UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)

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

                  For the quarterly period ended June 30, 2006
                For the quarterly period ended September 30, 2006
                For the quarterly period ended December 31, 2006

                                       OR

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

             For the transition period from ________ to ___________

                         Commission file number: 0-21895


                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3

           California                                           33-6163848
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                     17782 Sky Park Circle, Irvine, CA 92614
                   ( Address of principle executive offices )

                                 (714) 622-5565
                              ( Telephone Number )

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [ ]     No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer. See the definitions of "large
accelerated filer," "accelerated filer" in Rule 12b-2 of the Exchange Act.
(Check one):

Large accelerated filer___ Accelerated filer___  Non-accelerated filer___X__

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [ ]     No [X]

<PAGE>
<TABLE>
<S>     <C>

                       WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                            (A California Limited Partnership)

                                    INDEX TO FORM 10-Q

                       For the quarterly period ended June 30, 2006
                     For the quarterly period ended September 30, 2006
                     For the quarterly period ended December 31, 2006


PART I. FINANCIAL INFORMATION

     Item 1. Financial Statements

     Balance Sheets
           As of June 30, 2006, September 30, 2006, December 31, 2006 and March 31, 2006......3

     Statements of Operations
              For the Three Months Ended June 30, 2006 and 2005...............................4
              For the Three and Six Months Ended September 30, 2006 and 2005..................5
              For the Three and Nine Months Ended December 31, 2006 and 2005..................6

     Statements of Partners' Equity (Deficit)
              For the Three Months Ended June 30, 2006 .......................................7
              For the Six Months Ended September 30, 2006 ....................................7
              For the Nine Months Ended December 31, 2006 ....................................7

     Statements of Cash Flows
              For the Three Months Ended June 30, 2006 and 2005...............................8
              For the Six Months Ended September 30, 2006 and 2005............................9
              For the Nine Months Ended December 31, 2006 and 2005...........................10

     Notes to Financial Statements...........................................................11

     Item 2. Management's Discussion and Analysis of Financial
             Condition and Results of Operations.............................................23

     Item 3. Quantitative and Qualitative Disclosures About Market Risk......................26

     Item 4.  Controls and Procedures  ......................................................26

PART II. OTHER INFORMATION

     Item 1. Legal Proceedings...............................................................27

     Item 1A. Risk Factors...................................................................27

     Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds....................27

     Item 3.  Defaults Upon Senior Securities................................................27

     Item 4.  Submission of Matters to a Vote of Security Holders............................27

     Item 5.  Other Information..............................................................27

     Item 6. Exhibits........................................................................27

     Signatures..............................................................................28

                                            2
<PAGE>

                                      WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                                           (A California Limited Partnership)

                                                     BALANCE SHEETS
                                                       (UNAUDITED)

                                                                   JUNE 30,    SEPTEMBER 30,   DECEMBER 31,    MARCH 31,
                                                                     2006          2006           2006           2006
                                                                 -----------    -----------    -----------    -----------
ASSETS

Cash                                                             $     3,688    $    32,337    $    27,737    $    23,160

Investments in Local Limited Partnerships, net (Note 2)            2,074,308      2,025,884      1,993,009      2,735,652
                                                                 -----------    -----------    -----------    -----------

         Total Assets                                            $ 2,077,996    $ 2,058,221    $ 2,020,746    $ 2,758,812
                                                                 ===========    ===========    ===========    ===========

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
  Accrued expenses                                                     4,000          4,000          4,000          4,000
  Accrued fees and expenses due to
    General Partner and affiliates (Note 3)                        1,932,692      2,135,151      2,275,974      1,514,839
                                                                 -----------    -----------    -----------    -----------

         Total Liabilities                                         1,936,692      2,139,151      2,279,974      1,518,839
                                                                 -----------    -----------    -----------    -----------

Partners' equity (deficit):
  General Partner                                                   (174,079)      (176,301)      (178,084)     (163,092)
  Limited Partners (25,000 Partnership Units authorized;
    18,000 Partnership Units issued and outstanding)                 315,383         95,371        (81,144)     1,403,065
                                                                 -----------    -----------    -----------    -----------

         Total Partners' Equity (Deficit)                            141,304        (80,930)      (259,228)     1,239,973
                                                                 -----------    -----------    -----------    -----------
              Total Liabilities and Partners' Equity (Deficit)   $ 2,077,996    $ 2,058,221    $ 2,020,746    $ 2,758,812
                                                                 ===========    ===========    ===========    ===========

                                  See accompanying notes to financial statements
                                                           3
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                            STATEMENTS OF OPERATIONS
                FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND 2005
                                   (UNAUDITED)

                                                    2006                2005
                                                ------------        ------------
                                                THREE MONTHS        THREE MONTHS
                                                ------------        ------------
Reporting fees                                  $     1,500         $     1,500
                                                -----------         -----------

Operating expenses:
  Amortization (Note 2)                               4,050               6,066
  Asset management fees (Note 3)                     12,375              12,375
  Impairment loss (Note 2)                        1,197,931           1,058,869
  Legal and accounting fees                             675                 300
  Write off of advances to Local
     Limited Partnerships (Note 4)                  422,731              15,000
  Other                                               3,072               1,920
                                                -----------         -----------

    Total operating expenses                      1,640,834           1,094,530
                                                -----------         -----------

Loss from operations                             (1,639,334)         (1,093,030)

Equity in income (losses) of Local
 Limited Partnerships (Note 2)                      540,637            (158,455)

Interest income                                          28                  26
                                                -----------         -----------

Net loss                                        $(1,098,669)        $(1,251,459)
                                                ===========         ===========

Net loss allocated to:
  General Partner                               $   (10,987)        $   (12,515)
                                                ===========         ===========

  Limited Partners                              $(1,087,682)        $(1,238,944)
                                                ===========         ===========

Net loss per
  Partnership  Unit                             $       (60)        $       (69)
                                                ===========         ===========

Outstanding weighted
  Partnership  Units                                 18,000              18,000
                                                ===========         ===========

                 See accompanying notes to financial statements
                                       4
<PAGE>

                                 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                                      (A California Limited Partnership)

                                           STATEMENTS OF OPERATIONS
                                   FOR THE THREE MONTHS AND SIX MONTHS ENDED
                                          SEPTEMBER 30, 2006 AND 2005
                                                  (UNAUDITED)


                                                    2006                                2005
                                        -----------------------------       -----------------------------
                                           THREE              SIX             THREE               SIX
                                           MONTHS            MONTHS           MONTHS             MONTHS
                                        -----------       -----------       -----------       -----------

Reporting fees                          $    19,850       $    21,350       $     1,500       $     3,000
                                        -----------       -----------       -----------       -----------

Operating expenses:
  Amortization (Note 2)                       4,050             8,100             5,660            11,726
  Asset management fees (Note 3)             12,375            24,750            12,375            24,750
  Impairment loss (Note 2)                  569,462         1,767,393              --           1,058,869
  Legal and accounting fees                  18,625            19,300               198               498
  Write off of advances to Local
     Limited Partnerships (Note 4)          174,684           597,415             6,914            21,914
  Other                                       3,559             6,631             1,133             3,053
                                        -----------       -----------       -----------       -----------

    Total operating expenses                782,755         2,423,589            26,280         1,120,810
                                        -----------       -----------       -----------       -----------

Loss  from operations                      (762,905)       (2,402,239)          (24,780)       (1,117,810)

Equity in income (losses) of Local
 Limited Partnerships (Note 2)              540,637         1,081,274          (123,429)         (281,884)


Interest income                                  34                62                20                46
                                        -----------       -----------       -----------       -----------
Net loss                                $  (222,234)      $(1,320,903)      $  (148,189)      $(1,399,648)
                                        ===========       ===========       ===========       ===========

Net loss allocated to:
  General Partner                       $    (2,222)      $   (13,209)      $    (1,482)      $   (13,996)
                                        ===========       ===========       ===========       ===========

  Limited Partners                      $  (220,012)      $(1,307,694)      $  (146,707)      $(1,385,652)
                                        ===========       ===========       ===========       ===========

Net loss per
  Partnership Unit                      $       (12)      $       (73)      $        (8)      $       (77)
                                        ===========       ===========       ===========       ===========

