                        
                        
                        
                        1,643,636
                        
                        
                        
                        (972,130
                        )Chestnut
      Park Associates, L.P.
                        
                        
                        4,337,275
                        
                        
                        
                        781,700
                        
                        
                        
                        8,715,836
                        
                        
                        
                        (5,568,980
                        )Chowan
      Senior Manor Associates Limited Partnership
                        
                        
                        1,194,083
                        
                        
                        
                        86,101
                        
                        
                        
                        1,611,708
                        
                        
                        
                        (1,023,552
                        )Christian
      Street Commons Associates
                        
                        
                        521,832
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —Country
      View Apartments
                        
                        
                        905,761
                        
                        
                        
                        35,698
                        
                        
                        
                        1,314,750
                        
                        
                        
                        (559,551
                        )Desarrollos
      de Belen Limited Partnership
                        
                        
                        1,817,596
                        
                        
                        
                        96,190
                        
                        
                        
                        2,519,166
                        
                        
                        
                        (1,373,000
                        )Desarrollos
      de Emaus Limited Partnership
                        
                        
                        3,089,078
                        
                        
                        
                        214,000
                        
                        
                        
                        4,115,793
                        
                        
                        
                        (2,126,711
                        )Ellinwood
      Heights Apartments, L.P.
                        
                        
                        664,920
                        
                        
                        
                        10,000
                        
                        
                        
                        1,036,661
                        
                        
                        
                        (456,326
                        )Fulton
      Street Houses Limited Partnership
                        
                        
                        3,869,930
                        
                        
                        
                        2
                        
                        
                        
                        5,983,089
                        
                        
                        
                        (3,679,123
                        )Hayes
      Run Limited Partnership
                        
                        
                        1,378,596
                        
                        
                        
                        85,060
                        
                        
                        
                        1,703,131
                        
                        
                        
                        (796,891
                        )Howard
      L. Miller Sallisaw Apartments II, L.P.
                        
                        
                        596,258
                        
                        
                        
                        39,000
                        
                        
                        
                        823,657
                        
                        
                        
                        (327,881
                        )Hurlock
      Meadow Limited Partnership
                        
                        
                        1,225,472
                        
                        
                        
                        49,525
                        
                        
                        
                        1,647,845
                        
                        
                        
                        (1,038,310
                        )Ivy
      Family, L.P.
                        
                        
                        731,946
                        
                        
                        
                        11,000
                        
                        
                        
                        1,238,287
                        
                        
                        
                        (718,876
                        )Justin
      Associates
                        
                        
                        2,084,848
                        
                        
                        
                        27,472
                        
                        
                        
                        4,378,882
                        
                        
                        
                        (2,707,691
                        )LaBelle
      Commons, Ltd.
                        
                        
                        978,339
                        
                        
                        
                        98,947
                        
                        
                        
                        1,263,737
                        
                        
                        
                        (732,820
                        )Lawrence
      Road Properties, Ltd.
                        
                        
                        733,946
                        
                        
                        
                        50,000
                        
                        
                        
                        982,221
                        
                        
                        
                        (510,645
                        )Loma
      Del Norte Limited Partnership
                        
                        
                        1,391,814
                        
                        
                        
                        84,874
                        
                        
                        
                        2,031,383
                        
                        
                        
                        (894,984
                        )Long
      Reach Associates Limited Partnership
                        
                        
                        1,431,058
                        
                        
                        
                        118,446
                        
                        
                        
                        1,940,133
                        
                        
                        
                        (917,195
                        )Mirador
      del Toa Limited Partnership
                        
                        
                        1,811,472
                        
                        
                        
                        105,000
                        
                        
                        
                        2,393,997
                        
                        
                        
                        (1,687,038
                        )Moore
      Haven Commons, Ltd.
                        
                        
                        896,963
                        
                        
                        
                        73,645
                        
                        
                        
                        1,199,226
                        
                        
                        
                        (792,337
                        )NP-89
      Limited Dividend Housing Association Limited Partnership
                        
                        
                        2,895,016
                        
                        
                        
                        150,000
                        
                        
                        
                        7,987,623
                        
                        
                        
                        (4,949,362
                        )Nash
      Hill Associates, Limited Partnership
                        
                        
                        1,419,789
                        
                        
                        
                        123,876
                        
                        
                        
                        1,797,040
                        
                        
                        
                        (832,089
                        )North
      Calhoun City, L.P.
                        
                        
                        448,576
                        
                        
                        
                        12,000
                        
                        
                        
                        676,338
                        
                        
                        
                        (358,639
                        )Orange
      City Plaza, Limited Partnership
                        
                        
                        372,119
                        
                        
                        
                        53,904
                        
                        
                        
                        1,051,852
                        
                        
                        
                        (526,427
                        )Puerta
      del Mar Limited Partnership
                        
                        
                        2,433,052
                        
                        
                        
                        115,000
                        
                        
                        
                        3,273,573
                        
                        
                        
                        (2,261,005
                        )Purvis
      Heights Properties, L.P.
                        
                        
                        1,110,322
                        
                        
                        
                        47,000
                        
                        
                        
                        1,602,756
                        
                        
                        
                        (757,323
                        )Queen
      Lane Investors
                        
                        
                        1,884,424
                        
                        
                        
                        60,301
                        
                        
                        
                        2,841,369
                        
                        
                        
                        (1,729,552
                        )Somerset
      Manor, Ltd.
                        
                        
                        868,979
                        
                        
                        
                        53,383
                        
                        
                        
                        1,132,970
                        
                        
                        
                        (736,473
                        )Sugar
      Cane Villas, Ltd.
                        
                        
                        3,200,620
                        
                        
                        
                        58,500
                        
                        
                        
                        4,093,772
                        
                        
                        
                        (2,694,248
                        )Summerfield
      Apartments Limited Partnership
                        
                        
                        1,441,951
                        
                        
                        
                        195,411
                        
                        
                        
                        2,829,678
                        
                        
                        
                        (1,184,884
                        )Sydney
      Engel Associates L.P.
                        
                        
                        15,270,199
                        
                        
                        
                        284,305
                        
                        
                        
                        20,403,211
                        
                        
                        
                        (13,008,966
                        )Union
      Valley Associates Limited Partnership
                        
                        
                        1,400,527
                        
                        
                        
                        97,800
                        
                        
                        
                        1,758,877
                        
                        
                        
                        (799,753
                        )Walnut
      Grove Family, L.P.
                        
                        
                        821,643
                        
                        
                        
                        30,000
                        
                        
                        
                        1,128,222
                        
                        
                        
                        (612,532
                        )Waynesboro
      Apartments Limited Partnership
                        
                        
                        1,431,989
                        
                        
                        
                        76,000
                        
                        
                        
                        1,794,917
                        
                        
                        
                        (839,441
                        )West
      Calhoun City, L.P.
                        
