UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
                  (Mark One)

               [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended March 30, 2003
                                             --------------

                                       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.
599 West Putnam Avenue, 3rd floor
Greenwich, Connecticut                                          06830
-------------------------------------------------------------------------------
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code:         (203) 869-0900
                                                            --------------

Securities 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 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 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
          ---

Registrant has no voting stock.

Documents incorporated by reference:

Part I - pages 20 through 31 and 44 through 66 of 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 pursuant to Rule 424(b)(3) under the
Securities Act of 1933.

<PAGE>

                                     PART I

Item 1.     Business

Formation

American Tax Credit Properties III L.P. ("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")
which qualify 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 partnership equity interests in partnerships (the "Local Partnership" or
"Local Partnerships") that are the owners of the Properties. 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 "Commission") 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 Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933
(the "Prospectus"). Pursuant to Rule 12b-23 of the Commission'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 incorporated herein 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 ("Unit") at $1,000 per Unit to investors. 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.

Competition

Pursuant to Rule 12b-23 of the Commission'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 incorporated herein by
reference.

Employees

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.

Tax Reform Act of 1986, Revenue Act of 1987, Technical and Miscellaneous Revenue
Act of 1988, Omnibus Budget Reconciliation Act of 1989, Omnibus Budget
Reconciliation Act of 1990, Tax Extension Act of 1991, Omnibus Budget
Reconciliation Act of 1993, Uruguay Round Agreements Act, Tax and Trade Relief
Extension Act of 1998, Tax and Trade Relief Extension Act of 1999, Community
Renewal Tax Relief Act of 2000, Economic Growth and Tax Relief Reconciliation
Act of 2001 and Job Creation and Worker Assistance Act of 2002 (collectively the
"Tax Acts")

Registrant is organized as a limited partnership and is a "pass through" tax
entity that does not, itself, pay federal income tax. However, the partners of
Registrant who are subject to federal income tax may be affected by the Tax
Acts. Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions regarding its investments. Registrant does
not anticipate that the Tax Acts will currently have a material adverse impact
on Registrant's business operations, capital resources and plans or liquidity.


                                       2

<PAGE>

Item 2.     Properties

The executive offices of Registrant and the General Partner are located at 599
West Putnam Avenue, 3rd floor, Greenwich, Connecticut 06830. 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's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The relevant state tax credit agency
has allocated each of Registrant's 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 is expected to be fully exhausted by the Local Partnerships 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"). In addition, certain of the Local Partnerships have
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, regardless of any sale of the
Properties by the Local Partnerships after the Compliance Period. The Properties
must satisfy various requirements including rent restrictions and tenant income
limitations (the "Low-income Tax Credit Requirements") in order to maintain
eligibility for the recognition of the Low-income Tax Credit at all times during
the Compliance Period. Once a Local Partnership has become eligible for the
Low-income Tax Credit, it may lose such eligibility and suffer an event of
recapture if its Property fails to remain in compliance with the Low-income Tax
Credit Requirements. Through December 31, 2002, none of the Local Partnerships
have suffered an event of recapture of Low-income Tax Credits.

Although Registrant generally owns a 98.9%-99% limited partnership interest
("Local Partnership Interest") in the Local Partnerships, Registrant and
American Tax Credit Properties II L.P. ("ATCP II"), a Delaware limited
partnership and an affiliate of Registrant, together, in the aggregate, own a
99% Local Partnership Interest in the following Local Partnerships:

                                                  Registrant          ATCP II
                                                  ----------          -------

          Batesville Family, L.P.                    61.75%             37.25%
          Bruce Housing Associates, L.P.             61.75              37.25
           Carrington Limited Dividend Housing
            Association Limited Partnership          65.95              33.05
          Ivy Family, L.P.                           61.75              37.25
          Lawrence Road Properties, Ltd.             61.75              37.25
          Mirador del Toa Limited Partnership        59.06              39.94
          Purvis Heights Properties, L.P.            61.75              37.25
          Queen 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 subsidies on page 7). The subsidy
agreements expire at various times during and after the Compliance Periods of
the Local Partnerships. 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 before debt service and debt structure of
any or all Local Partnerships currently receiving such subsidy or similar
subsidies. One Local Partnership's Section 8 contracts are currently subject to
renewal under applicable HUD guidelines.


                                       3
<PAGE>

Item 2.     Properties (continued)

<TABLE>
<CAPTION>

                                                                                         Mortgage
Name of Local Partnership                         Number                            loans payable as of     Subsidy
Name of apartment complex                        of rental         Capital              December 31,         (see
Apartment complex location                         units         contribution              2002            footnotes)
--------------------------                       ---------       ------------       -------------------    ----------

<S>                                                  <C>         <C>                    <C>                 <C>
April Gardens Apartments II
  Limited Partnership
April Gardens Apartments
Las Piedras, Puerto Rico                             48          $  485,581             $1,980,296          (1b&d)

Ashland Park Apartments, L.P.
Ashland Park Apartments
Ashland, Nebraska                                    24             235,732              1,028,823          (1b&d)

Auburn Family, L.P.
Auburn Apartments
Louisville, Mississippi                              16              95,412                461,511          (1b&d)

Batesville Family, L.P.
Westridge Apartments
Batesville, Mississippi                              48             239,716 (2)          1,428,095            (1b)

Bay Springs Elderly, L.P.
Bay Springs Manor
Bay Springs, Mississippi                             24             208,820                670,554          (1b&d)

Brisas del Mar Apartments
  Limited Partnership
Brisas del Mar Apartments
Hatillo, Puerto Rico                                 66             668,172              2,629,597          (1b&d)

Bruce Housing Associates, L.P.
Bruce Family Apartments
Bruce, Mississippi                                   40             183,155 (2)          1,096,634          (1b&d)

Carrington Limited Dividend
  Housing Association Limited
  Partnership
Carrington Place
Farmington Hills, Michigan                          100           2,174,720 (2)          3,313,001            (1c)

Chestnut Park Associates, L.P.
Chestnut Park Apartments
East Orange, New Jersey                              59           4,204,576              4,936,911            (1a)

Chowan Senior Manor Associates
  Limited Partnership
Azalea Garden Senior Manor
  Apartments
Murfreesboro, North Carolina                         33             278,405              1,242,244          (1b&d)

Christian Street Commons
  Associates
Christian Street Commons
  Apartments
Philadelphia, Pennsylvania                           18             581,645                590,264          (1a&b)


                                       4
<PAGE>

Item 2. Properties (continued)


<CAPTION>

                                                                                         Mortgage
Name of Local Partnership                         Number                            loans payable as of     Subsidy
Name of apartment complex                        of rental         Capital              December 31,         (see
Apartment complex location                         units         contribution              2002            footnotes)
--------------------------                       ---------       ------------       -------------------    ----------

<S>                                                  <C>         <C>                    <C>                 <C>
Country View Apartments
Country View Apartments
Pembroke, Maine                                      16          $  279,183             $  929,391          (1b&d)

Desarrollos de Belen Limited
  Partnership
Vista de Jagueyes II Apartments
Aguas Buenas, Puerto Rico                            41             422,929              1,863,565          (1b&d)

Desarrollos de Emaus Limited
  Partnership
Hucares II Apartments
Naguabo, Puerto Rico                                 72             631,404              3,167,700          (1b&d)

Ellinwood Heights Apartments, L.P.
Ellinwood Heights Apartments
Ellinwood, Kansas                                    24             156,261                682,238          (1b&d)

Fulton Street Houses Limited
  Partnership
Fulton Street Townhouse
  Apartments
New York, New York                                   35           1,948,081              3,869,930          (1a&b)

Hayes Run Limited Partnership
Mashburn Gap Apartments
Marshall, North Carolina                             34             322,074              1,413,949          (1b&d)

Howard L. Miller Sallisaw
  Apartments II, L.P.
Sallisaw II Apartments
Sallisaw, Oklahoma                                   24             130,158                610,844          (1b&d)

Hurlock Meadow Limited
  Partnership
Hurlock Meadow Apartments
Hurlock, Maryland                                    30             284,218              1,259,122          (1b&d)

Ivy Family, L.P.
Ivy Apartments
Louisville, Mississippi                              32             135,528                778,437          (1b&d)

Justin Associates
Locust Tower Apartments
Philadelphia, Pennsylvania                           40           1,809,723              2,312,477          (1b&e)

LaBelle Commons, Ltd.
LaBelle Commons
LaBelle, Florida                                     32             253,580              1,004,428          (1b&d)
Lawrence Road Properties, Ltd.
Hillcrest Apartments
Newton, Mississippi                                  24             123,799                752,561          (1b&d)


                                       5

<PAGE>

Item 2. Properties (continued)


<CAPTION>

                                                                                        Mortgage
Name of Local Partnership                        Number                           loans payable as of      Subsidy
Name of apartment complex                       of rental        Capital              December 31,          (see
Apartment complex location                        units        contribution              2002             footnotes)
--------------------------                      ---------      ------------       -------------------     ----------

<S>                                                  <C>         <C>                    <C>                 <C>
Loma Del Norte Limited
  Partnership
Loma Del Norte Apartments
Anthony, New Mexico                                40          $  314,865             $1,426,203            (1b&d)
Long Reach Associates Limited
  Partnership
Oak Ridge Apartments
Bath, Maine                                        30             448,922              1,466,875            (1b&d)
Mirador del Toa Limited
  Partnership
Mirador del Toa Apartments
Toa Alta, Puerto Rico                              48             284,847 (2)          1,864,895            (1b&d)
Moore Haven Commons, Ltd.
Moore Haven Commons
Moore Haven, Florida                               28             213,402                920,328            (1b&d)
NP-89 Limited Dividend Housing
  Association Limited Partnership
Newport Apartments
Clinton Township, Michigan                        168           2,372,292              3,850,171          (1a,b&g)
Nash Hill Associates, Limited
  Partnership
Nash Hill Place
Williamsburg, Massachusetts                        28             302,575              1,456,772          (1b,d&f)
North Calhoun City, L.P.
North Calhoun City Apartments
Calhoun City, Mississippi                          18             146,565                479,097            (1b&d)
Orange City Plaza, Limited
  Partnership
Orange City Plaza Apartments
Orange City, Iowa                                  32             456,090                425,929             (1a)
Puerta del Mar Limited Partnership
Puerta del Mar Apartments
Hatillo, Puerto Rico                               66             630,570              2,502,210           (1b&d)
Purvis Heights Properties, L.P.
Pineview Apartments
Purvis, Mississippi                                40             191,512 (2)          1,136,111             (1b)
Queen Lane Investors
Queen's Row
Philadelphia, Pennsylvania                         29             597,050 (2)          1,532,919           (1b&e)
Somerset Manor, Ltd.
Somerset Manor
Central City, Pennsylvania                         24             208,465                890,588           (1b&d)
Sugar Cane Villas, Ltd.
Sugar Cane Villas
Pahokee, Florida                                   87             751,560              3,281,591           (1b&d)


                                       6

<PAGE>

Item 2. Properties (continued)

<CAPTION>

                                                                                    Mortgage
Name of Local Partnership                      Number                          loans payable as of     Subsidy
Name of apartment complex                     of rental         Capital            December 31,         (see
Apartment complex location                      units         contribution            2002            footnotes)
--------------------------                    ---------       ------------     -------------------    ----------

<S>                                              <C>         <C>                    <C>                 <C>
Summerfield Apartments Limited
  Partnership
Summerfield Apartments
Charlotte, North Carolina                         52         $ 1,088,667         $ 1,677,183             (1b)
Sydney Engel Associates L.P.
(formerly known as Sydney Engel
  Associates) The Castle
New York, New York                               224           3,201,874          16,682,455             (1b)
Union Valley Associates Limited
  Partnership
Union Valley Apartments
Union Township, Pennsylvania                      36             371,589           1,435,626             (1b)
Walnut Grove Family, L.P.
Walnut Grove Apartments
Walnut Grove, Mississippi                         24             191,695             840,843           (1b&d)
Waynesboro Apartments Limited
  Partnership
Waynesboro Apartments
Waynesboro, Pennsylvania                          36             360,859           1,470,625             (1b)
West Calhoun City, L.P.
West Calhoun City Apartments
Calhoun City, Mississippi                         28             230,212             745,254           (1b&d)
Westminster Apartments Limited
  Partnership
Westminster Apartments
Philadelphia, Pennsylvania                        42           1,047,993           1,607,972           (1b&e)
                                                             -----------       -------------
                                                             $29,264,476       $  83,716,219
                                                             ===========       =============
</TABLE>

(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 Michigan State Housing Development Authority allows tenants, who
          would otherwise pay more than 40% of their income for rent and
          utilities, to receive rental subsidies.

     (d)  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.

     (e)  The City of Philadelphia Housing Authority allows qualified low-income
          tenants to receive rental certificates.

     (f)  The Commonwealth of Massachusetts participates in a rental assistance
          program.

     (g)  The Local Partnership's Section 8 contracts are currently subject to
          renewal under applicable HUD guidelines.

(2)  Reflects amount attributable to Registrant only.


                                       7

<PAGE>


Item 3.     Legal Proceedings

Registrant is not aware of any material legal proceedings.


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

There were no matters submitted to a vote of the limited partners of Registrant
during the fourth quarter of the fiscal year covered by this report.