Outstanding weighted
  Partnership Units                          18,000            18,000            18,000            18,000
                                        ===========       ===========       ===========       ===========

                                See accompanying notes to financial statements
                                                       5

<PAGE>

                                      WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                                           (A California Limited Partnership)

                                                STATEMENTS OF OPERATIONS
                          FOR THE THREE MONTHS AND NINE MONTHS ENDED DECEMBER 31, 2006 AND 2005
                                                       (UNAUDITED)


                                                      2006                                    2005
                                        ---------------------------------       ---------------------------------
                                            THREE                NINE               THREE               NINE
                                           MONTHS               MONTHS              MONTHS              MONTHS
                                        -------------       -------------       -------------       -------------

Reporting fees                          $          -        $      21,350       $       1,500       $       4,500
                                        -------------       -------------       -------------       -------------

Operating expenses:
  Amortization (Note 2)                         4,050              12,150               5,660              17,386
  Asset management fees (Note 3)               12,375              37,125              12,375              37,125
  Impairment loss (Note 2)                    569,462           2,336,855                   -           1,058,869
  Legal and accounting fees                       108              19,408               5,550               6,048
  Write off of advances to Local
     Limited Partnerships (Note 4)            132,137             729,552             261,522             283,436
  Other                                           839               7,470               3,158               6,211
                                        -------------       -------------       -------------       -------------

    Total operating expenses                  718,971           3,142,560             288,265           1,409,075
                                        -------------       -------------       -------------       -------------

Loss from operations                         (718,971)         (3,121,210)           (286,765)         (1,404,575)

Equity in income (losses) of Local
 Limited Partnerships (Note 2)                540,637           1,621,911            (231,578)           (513,462)


Interest income                                    36                  98                  31                  77
                                        -------------       -------------       -------------       -------------

Net loss                                $    (178,298)      $  (1,499,201)      $    (518,312)      $  (1,917,960)
                                        =============       =============       =============       =============

Net loss allocated to:
  General Partner                       $      (1,783)      $     (14,992)      $      (5,183)      $     (19,180)
                                        =============       =============       =============       =============

  Limited Partners                      $    (176,515)      $  (1,484,209)      $    (513,129)      $  (1,898,780)
                                        =============       =============       =============       =============

Net loss per
  Partnerships Units                    $         (10)      $         (82)      $         (29)      $        (105)
                                        =============       =============       =============       =============

Outstanding weighted
  Partnership Units                            18,000              18,000              18,000              18,000
                                        =============       =============       =============       =============

                                     See accompanying notes to financial statements
                                                            6

<PAGE>

                            WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                                 (A California Limited Partnership)

                              STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
            FOR THE THREE MONTHS ENDED JUNE 30, 2006, SIX MONTHS ENDED SEPTEMBER 30, 2006
                               AND NINE MONTHS ENDED DECEMBER 31, 2006
                                             (UNAUDITED)



                              FOR THE THREE MONTHS ENDED JUNE 30, 2006

                                                         GENERAL           LIMITED
                                                         PARTNER           PARTNERS           TOTAL
                                                       -----------       -----------       -----------

Partners' equity (deficit) at March 31, 2006           $  (163,092)      $ 1,403,065       $ 1,239,973

Net loss                                                   (10,987)       (1,087,682)       (1,098,669)
                                                       -----------       -----------       -----------

Partners' equity (deficit) at June 30, 2006            $  (174,079)      $   315,383       $   141,304
                                                       ===========       ===========       ===========



                             FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2006

                                                        GENERAL          LIMITED
                                                        PARTNER          PARTNERS            TOTAL
                                                      -----------       -----------       -----------

Partners' equity (deficit) at March 31, 2006          $  (163,092)      $ 1,403,065       $ 1,239,973

Net loss                                                  (13,209)       (1,307,694)       (1,320,903)
                                                      -----------       -----------       -----------

Partners' equity (deficit) at September 30, 2006      $  (176,301)      $    95,371       $   (80,930)
                                                      ===========       ===========       ===========



                             FOR THE NINE MONTHS ENDED DECEMBER 31, 2006

                                                       GENERAL           LIMITED
                                                       PARTNER           PARTNERS           TOTAL
                                                     -----------       -----------       -----------

Partners' equity (deficit) at March 31, 2006         $  (163,092)      $ 1,403,065       $ 1,239,973

Net loss                                                 (14,992)       (1,484,209)       (1,499,201)
                                                     -----------       -----------       -----------

Partners' equity (deficit) at December 31, 2006      $  (178,084)      $   (81,144)      $  (259,228)
                                                     ===========       ===========       ===========


                           See accompanying notes to financial statements
                                                  7

<PAGE>

                            WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                                 (A California Limited Partnership)

                                      STATEMENTS OF CASH FLOWS
                          FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND 2005
                                             (UNAUDITED)

                                                                         2006              2005
                                                                      -----------       -----------
Cash flows from operating activities:
  Net loss                                                            $(1,098,669)      $(1,251,459)
    Adjustments to reconcile net loss to net
      cash used in operating activities:
        Amortization                                                        4,050             6,066
        Impairment loss                                                 1,197,931         1,058,869
        Equity in (income) losses of Local Limited Partnerships          (540,637)          158,455
        Advances made to Local Limited  Partnerships                     (422,731)          (15,000)
        Write off of advances made to Local Limited Partnerships          422,731            15,000
        Change in accrued  fees and expenses due to
           General Partner and affiliates                                 417,853            14,595
                                                                      -----------       -----------
        Net cash used in operating activities                             (19,472)          (13,474)
                                                                      -----------       -----------

Net decrease in cash                                                      (19,472)          (13,474)

Cash, beginning of period                                                  23,160            28,976
                                                                      -----------       -----------

Cash, end of period                                                   $     3,688       $    15,502
                                                                      ===========       ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

   Taxes paid                                                         $        -         $        -
                                                                      ===========       ===========


                           See accompanying notes to financial statements
                                                  8



<PAGE>

                            WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                                 (A California Limited Partnership)

                                      STATEMENTS OF CASH FLOWS
                        FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
                                             (UNAUDITED)

                                                                         2006              2005
                                                                      -----------       -----------
Cash flows from operating activities:
  Net loss                                                            $(1,320,903)      $(1,399,648)
    Adjustments to reconcile net loss to net
      cash used in operating activities:
        Amortization                                                        8,100            11,726
        Impairment loss                                                 1,767,393         1,058,869
        Equity in losses (income) of Local Limited Partnerships        (1,081,274)          281,884
        Advances made to Local Limited Partnerships                      (597,415)          (21,914)
        Write off of advances made to Local Limited Partnerships          597,415            21,914
        Change in accrued  fees and expenses due to
            General Partner and affiliates                                620,312            28,301
                                                                      -----------       -----------
        Net cash used in operating activities                              (6,372)          (18,868)
                                                                      -----------       -----------

Cash flows provided by investing activities:

        Distributions received from Local Limited Partnerships             15,549            11,000
                                                                      -----------       -----------
Net cash provided by inventing activities                                  15,549            11,000
                                                                      -----------       -----------
                                                                            9,177            (7,868)
Net increase (decrease) in cash

Cash, beginning of period                                                  23,160            28,976
                                                                      -----------       -----------

Cash, end of period                                                   $    32,337       $    21,108
                                                                      ===========       ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

   Taxes paid                                                         $         -       $         -
                                                                      ===========       ===========

                           See accompanying notes to financial statements
                                                  9


<PAGE>


                            WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                                 (A California Limited Partnership)

                                      STATEMENTS OF CASH FLOWS
                        FOR THE NINE MONTHS ENDED DECEMBER 31, 2006 AND 2005
                                             (UNAUDITED)

                                                                          2006              2005
                                                                      -----------       -----------
Cash flows from operating activities:
  Net loss                                                            $(1,499,201)      $(1,917,960)
    Adjustments to reconcile net loss to net cash used in
        operating activities:
        Amortization                                                       12,150            17,386
        Equity in losses (income) of Local Limited Partnerships        (1,621,911)          513,462
        Impairment loss                                                 2,336,855         1,058,869
        Advances made to Local Limited Partnerships                      (729,552)         (283,436)
        Write off of advances made to Local Limited Partnerships          729,552           283,436
        Change in accrued  fees and expenses due to
           General Partner and affiliates                                 761,135           310,189
                                                                      -----------       -----------
        Net cash used in operating activities                             (10,972)          (18,054)
                                                                      -----------       -----------