                        
                        672,387
                        
                        
                        
                        18,000
                        
                        
                        
                        1,197,295
                        
                        
                        
                        (599,851
                        )Westminster
      Apartments Limited Partnership
                        
                        
                        1,607,972
                        
                        
                        
                        51,651
                        
                        
                        
                        1,281,736
                        
                        
                        
                        (1,152,440
                        )$
                        75,984,949
                        
                        
                        $
                        3,710,215
                        
                        
                        $
                        112,260,449
                        
                        
                        $
                        (66,823,930
                        )
  39
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 6.
              Investment
      in Local Partnerships (Continued)
 
 The
      summary of property activity during the year ended December 31, 2009 is as
      follows:
 
 Balance as of
                      December 31, 2008
                  
                  
                  Net change
                      during the year
                      ended
                      December 31, 2009
                  
                  
                  Balance as of
                      December 31, 2009Land
                  
                  $
                  3,710,215
                  
                  
                  $
                  (101,811
                  )
                  
                  $
                  3,608,404Buildings
      and improvements
                  
                  
                  112,260,449
                  
                  
                  
                  (580,111
                  )
                  
                  
                  111,680,338115,970,664
                  
                  
                  
                  (681,922
                  )
                  
                  
                  115,288,742Accumulated
      depreciation
                  
                  
                  (66,823,930
                  )
                  
                  
                  (1,759,426
                  )
                  
                  
                  (68,583,356
                  )$
                  49,146,734
                  
                  
                  $
                  (2,441,348
                  )
                  
                  $
                  46,705,386
 
 The
Partnership’s investment in NP-89 represents more than 20% of the Partnership’s
total assets as of March 30, 2010 and 2009.  The following financial
information represents certain balance sheet and operating statement data of
NP-89 as of and for the years ended December 31, 2009 and 2008:
 
 2009
                  
                  
                  2008Total
      assets
                  
                  $
                  3,324,230
                  
                  
                  $
                  3,587,024Total
      liabilities
                  
                  $
                  2,739,318
                  
                  
                  $
                  2,988,368Revenue
                  
                  $
                  1,288,664
                  
                  
                  $
                  1,291,259Net
      income
                  
                  $
                  6,256
                  
                  
                  $
                  25,619
 
 7.
              Transactions
      with General Partner and Affiliates
 
 Pursuant
to the Partnership Agreement, the Partnership incurs an annual management fee
(the “Management Fee”) and an annual additional management fee (the “Additional
Management Fee”) payable to the General Partner for its services in connection
with the management of the affairs of the Partnership.  The annual
Management Fee is equal to .14% of all proceeds as of December 31 of any year,
invested or committed for investment in Local Partnerships plus all debts of the
Local Partnerships related to the Properties ("Invested Assets").  The
Partnership incurred a Management Fee of $122,053, $154,578, and $155,078 for
the years ended March 30, 2010, 2009 and 2008, respectively.  The
annual Additional Management Fee is equal to .06% of Invested
Assets.  The Partnership incurred an Additional Management Fee of
$52,308, $66,247 and $66,462 for the years ended March 30, 2010, 2009 and 2008,
respectively.  Such amounts are aggregated and reflected under the
caption management fees - affiliate in the accompanying statements of
operations.  Unpaid Management Fees and Additional Management Fees in
the cumulative amount of $1,487,164 and $1,362,803 are included in payable to
general partner and affiliates in the accompanying balance sheets as of March
30, 2010 and 2009, respectively.
 
 In
addition, pursuant to the Partnership Agreement, the Partnership is authorized
to contract for administrative services provided to the
Partnership.  From the inception of the Partnership through November
23, 1999, such administrative services were provided by ML Fund Administrators
Inc. (“MLFA”), an affiliate of the Selling Agent, pursuant to an Administrative
Services Agreement.  MLFA resigned the performance of its basic
services under the Administrative Services Agreement effective November 23,
1999, with certain transitional services continued through April 30,
2000.  The General Partner transitioned the administrative services to
an affiliate of the General Partner without any changes to the terms of the
Administrative Services Agreement.  Pursuant to such agreement, the
Partnership incurs an annual administration fee (the “Administration Fee”) and
an annual additional administration fee (the “Additional Administration Fee”)
for administrative services provided to the Partnership.  The
Partnership incurred an Administration Fee of $122,053, $154,578, and $155,078
for the years ended March 30, 2010, 2009 and 2008,
respectively.    The annual Additional Administration Fee is
equal to .06% of Invested Assets.  The Partnership incurred an
Additional Administration Fee of $52,308, $66,247 and $66,462 for the years
ended March 30, 2010, 2009 and 2008, respectively.  Such amounts are
aggregated and reflected under the caption administration fees - affiliate in
the accompanying statements of operations.  Unpaid Administration Fees
and Additional Administration Fees due to MLFA in the cumulative amount of
$440,673 are included in accounts payable and accrued expenses in the
accompanying balance sheets as of March 30, 2010 and 2009.  Unpaid
Administration Fees and Additional Administration Fees due to an affiliate of
the General Partner in the cumulative amount of $1,730,025 and $1,571,916 are
included in due to general partner and affiliates in the accompanying balance
sheets as of March 30, 2010 and 2009, respectively.
  40
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 7.
              Transactions
      with General Partner and Affiliates
(Continued)
 
 The
amount reflected above as due to MLFA and certain amounts due to the General
Partner and affiliates are payable pursuant to the terms of an agreement between
the Partnership, the General Partner and MLFA (the “Deferred Fee
Agreement”).  Such amounts are payable to the extent proceeds from the
sales of limited partner interests/local partnership properties become
available, as described in the Deferred Fee Agreement.
 
 For the
years ended December 31, 2009, 2008 and 2007, Chestnut Park paid and/or incurred
the following amounts to an affiliate of the General Partner in connection with
services provided to Chestnut Park:
 
 2009
                  
                  
                  2008
                  
                  
                  2007Paid
                  
                  
                  Incurred
                  
                  
                  Paid
                  
                  
                  Incurred
                  
                  
                  Paid
                  
                  
                  IncurredProperty
      management fees
                  
                  $
                  45,448
                  
                  
                  $
                  45,502
                  
                  
                  $
                  44,607
                  
                  
                  $
                  45,598
                  
                  
                  $
                  42,128
                  
                  
                  $
                  40,010
  41
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 8.
              Taxable
      Loss
 
 A
reconciliation of the financial statement net loss of the Partnership for the
years ended March 30, 2010, 2009 and 2008 to the tax return income (loss) for
the years ended December 31, 2009, 2008 and 2007 is as follows:
 
 2010
                  
                  
                  2009
                  
                  
                  2008Financial
      statement net loss for the years ended March 30, 2010, 2009 and
      2008
                  