                                       8

<PAGE>

                                     PART II

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

Market Information and Holders

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. The number of owners of Units as of May 31, 2003 was
approximately 1,633, holding 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. These estimated values are based on financial and other information
available to the independent services (i) on the prior August 15th for reporting
on December year-end and subsequent client account statements through the
following May's month-end client account statements and (ii) on March 31st for
reporting on June month-end and subsequent client account statements through the
November month-end client account statements of the same year. 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. In addition, Unit holders may not realize such estimated
values upon the liquidation of Registrant.

Distributions

Registrant owns a limited 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 partners. There were no cash distributions to the partners
during the years ended March 30, 2003 and 2002.

Low-income Tax Credits, which are subject to various limitations, may be used by
partners to offset federal income tax liabilities. The Low-income Tax Credits
per Unit generated by Registrant and allocated to the limited partners for the
tax years ended December 31, 2002 and 2001 and the cumulative Low-income Tax
Credits allocated from inception through December 31, 2002 are as follows:


                                                     Low-income
                                                     Tax Credits
                                                     -----------

               Tax year ended December 31, 2002        $ 21.61
               Tax year ended December 31, 2001        $ 87.38

               Cumulative totals                     $1,555.22


Notwithstanding future circumstances which may give rise to recapture or loss of
future benefits (see Part I, Item 2 - Properties, herein), Registrant expects to
generate total Low-income Tax Credits from investments in Local Partnerships of
approximately $1,558 per Unit through December 31, 2003.



                                       9
<PAGE>

Item 6.     Selected Financial Data

The information set forth below presents selected financial data of Registrant.
Additional detailed financial information is set forth in the audited financial
statements included under Part II, Item 8 herein.

<TABLE>
<CAPTION>

                                                                    Years Ended March 30,
                                        -----------------------------------------------------------------------------------
                                            2003              2002              2001              2000              1999
                                        -----------       -----------       -----------       -----------       -----------

<S>                                     <C>               <C>               <C>               <C>               <C>
Interest and other revenue              $   224,254       $   215,927       $   235,418       $   247,106       $   252,224
                                        ===========       ===========       ===========       ===========       ===========

Equity in loss of investment in
   local partnerships                   $  (536,158)      $(1,193,807)      $(1,228,135)      $(1,764,816)      $(2,453,590)
                                        ===========       ===========       ===========       ===========       ===========

Net loss                                $  (875,199)      $(1,509,355)      $(1,519,430)      $(2,035,647)      $(2,756,082)
                                        ===========       ===========       ===========       ===========       ===========

Net loss per unit of limited
   partnership interest                 $    (24.15)      $    (41.64)      $    (41.92)      $    (56.16)      $    (76.04)
                                        ===========       ===========       ===========       ===========       ===========
</TABLE>

<TABLE>
<CAPTION>

                                                                    Years Ended March 30,
                                        -----------------------------------------------------------------------------------
                                            2003              2002              2001              2000              1999
                                        -----------       -----------       -----------       -----------       -----------

<S>                                     <C>               <C>               <C>               <C>               <C>
Total assets                            $ 4,153,964       $ 4,744,278       $ 6,512,494       $ 7,579,955       $ 9,511,546
                                        ===========       ===========       ===========       ===========       ===========
</TABLE>


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

Capital Resources and Liquidity

Registrant admitted 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, 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 partnership interests in local partnerships (the "Local
Partnerships") that own low-income multifamily residential complexes (the
"Property" or "Properties") that qualify 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 an interest in forty-three
Local Partnerships.

As of March 30, 2003, Registrant has cash and cash equivalents and investments
in bonds totaling $2,896,108, which is available for operating expenses of
Registrant and circumstances which may arise in connection with the Local
Partnerships. As of March 30, 2003, Registrant's investments in bonds represent
corporate bonds of $1,198,059 and U.S. Treasury debt securities of $1,588,499
with various maturity dates ranging from 2003 to 2008. Registrant acquired such
investments in bonds with the intention of utilizing proceeds generated by such
investments to meet its annual obligations. Future sources of Registrant funds
are expected to be primarily from interest earned on working capital and limited
cash distributions from Local Partnerships.

During the year ended March 30, 2003, Registrant received cash from interest
revenue, maturity/redemption and sale of bonds and distributions from Local
Partnerships and utilized cash for operating expenses. Cash and cash equivalents
and investments in bonds decreased, in the aggregate, by approximately $33,000
during the year ended March 30, 2003 (which includes a net unrealized gain on
investments in bonds of approximately $226,000, the amortization of net premium
on investments in bonds of approximately $3,000 and the accretion of zero coupon
bonds of approximately $86,000). Notwithstanding circumstances that may arise in
connection with the Properties, Registrant does not expect to realize
significant gains or losses on its investments in bonds, if any.

During the year ended March 30, 2003, the investment in local partnerships
decreased as a result of Registrant's equity in the Local Partnerships' net loss
for the year ended December 31, 2002 of $536,158 (including an adjustment to
Registrant's carrying value of its investment in three Local Partnerships of
$103,063 in accordance with applicable accounting guidelines) (see discussion
below under Results of Operations) and cash distributions received from Local
Partnerships of $15,639 (exclusive of distributions from Local Partnerships of
$21,713 classified as other income). Payable to general partner and affiliate in
the accompanying balance sheet as of March 30, 2003 represents deferred
management and administration fees.

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

Results of Operations


                                       10
<PAGE>

Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly 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. 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. As a result, the reported equity in loss of investment in local
partnerships is expected to decrease as Registrant's investment balances in the
respective Local Partnerships become zero. The combined statements of operations
of the Local Partnerships reflected in Note 5 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 carrying value of
Registrant's investment in local partnerships may be reduced if the book value
(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. See discussion below under Local Partnership
Matters regarding certain Local Partnerships currently operating below economic
break even levels.

Registrant's operations for the years ended March 30, 2003, 2002, and 2001
resulted in net losses of $875,199, $1,509,355, and $1,519,430, respectively.
The decrease in net loss from fiscal 2002 to fiscal 2003 is primarily
attributable to a decrease in equity in loss of investment in local partnerships
of approximately $658,000. Equity in loss of investment in local partnerships
has fluctuated over the last three years as a result of (i) Registrant adjusting
the Local Partnership Carrying Value in connection with its investments in
certain Local Partnerships during the each of the three years ended March 30,
2003 as reflected in Note 5 to the financial statements, changes in the
nonrecognition of losses in accordance with the equity method of accounting and
(ii) changes in the net operating losses of those Local Partnerships in which
Registrant continues to have an investment balance.

The Local Partnerships' net loss of approximately $3,253,000 for the year ended
December 31, 2002 includes depreciation and amortization expense of
approximately $4,100,000 and interest on non-mandatory debt of approximately
$361,000, and does not include required principal payments on permanent
mortgages of approximately $754,000. The Local Partnerships' net loss of
approximately $3,262,000 for the year ended December 31, 2001 includes
depreciation and amortization expense of approximately $4,125,000 and interest
on non-mandatory debt of approximately $356,000, and does not include principal
payments on permanent mortgages of approximately $722,000. The Local
Partnerships' net loss of approximately $3,365,000 for the year ended December
31, 2000 includes depreciation and amortization expense of approximately
$4,088,000, interest on non-mandatory debt of approximately $357,000, and does
not include principal payments on permanent mortgages of approximately $667,000.

Local Partnership Matters

Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The relevant state tax credit agency
has allocated each of Registrant's 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 is expected to be fully exhausted by the Local Partnerships 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"). In addition, certain of the Local Partnerships have
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, regardless of any sale of the
Properties by the Local Partnerships after the Compliance Period. The Properties
must satisfy various requirements including rent restrictions and tenant income
limitations (the "Low-income Tax Credit Requirements") in order to maintain
eligibility for the recognition of the Low-income Tax Credit at all times during
the Compliance Period. Once a Local Partnership has become eligible for the
Low-income Tax credit, it may lose such eligibility and suffer an event of
recapture if its Property fails to remain in compliance with the Low-income Tax
Credit Requirements. Through December 31, 2002, none of the Local Partnerships
have suffered an event of recapture of Low-income Tax Credits.


                                       11
<PAGE>

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

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 during and after the Compliance Periods of the Local Partnerships. 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 before debt service and debt structure of any or all Local
Partnerships currently receiving such subsidy or similar subsidies. One Local
Partnership's 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"). In the event rents are not sufficient to cover operating
expenses, Mandatory Debt Service requirements and other charges, certain general
partners of the Local Partnerships (the "Local General Partners") are obligated
to provide advances to cover deficits for a certain period of time up to certain
amounts (the "Deficit Guarantee"). A Local General Partner's funding of such
Deficit Guarantee is dependent on its liquidity or ability to borrow the
required funds. During the year ended December 31, 2002, revenue from operations
of the Local Partnerships have generally been sufficient to cover operating
expenses and Mandatory Debt Service. Substantially all of the Local Partnerships
are effectively operating at or above break even levels, although certain Local
Partnerships' operating information reflects operating deficits that do not
represent cash deficits due to their mortgage and financing structure and the
required deferral of property management fees. However, as discussed below,
certain Local Partnerships' operating information indicates an operating deficit
after taking into account their mortgage and financing structure and any
required deferral of property management fees.

The terms of the partnership agreement of Westminster Apartments Limited
Partnership ("Westminster") require the Local General Partner to advance funds
to cover operating deficits through the Compliance Period. As of December 31,
2002, Westminster was in default under the terms of its first mortgage; payments
of principal, interest and replacement reserve deposits are approximately four
years in arrears, representing an arrearage of approximately $400,000. Although
Westminster has been involved in negotiating a restructuring of its mortgage
debt, a final resolution has not been reached and documented. There can be no
assurance that the issues will be resolved and the mortgage remains in default
without a formal forbearance as of June 2003. Westminster incurred an operating
deficit of approximately $53,000 for the year ended December 31, 2002, which
amount includes a provision for replacement reserve deposits of $1,184 per month
and debt service payments of $6,245 per month. Registrant's investment balance
in Westminster, after cumulative equity losses, became zero during the year
ended March 30, 1999. Westminster will have generated approximately $6.3 per
Unit per year to the limited partners upon the expiration of its Low-income Tax
Credit allocation in 2003.

The terms of the partnership agreement of Sydney Engel Associates L.P. ("Sydney
Engel") require the Local General Partners to advance funds to cover operating
deficits up to $1,000,000 through April 2003 and to cause the management agent
to defer property management fees in order to avoid a default under the
mortgage. Sydney Engel incurred an operating deficit of approximately $118,000
for the year ended December 31, 2002, which includes property management fees of
approximately $102,000. Payments on the mortgage are current and the Property
does not incur real estate taxes. Sydney Engel withdrew approximately $61,000
from its operating reserve during the year ended December 31, 2002. Such reserve
has a balance of approximately $122,000 as of December 31, 2002. Registrant's
investment balance in Sydney Engel, after cumulative equity losses, became zero
during the year ended March 30, 1997. Sydney Engel generated approximately $14.5
per Unit per year to the limited partners upon the expiration of its Low-income
Tax Credit allocation in 2001.


                                       12

<PAGE>

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

Fulton Street Houses Limited Partnership ("Fulton Street") has an escrow of
approximately $317,000 as of December 31, 2002 to cover operating deficits and
there are no Mandatory Debt Service payments or real estate taxes required
during the Compliance Period. Fulton Street incurred an operating deficit of
approximately $45,000 for the year ended December 31, 2002. Registrant's
investment balance in Fulton Street, after cumulative equity losses, became zero
during the year ended March 30, 2002. Fulton Street generated approximately
$11.7 per Unit per year to the limited partners upon the expiration of its
Low-income Tax Credit allocation in 2001.

Inflation

Inflation is not expected to have a material adverse impact on Registrant's
operations during its period of ownership of the Local Partnership Interests.

Critical Accounting Policies and Estimates

The financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America, which requires Registrant to
make certain estimates and assumptions. A summary of significant accounting
policies is provided in Note 1 to the 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 financial statements.

     o    Registrant accounts for its investment in local partnerships in
          accordance with the equity method of accounting since Registrant does
          not control the operations of a Local Partnership.

     o    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.

Recently Issued Accounting Standards

In November 2002, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45").
FIN 45 requires that upon issuance of a guarantee, a guarantor must recognize a
liability for the fair value of an obligation assumed under a guarantee. FIN 45
also requires additional disclosures by a guarantor in its interim and annual
financial statements about the obligations associated with guarantees issued.
The recognition provisions of FIN 45 are effective for any guarantees issued or
modified after December 31, 2002. The disclosure requirements are effective for
financial statements of interim or annual periods ending after December 15,
2002. The adoption of FIN 45 did not have a material effect on Registrant's
financial position, results of operations or cash flows.

In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities, an Interpretation of ARB No. 51" ("FIN 46"). FIN 46
addresses the consolidation by business enterprises of variable interest
entities as defined. FIN 46 applies immediately to variable interests in
variable interest entities created after January 31, 2003. For public
enterprises with a variable interest entity created before February 1, 2003, FIN
46 applies to that enterprise no later than the beginning of the first interim
or annual reporting period beginning after June 15, 2003. The adoption of FIN 46
is not expected to have a material effect on Registrant's financial position,
results of operations or cash flows.