Cash flows provided by investing activities:
      Distributions received from Local Limited Partnerships               15,549            11,000
                                                                      -----------       -----------
Net cash provided by investing activities                                  15,549            11,000
                                                                      -----------       -----------

Net increase (decrease) in cash                                             4,577            (7,054)

Cash, beginning of period                                                  23,160            28,976
                                                                      -----------       -----------

Cash, end of period                                                   $    27,737       $    21,922
                                                                      ===========       ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

   Taxes paid                                                         $      --         $      --
                                                                      ===========       ===========

                           See accompanying notes to financial statements
                                                 10
</TABLE>

<PAGE>


                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

General
-------

The accompanying condensed unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act
of 1934. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three months
ended June 30, 2006, six months ended September 30, 2006 and nine months ended
December 31, 2006 are not necessarily indicative of the results that may be
expected for the fiscal year ending March 31, 2007. For further information,
refer to the financial statements and footnotes thereto included in the
Partnership's annual report on Form 10-K for the fiscal year ended March 31,
2006.

Organization
------------

WNC Housing Tax Credit Fund V, L.P., Series 3, a California Limited Partnership
(the "Partnership"), was formed on March 28, 1995, under the laws of the state
of California. The Partnership was formed to invest primarily in other limited
partnerships or limited liability companies ("Local Limited Partnerships") which
own and operate multi-family housing complexes ("Housing Complexes") that are
eligible for Federal low-income housing tax credits ("Low Income Housing Tax
Credits"). The local general partners (the "Local General Partners") of each
Local Limited Partnership retain responsibility for maintaining, operating and
managing the Housing Complexes. Each Local Limited Partnership is governed by
its agreement of limited partnership (the "Local Limited Partnership
Agreement").

The general partner of the Partnership is WNC & Associates, Inc. ("Associates"
or the "General Partner"). The chairman and president of Associates own
substantially all of the outstanding stock of Associates. The business of the
Partnership is conducted primarily through the General Partner, as the
Partnership has no employees of its own.

The Partnership shall continue in full force and effect until December 31, 2050,
unless terminated prior to that date, pursuant to the partnership agreement or
law.

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

Pursuant to a registration statement filed with the Securities and Exchange
Commission on July 26, 1995, the Partnership commenced a public offering of
25,000 Units of Limited Partnership Interest ("Partnership Units") at a price of
$1,000 per Partnership Unit. As of the close of the public offering on January
21, 1996 a total of 18,000 Partnership Units representing $17,558,985 had been
sold. Holders of Partnership Units are referred to herein as "Limited Partners".
The General Partner has a 1% interest in operating profits and losses, taxable
income and losses, each available for distribution from the Partnership and tax
credits of the Partnership. The Limited Partners will be allocated the remaining
99% of these items in proportion to their respective investments.

Sempra Energy Financial, a California corporation, which is not an affiliate of
the Partnership or General Partner, has purchased 4,560 Units, which represents
25.3% of the Partnership Units outstanding for the Partnership. Sempra Energy
Financial invested $4,282,600. A discount of $277,400 was allowed due to a
volume discount. On July 1, 2006 Sempra Energy Financial transferred their 4,560
Partnership Units to Sempra Section 42, LLC. See Item 12(b) in the year ended
March 31, 2003 10-K/A. Western Financial Savings Bank, which is not an affiliate
of the Partnership or General Partner, has purchased 1,068 Partnership Units,
which represent 5.9% of the Units outstanding for the Partnership. Western
Financial Savings Bank invested $1,000,000. A discount of $68,000 was allowed
due to a volume discount. See Item 12(b) in the year ended March 31, 2006 10-K.

                                       11
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
--------------------------------------------------------------

The proceeds from the disposition of any of the Housing Complexes will be used
first to pay debts and other obligations per the respective Local Limited
Partnership Agreement. Any remaining proceeds will then be paid to the
Partnership. The sale of a Housing Complex may be subject to other restrictions
and obligations. Accordingly, there can be no assurance that a Local Limited
Partnership will be able to sell its Housing Complex. Even if it does so, there
can be no assurance that any significant amounts of cash will be distributed to
the Partnership. Should such distributions occur, the Limited Partners will be
entitled to receive distributions from the proceeds remaining after payment of
Partnership obligations and funding reserves, equal to their capital
contributions and their return on investment (as defined in the Partnership
Agreement). The General Partner would then be entitled to receive proceeds equal
to their capital contributions from the remainder. Any additional sale or
refinancing proceeds will be distributed 90% to the Limited Partners (in
proportion to their respective investments) and 10% to the General Partner.

Risks and Uncertainties
-----------------------

An investment in the Partnership and the Partnership's investments in Local
Limited Partnerships and their Housing Complexes are subject to risks. These
risks may impact the tax benefits of an investment in the Partnership, and the
amount of proceeds available for distribution to the Limited Partners, if any,
on liquidation of the Partnership's investments. Some of those risks include the
following:

The Low Income Housing Tax Credits rules are extremely complicated.
Noncompliance with these rules results in the loss of future Low Income Housing
Tax Credits and the fractional recapture of Low Income Housing Tax Credits
already taken. In most cases the annual amount of Low Income Housing Tax Credits
that an individual can use is limited to the tax liability due on the person's
last $25,000 of taxable income. The Local Limited Partnerships may be unable to
sell the Housing Complexes at a price which would result in the Partnership
realizing cash distributions or proceeds from the transaction. Accordingly, the
Partnership may be unable to distribute any cash to its limited partners. Low
Income Housing Tax Credits may be the only benefit from an investment in the
Partnership.

The Partnership has invested in a limited number of Local Limited Partnerships.
Such limited diversity means that the results of operation of each single
Housing Complex will have a greater impact on the Partnership. With limited
diversity, poor performance of one Housing Complex could impair the
Partnership's ability to satisfy its investment objectives. Each Housing Complex
is subject to mortgage indebtedness. If a Local Limited Partnership failed to
pay its mortgage, it could lose its Housing Complex in foreclosure. If
foreclosure were to occur during the first 15 years, the loss of any remaining
future Low Income Housing Tax Credits, a fractional recapture of prior Low
Income Housing Tax Credits, and a loss of the Partnership's investment in the
Housing Complex would occur. The Partnership is a limited partner or a
non-managing member of each Local Limited Partnership. Accordingly, the
Partnership will have very limited rights with respect to management of the
Local Limited Partnerships. The Partnership will rely totally on the Local
General Partners. Neither the Partnership's investments in Local Limited
Partnerships, nor the Local Limited Partnerships' investments in Housing
Complexes, are readily marketable. To the extent the Housing Complexes receive
government financing or operating subsidies, they may be subject to one or more
of the following risks: difficulties in obtaining tenants for the Housing
Complexes; difficulties in obtaining rent increases; limitations on cash
distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of interests in Local Limited Partnerships; limitations
on removal of Local General Partners; limitations on subsidy programs; and
possible changes in applicable regulations. Uninsured casualties could result in
loss of property and Low Income Housing Tax Credits and recapture of Low Income
Housing Tax Credits previously taken. The value of real estate is subject to
risks from fluctuating economic conditions, including employment rates,
inflation, tax, environmental, land use and zoning policies, supply and demand
of similar properties, and neighborhood conditions, among others.

                                       12
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
--------------------------------------------------------------

The ability of Limited Partners to claim tax losses from the Partnership is
limited. The IRS may audit the Partnership or a Local Limited Partnership and
challenge the tax treatment of tax items. The amount of Low Income Housing Tax
Credits and tax losses allocable to the limited partners could be reduced if the
IRS were successful in such a challenge. The alternative minimum tax could
reduce tax benefits from an investment in the Partnership. Changes in tax laws
could also impact the tax benefits from an investment in the Partnership and/or
the value of the Housing Complexes.