                  $
                  (413,184
                  )
                  
                  $
                  (474,101
                  )
                  
                  $
                  (551,682
                  )Add
      (less) net transactions occurring betweenJanuary
      1, 2007 and March 30, 2007
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  17,889January
      1, 2008 and March 30, 2008
                  
                  
                  —
                  
                  
                  
                  (125,165
                  )
                  
                  
                  125,165January
      1, 2009 and March 30, 2009
                  
                  
                  (120,348
                  )
                  
                  
                  120,348
                  
                  
                  
                  —January
      1, 2010 and March 30, 2010
                  
                  
                  97,168
                  
                  
                  
                  —
                  
                  
                  
                  —Adjusted
      financial statement net loss for the years ended December 31, 2009, 2008
      and 2007
                  
                  
                  (436,364
                  )
                  
                  
                  (478,918
                  )
                  
                  
                  (408,628
                  )Adjustment
      to management and administration fees pursuant to Internal Revenue Code
      Section 267
                  
                  
                  203,312
                  
                  
                  
                  327,562
                  
                  
                  
                  327,560Differences
      arising from equity in loss of investment in local
      partnerships
                  
                  
                  (1,923,864
                  )
                  
                  
                  (1,850,619
                  )
                  
                  
                  (2,617,547
                  )Differences
      in gain on sale of limited partner interests/local partnership
      properties
                  
                  
                  4,775,725
                  
                  
                  
                  —
                  
                  
                  
                  248,246Other
      income from local partnerships
                  
                  
                  (56,173
                  )
                  
                  
                  (36,063
                  )
                  
                  
                  (15,698
                  )Nondeductible
      flow through expenses
                  
                  
                  461
                  
                  
                  
                  39
                  
                  
                  
                  —Other
      differences
                  
                  
                  (1,604
                  )
                  
                  
                  1,988
                  
                  
                  
                  (748
                  )Tax
      return income (loss) for the years ended December 31, 2009, 2008 and
      2007
                  
                  $
                  2,561,493
                  
                  
                  $
                  (2,036,011
                  )
                  
                  $
                  (2,466,815
                  )
 
 The
differences between the investment in local partnerships for tax and financial
reporting purposes as of December 31, 2009 and 2008 are as follows:
 
 2009
                    
                    
                    2008Investment
      in local partnerships - financial reporting
                    
                    $
                    516,163
                    
                    
                    $
                    529,970Investment
      in local partnerships - tax
                    
                    
                    (22,667,175
                    )
                    
                    
                    (25,445,556
                    )$
                    23,183,338
                    
                    
                    $
                    25,975,526
 
 Payable
to general partner and affiliates in the accompanying balance sheets represents
accrued management and administration fees, which are not deductible for tax
purposes until paid pursuant to Internal Revenue Code Section
267.
  42
  AMERICAN
TAX CREDIT PROPERTIES III L.P.
 NOTES
TO FINANCIAL STATEMENTS - CONTINUED
 MARCH
30, 2010, 2009 AND 2008
 
 9.
              Fair
      Value of Financial Instruments
 
 The
estimated fair value amounts have been determined using available market
information, assumptions, estimates and valuation methodologies.
 
 Investment in Mutual
Fund
 
 The
investment in mutual fund is carried at estimated fair value.
 
 Cash andCashEquivalents
 
 The
carrying amount approximates fair value.
  43
  Item
9.  Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure.
 
 None.
 
 Item
9A.  Controls and
Procedures.
 
 Disclosure
controls and procedures are controls and procedures that are designed to ensure
that information required to be disclosed by Registrant in reports that
Registrant files or submits under the Exchange Act is recorded, processed,
summarized and timely reported as provided in SEC rules and
forms.  Registrant periodically reviews the design and effectiveness
of its disclosure controls and procedures, including compliance with various
laws and regulations that apply to its operations.  Registrant makes
modifications to improve the design and effectiveness of its disclosure controls
and procedures, and may take other corrective action, if its reviews identify a
need for such modifications or actions.  In designing and evaluating
the disclosure controls and procedures, Registrant recognizes that any controls
and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives.
  Registrant
has carried out an evaluation, under the supervision and the participation of
its management, including the Chief Executive Officer and Chief Financial
Officer of Richman Housing, of the effectiveness of the design and operation of
its disclosure controls and procedures (as defined in
Rule 13a-15(e) and 15d-15(e) under the Exchange Act), as of the
year ended March 30, 2010.  Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer of Richman Housing concluded that
Registrant’s disclosure controls and procedures were effective as of
March 30, 2010.
 
 Item
9A(T).  Management’s Annual Report
on Internal Control over Financial Reporting.
 
 Management’s Annual Report
on Internal Control Over Financial Reporting
 
 Registrant
is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act
Rule 13a-15(f).  Under the supervision and with the participation
of its management, including the Chief Executive Officer and Chief Financial
Officer of Richman Housing, Registrant conducted an evaluation of the
effectiveness of its internal control over financial reporting based on the
framework set forth in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission.  Based on its evaluation, management has
concluded that Registrant’s internal control over financial reporting was
effective as of March 30, 2010.
  This
Annual Report does not include an attestation report of Registrant’s independent
registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by
Registrant’s independent registered public accounting firm pursuant to temporary
rules of the SEC that permit Registrant to provide only management’s report
in this Annual Report.
 
 Changes in Internal Control
Over Financial Reporting
 
 There
were no changes in Registrant’s internal control over financial reporting during
the three months ended March 30, 2010 that have materially affected, or are
reasonably likely to materially affect, Registrant’s internal control over
financial reporting.
 
 Item
9B.   Other
Information.
 
 None.
  44
  PART
III
 
 Item
      10.
              Directors, Executive
      Officers and Corporate
Governance.
 
 Registrant
has no officers or directors.  The General Partner manages
Registrant's affairs and has general responsibility and authority in all matters
affecting its business.  The responsibilities of the General Partner
are currently carried out by Richman Housing.  The executive officers
and director of Richman Housing are:
 
 Served
      in presentName
                                
                                capacity since1
                                
                                Position heldRichard
      Paul Richman
                                
                                September
      21, 1989
                                
                                DirectorDavid
      A. Salzman
                                
                                February
      1, 2001
                                
                                PresidentJames
      Hussey
                                
                                January
      20, 2009
                                
                                Vice
      President and TreasurerGina
      K. Dodge
                                
                                September
      21, 1989
                                
                                SecretaryCharles
      L. Krafnick
                                
                                February
      1, 2001
                                
                                Assistant
      Treasurer
 1Director
holds office until his successor is elected and qualified.  All
officers serve at the pleasure of the Director.
 