Item 7a.  Quantitative and Qualitative Disclosure About Market Risk

Registrant has invested a significant portion of its working capital reserves in
corporate bonds and U.S. Treasury instruments. The market value of such
investments is subject to fluctuation based upon changes in interest rates
relative to each investment's maturity date and the associated bond rating.
Since Registrant's investments in bonds have various maturity dates through
2008, the value of such investments may be adversely impacted in an environment
of rising interest rates in the event Registrant decides to liquidate any such
investment prior to its maturity. Although Registrant may utilize reserves to
assist an under performing Property, it otherwise intends to hold such
investments to their respective maturities. Therefore, Registrant does not
anticipate any material adverse impact in connection with such investments.


                                       13
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.


Item 8.     Financial Statements and Supplementary Data


                                Table of Contents
                                                                            Page
                                                                            ----

Independent Auditors' Report..................................................15

Balance Sheets................................................................16

Statements of Operations......................................................17

Statements of Changes in Partners' Equity (Deficit)...........................18

Statements of Cash Flows......................................................19

Notes to Financial Statements.................................................21



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.



                                       14

<PAGE>

                          Independent Auditors' Report


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. as of March 30, 2003 and 2002, and the related statements of
operations, partners' equity (deficit) and cash flows for each of the three
years in the period ended March 30, 2003. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of American Tax Credit
Properties III L.P. as of March 30, 2003 and 2002, and the results of its
operations, changes in partners' equity (deficit) and its cash flows for each of
the three years in the period ended March 30, 2003, in conformity with
accounting principles generally accepted in the United States of America.


/s/ Reznick Fedder & Silverman

Bethesda, Maryland
June 17, 2003



                                       15

<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                 BALANCE SHEETS
                             MARCH 30, 2003 AND 2002


                                                          Notes             2003                  2002
                                                          -----           ----------           -----------
ASSETS

<S>                                                        <C>           <C>                   <C>
Cash and cash equivalents                                  3,9           $   109,550           $    51,896
Investments in bonds                                       4,9             2,786,558             2,877,273
Investment in local partnerships                           5,8             1,235,573             1,787,370
Interest receivable                                          9                22,283                27,739
                                                                         -----------           -----------

                                                                         $ 4,153,964           $ 4,744,278
                                                                         ===========           ===========

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                      8           $   864,971           $   950,974
  Payable to general partner and affiliate                 6,8             1,683,190             1,538,043
                                                                         -----------           -----------

                                                                           2,548,161             2,489,017
                                                                         -----------           -----------

Commitments and contingencies                                8

Partners' equity (deficit)                                 2,4

  General partner                                                           (301,815)             (293,063)
  Limited partners (35,883 units of limited
   partnership interest outstanding)                                       1,649,958             2,516,405
  Accumulated other comprehensive income, net                                257,660                31,919
                                                                         -----------           -----------

                                                                           1,605,803             2,255,261
                                                                         -----------           -----------

                                                                         $ 4,153,964           $ 4,744,278
                                                                         ===========           ===========
</TABLE>



                       See Notes to Financial Statements.


                                       16

<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF OPERATIONS
                    YEARS ENDED MARCH 30, 2003, 2002 AND 2001


                                                Notes          2003                2002                2001
                                                -----       -----------         -----------         -----------
REVENUE

<S>                                                         <C>                 <C>                 <C>
Interest                                                    $   202,541         $   204,436         $   226,667
Other income from local partnerships                             21,713              11,491               8,751
                                                            -----------         -----------         -----------

TOTAL REVENUE                                                   224,254             215,927             235,418
                                                            -----------         -----------         -----------

EXPENSES

Administration fees                               6,8           230,571             230,571             230,571
Management fees                                   6,8           230,571             230,571             230,571
Professional fees                                                53,730              53,037              47,601
Printing, postage and other                                      48,423              17,296              17,970
                                                            -----------         -----------         -----------

TOTAL EXPENSES                                                  563,295             531,475             526,713
                                                            -----------         -----------         -----------

Loss from operations                                           (339,041)           (315,548)           (291,295)

Equity in loss of investment in
local partnerships                                  5          (536,158)         (1,193,807)         (1,228,135)
                                                            -----------         -----------         -----------

NET LOSS                                                       (875,199)         (1,509,355)         (1,519,430)

Other comprehensive income (loss)                   4           225,741             (55,166)            194,488
                                                            -----------         -----------         -----------

COMPREHENSIVE LOSS                                          $  (649,458)        $(1,564,521)        $(1,324,942)
                                                            ===========         ===========         ===========

NET LOSS ATTRIBUTABLE TO                            2

  General partner                                           $    (8,752)        $   (15,094)        $   (15,194)
  Limited partners                                             (866,447)         (1,494,261)         (1,504,236)
                                                            -----------         -----------         -----------
                                                            $  (875,199)        $(1,509,355)        $(1,519,430)
                                                            ===========         ===========         ===========

NET LOSS per unit of limited
partnership
  Interest (35,883 units of limited
  partnership interest)                                     $    (24.15)        $    (41.64)        $    (41.92)
                                                            ===========         ===========         ===========
</TABLE>


                       See Notes to Financial Statements.


                                       17

<PAGE>


                   AMERICAN TAX CREDIT PROPERTIES III L.P.
             STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
                  YEARS ENDED MARCH 30, 2003, 2002 AND 2001


<TABLE>
<CAPTION>

                                                                                          Accumulated Other
                                                         General          Limited           Comprehensive
                                                         Partner          Partners        Income (Loss), Net     Total
                                                         -------          --------        ------------------     -----

<S>                                                  <C>                <C>               <C>                <C>
Partners' equity (deficit), March 30, 2000            $  (262,775)       $ 5,514,902        $  (107,403)       $ 5,144,724

Net loss                                                  (15,194)        (1,504,236)                           (1,519,430)

Other comprehensive income, net                                                                 194,488            194,488
                                                      -----------        -----------        -----------        -----------
Partners' equity (deficit), March 30, 2001               (277,969)         4,010,666             87,085          3,819,782

Net loss                                                  (15,094)        (1,494,261)                           (1,509,355)

Other comprehensive loss, net                                                                   (55,166)           (55,166)
                                                      -----------        -----------        -----------        -----------

Partners' equity (deficit), March 30, 2002               (293,063)         2,516,405             31,919          2,255,261

Net loss                                                   (8,752)          (866,447)                             (875,199)

Other comprehensive income, net                                                                 225,741            225,741
                                                      -----------        -----------            --------           --------

Partners' equity (deficit), March 30, 2003            $  (301,815)       $ 1,649,958        $   257,660        $ 1,605,803
                                                      ===========        ===========        ===========        ===========
</TABLE>


                       See Notes to Financial Statements.


                                       18
<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF CASH FLOWS
                    YEARS ENDED MARCH 30, 2003, 2002 AND 2001


                                                                   2003                2002                2001
                                                                ---------           ---------           ---------

CASH FLOWS FROM OPERATING ACTIVITIES

<S>                                                             <C>                 <C>                 <C>
Interest received                                               $ 105,058           $ 125,328           $ 153,508
Cash used for local partnerships for deferred
  expenses                                                         (2,200)             (4,750)
Cash paid for administration fees                                (132,195)           (388,645)           (100,000)
   management fees                                               (299,800)           (274,000)           (100,000)
   professional fees                                              (53,730)            (53,037)            (47,601)
   printing, postage and other expenses                           (18,426)            (17,288)            (16,881)
                                                                ---------           ---------           ---------

Net cash used in operating activities                            (399,093)           (609,842)           (115,724)
                                                                ---------           ---------           ---------

CASH FLOWS FROM INVESTING ACTIVITIES

Cash distributions from local partnerships                         37,352              18,020              29,578
Maturity/redemption and sale of bonds                             419,395             100,000             367,065
Investment in bonds (includes accrued interest
  of $14,838)                                                                                            (610,910)
                                                                ---------           ---------           ---------

Net cash provided by (used in) investing
  activities                                                      456,747             118,020            (214,267)
                                                                ---------           ---------           ---------

Net increase (decrease) in cash and cash
  equivalents                                                      57,654            (491,822)           (329,991)

Cash and cash equivalents at beginning of year                     51,896             543,718             873,709
                                                                ---------           ---------           ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR                        $ 109,550           $  51,896           $ 543,718
                                                                =========           =========           =========

Significant Non-Cash Investing Activities

Unrealized gain (loss) on investments in bonds, net             $ 225,741           $ (55,166)          $ 194,488
                                                                =========           =========           =========
</TABLE>

-------------------------------------------------------------------------------
See reconciliation of net loss to net cash used in operating activities on page
20.


                       See Notes to Financial Statements.



                                       19

<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (Continued)
                    YEARS ENDED MARCH 30, 2003, 2002 AND 2001


                                                               2003                2002             2001
                                                            -----------        -----------       -----------
<S>                                                         <C>                <C>               <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN
   OPERATING ACTIVITIES

Net loss                                                    $  (875,199)       $(1,509,355)      $(1,519,430)

Adjustments to reconcile net loss to net cash
  used in operating activities

   Equity in loss of investment in local
     partnerships                                               536,158          1,193,807         1,228,135
   Distributions from local partnerships
     classified as other income                                 (21,713)           (11,491)           (8,751)
   Loss (gain) on redemption and sale of bonds                  (19,434)                               4,167
   Amortization of net premium on investments
     in bonds                                                     2,986              5,747             7,074
   Accretion of zero coupon bonds                               (86,491)           (86,491)          (86,491)

   Decrease in interest receivable                                5,456              1,636             2,091
   Increase in payable to general partner and                   145,147             30,497           261,142
   affiliate
   Increase (decrease) in accounts payable and                  (86,003)          (231,992)            1,089
   accrued expenses
   Decrease in other liabilities                                                    (2,200)           (4,750)
                                                            -----------        -----------       -----------

NET CASH USED IN OPERATING ACTIVITIES                       $  (399,093)       $  (609,842)      $  (115,724)
                                                            ===========        ===========       ===========
</TABLE>


                       See Notes to Financial Statements.


                                       20

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                          NOTES TO FINANCIAL STATEMENTS
                          MARCH 30, 2003, 2002 AND 2001

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 on June 13, 1990. The Partnership was formed to invest
     primarily in leveraged low-income multifamily residential complexes (the
     "Property" or "Properties") which qualify 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 partnership 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.

     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 regularly assesses the carrying value of its investments in
     local partnerships. 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 and
     includes such reduction in equity in loss of investment in local
     partnerships.

     Use of Estimates

     The preparation of financial statements in conformity with accounting
     principles generally accepted in the United States of America requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets and
     liabilities 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.

     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.

     Income Taxes

     No provision for income taxes has been made because all income, losses and
     tax credits are allocated to the partners for inclusion in their respective
     tax returns. In accordance with Statement of Financial Accounting Standards
     ("SFAS") No. 109, "Accounting for Income Taxes," the Partnership has
     included in Note 7 disclosures related to differences in the book and tax
     bases of accounting.


                                       21
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


1. Organization, Purpose and Summary of Significant Accounting Policies
   (continued)

   Investments in Bonds

   Investments in bonds are classified as available-for-sale and represent
   investments that the Partnership intends to hold for an indefinite period of
   time but not necessarily to maturity. Any decision to sell an investment
   would be based on various factors, including significant movements in
   interest rates and liquidity needs. Investments in bonds are 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 are 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 are included in interest revenue. Realized gain (loss) on
   redemption or sale of investments in bonds are included in, or offset
   against, interest revenue on the basis of the adjusted cost of each specific
   investment redeemed or sold.

   Recently Issued Accounting Standards

   In November 2002, the Financial Accounting Standards Board ("FASB") issued
   FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure
   Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
   Others" ("FIN 45"). FIN 45 requires that upon issuance of a guarantee, a
   guarantor must recognize a liability for the fair value of an obligation
   assumed under a guarantee. FIN 45 also requires additional disclosures by a
   guarantor in its interim and annual financial statements about the
   obligations associated with guarantees issued. The recognition provisions of
   FIN 45 are effective for any guarantees issued or modified after December 31,
   2002. The disclosure requirements are effective for financial statements of
   interim or annual periods ending after December 15, 2002. The adoption of FIN
   45 did not have a material effect on the Partnership's financial position,
   results of operations or cash flows.

   In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation
   of Variable Interest Entities, an Interpretation of ARB No. 51" ("FIN 46").
   FIN 46 addresses the consolidation by business enterprises of variable
   interest entities as defined. FIN 46 applies immediately to variable
   interests in variable interest entities created after January 31, 2003. For
   public enterprises with a variable interest entity created before February 1,
   2003, FIN 46 applies to that enterprise no later than the beginning of the
   first interim or annual reporting period beginning after June 15, 2003. The
   adoption of FIN 46 is not expected to have a material effect on the
   Partnership's financial position, results of operations or cash flows.

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 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 Partnership received a capital
   contribution of $100 from the General Partner.

   Net loss is allocated 99% to the limited partners and 1% to the General
   Partner in accordance with the Partnership Agreement.

3. Cash and Cash Equivalents

   As of March 30, 2003, the Partnership has cash and cash equivalents of
   $109,550 that are deposited in interest bearing accounts with an institution
   that is not insured by the Federal Deposit Insurance Corporation.