No trading market for the Partnership Units exists or is expected to develop.
Limited Partners may be unable to sell their Partnership Units except at a
discount and should consider their Partnership Units to be a long-term
investment. Individual Limited Partners will have no recourse if they disagree
with actions authorized by a vote of the majority of Limited Partners.

The Partnership currently has insufficient working capital to fund its
operations. Associates has agreed to continue providing advances sufficient
enough to fund the operations and working capital requirements of the
Partnership through September 30, 2010.

Anticipated future and existing cash resources of the Partnership are not
sufficient to pay existing liabilities of the Partnership. However,
substantially all of the existing liabilities of the Partnership are payable to
the General Partner and/or its affiliates. Though the amounts payable to the
General Partner and/or its affiliates are contractually currently payable, the
Partnership anticipates that the General Partner and/or its affiliates will not
require the payment of these contractual obligations until capital reserves are
in excess of the aggregate of then existing contractual obligations and then
anticipated future foreseeable obligations of the Partnership. The Partnership
would be adversely affected should the General Partner and/or its affiliates
demand current payment of the existing contractual obligations and or suspend
services for this or any other reason.

Exit Strategy
-------------

The IRS compliance period for Low-Income Housing Tax Credit properties is
generally 15 years from occupancy following construction or rehabilitation
completion. Associates was one of the first in the industry to offer syndicated
investments using the Low Income Housing Tax Credits. The initial programs are
completing their compliance periods. As of December 31, 2006, none of the Local
Limited Partnerships had completed the 15 year compliance period.

With that in mind, the Partnership is continuing to review the Housing
Complexes, with special emphasis on the more mature Housing Complexes such as
any that have satisfied the IRS compliance requirements. The review considers
many factors, including extended use requirements (such as those due to mortgage
restrictions or state compliance agreements), the condition of the Housing
Complexes, and the tax consequences to the Limited Partners from the sale of the
Housing Complexes.

Upon identifying those Housing Complexes with the highest potential for a
successful sale, refinancing or syndication, the Partnership expects to proceed
with efforts to liquidate them. The objective is to maximize the Limited
Partners' return wherever possible and, ultimately, to wind down the
Partnership. Local Limited Partnership interests may be disposed of any time by
the General Partner at its discretion. While liquidation of the Housing
Complexes continues to be evaluated, the dissolution of the Partnership was not
imminent as of December 31, 2006. As of December 31, 2006, no Housing Complexes
had been sold or selected for disposition. Subsequent to December 31, 2006, one
Housing Complex Cascade Pines, has been sold (see Note 5) and one additional
Housing Complex, Patten Towers, L.P II, has been identified for disposition.

Method of Accounting for Investments in Local Limited Partnerships
------------------------------------------------------------------

The Partnership accounts for its investments in Local Limited Partnerships using
the equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnerships' results of operations
and for any contributions made and distributions received. The Partnership
reviews the carrying amount of an individual investment in a Local Limited

                                       13
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
--------------------------------------------------------------

Partnership for possible impairment whenever events or changes in circumstances
indicate that the carrying amount of such investment may not be recoverable.
Recoverability of such investment is measured by the estimated value derived by
management, generally consisting of the sum of the remaining future Low Income
Housing Tax Credits estimated to be allocable to the Partnership and the
estimated residual value to the Partnership. If an investment is considered to
be impaired, the Partnership reduces the carrying value of its investment in any
such Local Limited Partnership. The accounting policies of the Local Limited
Partnerships, generally, are expected to be consistent with those of the
Partnership. Costs incurred by the Partnership in acquiring the investments are
capitalized as part of the investment and are being amortized over 30 years (see
Note 2).

"Equity in losses of Local Limited Partnerships" for each of the periods ended
June 30, 2006, September 30, 2006, December 31, 2006 and 2005, respectively have
been recorded by the Partnership. Management's estimate for the three, six and
nine-month periods is based on either actual unaudited results reported by the
Local Limited Partnerships or historical trends in the operations of the Local
Limited Partnerships. In subsequent annual financial statements, upon receiving
the actual annual results reported by the Local Limited Partnerships, management
reverses its prior estimate and records the actual results reported by the Local
Limited Partnerships. Equity in losses from the Local Limited Partnerships
allocated to the Partnership are not recognized to the extent that the
investment balance would be adjusted below zero. As soon as the investment
balance reaches zero, the related costs of acquiring the investment are impaired
(see Note 2). If the Local Limited Partnerships reported net income in future
years, the Partnership will resume applying the equity method only after its
share of such net income equals the share of net losses not recognized during
the period(s) the equity method was suspended (see Note 2).

The Partnership does not consolidate the accounts and activities of the Local
Limited Partnerships, which are considered Variable Interest Entities under
Financial Accounting Standards Board ("FASB") Interpretation No. 46-Revised,
"Consolidation of Variable Interest Entities", because the Partnership is not
considered the primary beneficiary. The Partnership's balance in investments in
Local Limited Partnerships, plus the risk of recapture of tax credits previously
recognized on such investments, represents the maximum exposure to loss in
connection with such investments. The Partnership's exposure to loss on the
Local Limited Partnerships is mitigated by the condition and financial
performance of the underlying Housing Complexes as well as the strength of the
Local General Partners and their guarantees against Low Income Housing Tax
Credit recapture.

Distributions received by the Partnership are accounted for as a reduction of
the investment balance. Distributions received after the investment has reached
zero are recognized as distribution income. As of June 30, 2006, September 30,
2006 and December 31, 2006, eleven investment accounts in Local Limited
Partnerships had reached a zero balance.

Use of Estimates
----------------

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

Cash and Cash Equivalents
-------------------------

The Partnership considers all highly liquid investments with original maturities
of three months or less when purchased to be cash equivalents. For all periods
presented, the Partnership had no cash equivalents.

Reporting Comprehensive Income
------------------------------

The STATEMENT OF FINANCIAL ACCOUNTING STANDARDS ("SFAS") NO. 130, REPORTING
COMPREHENSIVE INCOME established standards for the reporting and display of
comprehensive income (loss) and its components in a full set of general-purpose
financial statements.

                                       14
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
--------------------------------------------------------------

The Partnership had no items of other comprehensive income for all periods
presented, as defined by SFAS No. 130.

Income Taxes
------------

No provision for income taxes has been recorded in the financial statements as
any liability and or benefits for income taxes flows to the partners of the
Partnership and is their obligation and/or benefit. For income tax purposes the
Partnership reports on a calendar year basis.

In June 2006, the FASB issued Interpretation No. 48 "Accounting for Uncertainty
in Income Taxes" (FIN 48), an interpretation of FASB Statement No. 109. FIN 48
provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Partnership's tax returns to determine whether the tax positions
are more-likely-than-not of being sustained upon examination by the applicable
tax authority, based on the technical merits of the tax position, and then
recognizing the tax benefit that is more-likely-than-not to be realized. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax expense in the current reporting period. As required, the
Partnership adopted FIN 48 effective April 1, 2007 and concluded that the effect
is not material to its financial statements. Accordingly, no cumulative effect
adjustment related to the adoption of FIN 48 was recorded.

Net Loss Per Partnership Unit
-----------------------------

Net loss per Partnership Unit is calculated pursuant to Statement of Financial
Accounting Standards No. 128, Earnings Per Share. Net loss per Partnership Unit
includes no dilution and is computed by dividing loss allocated to Limited
Partners by the weighted average number of Partnership Units outstanding during
the period. Calculation of diluted net loss per Partnership Unit is not
required.

Revenue Recognition
-------------------

The Partnership is entitled to receive reporting fees from the Local Limited
Partnerships. The intent of the reporting fees is to offset (in part)
administrative costs incurred by the Partnership in corresponding with the Local
Limited Partnerships. Due to the uncertainty of the collection of these fees,
the Partnership recognizes reporting fees as collections are made.

Amortization
------------

Acquisition fees and costs are being amortized over 30 years using the
straight-line method. Amortization expense for the three months ended June 30,
2006 and 2005 was $4,050 and $6,066, respectively. For the six months ended
September 30, 2006 and 2005 amortization expense was $8,100 and $11,726,
respectively, and for the nine months ended December 31, 2006 and 2005 it was
$12,150 and $17,386, respectively.