 Richard Paul Richman, age 62,
is the sole Director of Richman Housing.  Mr. Richman is the Chairman
and a stockholder of Richman Group.  Mr. Richman is involved in the
syndication, development and management of residential property.  Mr.
Richman is also a director of Wilder Richman Resources Corp., an affiliate of
Richman Housing and the general partner of Secured Income L.P., a director of
Wilder Richman Historic Corporation, an affiliate of Richman Housing and the
general partner of Wilder Richman Historic Properties II, L.P., a director of
Richman Tax Credit Properties Inc., an affiliate of Richman Housing and the
general partner of the general partner of American Tax Credit Properties L.P., a
director of Richman Tax Credits Inc., an affiliate of Richman Housing and the
general partner of the general partner of American Tax Credit Properties II L.P.
and a director of Richman American Credit Corp., an affiliate of Richman Housing
and the manager of American Tax Credit Trust, a Delaware statutory business
trust.
 
 David A. Salzman,age 49, is
the President of Richman Housing and is a stockholder and the President of
Richman Group.  Mr. Salzman has been employed by Richman Group or an
affiliate since 1986 and is responsible for the acquisition of residential real
estate for syndication for Richman Group.
 
 James Hussey, age 49, is a
Vice President and the Treasurer of Richman Housing.  Mr. Hussey, the
Treasurer of Richman Group, is engaged primarily in the finance operations of
Richman Group.  In addition, Mr. Hussey is a Vice President and the
Treasurer of Richman Asset Management, Inc. (“RAM”), an affiliate of Richman
Housing.  Mr. Hussey’s is engaged primarily in the partnership
management and finance operations of RAM.  Prior to joining RAM, Mr.
Hussey, a Certified Public Accountant, was the Chief Financial Officer of WCI
Communities Inc. NE Region and Spectrum Communities, LLC.  From 1989
to 1998, Mr. Hussey held various positions with Center Development Corp, a
developer of affordable housing in the New York metropolitan area.
 
 Gina K. Dodge, age 54, is the
Secretary of Richman Housing and is a Vice President and the Secretary of
Richman Group.  Ms. Dodge has been employed by Richman Group or an
affiliate since 1988 and, as the Director of Investor Services, is responsible
for communications with investors.
 
 Charles L. Krafnick, age 48,
is the Assistant Treasurer of Richman Housing and is the Assistant Treasurer of
Richman Group.  Mr. Krafnick has been employed by Richman Group or an
affiliate since 1994 and is engaged primarily in the finance operations of
Richman Group.  In addition, Mr. Krafnick is the Assistant Treasurer of
RAM.  Mr. Krafnick's responsibilities in connection with RAM include
various finance and partnership management functions.
 
 Registrant
is not aware of any family relationship between the director and executive
officers listed in this Item 10.
 
 Registrant
is not aware of the involvement in certain legal proceedings with respect to the
director and executive officers listed in this Item 10.
 
 Mr.
Richman, Mr. Hussey and Mr. Krafnick serve on a committee that performs the
functions of an audit committee on behalf of Registrant (the “Audit Committee”).
Each of Mr. Richman, Mr. Hussey and Mr. Krafnick meets the qualifications of an
audit committee financial expert. Mr. Richman, Mr. Hussey and Mr. Krafnick are
not independent under the Nasdaq Stock Market independence standards; however
Registrant believes that each exercises his judgment in the best interest of
Registrant with respect to matters that would ordinarily be passed upon by an
audit committee.
  45
  Item
      10.
              Directors, Executive
      Officers and Corporate Governance
  (Continued).
 
 The Board
of Director of Richman Housing has adopted a code of ethics for senior financial
officers of Registrant, applicable to Registrant's principal executive officer,
principal financial officer and comptroller or principal accounting officer, or
persons performing similar functions.  Registrant will provide to any
person without charge a copy of such code of ethics upon written request to the
General Partner at 340 Pemberwick Road, Greenwich, Connecticut 06831, Attention:
Secretary.
 
 Item
11.   Executive
Compensation.
 
 Registrant
has no officers or directors.  Registrant does not pay or accrue any
fees, salaries or other forms of compensation to the officers or director of
Richman Housing and did not pay any such compensation during the year ended
March 30, 2010 or during the prior two fiscal years.  During the year
ended March 30, 2010 and during the prior two fiscal years, Richman Housing did
not pay any compensation to any of its officers or its director.  The
director and certain officers of Richman Housing receive compensation from
certain affiliates of Richman Housing for services performed for various
affiliated entities which may include services performed for
Registrant.
 
 Under the
terms of the Partnership Agreement, Registrant has entered into certain
arrangements with the General Partner and certain of its affiliates which
provide for compensation to be paid to the General Partner and certain of its
affiliates.  See Note 7 to the audited financial statements included
in Item 8 - “Financial Statements and Supplementary Data” of this Annual
Report.
 
 Tabular
information concerning salaries, bonuses and other types of compensation payable
to executive officers has not been included in this Annual Report.  As
noted above, Registrant has no executive officers.  The levels of
compensation payable to the General Partner and/or its affiliates is limited by
the terms of the Partnership Agreement and may not be increased therefrom on a
discretionary basis.
 
 Item
      12.
              Security Ownership of
      Certain Beneficial Owners and Management and Related Stockholder
      Matters.
 
 JJJ Fund,
LLC and an affiliate, having the mailing address 7463 E. Beryl, Scottsdale,
Arizona 85258 are the owners of 2,788 Units, representing approximately 7.8% of
all such Units.  Prizm Investments and certain affiliates thereof,
having the mailing address P.O. Box 47638, Phoenix, Arizona 85068 are the owners
of 2,691 Units, representing approximately 7.5% of all such Units.  As
of approximately June 15, 2010, no person or entity, other than the entities and
affiliates identified above herein Item 12, was known by Registrant to be the
beneficial owner of more than five percent of the Units.
 
 Neither
the General Partner, Richman Housing nor the director or any officer of Richman
Housing own any Units.  Richman Housing is wholly owned by Richard
Paul Richman.
 
 Item
13.  Certain
Relationships and Related Transactions and Director
Independence.
 
 Transactions with Related
Persons
 
 The
General Partner and certain of its affiliates are entitled to receive certain
fees and reimbursement of expenses and have received/earned fees for services
provided to Registrant as described in Note 7 to the audited financial
statements included in Item 8 - "Financial Statements and Supplementary Data"
herein.  Such fees will continue to be incurred by Registrant during
the fiscal year ending March 30, 2011.
 