                                       22
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


4.   Investments in Bonds

     The Partnership carries its investments in bonds as available-for-sale
     because such investments are used to facilitate and provide flexibility for
     the Partnership's obligations, including the providing of operating
     advances resulting from circumstances that may arise in connection with the
     Local Partnerships. Investments in bonds are reflected in the accompanying
     balance sheets at estimated fair value.

     As of March 30, 2003, certain information concerning investments in bonds
     is as follows:

<TABLE>
<CAPTION>

                                                                         Gross              Gross             Estimated
                                                     Amortized         unrealized         unrealized            fair
      Description and maturity                          cost             gains              losses              value
      ------------------------                      ----------         ----------         ----------         ----------

<S>                                               <C>               <C>                  <C>                <C>
Corporate debt securities
   After one year through five years                $  784,039         $   47,212         $     --           $  831,251
   After five years through ten years                  319,549             47,259               --              366,808
                                                    ----------         ----------         ----------         ----------

                                                     1,103,588             94,471               --            1,198,059
                                                    ----------         ----------         ----------         ----------

U.S. Treasury debt securities
  After one year through five years                    752,158             85,427               --              837,585
   After five years through ten years                  673,152             77,762               --              750,914
                                                    ----------         ----------         ----------         ----------

                                                     1,425,310            163,189               --            1,588,499
                                                    ----------         ----------         ----------         ----------

                                                    $2,528,898         $  257,660         $     --           $2,786,558
                                                    ==========         ==========         ==========         ==========


       As of March 30, 2002, certain information concerning investments in bonds
is as follows:

<CAPTION>

                                                                         Gross              Gross             Estimated
                                                     Amortized         unrealized         unrealized            fair
      Description and maturity                          cost             gains              losses              value
      ------------------------                      ----------         ----------         ----------         ----------

<S>                                                <C>               <C>                  <C>                <C>
Corporate debt securities
   Within one year                                 $   199,466        $     6,848         $      --          $   206,314
   After one year through five years                   797,906             19,896                --              817,802
   After five years through ten years                  504,386             14,820              (4,489)           514,717
                                                   -----------        -----------         -----------        -----------

                                                     1,501,758             41,564              (4,489)         1,538,833

U.S. Treasury debt securities
   After five years through ten years                1,343,596                335              (5,491)         1,338,440
                                                   -----------        -----------         -----------        -----------

                                                   $ 2,845,354        $    41,899         $    (9,980)       $ 2,877,273
                                                   ===========        ===========         ===========        ===========
</TABLE>


                                       23
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


5.   Investment in Local Partnerships

     As of March 30, 2003, the Partnership owns a limited partnership interest
     in the following Local Partnerships:

     1.   April Gardens Apartments II Limited Partnership;
     2.   Ashland Park Apartments, L.P.;
     3.   Auburn Family, L.P.;
     4.   Batesville Family, L.P.;
     5.   Bay Springs Elderly, L.P.;
     6.   Brisas del Mar Apartments Limited Partnership;
     7.   Bruce Housing Associates, L.P.;
     8.   Carrington Limited Dividend Housing Association Limited Partnership;
     9.   Chestnut Park Associates, L.P.*;
     10.  Chowan Senior Manor Associates Limited Partnership;
     11.  Christian Street Commons Associates;
     12.  Country View Apartments ("Country View");
     13.  Desarrollos de Belen Limited Partnership;
     14.  Desarrollos de Emaus Limited Partnership;
     15.  Ellinwood Heights Apartments, L.P.;
     16.  Fulton Street Houses Limited Partnership;
     17.  Hayes Run Limited Partnership;
     18.  Howard L. Miller Sallisaw Apartments II, L.P.;
     19.  Hurlock Meadow Limited Partnership;
     20.  Ivy Family, L.P.;
     21.  Justin Associates ("Justin");
     22.  LaBelle Commons, Ltd.;
     23.  Lawrence Road Properties, Ltd.;
     24.  Loma Del Norte Limited Partnership;
     25.  Long Reach Associates Limited Partnership;
     26.  Mirador del Toa Limited Partnership;
     27.  Moore Haven Commons, Ltd.;
     28.  NP-89 Limited Dividend Housing Association Limited Partnership;
     29.  Nash Hill Associates, Limited Partnership;
     30.  North Calhoun City, L.P. ("North Calhoun");
     31.  Orange City Plaza, Limited Partnership ("Orange City");
     32.  Puerta del Mar Limited Partnership;
     33.  Purvis Heights Properties, L.P.;
     34.  Queen Lane Investors;
     35.  Somerset Manor, Ltd.;
     36.  Sugar Cane Villas, Ltd.;
     37.  Summerfield Apartments Limited Partnership ("Summerfield");
     38.  Sydney Engel Associates L.P. (formerly known as Sydney Engel
          Associates)*;
     39.  Union Valley Associates Limited Partnership;
     40.  Walnut Grove Family, L.P.;
     41.  Waynesboro Apartments Limited Partnership;
     42.  West Calhoun City, L.P. ("West Calhoun"); and
     43.  Westminster Apartments Limited Partnership ("Westminster").

       *An affiliate of the General Partner is a general partner of and/or
provides services to the Local Partnership.


                                       24
<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001

5. Investment in Local Partnerships (continued)

   Although the Partnership generally owns a 98.9%-99% limited partnership
   interest in the Local Partnerships, the Partnership and American Tax Credit
   Properties II L.P. ("ATCP II"), a Delaware limited partnership and an
   affiliate of the Partnership, together, in the aggregate, own a 99% Local
   Partnership Interest in the following Local Partnerships:

                                                      The
                                                   Partnership      ATCP II
                                                   -----------      -------

             Batesville Family, L.P.                  61.75%         37.25%
             Bruce Housing Associates, L.P.           61.75          37.25
             Carrington Limited Dividend
             Housing Association Limited
               Partnership                            65.95          33.05
             Ivy Family, L.P.                         61.75          37.25
             Lawrence Road Properties, Ltd.           61.75          37.25
             Mirador del Toa Limited
               Partnership                            59.06          39.94
             Purvis Heights Properties, L.P.          61.75          37.25
             Queen 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, the Partnership committed to make capital contribution payments
   in the aggregate amount of $29,264,476, all of which has been paid as of
   March 30, 2003. As of December 31, 2002, the Local Partnerships have
   outstanding mortgage loans payable totaling approximately $83,716,000 and
   accrued interest payable on such loans totaling $4,027,000, 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 such 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
   $2,586,565, $2,440,940, and $2,468,205 for the years ended December 31, 2002,
   2001 and 2000, respectively, as reflected in the combined statements of
   operations of the Local Partnerships reflected herein Note 5.

   As of December 31, 2002, Westminster was in default under the terms of its
   first mortgage; payments of principal, interest and replacement reserve
   deposits are approximately four years in arrears, representing an arrearage
   of approximately $400,000. Although Westminster has been involved in
   negotiating a restructuring of its mortgage debt, a final resolution has not
   been reached and documented. There can be no assurance that the issues will
   be resolved and the mortgage remains in default without a formal forbearance.

   As a result of management's assessment of the carrying value of the
   investment in local partnerships under applicable accounting guidelines (see
   Note 1), the Partnership reduced its investment in Country View, North
   Calhoun and West Calhoun by $34,787, $29,765 and $38,511 respectively for the
   year ended March 31, 2003. The partnership reduced the investment in Justin,
   Orange City, and Summerfield by $234,362, $194,862, and $205,205
   respectively, for the year ended March 31, 2002, and by $230,000, $155,000,
   and $186,000 respectively, for the year ended March 31, 2001. Such losses are
   included in the equity in loss of investment in local partnerships in the
   accompanying statements of operations of the Partnership for the years
   indicated.

   The combined balance sheets of the Local Partnerships as of December 31, 2002
   and 2001 and the combined statements of operations of the Local Partnerships
   for the years ended December 31, 2002, 2001 and 2000 are reflected on pages
   26 and 27, respectively.


                                       25
<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


5.   Investment in Local Partnerships (continued)

     The combined balance sheets of the Local Partnerships as of December 31,
     2002 and 2001 are as follows:

                                                                       2002                 2001
                                                                  ------------          ------------
    ASSETS

<S>                                                               <C>                   <C>
Cash and cash equivalents                                         $  1,339,340          $  1,315,560
Rents receivable                                                       481,854               436,887
Escrow deposits and reserves                                         5,297,817             5,116,763
Land                                                                 3,910,215             3,910,215
Buildings and improvements (net of
  accumulated depreciation of $47,186,840 and $43,134,422)          67,320,566            71,063,036
Intangible assets (net of accumulated
  amortization of $503,495 and $461,704)                               545,454               587,246
Other assets                                                         1,024,189               952,741
                                                                  ------------          ------------

                                                                  $ 79,919,435          $ 83,382,448
                                                                  ============          ============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                           $  1,045,598          $    971,643
  Due to related parties                                             5,092,769             5,021,765
  Mortgage loans                                                    83,716,219            84,445,613
  Accrued interest                                                   4,026,656             3,620,621
  Other liabilities                                                    691,048               673,666
                                                                  ------------          ------------

                                                                    94,572,290            94,733,308
                                                                  ------------          ------------

Partners' equity (deficit)

  American Tax Credit Properties III L.P.
   Capital contributions, net of distributions                      28,866,952            28,894,128
   Cumulative loss                                                 (26,164,890)          (25,731,795)
                                                                  ------------          ------------

                                                                     2,702,062             3,162,333
                                                                  ------------          ------------

  General partners and other limited partners
   Capital contributions, net of distributions                        (267,633)             (245,667)
   Cumulative loss                                                 (17,087,284)          (14,267,526)
                                                                  ------------          ------------

                                                                   (17,354,917)          (14,513,193)
                                                                  ------------          ------------

                                                                   (14,652,855)          (11,350,860)
                                                                  ------------          ------------
                                                                  $ 79,919,435          $ 83,382,448
                                                                  ============          ============
</TABLE>



                                       26

<PAGE>

                   AMERICAN TAX CREDIT PROPERTIES III L.P.
                 NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


5.   Investment in Local Partnerships (continued)

     The combined statements of operations of the Local Partnerships for the
     years ended December 31, 2002, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>

                                                          2002                    2001                    2000
                                                     ------------             ------------             ------------
    REVENUE

<S>                                                  <C>                      <C>                      <C>
Rental                                               $ 11,188,578             $ 10,917,485             $ 10,778,097
Interest and other                                        343,487                  376,528                  400,732
                                                     ------------             ------------             ------------
Total Revenue
                                                       11,532,065               11,294,013               11,178,829
                                                     ------------             ------------             ------------

EXPENSES

Administrative                                          2,295,834                2,305,944                2,400,469
Utilities                                               1,184,078                1,223,442                1,080,099
Operating and maintenance                               2,671,075                2,511,755                2,552,119
Taxes and insurance                                     1,461,674                1,273,886                1,237,907
Financial                                               3,072,036                3,115,247                3,185,319
Depreciation and amortization                           4,100,221                4,125,260                4,088,150
                                                     ------------             ------------             ------------

Total Expenses
                                                       14,784,918               14,555,534               14,544,063
                                                     ------------             ------------             ------------

NET LOSS                                             $ (3,252,853)            $ (3,261,521)            $ (3,365,234)
                                                     ============             ============             ============

NET LOSS ATTRIBUTABLE TO

  American Tax Credit                                $   (433,095)            $   (559,378)            $   (657,135)
  Properties III L.P.
  General partners and other limited
   partners, which includes $2,586,565,
   $2,444,940 and $2,468,205 of
   Partnership loss in excess
   of investment                                       (2,819,758)              (2,702,143)              (2,708,099)
                                                     ------------             ------------             ------------

                                                     $ (3,252,853)            $ (3,261,521)            $ (3,365,234)
                                                     ============             ============             ============
</TABLE>



                                       27

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


5. Investment in Local Partnerships (continued)

Investment activity with respect to each Local Partnership for the year ended
March 30, 2003 is as follows:
<TABLE>
<CAPTION>

                                                           Partnership's                    Cash           Cash
                                            Investment       equity in    Adjustment to distributions   distributions   Investment
                                             in Local      income (loss) carrying value    received     classified as    in Local
                                            Partnership       for the      during the     during the    other income    Partnership
                                           balance as of     year ended    year ended     year ended   during the year  balance as
                                             March 30,      December 31,    March 30,   March 30, 2003  ended March 30, of March 30,
Name of Local Partnership                      2002             2002          2003                          2003            2003