Impairment
----------

A loss in value from Local Limited Partnership other than a temporary decline is
recorded as an impairment loss. Impairment is measured by comparing the
investment carrying amount to the sum of the total of the remaining Low Income
Housing Tax Credits and the estimated residual value to the Partnership.

                                       15
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
--------------------------------------------------

As of the periods presented, the Partnership had acquired limited partnership
interests in 17 Local Limited Partnerships, each of which owns one Housing
Complex consisting of an aggregate of 1,120 apartment units. The respective
Local General Partners of the Local Limited Partnerships manage the day to day
operations of the entities. Significant Local Limited Partnership business
decisions, as defined, require approval from the Partnership. The Partnership,
as a Limited Partner, is generally entitled to 99%, as specified in the Local
Limited Partnership agreements, of the operating profits and losses, taxable
income and losses, and tax credits of the Local Limited Partnerships, except
for one of the investments in which it is entitled to 49.49% of such amount.

A loss in value from a Local Limited Partnership other than a temporary decline
is recorded as an impairment loss. Impairment is measured by comparing the
investment carrying amount to the sum of the total amount of the remaining Low
Income Housing Tax Credits allocated to the Partnership and the estimated
residual value of the investment. Accordingly, the Partnership recorded an
impairment loss of $1,197,931 and $1,058,869, during the three months ended June
30, 2006 and 2005, respectively. During the six months ended September 30, 2006
and 2005, the impairment losses were $1,767,393 and $1,058,869, respectively.
During the nine months ended December 31, 2006 and 2005, the impairment losses
were $2,336,855 and $1,058,869, respectively.

The following is a summary of the equity method activity of the investments in
Local Limited Partnerships for the periods presented below:

<TABLE>
                                                                FOR THE THREE         FOR THE YEAR
                                                                 MONTHS ENDED            ENDED
                                                                JUNE 30, 2006        MARCH 31, 2006
                                                                 -----------          -----------
     <S>                                                         <C>                  <C>
     Investments per balance sheet, beginning of period          $ 2,735,652          $ 4,284,480
     Impairment loss                                              (1,197,931)          (1,058,869)
     Equity in income (losses) of Local Limited
     Partnerships                                                    540,637             (455,938)
     Distributions received from Local Limited Partnerships             --                (12,585)
     Amortization of capitalized acquisition fees and
     costs                                                            (4,050)             (21,436)
                                                                 -----------          -----------
     Investments per balance sheet, end of period                $ 2,074,308          $ 2,735,652
                                                                 ===========          ===========

                                                                 FOR THE SIX          FOR THE YEAR
                                                                 MONTHS ENDED             ENDED
                                                              SEPTEMBER 30, 2006     MARCH 31, 2006
                                                              ------------------     --------------
     Investments per balance sheet, beginning of period          $ 2,735,652          $ 4,284,480
     Impairment loss                                              (1,767,393)          (1,058,869)
     Equity in income (losses) of Local Limited
     Partnerships                                                  1,081,274             (455,938)
     Distributions received from Local Limited Partnerships          (15,549)             (12,585)
     Amortization of capitalized acquisition fees and
     costs                                                            (8,100)             (21,436)
                                                                 -----------          -----------
     Investments per balance sheet, end of period                $ 2,025,884          $ 2,735,652
                                                                 ===========          ===========

                                       16
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, CONTINUED
-------------------------------------------------------------

                                                                    FOR THE NINE      FOR THE YEAR
                                                                    MONTHS ENDED          ENDED
                                                                 DECEMBER 31, 2006   MARCH 31, 2006
                                                                 -----------------   --------------
Investments per balance sheet, beginning of period                 $ 2,735,652       $ 4,284,480
Impairment loss                                                     (2,336,855)       (1,058,869)
Equity in income (losses) of Local Limited
Partnerships                                                         1,621,911          (455,938)
Distributions received from Local Limited Partnerships                 (15,549)          (12,585)
Amortization of capitalized acquisition fees and
costs                                                                  (12,150)          (21,436)
                                                                   -----------       -----------
Investments per balance sheet, end of period                       $ 1,993,009       $ 2,735,652
                                                                   ===========       ===========


                                                                   FOR THE THREE     FOR THE YEAR
                                                                    MONTHS ENDED         ENDED
                                                                   JUNE 30, 2006     MARCH 31, 2006
                                                                   -------------     --------------
Investments in Local Limited Partnerships, net                      $1,731,084        $2,388,378
Acquisition fees and costs, net of accumulated amortization of
$978,071 and $974,021                                                  343,224           347,274
                                                                    ----------        ----------
Investments per balance sheet, end of period                        $2,074,308        $2,735,652
                                                                    ==========        ==========


                                                                 FOR THE SIX MONTHS   FOR THE YEAR
                                                                       ENDED              ENDED
                                                                 SEPTEMBER 30, 2006   MARCH 31, 2006
                                                                 ------------------   --------------
Investments in Local Limited Partnerships, net                      $1,686,709          $2,388,378
Acquisition fees and costs, net of accumulated amortization of
$982,121 and $974,021                                                  339,175             347,274
                                                                    ----------          ----------
Investments per balance sheet, end of period                        $2,025,884          $2,735,652
                                                                    ==========          ==========


                                                                 FOR THE NINE MONTHS     FOR THE YEAR
                                                                        ENDED               ENDED
                                                                  DECEMBER 31, 2006     MARCH 31, 2006
                                                                  -----------------     --------------
Investments in Local Limited Partnerships, net                      $1,657,884          $2,388,378
Acquisition fees and costs, net of accumulated amortization of
$986,171 and $974,021                                                  335,125             347,274
                                                                    ----------          ----------
Investments per balance sheet, end of period                        $1,993,009          $2,735,652
                                                                    ==========          ==========

                                       17
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, CONTINUED
-------------------------------------------------------------

Selected financial information for the three months ended June 30, 2006 and 2005
from the unaudited combined condensed financial statements of the Local Limited
Partnerships in which the Partnership has invested is as follows:

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

                                                            2006              2005
                                                         -----------       -----------
     Revenues                                            $ 2,062,000       $ 1,034,000
                                                         -----------       -----------
     Expenses:
       Interest expense                                      191,000           231,000
       Depreciation and amortization                         429,000           310,000
       Operating expenses                                  1,104,000           818,000
                                                         -----------       -----------
         Total expenses                                    1,742,000         1,359,000
                                                         -----------       -----------


     Net income (loss)                                   $   338,000       $  (325,000)
                                                         ===========       ===========
                                                         $   333,000       $  (323,000)
     Net income (loss) allocable to the Partnership
                                                         ===========       ===========
     Net income (loss) recorded by the Partnership       $   541,000       $  (158,000)
                                                         ===========       ===========

Selected financial information for the six months ended September 30, 2006 and
2005 from the unaudited combined condensed financial statements of the Local
Limited Partnerships in which the Partnership has invested is as follows:

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

                                                            2006             2005
                                                         -----------      -----------
     Revenues                                            $ 4,124,000      $ 2,068,000
                                                         -----------      -----------
     Expenses:
       Interest expense                                      384,000          462,000
       Depreciation and amortization                         857,000          620,000
       Operating expenses                                  2,207,000        1,637,000
                                                         -----------      -----------
     Total expenses                                        3,448,000        2,719,000
                                                         -----------      -----------


     Net income (loss)                                   $   676,000      $  (651,000)
                                                         ===========      ===========
     Net income (loss) allocable to the Partnership      $   666,000      $  (646,000)
                                                         ===========      ===========
     Net income (loss) recorded by the Partnership       $ 1,081,000      $  (282,000)
                                                         ===========      ===========

Selected financial information for the nine months ended December 31, 2006 and
2005 from the unaudited combined condensed financial statements of the Local
Limited Partnerships in which the Partnership has invested is as follows:

                                       18
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, CONTINUED
-------------------------------------------------------------

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

                                                            2006               2005
                                                         -----------       -----------
     Revenues                                            $ 6,186,000       $ 3,103,000
                                                         -----------       -----------
     Expenses:
       Interest expense                                      575,000           693,000
       Depreciation and amortization                       1,286,000           930,000
       Operating expenses                                  3,311,000         2,456,000
                                                         -----------       -----------
     Total expenses                                        5,172,000         4,079,000
                                                         -----------       -----------