 Review, Approval or
Ratification of Transactions with Related Parties
 
 Pursuant
to the terms of the Partnership Agreement, Registrant has specific
rights and limitations in conducting business with the General Partner and
affiliates.  To date, Registrant has followed such provisions of
the Partnership Agreement.  Registrant's unwritten
policies for transacting business with related parties are
to first refer to the Partnership Agreement in connection
with conducting such business or making payments and then,
if circumstances arise for which a new related party
transaction is contemplated, present the proposed
transaction to certain officers of Richman Housing for review and
approval.  If any matter in connection with such transaction might be
unclear under the terms of the Partnership Agreement, such matter is
presented to general or outside counsel for review prior
to any such transaction being entered into by
Registrant.
 
 Indebtedness of
Management.
 
 No
officer or director of Richman Housing or any affiliate of the foregoing was
indebted to Registrant at any time during the years ended March 30, 2010 and
2009.
  46


Item
13.  Certain
Relationships and Related Transactions and Director Independence
(Continued).





Corporate
Governance





As
discussed elsewhere in this annual report, Registrant does not have any
directors, although as noted above Mr. Richman, Mr. Hussey and Mr. Krafnick
serve on a committee that performs the functions of an audit committee on behalf
of Registrant. Under Nasdaq Stock Market independence standards, Mr. Richman,
Mr. Hussey and Mr. Krafnick would not be considered independent as they serve as
officers of Richman Housing. Although Mr. Richman, Mr. Hussey and Mr. Krafnick
are not independent under Nasdaq rules, Registrant believes that each exercises
his judgment in the best interest of Registrant with respect to matters that
would ordinarily be passed upon by an audit committee.  Registrant is
not a listed issuer whose securities are listed on a national securities
exchange, or an inter-dealer quotation system which has requirements that a
majority of the board of directors be independent, and Registrant is not
required to have an audit committee which consists of independent directors and
meets the other requirements of the Securities Exchange Act of 1934 and the
rules promulgated thereunder.





Item
14.  Principal Accountant Fees
and Services.





Registrant’s
independent registered public accounting firm billed Registrant the following
fees for professional services rendered in the years ended March 30, 2010 and
2009:





2010
                    
                    
                    2009Audit
      Fees
                    
                    $
                    40,500
                    
                    
                    $
                    45,000Audit-Related
      Fees
                    
                    
                    —
                    
                    
                    
                    —Tax
      Fees
                    
                    $
                    13,500
                    
                    
                    $
                    15,000All
      Other Fees
                    
                    
                    —
                    
                    
                    
                    —





Audit
fees consist of fees for the annual audit and review of Registrant’s financial
statements and assistance with and review of documents filed with the
SEC.  Tax fees generally represent fees for annual tax return
preparation.  There were no other accounting fees incurred by
Registrant in fiscal 2010 and 2009.





The Audit
Committee has adopted a set of pre-approval policies and procedures under which,
pursuant to the requirements of the Sarbanes-Oxley Act of 2002, all audit and
permitted non-audit services to be performed by the independent registered
public accounting firm require pre-approval by the Audit Committee.





The Audit
Committee approved all fiscal 2010 and 2009 principal accountant fees and
services.


47


PART
IV





Item
      15.
            Exhibits and Financial
      Statement Schedules.





(a)
Financial Statements,
Financial Statement Schedules and Exhibits





(1)  Financial
Statements





See Item
8 - "Financial Statements and Supplementary Data."





(2)  Financial Statement
Schedules





No
financial statement schedules are included because of the absence of the
conditions under which they are required or because the information is included
in the financial statements or the notes thereto.





(3)  Exhibits





Incorporated
      byExhibit
                  
                  Reference to4.1
                  Amended
      and Restated Agreement of Limited Partnership of
Registrant
                  
                  Exhibit
      A to Registrant’s Prospectus filed February 15, 1990
                    (File
      No. 33-31390)10.1
                  April
      Gardens Apartments II Limited Partnership (A Delaware Limited Partnership)
      Amended and Restated Agreement of Limited Partnership
                  
                  Exhibit
      10.1 to Form 10-Q Report forthe
      period ended December 30, 1990
                    (File
      No. 33-31390)10.2
                  Ashland
      Park Apartments, L.P. Second Amended and Restated Agreement of Limited
      Partnership
                  
                  Exhibit
      10.2 to Form 10-K Report for the year ended March 30, 1991
                    (File
      No. 33-31390)10.3
                  Auburn
      Family, L.P. Amended and Restated Limited Partnership Agreement and
      Certificate of Limited Partnership
                  
                  Exhibit
      10.1 to Form 10-Q Report forthe
      period ended December 30, 1991
                    (File
      No. 0-19217)10.4
                  Amended
      No. 2 to the Batesville Family, L.P. Amended and Restated Agreement of
      Limited Partnership
                  
                  Exhibit
      10.2 to Form 10-Q Report forthe
      period ended December 30, 1990
                    (File
      No. 33-31390)10.5
                  Batesville
      Family, L.P. Amendment No. 3 to the Amended and Restated Agreement of
      Limited Partnership
                  
                  Exhibit
      10.2 to Form 10-Q Report forthe
      period ended December 30, 1991
                    (File
      No. 0-19217)10.6
                  Bay
      Springs Elderly, L.P. (A Mississippi Limited Partnership) Amended and
      Restated Limited Partnership Agreement and Certificate of Limited
      Partnership
                  
                  Exhibit
      10.1 to Form 10-Q Report forthe
      period ended September 29, 1991
                    (File
      No. 0-19217)10.7
                  Brisas
      del Mar Apartments Limited Partnership (A Delaware Limited Partnership)
      Amended and Restated Agreement of Limited Partnership
                  
                  Exhibit
      10.3 to Form 10-Q Report for the period ended December 30,
      1990
                    (File
      No. 33-31390)10.8
                  Amendment
      No. 1 to the Bruce Housing Associates, L.P. Amended and Restated Agreement
      of Limited Partnership
                  
                  Exhibit
      10.8 to Form 10-K Reportfor
      the year ended March 30, 1992
                    (File
      No. 33-31390)


48





Incorporated
      byExhibit
                
                Reference to10.9
                Amendment
      No. 2 to the Bruce Housing Associates, L.P. Amended and Restated Agreement
      of Limited Partnership
                
                Exhibit
      10.4 to Form 10-Q Report forthe
      period ended December 30, 1990
                  (File
      No. 33-31390)10.10
                Bruce
      Housing Associates, L.P. Amendment No. 3 to the Amended and Restated
      Agreement of Limited Partnership
                
                Exhibit
      10.3 to Form 10-Q Report forthe
      period ended December 30, 1991
                  (File
      No. 0-19217)10.11
                Carrington
      Limited Dividend Housing Association Limited Partnership Amended and
      Restated Agreement of Limited Partnership
                
                Exhibit
      10.1 to Form 10-Q Report forthe
      period ended September 29, 1990
                  (File
      No. 33-31390)10.12
                Carrington
      Limited Dividend Housing Association Limited Partnership Second Amended
      and Restated Agreement of Limited Partnership
                