<S>                                         <C>          <C>             <C>             <C>              <C>
April Gardens Apartments II Limited
  Partnership                               $     --     $       --(2)   $      --       $   (960)        $      960     $       --
Ashland Park Apartments, L.P.                     --             --(2)          --             --                 --             --
Auburn Family, L.P.                               --             --(2)          --             --                 --             --
Batesville Family, L.P.                           --             --(2)          --             --                 --             --
Bay Springs Elderly, L.P.                         --             --(2)          --             --                 --             --
Brisas del Mar Apartments Limited
  Partnership                                     --             --(2)          --         (1,320)             1,320             --
Bruce Housing Associates, L.P.                    --             --(2)          --             --                 --             --
Carrington Limited Dividend Housing
  Association Limited Partnership            461,757       (124,962)            --             --                 --        336,795
Chestnut Park Associates, L.P.                    --             --(2)          --             --                 --             --
Chowan Senior Manor Associates
  Limited Partnership                             --             --(2)          --         (1,580)             1,580             --
Christian Street Commons Associates               --             --(2)          --             --                 --             --
Country View Apartments                       47,058        (11,521)        (34,787)(3)      (750)                --             --
Desarrollos de Belen Limited
  Partnership                                     --            --(2)           --             --                 --             --
Desarrollos de Emaus Limited
  Partnership                                     --            --(2)           --             --                 --             --
Ellinwood Heights Apartments, L.P.            20,606          5,279             --             --                 --         25,885
Fulton Street Houses Limited
  Partnership                                     --            --(2)           --             --                 --             --
Hayes Run Limited Partnership                     --            --(2)           --         (1,785)             1,785             --
Howard L. Miller Sallisaw
  Apartments II, L.P.                          4,115         (2,912)            --             --                 --          1,203
Hurlock Meadow Limited
  Partnership                                     --             --(2)          --         (3,176)             3,176             --
Ivy Family, L.P.                                  --             --(2)          --             --                 --             --
Justin Associates                                 --             --             --             --                 --             --
LaBelle Commons, Ltd.                             --             --(2)          --             --                 --             --
Lawrence Road Properties, Ltd.                    --             --(2)          --             --                 --             --
Loma Del Norte Limited Partnership             9,220         (5,220)(1)         --         (4,000)                --             --
Long Reach Associates Limited
  Partnership                                     --             --(2)          --             --                 --             --
Mirador del Toa Limited Partnership               --             --(2)          --           (572)               572             --
Moore Haven Commons, Ltd.                         --             --(2)          --             --                 --             --
NP-89 Limited Dividend Housing
  Association Limited Partnership          1,082,233       (212,730)            --        (10,000)                --        860,503
Nash Hill Associates, Limited
  Partnership                                 42,781        (40,602)            --             --                 --          2,179
North Calhoun City, L.P.                      37,012         (7,247)       (29,765)(3)         --                 --             --
Orange City Plaza, Limited
  Partnership                                     --            --(2)           --             --                 --             --
Puerta del Mar Limited Partnership                --            --(2)           --         (1,320)             1,320             --
Purvis Heights Properties, L.P.               32,896        (22,999)            --           (889)                --          9,008
Queen Lane Investors                              --            --(2)           --             --                 --             --
Somerset Manor, Ltd.                              --            --(2)           --             --                 --             --
Sugar Cane Villas, Ltd.                           --            --(2)           --             --                 --             --
Summerfield Apartments Limited
  Partnership                                     --            --(2)           --        (10,000)            10,000             --
Sydney Engel Associates L.P.                      --            --(2)           --         (1,000)             1,000             --
Union Valley Associates Limited
  Partnership                                     --            --(2)           --             --                 --             --
Walnut Grove Family, L.P.                         --            --(2)           --             --                 --             --
Waynesboro Apartments Limited
  Partnership                                     --            --(2)           --             --                 --             --
West Calhoun City, L.P.                       48,692       (10,181)        (38,511)(3)         --                 --             --
Westminster Apartments Limited
  Partnership                                     --            --(2)           --             --                 --             --
                                         -----------     ---------       ---------       --------         ----------     ----------
                                         $ 1,787,370     $(433,095)      $(103,063)      $(37,352)        $   21,713     $1,235,573
                                         ===========     =========       =========       ========         ==========     ==========
</TABLE>


(1)  The Partnership's equity in loss of an investment in a Local Partnership is
     limited to the remaining investment balance.

(2)  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.

(3)  The Partnership has adjusted the investment's carrying value in accordance
     with applicable accounting guidelines.



                                       28


<PAGE>
                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


5. Investment in Local Partnerships (continued)

Investment activity with respect to each Local Partnership for the year ended
March 30, 2002 is as follows:

<TABLE>
<CAPTION>
                                                                                                          Cash
                                                       Partnership's                        Cash       distributions    Investment
                                      Investment        equity in        Adjustment to  distributions  classified as     in Local
                                       in Local       income (loss)     carrying value     received    other income     Partnership
                                      Partnership         for the         during the      during the    during the       balance
                                     balance as of      year ended        year ended      year ended    year ended        as of
                                       March 30,       December 31,        March 30,      March 30,     March 30,        March 30,
Name of Local Partnership                2001              2001              2002           2002          2002             2002
-----------------------------------------------------------------------------------------------------------------------------------

<S>                                    <C>              <C>               <C>            <C>
April Gardens Apartments II
  Limited Partnership                 $       --        $      --(2)       $    --        $    (960)    $    960       $        --
Ashland Park Apartments, L.P.                 --               --(2)            --               --           --                --
Auburn Family, L.P.                        8,160           (8,160)              --               --           --                --
Batesville Family, L.P.                       --               --(2)            --             (390)         390                --
Bay Springs Elderly, L.P.                 11,177          (11,177)(1)           --               --           --                --
Brisas del Mar Apartments
  Limited Partnership                         --               --(2)            --           (1,320)       1,320                --
Bruce Housing Associates, L.P.                --               --(2)            --               --           --                --
Carrington Limited Dividend
  Housing Association Limited
  Partnership                            610,103         (148,346)              --               --           --           461,757
Chestnut Park Associates, L.P.                --               --(2)            --               --           --                --
Chowan Senior Manor Associates
  Limited Partnership                         --               --(2)            --           (1,580)       1,580                --
Christian Street Commons
  Associates                                  --               --(2)            --               --           --                --
Country View Apartments                   81,954          (34,146)              --             (750)          --            47,058
Desarrollos de Belen Limited
  Partnership                                 --               --(2)            --               --           --                --
Desarrollos de Emaus Limited
  Partnership                                 --               --(2)            --               --           --                --
Ellinwood Heights Apartments, L.P.        14,394             6,212              --               --           --            20,606
Fulton Street Houses Limited
  Partnership                                 --               --(2)            --               --           --                --
Hayes Run Limited Partnership                 --               --(2)            --           (1,785)       1,785                --
Howard L. Miller Sallisaw
  Apartments II, L.P.                      8,284           (4,169)              --               --           --             4,115
Hurlock Meadow Limited
  Partnership                                 --              --(2)             --               --           --                --
Ivy Family, L.P.                              --              --(2)             --               --           --                --
Justin Associates                        368,047          (133,685)        (234,362)(3)          --           --                --
LaBelle Commons, Ltd.                         --               --(2)            --               --           --                --
Lawrence Road Properties,
  Ltd.                                        --               --(2)            --             (565)         565                --
Loma Del Norte Limited
  Partnership                             31,623          (18,403)              --           (4,000)          --             9,220
Long Reach Associates Limited
  Partnership                             35,757          (35,757)(1)           --               --           --                --
Mirador del Toa Limited
  Partnership                                 --               --(2)            --             (572)         572                --
Moore Haven Commons, Ltd.                     --               --(2)            --               --           --                --
NP-89 Limited Dividend
  Housing Association
  Limited Partnership                  1,150,934          (67,701)              --               --           --         1,083,233
Nash Hill Associates, Limited
  Partnership                             81,001          (38,220)              --               --           --            42,781
North Calhoun City, L.P.                  41,469           (4,457)              --               --           --            37,012
Orange City Plaza, Limited
  Partnership                            211,001          (16,139)         (194,862)             --           --                --
Puerta del Mar Limited
  Partnership                                 --               --(2)            --           (1,320)       1,320                --
Purvis Heights Properties,
  L.P.                                    45,979          (11,304)              --           (1,779)          --            32,896
Queen Lane Investors                          --               --(2)            --           (2,999)       2,999                --
Somerset Manor, Ltd.                          --               --(2)            --               --           --                --
Sugar Cane Villas, Ltd.                       --               --(2)            --               --           --                --
Summerfield Apartments
  Limited Partnership                    228,444          (23,239)         (205,205)             --           --                --
Sydney Engel Associates L.P.                  --               --(2)            --               --           --                --
Union Valley Associates
  Limited Partnership                         --               --(2)            --               --           --                --
Walnut Grove Family, L.P.                     --               --(2)            --               --           --                --
Waynesboro Apartments
  Limited Partnership                         --               --(2)            --               --           --                --
West Calhoun City, L.P.                   59,379          (10,687)              --               --           --            48,692
Westminster Apartments
  Limited Partnership                         --               --(2)            --               --           --                --
                                      ----------        ---------         ---------        --------     --------       -----------
                                      $2,987,706        $(559,378)        $(634,429)       $(18,020)    $ 11,491       $ 1,787,370
                                      ==========        =========         =========        ========     ========       ===========
</TABLE>


(1)  The Partnership's equity in loss of an investment in a Local Partnership is
     limited to the remaining investment balance.

(2)  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.

(3)  The Partnership has adjusted the investment's carrying value in accordance
     with applicable accounting guidelines.


                                       29


<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


5.   Investment in Local Partnerships (continued)

     Property information for each Local Partnership as of December 31, 2002 is
     as follows:

<TABLE>
<CAPTION>

                                                                   Mortgage                         Buildings and    Accumulated
          Name of Local Partnership                              loans payable         Land         improvements     depreciation
       --------------------------------------------------------- --------------  ---------------- ---------------- ---------------

<S>                                                            <C>               <C>              <C>              <C>
       April Gardens Apartments II Limited Partnership         $  1,980,296      $     39,984     $   2,484,604    $   (1,198,472)
       Ashland Park Apartments, L.P.                               1,028,823           50,160         1,247,739          (547,591)
       Auburn Family, L.P.                                           461,511           20,000           564,799          (239,518)
       Batesville Family, L.P.                                     1,428,095           52,000         1,820,751          (705,028)
       Bay Springs Elderly, L.P.                                     670,554           38,000           847,593          (354,876)
       Brisas del Mar Apartments Limited Partnership               2,629,597          100,280         3,362,895        (1,623,278)
       Bruce Housing Associates, L.P.                              1,096,634           16,000         1,460,299          (675,664)
       Carrington Limited Dividend Housing Association
          Limited Partnership                                      3,313,001          200,000         6,576,478        (2,992,681)
       Chestnut Park Associates, L.P.                              4,936,911          781,700         8,654,778        (3,692,202)
       Chowan Senior Manor Associates Limited Partnership          1,242,244           86,101         1,530,162          (675,850)
       Christian Street Commons Associates                           590,264               --             7,545            (1,085)
       Country View Apartments                                       929,391           35,698         1,238,033          (348,450)
       Desarrollos de Belen Limited Partnership                    1,863,565           96,190         2,534,399          (872,191)
       Desarrollos de Emaus Limited Partnership                    3,167,700          214,000         4,050,973        (1,318,784)
       Ellinwood Heights Apartments, L.P.                            682,238           10,000           892,848          (278,602)
       Fulton Street Houses Limited Partnership                    3,869,930                2         6,023,119        (2,402,631)
       Hayes Run Limited Partnership                               1,413,949           85,060         1,566,104          (475,651)
       Howard L. Miller Sallisaw Apartments II, L.P.                 610,844           39,000           735,346          (240,073)
       Hurlock Meadow Limited Partnership                          1,259,122           49,525         1,587,778          (671,775)
       Ivy Family, L.P.                                              778,437           11,000         1,075,733          (501,620)
       Justin Associates                                           2,312,477           27,472         4,369,992        (1,750,111)
       LaBelle Commons, Ltd.                                       1,004,428           98,947         1,184,937          (458,923)
       Lawrence Road Properties, Ltd.                                752,561           50,000           947,764          (358,996)
       Loma Del Norte Limited Partnership                          1,426,203           84,874         1,814,082          (568,731)
       Long Reach Associates Limited Partnership                   1,466,875          118,446         1,878,410          (623,154)
       Mirador del Toa Limited Partnership                         1,864,895          105,000         2,341,013        (1,155,272)
       Moore Haven Commons, Ltd.                                     920,328           73,645         1,197,000          (539,431)
       NP-89 Limited Dividend Housing Association Limited
          Partnership                                              3,850,171          150,000         7,536,598        (3,128,386)
       Nash Hill Associates, Limited Partnership                   1,456,772          123,876         1,695,582          (542,552)
       North Calhoun City, L.P.                                      479,097           12,000           645,767          (270,259)
       Orange City Plaza, Limited Partnership                        425,929           53,904         1,045,306          (373,561)
       Puerta del Mar Limited Partnership                          2,502,210          115,000         3,201,130        (1,553,840)
       Purvis Heights Properties, L.P.                             1,136,111           47,000         1,506,005          (541,865)
       Queen Lane Investors                                        1,532,919           60,301         2,781,754        (1,188,295)
       Somerset Manor, Ltd.                                          890,588           53,383         1,107,954          (491,700)
       Sugar Cane Villas, Ltd.                                     3,281,591           58,500         4,088,461        (1,819,665)
       Summerfield Apartments Limited Partnership                  1,677,183          195,411         2,708,470          (771,346)
       Sydney Engel Associates L.P.                               16,682,455          284,305        19,443,724        (8,540,801)
       Union Valley Associates Limited Partnership                 1,435,626           97,800         1,758,877          (540,318)
       Walnut Grove Family, L.P.                                     840,843           30,000         1,041,805          (445,539)
       Waynesboro Apartments Limited Partnership                   1,470,625           76,000         1,790,894          (575,728)
       West Calhoun City, L.P.                                       745,254           18,000         1,030,716          (435,562)
       Westminster Apartments Limited Partnership                  1,607,972           51,651         1,129,209          (696,783)
                                                                ------------     ------------      ------------     -------------
                                                                $ 83,716,219     $  3,910,215      $114,507,406     $ (47,186,840)
                                                                ============     ============      ============     =============
</TABLE>