     Net income (loss)                                   $ 1,014,000       $  (976,000)
                                                         ===========       ===========

     Net income (loss) allocable to the Partnership      $   998,000       $  (970,000)
                                                         ===========       ===========
     Net income (loss) recorded by the Partnership       $ 1,622,000       $  (513,000)
                                                         ===========       ===========
</TABLE>

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

Troubled Housing Complexes
--------------------------

The Partnership has a 99% limited partnership investment in Cascade Pines, L.P.
II ("Cascade"). Cascade was a defendant in a wrongful death lawsuit and related
injury lawsuit. Cascade carries general liability and extended liability
insurance. The wrongful death claim and related injury lawsuit was settled,
released and dismissed. Liability insurance covered the settlement. Due to
continued operating deficits, an associate of WNC, Shelter Resource Corporation
(SRC) became the managing general partner of Cascade in November 2003.
Operations improved until late 2004 when the Atlanta Housing Authority ceased
all rental assistance contracts with Cascade thereby causing irreversible
operating problems. In January 2005 Cascade filed for bankruptcy protection. In
January 2007 Cascade successfully sold the apartment community with the approval
of the bankruptcy court. The property was sold to an investor that was going to
rent the affordable apartment units to market rate tenants thereby creating an
event of recapture for the Partnership as the limited partner of Cascade.

As of June 30, 2006, September 30, 2006 and December 31, 2006 cumulative
advances to one Local Limited Partnership, Cascade Pines totaled $1,056,697,
$1,056,697 and $1,061,332, respectively. Total cumulative advances to Cascade
Pines totaled $1,155,728. The Partnership had received cash advances from the
General Partner or affiliates, which were in turn advanced to Cascade Pines to
aid the property with its operational issues. When Cascade Pines was sold during
the year ended March 31, 2007, there were no net cash proceeds and therefore the
advances that were previously made by the General Partner to the Partnership to
fund the advances to Cascade Pines were forgiven. The cancellation of that debt
is considered a capital contribution by the General Partner to the Partnership
and as such it is reflected in the statement of partners' equity (deficit) in
the Partnership's financial statements.

One Local Limited Partnership, Patten Towers L.P. II ("Patten Towers"), had a
less-than-satisfactory score from HUD on the 2006 and 2007 property inspection.
HUD currently has the authority to revoke their housing assistance program
("HAP") with Patten Towers and thereby suspend all rental assistance for the
tenants of Patten Towers. If HUD were to revoke the HAP contract then most of
the current tenants would be unable to make their rental payments thereby
denying Patten Towers with the necessary monthly revenue it needs to pay all


                                       19
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, CONTINUED
-------------------------------------------------------------

costs and expenses.  Patten Towers has requested and received  approval from HUD
to participate in a follow-up  inspection.  As of January 2009, HUD re-inspected
the property and Pattern  Towers  received an acceptable  score from HUD thereby
allowing  the  property  to continue to  participate  in the housing  assistance
program.  Pattern Towers is currently listed for sale with a national  brokerage
firm. Any sale transaction  contemplated will require that the property maintain
compliance with the Section 42 tax credit provisions, thereby avoiding recapture
of any previously claimed tax credits.

The Partnership has a 99% limited partnership investment in Heritage Apartments,
L.P. ("Heritage"). Heritage is a defendant in several wrongful death lawsuits
and related injury lawsuits. Heritage carries general liability and extended
liability insurance. Discovery for these lawsuits is ongoing, but the management
of Heritage and WNC are unable to determine the outcome of these lawsuits at
this time or their impact, if any, on the Partnership's financial statements.
Should Heritage be unsuccessful in its defense and the insurer denies coverage
or the insurance coverage proves to be inadequate, the Partnership may be
required to sell its investment or may otherwise lose its investment in
Heritage, which approximated $157,076, $144,940 and $132,804 at December 31,
2006, September 30, 2006 and June 30, 2006, respectively. Loss of the Heritage
investment could result in the cessation and recapture of tax credits and
certain prior tax deductions. As of the date of this report no losses have been
recognized and management does not expect losses to occur.

NOTE 3 - RELATED PARTY TRANSACTIONS
-----------------------------------

Under the terms of the Partnership Agreement, the Partnership has paid or is
obligated to the General Partner or its affiliates for the following fees:

     (a)  Acquisition fees of up to 7.5% of the gross proceeds from the sale of
          Partnership Units as compensation for services rendered in connection
          with the acquisition of Local Limited Partnerships. At the end of all
          periods presented, the Partnership incurred acquisition fees of
          $1,200,785. Accumulated amortization of these capitalized costs was
          $865,661, $861,611, $857,561 and $853,511 as of December 31, 2006,
          September 30, 2006, June 30, 2006 and March 31, 2006, respectively.

     (b)  Reimbursement of costs incurred by the General Partner or an affiliate
          of Associates in connection with the acquisition of Local Limited
          Partnerships. These reimbursements have not exceeded 1% of the gross
          proceeds. As of the end of all periods presented, the Partnership
          incurred acquisition costs of $120,510, which have been included in
          investments in Local Limited Partnerships. Accumulated amortization
          was $120,510 as of December 31, 2006, September 30, 2006, June 30,
          2006 and March 31, 2006.

     (c)  An annual asset management fee equal to the greater amount of (i)
          $2,000 for each Housing complex, or (ii) 0.275% of gross proceeds. In
          either case, the fee will be decreased or increased annually based on
          changes to the Consumer Price Index. However, in no event will the
          maximum amount exceed 0.2% of the invested assets of the Partnerships,
          as defined. "Invested Assets" means the sum of the Partnership's
          investment in Local Limited Partnership interests and the
          Partnership's Allocable share of mortgage loans on and other debts
          related to the Housing Complexes owned by such Local Limited
          Partnerships. Asset management fees of $12,375 were incurred during
          each of the three months ended June 30, 2006 and 2005. For each of the
          six months ended September 30, 2006 and 2005, the Partnership incurred
          asset management fees of $24,750. Management fees of $37,125 were
          incurred during each of the nine months ended December 31, 2006 and
          2005. The Partnership paid the General Partner or its affiliates $0 of
          those fees during the three months ended June 30, 2006 and 2005, the
          six months ended September 30, 2006 and 2005 and nine months ended
          December 31, 2006 and 2005.

     (d)  A subordinated disposition fee in an amount equal to 1% of the sales
          price of real estate sold. Payment of this fee is subordinated to the
          limited partners receiving a preferred return of 14% through December
          31, 2006 and

                                       20
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 3 - RELATED PARTY TRANSACTIONS, CONTINUED
----------------------------------------------

          6% thereafter (as defined in the Partnership Agreement) and is payable
          only if the General Partner or its affiliates render services in the
          sales effort. No such fees were incurred for any of the periods
          presented.

     (e)  The Partnership reimburses the General Partner or its affiliates for
          operating expenses incurred on behalf of the Partnership. Operating
          expense reimbursements were $0 during the three months ended June 30,
          2006 and 2005, the six months ended September 30, 2006 and 2005 and
          the nine months ended December 31, 2006 and 2005.

The accrued fees and expenses due to General Partner and affiliates consisted of
the following at:
<TABLE>
                                       JUNE 30,      SEPTEMBER 30,   DECEMBER 31,     MARCH 31,
                                         2006            2006             2006           2006
                                      ----------      ----------      ----------      ----------
<S>                                   <C>             <C>             <C>             <C>
Asset management fee payable          $  287,000      $  299,375      $  311,750      $  274,625
Expenses paid by the General
    Partners or an affiliate on
    behalf of the Partnership            132,933         155,116         156,064         129,186
Advances made to the Partnership
    from the General Partner or
    affiliates                         1,512,759       1,680,660       1,808,160       1,111,028
                                      ----------      ----------      ----------      ----------
Total                                 $1,932,692      $2,135,151      $2,275,974      $1,514,839
                                      ==========      ==========      ==========      ==========
</TABLE>

The General Partner and/or its affiliates do not anticipate that these accrued
fees will be paid in full until such time as capital reserves are in excess of
future foreseeable working capital requirements of the Partnership.