                Exhibit
      10.2 to Form 10-Q Report forthe
      period ended September 29, 1990
                  (File
      No. 33-31390)10.13
                Carrington
      Limited Dividend Housing Association Limited Partnership Amendment No. 1
      to the Second Amended and Restated Agreement of Limited
      Partnership
                
                Exhibit
      10.5 to Form 10-Q Report forthe
      period ended December 30, 1990
                  (File
      No. 33-31390)10.14
                Chestnut
      Park Associates, L.P. Amended and Restated Agreement of Limited
      Partnership
                
                Exhibit
      10.3 to Form 10-Q Report forthe
      period ended September 29, 1990
                  (File
      No. 33-31390)10.15
                Chowan
      Senior Manor Associates Limited Partnership Amended and Restated Agreement
      of Limited Partnership
                
                Exhibit
      10.15 to Form 10-K Reportfor
      the year ended March 30, 1992
                  (File
      No. 33-31390)10.16
                Christian
      Street Commons Associates Amended and Restated Limited Partnership
      Agreement and Certificate of Limited Partnership
                
                Exhibit
      10.16 to Form 10-K Reportfor
      the year ended March 30, 1992
                  (File
      No. 33-31390)10.17
                Country
      View Apartments Second Amended and Restated Limited Partnership Agreement
      and Certificate of Limited Partnership
                
                Exhibit
      10.17 to Form 10-K Reportfor
      the year ended March 30, 1992
                  (File
      No. 33-31390)10.18
                Desarrollos
      de Belen Limited Partnership Amended and Restated Agreement of Limited
      Partnership
                
                Exhibit
      10.18 to Form 10-K Reportfor
      the year ended March 30, 1992
                  (File
      No. 33-31390)10.19
                Desarrollos
      de Emaus Limited Partnership Amended and Restated Agreement of Limited
      Partnership
                
                Exhibit
      10.19 to Form 10-K Reportfor
      the year ended March 30, 1992
                  (File
      No. 33-31390)10.20
                Ellinwood
      Heights Apartments, L.P. Amended and Restated Agreement of Limited
      Partnership
                
                Exhibit
      10.1 to Form 10-Q Report forthe
      period ended June 29, 1991
                  (File
      No. 0-19217)10.21
                Fulton
      Street Houses Limited Partnership Amended and Restated Agreement of
      Limited Partnership
                
                Exhibit
      10.21 to Form 10-K Reportfor
      the year ended March 30, 1992
                  (File
      No. 33-31390)


49





Incorporated
      byExhibit
                
                Reference to10.22
                Hayes
      Run Limited Partnership Amended and Restated Agreement of Limited
      Partnership
                
                Exhibit
      10.2 to Form 10-Q Report for
                  the
      period ended June 29, 1991
                  (File
      No. 0-19217)10.23
                Howard
      L. Miller Sallisaw Apartments II, L.P. Third Amended and Restated
      Agreement and Certificate of Limited Partnership
                
                Exhibit
      10.10 to Form 10-K Report
                  for
      the year ended March 30, 1991
                  (File
      No. 33-31390)10.24
                Hurlock
      Meadow Limited Partnership Amended and Restated Limited Partnership
      Agreement
                
                Exhibit
      10.24 to Form 10-K Report
                  for
      the year ended March 30, 1992
                  (File
      No. 33-31390)10.25
                Amendment
      No. 1 to the Ivy Family, L.P. Amended and Restated Agreement of Limited
      Partnership
                
                Exhibit
      10.6 to Form 10-Q Report for
                  the
      period ended December 30, 1990
                  (File
      No. 33-31390)10.26
                Ivy
      Family, L.P. Amendment No. 3 to the Amended and Restated Agreement of
      Limited Partnership
                
                Exhibit
      10.4 to Form 10-Q Report for
                  the
      period ended December 30, 1991
                  (File
      No. 0-19217)10.27
                Justin
      Associates Amended and Restated Agreement and Certificate of Limited
      Partnership
                
                Exhibit
      10.7 to Form 10-Q Report for
                  the
      period ended December 30, 1990
                  (File
      No. 33-31390)10.28
                LaBelle
      Commons, Ltd. Amended and Restated Agreement of Limited
      Partnership
                
                Exhibit
      10.13 to Form 10-K Report
                  for
      the year ended March 30, 1991
                  (File
      No. 33-31390)10.29
                LaBelle
      Commons, Ltd. Amendment No. 1 to Amended and Restated Agreement of Limited
      Partnership
                
                Exhibit
      10.29 to Form 10-K Report
                  for
      the year ended March 30, 1992
                  (File
      No. 33-31390)10.30
                Amendment
      No. 2 to the Lawrence Road Properties, Ltd. Amended and Restated Agreement
      of Limited Partnership
                
                Exhibit
      10.8 to Form 10-Q Report for
                  the
      period ended December 30, 1990
                  (File
      No. 33-31390)10.31
                Lawrence
      Road Properties, Ltd. Amendment No. 3 to the Amended and Restated
      Agreement of Limited Partnership
                
                Exhibit
      10.5 to Form 10-Q Report for
                  the
      period ended December 30, 1991
                  (File
      No. 0-19217)10.32
                Loma
      Del Norte Limited Partnership Amended and Restated Limited Partnership
      Agreement
                
                Exhibit
      10.2 to Form 10-Q Report for
                  the
      period ended September 29, 1991
                  (File
      No. 0-19217)10.33
                Long
      Reach Associates Limited Partnership Sixth Amended and Restated Agreement
      of Limited Partnership
                
                Exhibit
      10.15 to Form 10-K Report
                  for
      the year ended March 30, 1991
                  (File
      No. 33-31390)10.34
                Mirador
      del Toa Limited Partnership Amended and Restated Agreement of Limited
      Partnership
                
                Exhibit
      10.16 to Form 10-K Report
                  for
      the year ended March 30, 1991
                  (File
      No. 33-31390)


50





Incorporated
      byExhibit
                  
                  Reference to10.35
                  Amendment
      No. 1 to the Mirador del Toa Limited Partnership Amended and Restated
      Agreement of Limited Partnership
                  
                  Exhibit
      10.17 to Form 10-K Report
                    for
      the year ended March 30, 1991
                    (File
      No. 33-31390)10.36
                  Moore
      Haven Commons, Ltd. Amended and Restated Agreement of Limited
      Partnership
                  
                  Exhibit
      10.9 to Form 10-Q Report for
                    the
      period ended December 30, 1990
                    (File
      No. 33-31390)10.37
                  NP-89
      Limited Dividend Housing Association Limited Partnership Second Restated
      and Amended Agreement of Limited Partnership
                  