                                       30

<PAGE>

<TABLE>
<CAPTION>

5.   Investment in Local Partnerships (continued)

     Property information for each Local Partnership as of December 31, 2001 is
     as follows:


                                                        AMERICAN TAX CREDIT PROPERTIES III L.P.
                                                      NOTES TO FINANCIAL STATEMENTS - (Continued)
                                                             MARCH 30, 2003, 2002 AND 2001


                                                                   Mortgage                         Buildings and    Accumulated
          Name of Local Partnership                              loans payable         Land         improvements     depreciation
       --------------------------------------------------------- --------------  ---------------- ---------------- ---------------

<S>                                                            <C>               <C>              <C>              <C>
       April Gardens Apartments II Limited Partnership          $  1,985,673      $     39,984     $   2,472,242    $  (1,102,091)
       Ashland Park Apartments, L.P.                               1,032,119            50,160         1,247,739         (502,430)
       Auburn Family, L.P.                                           464,082            20,000           562,144         (218,849)
       Batesville Family, L.P.                                     1,431,853            52,000         1,816,601         (656,198)
       Bay Springs Elderly, L.P.                                     672,501            38,000           846,080         (324,486)
       Brisas del Mar Apartments Limited Partnership               2,636,764           100,280         3,346,248       (1,491,564)
       Bruce Housing Associates, L.P.                              1,100,431            16,000         1,441,646         (622,106)
       Carrington Limited Dividend Housing Association
          Limited Partnership                                      3,349,699           200,000         6,524,793       (2,744,908)
       Chestnut Park Associates, L.P.                              5,008,787           781,700         8,654,778       (3,378,174)
       Chowan Senior Manor Associates Limited Partnership          1,248,204            86,101         1,525,607         (612,810)
       Christian Street Commons Associates                           598,651                --             7,545             (811)
       Country View Apartments                                       932,315            35,698         1,234,700         (314,237)
       Desarrollos de Belen Limited Partnership                    1,873,153            96,190         2,533,351         (780,692)
       Desarrollos de Emaus Limited Partnership                    3,177,251           214,000         4,048,704       (1,180,684)
       Ellinwood Heights Apartments, L.P.                            684,342            10,000           882,871         (262,063)
       Fulton Street Houses Limited Partnership                    3,869,930                 2         6,023,119       (2,170,387)
       Hayes Run Limited Partnership                               1,418,244            85,060         1,539,859         (431,255)
       Howard L. Miller Sallisaw Apartments II, L.P.                 612,583            39,000           735,346         (227,041)
       Hurlock Meadow Limited Partnership                          1,263,287            49,525         1,579,618         (612,430)
       Ivy Family, L.P.                                              783,986            11,000         1,067,700         (459,469)
       Justin Associates                                           2,351,775            27,472         4,369,992       (1,588,285)
       LaBelle Commons, Ltd.                                       1,007,656            98,947         1,184,937         (415,876)
       Lawrence Road Properties, Ltd.                                754,841            50,000           943,132         (334,816)
       Loma Del Norte Limited Partnership                          1,430,362            84,874         1,805,709         (520,563)
       Long Reach Associates Limited Partnership                   1,471,185           118,446         1,878,409         (570,854)
       Mirador del Toa Limited Partnership                         1,870,929           105,000         2,335,743       (1,069,149)
       Moore Haven Commons, Ltd.                                     923,166            73,645         1,197,000         (497,446)
       NP-89 Limited Dividend Housing Association
          Limited Partnership                                      3,958,572           150,000         7,503,004        (2,831,590)
       Nash Hill Associates, Limited Partnership                   1,461,265           123,876         1,694,743         (497,387)
       North Calhoun City, L.P.                                      482,888            12,000           632,110         (247,167)
       Orange City Plaza, Limited Partnership                        433,606            53,904         1,045,306         (339,881)
       Puerta del Mar Limited Partnership                          2,510,534           115,000         3,184,214       (1,429,418)
       Purvis Heights Properties, L.P.                             1,139,573            47,000         1,498,309         (502,897)
       Queen Lane Investors                                        1,543,391            60,301         2,778,023       (1,081,767)
       Somerset Manor, Ltd.                                          893,214            53,383         1,107,954         (450,879)
       Sugar Cane Villas, Ltd.                                     3,291,361            58,500         4,088,461       (1,674,400)
       Summerfield Apartments Limited Partnership                  1,707,117           195,411         2,694,742         (703,534)
       Sydney Engel Associates L.P.                               16,949,953           284,305        19,443,724       (7,831,633)
       Union Valley Associates Limited Partnership                 1,439,891            97,800         1,758,877         (496,625)
       Walnut Grove Family, L.P.                                     843,113            30,000         1,034,054         (405,406)
       Waynesboro Apartments Limited Partnership                   1,475,235            76,000         1,790,894         (531,293)
       West Calhoun City, L.P.                                       754,159            18,000         1,029,702         (397,136)
       Westminster Apartments Limited Partnership                  1,607,972            51,651         1,107,728         (623,735)
                                                                ------------      ------------      ------------     ------------
                                                                $ 84,445,613      $  3,910,215      $114,197,458    $ (43,134,422)
                                                                ============      ============      ============    =============
</TABLE>



                                       31

<PAGE>


                   AMERICAN TAX CREDIT PROPERTIES III L.P.
                 NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


5. Investment in Local Partnerships (continued)

   The summary of property activity during the year ended December 31, 2002 is
     as follows:

<TABLE>
<CAPTION>

                                                                    Net change
                                                                  during the year
                                              Balance as of           ended             Balance as of
                                            December 31, 2001    December 31, 2002     December 31, 2002
                                            -----------------    -----------------     -----------------

<S>                                           <C>                 <C>                    <C>
Land                                          $   3,910,215       $        --            $   3,910,215
Buildings and improvements                      114,197,458             309,948            114,507,406
                                              -------------       -------------          -------------
                                                118,107,673             309,948            118,417,621
Accumulated depreciation                        (43,134,422)         (4,052,418)           (47,186,840)
                                              -------------       -------------          -------------
                                              $  74,973,251       $  (3,742,470)         $  71,230,781
                                              =============       =============          =============
</TABLE>


6. Transactions with General Partner and Affiliates

   For the years ended March 30, 2003, 2002 and 2001, the Partnership paid
   and/or incurred the following amounts to the General Partner and/or
   affiliates in connection with services provided to the Partnership:

<TABLE>
<CAPTION>

                                                2003                        2002                        2001
                                        ----------------------      -----------------------     ----------------------
                                          Paid        Incurred       Paid         Incurred       Paid        Incurred
                                        --------      --------      --------      ---------     --------     ---------

<S>                       <C>           <C>           <C>           <C>           <C>           <C>           <C>
Management fees (see Note 8)            $299,800      $230,571      $274,000      $230,571      $100,000      $230,571

Administration fees (see Note 8)          16,195       230,571       156,645       230,571       100,000       230,571
</TABLE>


      For the years ended December 31, 2002, 2001 and 2000, the Local
      Partnerships paid and/or incurred the following amounts to the General
      Partner and/or affiliates in connection with services provided to the
      Local Partnerships:

<TABLE>
<CAPTION>

                                                2002                        2001                        2000
                                        ----------------------      -----------------------     ----------------------
                                         Paid         Incurred        Paid         Incurred      Paid         Incurred
                                        -------       --------      --------       --------     -------       --------

<S>                       <C>            <C>           <C>          <C>           <C>           <C>           <C>
Property management fees                $32,851        $37,800       $30,585        $32,020     $ 7,387       $31,754

Insurance and other services             35,297         34,231        17,267         17,267      22,953        22,687
</TABLE>



                                       32

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


7. Taxable Loss

   A reconciliation of the financial statement net loss of the Partnership for
   the years ended March 30, 2003, 2002 and 2001 to the tax return net loss for
   the years ended December 31, 2002, 2001 and 2000 is as follows:

<TABLE>
<CAPTION>

                                                                        2003              2002               2001
                                                                    -----------        -----------        -----------
<S>                                                              <C>                 <C>                <C>
Financial  statement  net loss for the years ended March 30,
   2003, 2002, and 2001                                             $  (875,199)       $(1,509,355)       $(1,519,430)

Add (less) net transactions occurring between
    January 1, 2000 and March 30, 2000                                     --                 --              (64,238)
    January 1, 2001 and March 30, 2001                                     --              (73,432)            73,342
    January 1, 2002 and March 30, 2002                                  (72,489)            72,489               --
    January 1, 2003 and March 30, 2003                                   59,193               --                 --
                                                                    -----------        -----------        -----------

Adjusted financial statement net loss for the years ended
   December 31, 2002, 2001 and 2000                                    (888,495)        (1,510,298)        (1,510,236)

Adjustment to management and administration fees
   pursuant to Internal Revenue Code Section 267                        145,147            143,797            263,465

Differences arising from equity in loss of investment
   in local partnerships                                             (2,773,921)        (2,112,608)        (2,035,429)

Other income from local partnerships                                    (13,537)           (16,877)           (10,455)

Other differences                                                        (9,961)            11,184            (14,870)
                                                                    -----------        -----------        -----------
Tax return net loss for the years ended December 31,
   2002, 2001 and 2000                                              $(3,540,767)       $(3,484,802)       $(3,307,525)
                                                                    ===========        ===========        ===========
</TABLE>


     The differences between the investment in local partnerships for tax and
     financial reporting purposes as of December 31, 2002 and 2001 are as
     follows:

                                                   2002             2001
                                                -----------      -----------

    Investment in local partnerships -
      financial reporting                       $ 1,237,573      $ 1,788,120
    Investment in local partnerships - tax       (8,971,306)      (5,633,301)
                                                -----------      -----------
                                                $10,208,879      $ 7,421,421
                                                ===========      ===========

     Payable to general partner and affiliate in the accompanying balance sheets
     represents accrued management and administrative fees not deductible for
     tax purposes pursuant to Internal Revenue Code Section 267.


                                       33

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


8.   Commitments and Contingencies

     Pursuant to the Partnership Agreement, the Partnership incurs an annual
     management fee ("Management Fee") and an annual additional management fee
     ("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 $161,400 for each of the three years ended March 30, 2003. The annual
     Additional Management Fee is equal to .06% of Invested Assets. The
     Partnership incurred an Additional Management Fee of $69,171 for each of
     the three years ended March 30, 2003. Such amounts are aggregated and
     reflected under the caption management fees in the accompanying financial
     statements. Unpaid Management Fees and Additional Management Fees in the
     amount of $1,209,669 and $1,278,898 are included in payable to general
     partner and affiliate in the accompanying balance sheets as of March 30,
     2003 and 2002, 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 ("Administration Fee")
     and an annual additional administration fee ("Additional Administration
     Fee") for administrative services provided to the Partnership. The annual
     Administration Fee is equal to .14% of Invested Assets. The Partnership
     incurred an Administration Fee of $161,400 for each of the three years
     ended March 30, 2003. The annual Additional Administration Fee is subject
     to certain provisions of the Partnership Agreement and is equal to .06% of
     Invested Assets. The Partnership incurred an Additional Administration Fee
     of $69,171 for each of the three years ended March 30, 2003. Such amounts
     are aggregated and reflected under the caption administration fees in the
     accompanying financial statements. Unpaid Administration Fees and
     Additional Administration Fees due to MLFA in the amount of $788,673 and
     $904,673 are included in accounts payable and accrued expenses in the
     accompanying balance sheets as of March 30, 2003 and 2002, respectively.
     Unpaid Administration Fees and Additional Administration Fees due to an
     affiliate of the General Partner in the cumulative amount of $473,521 and
     $259,145 are included in due to general partner and affiliate in the
     accompanying balance sheets as of March 30, 2003 and 2002, respectively.

     The rents of the Properties, many of which receive rental subsidy payments,
     including payments under Section 8 of Title II of the Housing and Community
     Development Act of 1974 ("Section 8"), are subject to specific laws,
     regulations and agreements with federal and state agencies. The subsidy
     agreements expire at various times during and after the Compliance Periods
     of the Local Partnerships. 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. The
     Partnership 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 and
     debt structure of any or all Local Partnerships currently receiving such
     subsidy or similar subsidies. One Local Partnership's Section 8 contracts
     are currently subject to renewal under applicable HUD guidelines.



                                       34
<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


9.   Fair Value of Financial Instruments

     The following disclosure of the estimated fair value of financial
     instruments is made in accordance with the requirements of SFAS No. 107,
     "Disclosures about Fair Value of Financial Instruments." The estimated fair
     value amounts have been determined using available market information,
     assumptions, estimates and valuation methodologies.

     Cash and cash equivalents

     The carrying amount approximates fair value.

     Investments in Bonds

     Fair value is estimated based on market quotes provided by an independent
     service as of the balance sheet dates.

     Interest receivable

     The carrying amount approximates fair value due to the terms of the
     underlying investments.