NOTE 4 -ADVANCES TO LOCAL LIMITED PARTNERSHIPS
----------------------------------------------

During the nine months ended December 31, 2006, the Partnership advanced
approximately $729,552 to four of the Local Limited Partnerships in which the
Partnership is a limited partner. These Local Limited Partnerships have
experienced operational issues. As of December 31, 2006, total advances made to
Local Limited Partnerships were $2,018,519, all of which was reserved. The
Partnership determined the recoverability of these advances to be improbable
and, accordingly, a reserve has been recorded. For the quarterly periods ended
June 30, September 30, and December 31, 2005, the Partnership advanced to Local
Limited Partnerships $422,731, $174,684, and $132,137, respectively.

NOTE 5- SUBSEQUENT EVENTS
-------------------------

In January 2007, one Housing Complex had been sold, Cascade Pines, L.P.II
("Cascade"). This Local Limited Partnership started to experience operational
issues during the year ended March 31, 2003 and continued to have operational
issues primarily due to cash flow issues. As discussed in Note 2 Cascade lost
all its rental assistance contracts in late 2004, thereby creating cash flow
issues that were not correctable. Therefore the Partnership deemed it to be to
the benefit of the Partnership to sell its interest in Cascade.

Subsequent to December 31, 2006, cumulative advances to one Local Limited
Partnership, Cascade Pines, L.P., II ("Cascade Pines") totaled $1,155,728. The
Partnership had received cash advances from the General Partner or affiliates,
which were in turn advanced to Cascade Pines to aid the property with its
operational issues. When Cascade Pines was sold during the year ended March 31,
2007, there were no net cash proceeds and therefore the advances that were
previously made by the General Partner to the Partnership to fund the advances
to Cascade Pines were forgiven. The cancellation of that debt is considered a

                                       21
<PAGE>

                  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
      FOR THE QUARTERLY PERIODS ENDED JUNE 30, 2006, SEPTEMBER 30, 2006 AND
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 5- SUBSEQUENT EVENTS, CONTINUED
------------------------------------

capital contribution by the General Partner to the Partnership and as such it
will be reflected in the statement of partners' equity (deficit) in the
Partnership's financial statements for the year ended March 31, 2007.

Subsequent to December 31, 2006, the General Partner forgave past advances made
to the Partnership totaling $1,432,427. The Partnership had received cash
advances from the General Partner or affiliates, which were in turn advanced to
certain Local Limited Partnerships to help aid the Local Limited Partnerships
with their operational issues. The advances were deemed to be uncollectible by
the General Partner therefore the debt was forgiven and was recorded as a
capital contribution made by the General Partner to the Partnership.

Subsequent to December 31, 2006, one Local Limited Partnership, Patten Towers
L.P. II ("Patten Towers"), had a less-than-satisfactory score from HUD on the
2006 and 2007 property inspection. HUD currently has the authority to revoke
their housing assistance program ("HAP") with Patten Towers and thereby suspend
all rental assistance for the tenants of Patten Towers. If HUD were to revoke
the HAP contract then most of the current tenants would be unable to make their
rental payments thereby denying Patten Towers with the necessary monthly revenue
it needs to pay all costs and expenses. Patten Towers requested and received
approval from HUD to participate in a follow-up inspection. As of January 2009,
HUD re-inspected the property and Patten Towers received an acceptable score
from HUD thereby allowing the property to continue to participate in the housing
assistance program. Patten Towers is currently listed for sale with a national
brokerage firm. Any sale transaction contemplated will require that the property
maintain compliance with the Section 42 tax credit provisions, thereby avoiding
recapture of any previously claimed tax credits. Patten Towers has been
identified for disposition.

                                       22
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FORWARD LOOKING STATEMENTS

With the exception of the discussion regarding historical information, this
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other discussions elsewhere in this Form 10-Q contain forward
looking statements. Such statements are based on current expectations subject to
uncertainties and other factors which may involve known and unknown risks that
could cause actual results of operations to differ materially from those
projected or implied. Further, certain forward-looking statements are based upon
assumptions about future events which may not prove to be accurate.

Risks and uncertainties inherent in forward looking statements include, but are
not limited to, our future cash flows and ability to obtain sufficient
financing, level of operating expenses, conditions in the Low Income Housing Tax
Credit property market and the economy in general, as well as legal proceedings.
Historical results are not necessarily indicative of the operating results for
any future period.

Subsequent written and oral forward looking statements attributable to the
Partnership or persons acting on its behalf are expressly qualified in their
entirety by cautionary statements in this Form 10-Q and in other reports filed
with the Securities and Exchange Commission. The following discussion should be
read in conjunction with the Financial Statements and the Notes thereto included
elsewhere in this filing.

The following discussion and analysis compares the results of operations for the
three months ended June 30, 2006 and 2005, the three and six months ended
September 30, 2006 and 2005, and the three and nine months ended December 31,
2006 and 2005, and should be read in conjunction with the combined condensed
financial statements and accompanying notes included within this report.

FINANCIAL CONDITION

The Partnership's assets at June 30, 2006 consisted of $4,000 in cash and
aggregate investments in the seventeen Local Limited Partnerships of $2,074,000.
Liabilities at June 30, 2006 consisted of $1,933,000 of accrued annual asset
management fees and reimbursement for expenses paid by the General Partner
and/or its affiliates and accrued expenses of $4,000.

The Partnership's assets at September 30, 2006 consisted of $32,000 in cash and
aggregate investments in the seventeen Local Limited Partnerships of $2,026,000.
Liabilities at September 30, 2006 consisted of $2,135,000 of accrued annual
asset management fees and reimbursement for expenses paid by the General Partner
and/or its affiliates and accrued expenses of $4,000.

The Partnership's assets at December 31, 2006 consisted of $28,000 in cash and
aggregate investments in the seventeen Local Limited Partnerships of $1,993,000.
Liabilities at December 31, 2006 consisted of $2,276,000 of accrued annual asset
management fees and reimbursement for expenses paid by the General Partner
and/or its affiliates and accrued expenses of $4,000.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2006 COMPARED TO THREE MONTHS ENDED JUNE 30, 2005
The Partnership's net loss for the three months ended June 30, 2006 was
$(1,099,000), reflecting a decrease of approximately $152,000 from the net loss
of $(1,251,000) for the three months ended June 30, 2005. Equity in income
(losses) of Local Limited Partnerships increased by $699,000 from the three
months ended June 30, 2005 due to forgiveness of debt recognized by a Local
Limited Partnership, Patten Towers II, L.P., during the three months ended June
30, 2006. The income contributed to the $(139,000) increase in impairment loss
for the three months ended June 30, 2006 form the three months ended June 30,
2005 due to the write up in the investment for the income and the subsequent
impairment. The impairment analysis indicated there were no tax credits or
residual value to support the investment balance. There was also an increase of
$(408,000) in write off of advances to Local Limited Partnerships for the three
months ended June 30, 2006 due to advances of $423,000 being made during the
three months ended June 30, 2006 and reserved for in the same quarter compared


                                       23
<PAGE>

to $15,000 advanced and reserved in the three months ended June 30, 2005. A
Local Limited Partnership was experiencing some operational issues and the
Partnership advanced the funds that were necessary. Other expenses also
increased by $(1,000) for three months ended June 30, 2006. The amortization
decreased by $2,000 due to the acquisition costs and fees associated with Local
Limited Partnerships whose investment balances reached below zero being written
off, thereby reducing amortization expense.