                  Exhibit
      10.3 to Form 10-Q Report for
                    the
      period ended June 29, 1991
                    (File
      No. 0-19217)10.38
                  Nash
      Hill Associates, Limited Partnership Amended and Restated Agreement of
      Limited Partnership
                  
                  Exhibit
      10.37 to Form 10-K Report
                    for
      the year ended March 30, 1992
                    (File
      No. 33-31390)10.39
                  North
      Calhoun City, L.P. (A Mississippi Limited Partnership) Amended and
      Restated Limited Partnership Agreement and Certificate of Limited
      Partnership
                  
                  Exhibit
      10.3 to Form 10-Q Report for
                    the
      period ended September 29, 1991
                    (File
      No. 0-19217)10.40
                  Orange
      City Plaza, Limited Partnership Amended and Restated Partnership
      Agreement
                  
                  Exhibit
      10.40 to Form 10-K Report
                    for
      the year ended March 30, 1992
                    (File
      No. 33-31390)10.41
                  Puerta
      del Mar Limited Partnership (A Delaware Limited Partnership) Amended and
      Restated Agreement of Limited Partnership
                  
                  Exhibit
      10.10 to Form 10-Q Report for
                    the
      period ended December 30, 1990
                    (File
      No. 33-31390)10.42
                  Amendment
      No. 2 to the Purvis Heights Properties, L.P. Amended and Restated
      Agreement of Limited Partnership
                  
                  Exhibit
      10.11 to Form 10-Q Report for
                    the
      period ended December 30, 1990
                    (File
      No. 33-31390)10.43
                  Purvis
      Heights Properties, L.P. Amendment No. 3 to the Amended and Restated
      Agreement of Limited Partnership
                  
                  Exhibit
      10.6 to Form 10-Q Report for
                    the
      period ended December 30, 1991
                    (File
      No. 0-19217)10.44
                  Queen
      Lane Investors Amendment No. 1 to Amended and Restated Agreement and
      Certificate of Limited Partnership
                  
                  Exhibit
      10.12 to Form 10-Q Report for
                    the
      period ended December 30, 1990
                    (File
      No. 33-31390)10.45
                  Somerset
      Manor, Ltd. Amended and Restated Agreement and Certificate of Limited
      Partnership
                  
                  Exhibit
      10.13 to Form 10-Q Report for
                    the
      period ended December 30, 1990
                    (File
      No. 33-31390)10.46
                  Sugar
      Cane Villas, Ltd. Amended and Restated Agreement of Limited
      Partnership
                  
                  Exhibit
      10.23 to Form 10-K Report
                    for
      the year ended March 30, 1991
                    (File
      No. 33-31390)10.47
                  Summerfield
      Apartments Limited Partnership Amended and Restated Agreement of Limited
      Partnership
                  
                  Exhibit
      10.47 to Form 10-K Report
                    for
      the year ended March 30, 1992
                    (File
      No. 33-31390)


51





Incorporated
      byExhibit
                    
                    Reference to10.48
                    Amendment
      No.1 to the Summerfield Apartments Limited Partnership Amended and
      Restated Agreement of Limited Partnership
                    
                    Exhibit
      10.48 to Form 10-K Report
                      for
      the year ended March 30, 1999
                      (File
      No. 0-19217)10.49
                    Sydney
      Engel Associates Second Amended and Restated Agreement of Limited
      Partnership
                    
                    Exhibit
      10.4 to Form 10-Q Report for
                      the
      period ended September 29, 1990
                      (File
      No. 33-31390)10.50
                    First
      Amendment to Second Amended and Restated Agreement of Limited Partnership
      of Sydney Engel Associates
                    
                    Exhibit
      10.49 to Form 10-K Report
                      for
      the year ended March 30, 1997
                      (File
      No. 0-19217)10.51
                    Second
      Amendment to Second Amended and Restated Agreement of Limited Partnership
      of Sydney Engel Associates L.P.
                    
                    Exhibit
      10.50 to Form 10-K Report
                      for
      the year ended March 30, 1997
                      (File
      No. 0-19217)10.52
                    Third
      Amendment to Second Amended and Restated Agreement of Limited Partnership
      of Sydney Engel Associates L.P.
                    
                    Exhibit
      10.51 to Form 10-K Report
                      for
      the year ended March 30, 1997
                      (File
      No. 0-19217)10.53
                    Fourth
      Amendment to Second Amended and Restated Agreement of Limited Partnership
      of Sydney Engel Associates L.P.
                    
                    Exhibit
      10.52 to Form 10-K Report
                      for
      the year ended March 30, 1997
                      (File
      No. 0-19217)10.54
                    Union
      Valley Associates Limited Partnership Amended and Restated Agreement and
      Certificate of Limited Partnership
                    
                    Exhibit
      10.14 to Form 10-Q Report for
                      the
      period ended December 30, 1990
                      (File
      No. 33-31390)10.55
                    Walnut
      Grove Family, L.P. (A Mississippi Limited Partnership) Amended and
      Restated Limited Partnership Agreement and Certificate of Limited
      Partnership
                    
                    Exhibit
      10.4 to Form 10-Q Report for
                      the
      period ended September 29, 1991
                      (File
      No. 0-19217)10.56
                    Waynesboro
      Apartments Limited Partnership Amended and Restated Agreement and
      Certificate of Limited Partnership
                    
                    Exhibit
      10.15 to Form 10-Q Report for
                      the
      period ended December 30, 1990
                      (File
      No. 33-31390)10.57
                    West
      Calhoun City, L.P. (A Mississippi Limited Partnership) Amended and
      Restated Limited Partnership Agreement and Certificate of Limited
      Partnership
                    
                    Exhibit
      10.5 to Form 10-Q Report for
                      the
      period ended September 29, 1991
                      (File
      No. 0-19217)10.58
                    Westminster
      Apartments Limited Partnership Second Amended and Restated Agreement of
      Limited Partnership
                    
                    Exhibit
      10.53 to Form 10-K Report
                      for
      the year ended March 30, 1992
                      (File
      No. 33-31390)*31.1
                    Rule
      13a-14(a)/15d-14(a) Certification of Chief Executive
    Officer*31.2
                    Rule
      13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer.*32.1
                    Section
      1350 Certification of Chief Executive Officer.