     The estimated fair value of the Partnership's financial instruments as of
     March 30, 2003 and 2002 are disclosed elsewhere in the financial
     statements.


10.  Quarterly Financial Information - Unaudited

     The following is a summary of results of operations for each of the four
quarters for the years indicated:

<TABLE>
<CAPTION>

                                            First                Second              Third                 Fourth
                                            Quarter              Quarter             Quarter               Quarter
                                          ----------           ----------          ----------            -----------
2003
----

<S>                                       <C>                  <C>                  <C>                  <C>
Total revenue                             $  57,556            $  48,609            $  48,056            $  70,033

Loss from operations                        (83,360)             (79,110)             (87,378)             (89,193)

Equity in loss of investment
   in local partnerships                   (103,853)            (138,879)            (135,450)            (157,976)

Net loss                                   (187,213)            (217,989)            (222,828)            (247,169)

2002
----

Total revenue                             $  62,265            $  54,341            $  52,769            $  46,552

Loss from operations                        (70,677)             (79,684)             (92,698)             (72,489)

Equity in loss of investment
   in local partnerships                   (192,982)            (156,563)            (138,744)            (705,518)

Net loss                                   (263,659)            (236,247)            (231,442)            (778,007)
</TABLE>


                                       35

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2003, 2002 AND 2001


10. Quarterly Financial Information - Unaudited (continued)

<TABLE>
<CAPTION>

                                           First                Second              Third                 Fourth
                                           Quarter              Quarter             Quarter               Quarter
                                         ----------           ----------          ----------            -----------
2003
----

<S>                                      <C>                  <C>                  <C>                  <C>
2001
----

Total revenue                            $  57,178            $  59,978            $  60,402            $  57,860

Loss from operations                       (72,735)             (73,954)             (71,174)             (73,432)

Equity in loss of investment
   in local partnerships                  (206,251)            (145,784)            (126,502)            (749,598)

Net loss                                  (278,986)            (219,738)            (197,676)            (823,030)
</TABLE>




                                       36

<PAGE>

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

None

                                    PART III

Item 10.    Directors and Executive Officers of the Registrant

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 directors
of Richman Housing are:

                          Served in present
Name                      capacity since(1)         Position held
----                      -----------------         -------------

Richard Paul Richman      September 21, 1989        Director
David A. Salzman          February 1, 2001          President
Neal Ludeke               September 21, 1989        Vice President and Treasurer
Gina S. Dodge             September 21, 1989        Secretary

--------------------------------------------------------------------------------
(1) Director holds office until his successor is elected and qualified. All
officers serve at the pleasure of the Director.

Richard Paul Richman, age 55, is the sole Director of Richman Housing. Mr.
Richman is the Chairman and principal 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 42, is the President of Richman Housing and is a minority
stockholder and the President of Richman Group. Mr. Salzman is responsible for
the acquisition and development of residential real estate for syndication for
Richman Group.

Neal Ludeke, age 45, is a Vice President and the Treasurer of Richman Housing.
Mr. Ludeke, a Vice President and the Treasurer of Richman Group, is engaged
primarily in the syndication, asset management and finance operations of Richman
Group. In addition, Mr. Ludeke is a Vice President and the Treasurer of Richman
Asset Management, Inc. ("RAM"), an affiliate of Richman Housing. Mr. Ludeke's
responsibilities in connection with RAM include various partnership management
functions.

Gina S. Dodge, age 47, is the Secretary of Richman Housing. Ms. Dodge is a Vice
President and the Secretary of Richman Group. As the Director of Investor
Services, Ms. Dodge is responsible for communications with investors.

Item 11.    Executive Compensation

Registrant has no officers or directors. Registrant does not pay the officers or
director of Richman Housing any remuneration. During the year ended March 30,
2003, Richman Housing did not pay any remuneration to any of its officers or its
director.

Item 12.    Security Ownership of Certain Beneficial Owners and Management

Affiliates of Everest Properties, Inc., having the mailing address 155 N. Lake
Avenue, Suite 1000, Pasadena, California 91101 are the owners of 2,125 Units,
representing approximately 5.9% of all such Units. As of May 31, 2003, no person
or entity, other than affiliates of Everest Properties, Inc., was known by
Registrant to be the beneficial owner of more than five percent of the Units.
Richman Housing is wholly owned by Richard Paul Richman.


                                       37

<PAGE>

Item 13.  Certain Relationships and Related Transactions

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 Notes 6 and 8 to the audited
financial statements included in Item 8 - "Financial Statements and
Supplementary Data" herein.

Transactions with General Partner and Affiliates

The net tax losses and Low-income Tax Credits generated by Registrant during the
year ended December 31, 2002 allocated to the General Partner were $35,408 and
$7,836, respectively. The net tax losses and Low-income Tax Credits generated by
the General Partner during the year ended December 31, 2002 (from the allocation
of Registrant discussed above) and allocated to Richman Housing were $28,620 and
$6,333, respectively.

Indebtedness of Management.

No officer or director of the General Partner or any affiliate of the foregoing
was indebted to Registrant at any time during the year ended March 30, 2003.


Item 14. Controls and Procedures

   Evaluation of Disclosure Controls and Procedures

a. Within the 90 days prior to the date of this report, Registrant's Chief
   Executive Officer and Chief Financial Officer carried out an evaluation of
   the effectiveness of Registrant's "disclosure controls and procedures" as
   defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and
   15(d)-14(c). Based on that evaluation, Registrant's Chief Executive Officer
   and Principal Financial Officer have concluded that as of the date of the
   evaluation, Registrant's disclosure controls and procedures were adequate and
   effective in timely alerting them to material information relating to
   Registrant required to be included in Registrant's periodic SEC filings.

   Changes in Internal Controls

b. There were no significant changes in Registrant's internal controls or in
   other factors that could significantly affect Registrant's internal controls
   subsequent to the date of that evaluation.




                                       38
<PAGE>


                                     PART IV

Item 15.    Exhibits, Financial Statement Schedules, and Reports on form 8-K

   (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

<TABLE>
<CAPTION>

                                                                                 Incorporated by
                                  Exhibit                                         Reference to
                                  -------                                        ---------------

<S>  <C>              <C>                                                        <C>
     10.1            April Gardens Apartments II Limited Partnership (A          Exhibit 10.1 to Form 10-Q Report
                     Delaware Limited Partnership) Amended and Restated          dated December 30, 1990
                     Agreement of Limited Partnership                            (File No. 33-31390)

     10.2            Ashland Park Apartments, L.P. Second Amended and Restated   Exhibit 10.2 to Form 10-K Report
                     Agreement of Limited Partnership                            dated March 30, 1991
                                                                                 (File No. 33-31390)

     10.3            Auburn Family, L.P. Amended and Restated Limited            Exhibit 10.1 to Form 10-Q Report
                     Partnership Agreement and Certificate of Limited            dated December 31, 1991
                     Partnership                                                 (File No. 0-19217)

     10.4            Amended No. 2 to the Batesville Family, L.P. Amended and    Exhibit 10.2 to Form 10-Q Report
                     Restated Agreement of Limited Partnership                   dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.5            Batesville Family, L.P. Amendment No. 3 to the Amended      Exhibit 10.2 to Form 10-Q Report
                     and Restated Agreement of Limited Partnership               dated December 31, 1991
                                                                                 (File No. 0-19217)

     10.6            Bay Springs Elderly, L.P. (A Mississippi Limited            Exhibit 10.1 to Form 10-Q Report
                     Partnership) Amended and Restated Limited Partnership       dated September 29, 1991
                     Agreement and Certificate of Limited Partnership            (File No. 0-19217)

     10.7            Brisas del Mar Apartments Limited Partnership (A Delaware   Exhibit 10.3 to Form 10-Q Report
                     Limited Partnership) Amended and Restated Agreement of      dated December 30, 1990
                     Limited Partnership                                         (File No. 33-31390)

     10.8            Amendment No. 1 to the Bruce Housing Associates, L.P.       Exhibit 10.8 to Form 10-K Report
                     Amended and Restated Agreement of Limited Partnership       dated March 30, 1992
                                                                                 (File No. 33-31390)
</TABLE>


                                       39

<PAGE>

<TABLE>
<CAPTION>

                                                                                 Incorporated by
                                  Exhibit                                         Reference to
                                  -------                                        ---------------

<S>  <C>              <C>                                                        <C>
     10.9            Amendment No. 2 to the Bruce Housing Associates, L.P.       Exhibit 10.4 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.10           Bruce Housing Associates, L.P. Amendment No. 3 to the       Exhibit 10.3 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 31, 1991
                                                                                 (File No. 0-19217)

     10.11           Carrington Limited Dividend Housing Association Limited     Exhibit 10.1 to Form 10-Q Report
                     Partnership Amended and Restated Agreement of Limited       dated September 29, 1990
                     Partnership                                                 (File No. 33-31390)

     10.12           Carrington Limited Dividend Housing Association Limited     Exhibit 10.2 to Form 10-Q Report
                     Partnership Second Amended and Restated Agreement of        dated September 29, 1990
                     Limited Partnership                                         (File No. 33-31390)

     10.13           Carrington Limited Dividend Housing Association Limited     Exhibit 10.5 to Form 10-Q Report
                     Partnership Amendment No. 1 to the Second Amended and       dated December 30, 1990
                     Restated Agreement of Limited Partnership                   (File No. 33-31390)

     10.14           Chestnut Park Associates, L.P. Amended and Restated         Exhibit 10.3 to Form 10-Q Report
                     Agreement of Limited Partnership                            dated September 29, 1990
                                                                                 (File No. 33-31390)

     10.15           Chowan Senior Manor Associates Limited Partnership          Exhibit 10.15 to Form 10-K Report
                     Amended and Restated Agreement of Limited Partnership       dated March 30, 1992
                                                                                 (File No. 33-31390)
     10.16           Christian Street Commons Associates Amended and Restated    Exhibit 10.16 to Form 10-K Report
                     Limited Partnership Agreement and Certificate of Limited    dated March 30, 1992
                     Partnership                                                 (File No. 33-31390)

     10.17           Country View Apartments Second Amended and Restated         Exhibit 10.17 to Form 10-K Report
                     Limited Partnership Agreement and Certificate of Limited    dated March 30, 1992
                     Partnership                                                 (File No. 33-31390)

     10.18           Desarrollos de Belen Limited Partnership Amended and        Exhibit 10.18 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.19           Desarrollos de Emaus Limited Partnership Amended and        Exhibit 10.19 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.20           Ellinwood Heights Apartments, L.P. Amended and Restated     Exhibit 10.1 to Form 10-Q Report
                     Agreement of Limited Partnership                            dated June 29, 1991
                                                                                 (File No. 0-19217)
</TABLE>


                                       40
<PAGE>

<TABLE>
<CAPTION>

                                                                                 Incorporated by
                                  Exhibit                                         Reference to
                                  -------                                        ---------------

<S>  <C>              <C>                                                        <C>
     10.21           Fulton Street Houses Limited Partnership Amended and        Exhibit 10.21 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.22           Hayes Run Limited Partnership Amended and Restated          Exhibit 10.2 to Form 10-Q Report
                     Agreement of Limited Partnership                            dated June 29, 1991
                                                                                 (File No. 0-19217)

     10.23           Howard L. Miller Sallisaw Apartments II, L.P. Third         Exhibit 10.10 to Form 10-K Report
                     Amended and Restated Agreement and Certificate of Limited   dated March 30, 1991
                     Partnership                                                 (File No. 33-31390)

     10.24           Hurlock Meadow Limited Partnership Amended and Restated     Exhibit 10.24 to Form 10-K Report
                     Limited Partnership Agreement                               dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.25           Amendment No. 1 to the Ivy Family, L.P. Amended and         Exhibit 10.6 to Form 10-Q Report
                     Restated Agreement of Limited Partnership                   dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.26           Ivy Family, L.P. Amendment No. 3 to the Amended and         Exhibit 10.4 to Form 10-Q Report
                     Restated Agreement of Limited Partnership                   dated December 31, 1991
                                                                                 (File No. 0-19217)

     10.27           Justin Associates Amended and Restated Agreement and        Exhibit 10.7 to Form 10-Q Report
                     Certificate of Limited Partnership                          dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.28           LaBelle Commons, Ltd. Amended and Restated Agreement of     Exhibit 10.13 to Form 10-K Report
                     Limited Partnership                                         dated March 30, 1991
                                                                                 (File No. 33-31390)

     10.29           LaBelle Commons, Ltd. Amendment No. 1 to Amended and        Exhibit 10.29 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.30           Amendment No. 2 to the Lawrence Road Properties, Ltd.       Exhibit 10.8 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.31           Lawrence Road Properties, Ltd. Amendment No. 3 to the       Exhibit 10.5 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 31, 1991
                                                                                 (File No. 0-19217)

     10.32           Loma Del Norte Limited Partnership Amended and Restated     Exhibit 10.2 to Form 10-Q Report
                     Limited Partnership Agreement                               dated September 29, 1991
                                                                                 (File No. 0-19217)

     10.33           Long Reach Associates Limited Partnership Sixth Amended     Exhibit 10.15 to Form 10-K Report
                     and Restated Agreement of Limited Partnership               dated March 30, 1991
                                                                                 (File No. 33-31390)
</TABLE>