52





Incorporated
      byExhibit
                  
                  Reference to*32.2
                  Section
      1350 Certification of Chief FinancialOfficer.99.1
                  Pages
      20 through 31 of Prospectus dated February 7, 1990 filed pursuant to Rule
      424(b)(3) under Securities Act of 1933
                  
                  Exhibit
      99.1 to Form 10-K Report
                    for
      the year ended March 30, 2009
                    (File
      No. 0-19217)99.2
                  Pages
      44 through 71 of Prospectus dated February 7, 1990 filed pursuant to Rule
      424(b)(3) under Securities Act of 1933
                  
                  Exhibit
      99.2 to Form 10-K Report
                    for
      the year ended March 30, 2009
                    (File
      No. 0-19217)99.3
                  Pages
      78 through 80 of Prospectus dated February 7, 1990 filed pursuant to Rule
      424(b)(3) under Securities Act of 1933
                  
                  Exhibit
      99.3 to Form 10-K Report
                    for
      the year ended March 30, 2009
                    (File
      No. 0-19217)99.4
                  Pages
      14 through 19 of Prospectus dated February 7, 1990 filed pursuant to Rule
      424(b)(3) under Securities Act of 1933
                  
                  Exhibit
      99.4 to Form 10-K Report
                    for
      the year ended March 30, 2009
                    (File
      No. 0-19217)99.5
                  Supplement
      No. 1 dated June 6, 1990 to Prospectus dated February 7, 1990 filed
      pursuant to Rule 424(b)(3) under Securities Act of 1933
                  
                  Exhibit
      99.5 to Form 10-K Report
                    for
      the year ended March 30, 2009
                    (File
      No. 0-19217)99.6
                  Supplement
      No. 2 dated November 21, 1990 to Prospectus dated February 7, 1990 filed
      pursuant to Rule 424(b)(3) under Securities Act of 1933
                  
                  Exhibit
      99.6 to Form 10-K Report
                    for
      the year ended March 30, 2009
                    (File
      No. 0-19217)99.7
                  Supplement
      No. 3 dated December 20, 1990 to Prospectus dated February 7, 1990 filed
      pursuant to Rule 424(b)(3) under Securities Act of 1933
                  
                  Exhibit
      99.7 to Form 10-K Report
                    for
      the year ended March 30, 2009
                    (File
      No. 0-19217)99.8
                  Supplement
      No. 4 dated October 30, 1991 to Prospectus dated February 7, 1990 filed
      pursuant to Rule 424(b)(3) under Securities Act of 1933
                  
                  Exhibit
      99.8 to Form 10-K Report
                    for
      the year ended March 30, 2009
                    (File
      No. 0-19217)99.9
                  Supplement
      No. 5 dated December 26, 1991 to Prospectus dated February 7, 1990 filed
      pursuant to Rule 424(b)(3) under Securities Act of 1933
                  
                  Exhibit
      99.9 to Form 10-K Report
                    for
      the year ended March 30, 2009
                    (File
      No. 0-19217)99.10
                  Supplement
      No. 6 dated January 15, 1992 to Prospectus dated February 7, 1990 filed
      pursuant to Rule 424(b)(3) under Securities Act of 1933
                  
                  Exhibit
      99.10 to Form 10-K Report
                    for
      the year ended March 30, 2009
                    (File
      No. 0-19217)99.11
                  Report
      of Independent Registered Public Accounting Firm of Carrington L.D.H.A.
      Limited Partnership as of and for the year ended December 31,
      2004
                  
                  Exhibit
      99.9 to Form 10-K Report
                    for
      the year ended March 30, 2005
                    (File
      No. 0-19217)


53





Incorporated
      byExhibit
                
                Reference to99.12
                Independent
      Auditor’s Report of Ellinwood Heights Apartments, L.P. as of and for the
      years ended December 31, 2004 and 2003
                
                Exhibit
      99.10 to Form 10-K Report
                  for
      the year ended March 30, 2005
                  (File
      No. 0-19217)99.13
                Independent
      Auditors’ Report of NP-89 Limited Dividend Housing Association Limited
      Partnership as of and for the year ended December 31, 2004
                
                Exhibit
      99.11 to Form 10-K Report
                  for
      the year ended March 30, 2005
                  (File
      No. 0-19217)99.14
                Audited
      Financial Statements of NP-89 Limited Dividend Housing Association Limited
      Partnership as of and for the year ended December 31, 2005
                
                Exhibit
      99.12 to Form 10-K Report
                  for
      the year ended March 30, 2006
                  (File
      No. 0-19217)99.15
                Report
      of Independent Registered Public Accounting Firm of NP-89 Limited Dividend
      Housing Association Limited Partnership as of and for the year ended
      December 31, 2005
                
                Exhibit
      99.13 to Form 10-K Report
                  for
      the year ended March 30, 2006
                  (File
      No. 0-19217)99.16
                Audited
      Financial Statements of NP-89 Limited Dividend Housing Association Limited
      Partnership as of and for the year ended December 31, 2006
                
                Exhibit
      99.14 to Form 10-K Report
                  for
      the year ended March 30, 2007
                  (File
      No. 0-19217)99.17
                Report
      of Independent Registered Public Accounting Firm of NP-89 Limited Dividend
      Housing Association Limited Partnership as of and for the year ended
      December 31, 2007
                
                Exhibit
      99.15 to Form 10-K Report
                  for
      the year ended March 30, 2008
                  (File
      No. 0-19217)99.18
                Deferred
      Fee Agreement between Registrant, the General Partner and ML Fund
      Administrators Inc.
                
                Exhibit
      99.18 to Form 10-K Report
                  for
      the year ended March 30, 2009
                  (File
      No. 0-19217)99.19
                Report
      of Independent Registered Public Accounting Firm of NP-89 Limited Dividend
      Housing Association Limited Partnership as of and for the year ended
      December 31, 2008
                
                Exhibit
      99.19 to Form 10-K Report
                  for
      the year ended March 30, 2009
                  (File
      No. 0-19217)*99.20
                Report
      of Independent Registered Public Accounting Firm of NP-89 Limited Dividend
      Housing Association Limited Partnership as of and for the year ended
      December 31, 2009





*Filed
herewith.





(b)
Exhibits





See
(a)(3) above.





(c)
Financial Statement
Schedules





See
(a)(2) above.


54


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.





AMERICAN
      TAX CREDIT PROPERTIES III L.P.(a
      Delaware limited partnership)By:
                    Richman
      Tax Credit Properties III L.P.,General
      PartnerBy:
                    Richman
      Housing Credits Inc.,general
      partnerDated:  June 25,
      2010
                    /s/David SalzmanDavid
      SalzmanChief
      Executive OfficerDated:  June 25,
      2010
                    /s/James HusseyJames
      HusseyChief
      Financial
Officer





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 in the
capacities and on the dates indicated.





Signature
                      
                      Title
                      
                      Date/s/David Salzman
                      
                      Chief
      Executive Officer of  the general
                      
                      June 25, 2010(David
      Salzman)
                      
                      partner
      of the General Partner/s/James Hussey
                      
                      Chief
      Financial Officer of the general
                      
                      June 25,
      2010(James
      Hussey)
                      
                      partner
      of the General Partner/s/Richard Paul Richman
                      
                      Director
      of the general partner of the
                      
                      June 25,
      2010(Richard
      Paul Richman)
                      
                      General
      Partner


55