                                       41
<PAGE>

<TABLE>
<CAPTION>

                                                                                 Incorporated by
                                  Exhibit                                         Reference to
                                  -------                                        ---------------

<S>  <C>              <C>                                                        <C>
     10.34           Mirador del Toa Limited Partnership Amended and Restated    Exhibit 10.16 to Form 10-K Report
                     Agreement of Limited Partnership                            dated March 30, 1991
                                                                                 (File No. 33-31390)

     10.35           Amendment No. 1 to the Mirador del Toa Limited              Exhibit 10.17 to Form 10-K Report
                     Partnership Amended and Restated Agreement of Limited       dated March 30, 1991
                     Partnership                                                 (File No. 33-31390)

     10.36           Moore Haven Commons, Ltd. Amended and Restated Agreement    Exhibit 10.9 to Form 10-Q Report
                     of Limited Partnership                                      dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.37           NP-89 Limited Dividend Housing Association Limited          Exhibit 10.3 to Form 10-Q Report
                     Partnership Second Restated and Amended Agreement of        dated June 29, 1991
                     Limited Partnership                                         (File No. 0-19217)

     10.38           Nash Hill Associates, Limited Partnership Amended and       Exhibit 10.37 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.39           North Calhoun City, L.P. (A Mississippi Limited             Exhibit 10.3 to Form 10-Q Report
                     Partnership) Amended and Restated Limited Partnership       dated September 29, 1991
                     Agreement and Certificate of Limited Partnership            (File No. 0-19217)

     10.40           Orange City Plaza, Limited Partnership Amended and          Exhibit 10.40 to Form 10-K Report
                     Restated Partnership Agreement                              dated March 30, 1992
                                                                                 (File No. 33-31390)
     10.41           Puerta del Mar Limited Partnership (A Delaware Limited      Exhibit 10.10 to Form 10-Q Report
                     Partnership) Amended and Restated Agreement of Limited      dated December 30, 1990
                     Partnership                                                 (File No. 33-31390)
     10.42           Amendment No. 2 to the Purvis Heights Properties, L.P.      Exhibit 10.11 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 30, 1990
                                                                                 (File No. 33-31390)
     10.43           Purvis Heights Properties, L.P. Amendment No. 3 to the      Exhibit 10.6 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 31, 1991
                                                                                 (File No. 0-19217)
     10.44           Queen Lane Investors Amendment No. 1 to Amended and         Exhibit 10.12 to Form 10-Q Report
                     Restated Agreement and Certificate of Limited Partnership   dated December 30, 1990
                                                                                 (File No. 33-31390)
     10.45           Somerset Manor, Ltd. Amended and Restated Agreement and     Exhibit 10.13 to Form 10-Q Report
                     Certificate of Limited Partnership                          dated December 30, 1990
                                                                                 (File No. 33-31390)
     10.46           Sugar Cane Villas, Ltd. Amended and Restated Agreement of   Exhibit 10.23 to Form 10-K Report
                     Limited Partnership                                         dated March 30, 1991
                                                                                 (File No. 33-31390)
</TABLE>


                                       42
<PAGE>

<TABLE>
<CAPTION>

                                                                                 Incorporated by
                                  Exhibit                                         Reference to
                                  -------                                        ---------------

<S>  <C>              <C>                                                        <C>
     10.47           Summerfield Apartments Limited Partnership Amended and      Exhibit 10.47 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.48           Amendment No.1 to the Summerfield Apartments Limited        Exhibit 10.48 to Form 10-K Report
                     Partnership Amended and Restated Agreement of Limited       dated March 30, 1999
                     Partnership                                                 (File No. 0-19217)

     10.49           Sydney Engel Associates Second Amended and Restated         Exhibit 10.4 to Form 10-Q Report
                     Agreement of Limited Partnership                            dated September 29, 1990
                                                                                 (File No. 33-31390)

     10.50           First Amendment to Second Amended and Restated Agreement    Exhibit 10.49 to Form 10-K Report
                     of Limited Partnership of Sydney Engel Associates           dated March 30, 1997
                                                                                 (File No. 0-19217)

     10.51           Second Amendment to Second Amended and Restated Agreement   Exhibit 10.50 to Form 10-K Report
                     of Limited Partnership of Sydney Engel Associates L.P.      dated March 30, 1997
                                                                                 (File No. 0-19217)

     10.52           Third Amendment to Second Amended and Restated Agreement    Exhibit 10.51 to Form 10-K Report
                     of Limited Partnership of Sydney Engel Associates L.P.      dated March 30, 1997
                                                                                 (File No. 0-19217)

     10.53           Fourth Amendment to Second Amended and Restated Agreement   Exhibit 10.52 to Form 10-K Report
                     of Limited Partnership of Sydney Engel Associates L.P.      dated March 30, 1997
                                                                                 (File No. 0-19217)

     10.54           Union Valley Associates Limited Partnership Amended and     Exhibit 10.14 to Form 10-Q Report
                     Restated Agreement and Certificate of Limited Partnership   dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.55           Walnut Grove Family, L.P. (A Mississippi Limited            Exhibit 10.4 to Form 10-Q Report
                     Partnership) Amended and Restated Limited Partnership       dated September 29, 1991
                     Agreement and Certificate of Limited Partnership            (File No. 0-19217)

     10.56           Waynesboro Apartments Limited Partnership Amended and       Exhibit 10.15 to Form 10-Q Report
                     Restated Agreement and Certificate of Limited Partnership   dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.57           West Calhoun City, L.P. (A Mississippi Limited              Exhibit 10.5 to Form 10-Q Report
                     Partnership) Amended and Restated Limited Partnership       dated September 29, 1991
                     Agreement and Certificate of Limited Partnership            (File No. 0-19217)

     10.58           Westminster Apartments Limited Partnership Second Amended   Exhibit 10.53 to Form 10-K Report
                     and Restated Agreement of Limited Partnership               dated March 30, 1992
                                                                                 (File No. 33-31390)
</TABLE>


                                       43
<PAGE>


<TABLE>
<CAPTION>

                                                                                 Incorporated by
                                  Exhibit                                         Reference to
                                  -------                                        ---------------

<S>  <C>              <C>                                                        <C>
     28.0            Pages 20  through  31, 44  through 71 and 78 through 80 of  Exhibit 28.0 to Form 10-K Report
                     Prospectus   filed  pursuant  to  Rule   424(b)(3)   under  dated March 30, 1990
                     Securities Act of 1933                                      (File No. 33-31390)

     28.1            Pages 14 through 19 of Prospectus filed pursuant to Rule    Exhibit 28.1 to Form 10-K Report
                     424(b)(3) under Securities Act of 1933                      dated March 30, 1991
                                                                                 (File No. 33-31390)

     28.2            Supplement No. 1 dated June 6, 1990 to Prospectus           Exhibit 28.2 to Form 10-K Report
                                                                                 dated March 30, 1991
                                                                                 (File No. 33-31390)

     28.3            Supplement No. 2 dated November 21, 1990 to Prospectus      Exhibit 28.3 to Form 10-K Report
                                                                                 dated March 30, 1991
                                                                                 (File No. 33-31390)
     28.4            Supplement No. 3 dated December 20, 1990 to Prospectus      Exhibit 28.4 to Form 10-K Report
                                                                                 dated March 30, 1991
                                                                                 (File No. 33-31390)

     28.5            Supplement No. 4 dated October 30, 1991 to Prospectus       Exhibit 28.5 to Form 10-K Report
                                                                                 dated March 30, 1992
                                                                                 (File No. 33-31390)

     28.6            Supplement No. 5 dated December 26, 1991 to Prospectus      Exhibit 28.6 to Form 10-K Report
                                                                                 dated March 30, 1992
                                                                                 (File No. 33-31390)

     28.7            Supplement No. 6 dated January 15, 1992 to Prospectus       Exhibit 28.7 to Form 10-K Report
                                                                                 dated March 30, 1990
                                                                                 (File No. 33-31390)

     99.1            Certification pursuant to 18 U.S.C. Section 1350, as
                     adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                     of 2002 - David Salzman - Chief Executive Officer of
                     Richman Housing Credits Inc., general partner of Richman
                     Tax Credit Properties III L.P., General Partner of the
                     Company.

     99.2            Certification pursuant to 18 U.S.C. Section 1350, as
                     adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                     of 2002 - Neal Ludeke - Chief Financial Officer of
                     Richman Housing  Credits Inc., general partner of Richman
                     Tax Credit Properties III L.P., General Partner of the
                     Company.
</TABLE>



                                       44
<PAGE>


   (b) Reports on Form 8-K

   No reports on Form 8-K were filed by Registrant during the last quarter of
   the period covered by this report.

   (c) Exhibits

   See (a)(3) above.

   (d) Financial Statement Schedules

   See (a)(2) above.



                                       45

<PAGE>


                                   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 Partner

                                   by:  Richman Housing Credits Inc.,
                                        general partner

Dated:  June 30, 2003              /s/ David Salzman
        -------------              -----------------------------
                                   by:   David Salzman
                                         Chief Executive Officer


Dated:  June 30, 2003              /s/ Neal Ludeke
        -------------              ------------------------------
                                   by:  Neal Ludeke
                                        Chief 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      June 30, 2003
--------------------------     the general partner              -------------
(David Salzman)                of the General Partner

/s/ Neal Ludeke                Chief Financial Officer of       June 30, 2003
--------------------------     the general partner              -------------
(Neal Ludeke)                  of the General Partner




                                       46

<PAGE>


                                 CERTIFICATIONS


I, David Salzman, certify that:

1. I have reviewed this annual report on Form 10-K of American Tax Credit
   Properties III L.P.;

2. Based on my knowledge, this annual report does not contain any untrue
   statement of a material fact or omit to state a material fact necessary to
   make the statements made, in light of the circumstances under which such
   statements were made, not misleading with respect to the period covered by
   this annual report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this annual report, fairly present in all material
   respects the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

   (a)  designed such disclosure controls and procedures to ensure that
        material information relating to the registrant, including its
        consolidated subsidiaries, is made known to us by others within those
        entities, particularly during the period in which this annual report
        is being prepared;

   (b)  evaluated the effectiveness of the registrant's disclosure controls and
        procedures as of a date within 90 days prior to the filing date of this
        annual report (the "Evaluation Date"); and

   (c)  presented in this annual report our conclusions about the effectiveness
        of the disclosure controls and procedures based on our evaluation as of
        the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
   most recent evaluation, to the Company's auditors and the audit committee of
   the registrant's board of directors (or persons performing the equivalent
   function):

   (a)  all significant deficiencies in the design or operation of internal
        controls which could adversely affect the registrant's ability to
        record, process, summarize and report financial data and have identified
        for the registrant's auditors any material weaknesses in internal
        controls; and

   (b)  any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        controls; and

6. The registrant's other certifying officer and I have indicated in this annual
   report whether or not there were significant changes in internal controls or
   in other factors that could significantly affect internal controls subsequent
   to the date of our most recent evaluation, including any corrective actions
   with regard to significant deficiencies and material weaknesses.


Date:   June 30, 2003                             /s/  David Salzman
                                                  ------------------------------
                                                  by: David Salzman
                                                  Chief Executive Officer
                                                  of Richman Housing
                                                  Credits Inc., general
                                                  partner of Richman Tax
                                                  Credit Properties III
                                                  L.P., General Partner
                                                  of the Registrant



                                       47

<PAGE>

I, Neal Ludeke, certify that:

1. I have reviewed this annual report on Form 10-K of American Tax Credit
   Properties III L.P.;

2. Based on my knowledge, this annual report does not contain any untrue
   statement of a material fact or omit to state a material fact necessary to
   make the statements made, in light of the circumstances under which such
   statements were made, not misleading with respect to the period covered by
   this annual report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this annual report, fairly present in all material
   respects the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I am responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

   (a)  designed such disclosure controls and procedures to ensure that
        material information relating to the registrant, including its
        consolidated subsidiaries, is made known to us by others within those
        entities, particularly during the period in which this annual report
        is being prepared;

   (b)  evaluated the effectiveness of the registrant's disclosure controls and
        procedures as of a date within 90 days prior to the filing date of this
        annual report (the "Evaluation Date"); and

   (c)  presented in this annual report our conclusions about the effectiveness
        of the disclosure controls and procedures based on our evaluation as of
        the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
   most recent evaluation, to the Company's auditors and the audit committee of
   the registrant's board of directors (or persons performing the equivalent
   function):

   (a)  all significant deficiencies in the design or operation of internal
        controls which could adversely affect the registrant's ability to
        record, process, summarize and report financial data and have identified
        for the registrant's auditors any material weaknesses in internal
        controls; and

   (b)  any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        controls; and

6. The registrant's other certifying officer and I have indicated in this annual
   report whether or not there were significant changes in internal controls or
   in other factors that could significantly affect internal controls subsequent
   to the date of our most recent evaluation, including any corrective actions
   with regard to significant deficiencies and material weaknesses.


Date:   June 30, 2003                             /s/  Neal Ludeke
                                                  ------------------------------
                                                  by: Neal Ludeke
                                                  Chief Financial Officer
                                                  of Richman Housing
                                                  Credits Inc., general
                                                  partner of Richman Tax
                                                  Credit Properties III
                                                  L.P., General Partner
                                                  of the Registrant



                                       48