THREE MONTHS ENDED SEPTEMBER 30, 2006 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2005 The Partnership's net loss for the three months ended
September 30, 2006 was $(222,000), reflecting an increase of approximately
$(74,000) from the net loss of $(148,000) for the three months ended September
30, 2005. Equity in income (losses) of Local Limited Partnerships increased by
$664,000 from the three months ended September 30, 2005 due to forgiveness of
debt recognized by a Local Limited Partnership, Patten Towers II, L.P., during
the three months ended September 30, 2006. The income contributed to the
$(569,000) increase in impairment loss for the three months ended September 30,
2006 from the three months ended September 30, 2005 due to the write up in the
investment for the income and subsequent impairment. The impairment analysis
indicated there were no tax credits or residual value to support the investment
balance. There was also an increase of $(168,000) in write off of advances to
Local Limited Partnerships for the three months ended September 30, 2006 due to
advances of $175,000 being made during the three months ended September 30, 2006
and reserved for in the same quarter compared to $7,000 advanced and reserved in
the three months ended September 30, 2005. A Local Limited Partnership was
experiencing some operational issues and the Partnership advanced the funds that
were necessary. The legal and accounting fees increased by $(18,000) for the
three months ended September 30, 2006 compared to the three months ended
September 30, 2005 due to the timing of when the work was performed. The
amortization decreased by $2,000 due to the acquisition costs and fees
associated with those Local Limited Partnerships whose investment balances
reached below zero being written off, thereby reducing amortization expense. The
reporting fee income increased by $18,000 for the three months ended September
30, 2006 compared to the three months ended September 30, 2005 due to the fact
that Local Limited Partnerships pay the reporting fee to the Partnership when
the Local Limited Partnership's cash flow will allow for the payment.

SIX MONTHS ENDED SEPTEMBER 30, 2006 COMPARED TO THE SIX MONTHS ENDED SEPTEMBER
30, 2005 The Partnership's net loss for the six months ended September 30, 2006
was $(1,321,000), reflecting a decrease of approximately $79,000 from the net
loss of $(1,400,000) for the six months ended September 30, 2005. Equity in
income (losses) of Local Limited Partnerships increased by $1,363,000 from the
six months ended September 30, 2005 due to forgiveness of debt recognized by a
Local Limited Partnership, Patten Towers II, L.P., during the six months ended
September 30, 2006. This income contributed to the $(709,000) increase in
impairment loss for the six months ended September 30, 2006 from the six months
ended September 30, 2005 due to the write up in the investment for the income
and the subsequent impairment. The impairment analysis indicated there were no
tax credits or residual value to support the investment balance. There was also
an increase of $(575,000) in write off of advances to Local Limited Partnerships
for the six months ended September 30, 2006 due to advances of $597,000 being
made during the six months ended September 30, 2006 and reserved for in the same
quarter compared to $22,000 advanced and reserved for in the six months ended
September 30, 2005. A Local Limited Partnership was experiencing some
operational issues and the Partnership advanced the funds that were necessary.
The legal and accounting fees increased by $(19,000) for the six months ended
September 30, 2006 compared to the six months ended September 30, 2005 due to
the timing of when the work was performed. The amortization decreased by $4,000
due to the acquisition costs and fees associated with those Local Limited
Partnerships whose investment balances reached below zero being were written
off, thereby reducing amortization expense. The reporting fee income increased
by $18,000 for the six months ended September 30, 2006 compared to the six
months ended September 30, 2005 due to the fact that Local Limited

                                       24
<PAGE>

Partnerships pay the reporting fee to the Partnership when the Local Limited
Partnership's cash flow will allow for the payment.

THREE MONTHS ENDED DECEMBER 31, 2006 COMPARED TO THE THREE MONTHS ENDED DECEMBER
31, 2005 The Partnership's net loss for the three months ended December 31, 2006
was $(178,000), reflecting a decrease of approximately $340,000 from the net
loss of $(518,000) for the three months ended December 31, 2005. Equity in
income (losses) of Local Limited Partnerships increased by $773,000 from the
three months ended December 31, 2005 due to forgiveness of debt recognized by a
Local Limited Partnership, Patten Towers II, L.P., during the three months ended
December 31, 2006. This income contributed to the $(569,000) increase in
impairment loss for the three months ended December 31, 2006 from the three
months ended December 31, 2005 due to the write up in the investment for the
income and the subsequent impairment. The impairment analysis indicated there
were no tax credits or residual value to support the investment balance. There
was a decrease of $130,000 in write off of advances to Local Limited
Partnerships for the three months ended December 31, 2006 due to advances of
$132,000 being made during the three months ended December 31, 2006 and reserved
for in the same quarter compared to $262,000 advanced and reserved in the three
months ended June 31, 2005. A Local Limited Partnership was experiencing some
operational issues and the Partnership advanced the funds that were necessary.
The legal and accounting fees decreased by $5,000 for the three months ended
December 31, 2006 compared to the three months ended December 31, 2005 due to
the timing of when the work was performed. The amortization decreased by $2,000
due to the acquisition costs and fees associated with those Local Limited
Partnerships whose investment balances reached below zero being were written
off, thereby reducing amortization expense. The reporting fee income decreased
by $(2,000) for the three months ended December 31, 2006 compared to the three
months ended December 31, 2005 due to the fact that Local Limited Partnerships
pay the reporting fee to the Partnership when the Local Limited Partnership's
cash flow will allow for the payment.

NINE MONTHS ENDED DECEMBER 31, 2006 COMPARED TO NINE MONTHS ENDED DECEMBER 31,
2005 The Partnership's net loss for the nine months ended December 31, 2006 was
$(1,500,000), reflecting a decrease of approximately $418,000 from the net loss
of $(1,918,000) for the nine months ended December 31, 2005. Equity in income
(losses) of Local Limited Partnerships increased by $2,135,000 from the nine
months ended December 31, 2005 due to forgiveness of debt recognized by a Local
Limited Partnership, Patten Towers II, L.P., during the nine months ended
December 31, 2006. The income contributed to the $(1,278,000) increase in
impairment loss for the nine months ended December 31, 2006 from the nine months
ended December 31, 2005 due to the write up in the investment for the income and
subsequent impairment. The impairment analysis indicated there were no tax
credits or residual value to support the investment balance. There was also an
increase of $(447,000) in write off of advances to Local Limited Partnerships
for the nine months ended December 31, 2006 due to advances of $730,000 being
made during the nine months ended December 31, 2006 and reserved for in the same
period compared to $283,000 advanced and reserved in the nine months ended
December 31, 2005. A Local Limited Partnership was experiencing some operational
issues and the Partnership advanced the funds that were necessary. The legal and
accounting fees increased by $(13,000) for the nine months ended December 31,
2006 compared to the nine months ended December 31, 2005 due to the timing of
when the work was performed. The amortization decreased by $5,000 due to the
acquisition costs and fees associated with those Local Limited Partnerships
whose investment balances reached below zero being were written off, thereby
reducing amortization expense. The reporting fee income increased by $17,000 for
the nine months ended December 31, 2006 compared to the nine months ended
December 31, 2005 due to the fact that Local Limited Partnerships pay the
reporting fee to the Partnership when the Local Limited Partnership's cash flow
will allow for the payment.

CAPITAL RESOURCES AND LIQUIDITY

THREE MONTHS ENDED JUNE 30, 2006 COMPARED TO THREE MONTHS ENDED JUNE 30, 2005
Net cash used during the three months ended June 30, 2006 was $(19,000),
compared to net cash used during the three months ended June 30, 2005 of
$(13,000), reflecting a change of $(6,000). During the three months ended June
30, 2006, the Partnership received an advance of $405,000 from General Partner
while no advance was received during the three months ended June 30, 2005.
During the three months ended June 30, 2006, the Partnerships made advances to
Local Limited Partnerships of $(423,000) compared to $15,000 of advances being
made to Local Limited Partnerships during the three months ended June 30, 2005.

SIX MONTHS ENDED SEPTEMBER 30, 2006 COMPARED TO SIX MONTHS ENDED SEPTEMBER 30,
2005 Net cash provided during the six months ended September 30, 2006 was $9,000
compared to net cash used during the six months ended September 30, 2005 of
$(8,000), reflecting a change of $17,000. During the six months ended September
30, 2006, the Partnership received an advance of $596,000 from General Partner
while no advance was received from General Partner during the six months ended

                                       25
<PAGE>

September 30, 2005. During the six months ended September 30, 2006, the
Partnerships made advances to Local Limited Partnerships of $(597,000) compared
to $(22,000) of advances made to Local Limited Partnerships during the six
months ended September 30, 2005. The advances were paid to several Local Limited
Partnerships experiencing cash flow issues. Reporting fee income received also
increased by $17,000 for the six months ended September 30, 2006.

NINE MONTHS ENDED DECEMBER 31, 2006 COMPARED TO NINE MONTHS ENDED DECEMBER 31,
2005 Net cash provided during the six months ended December 31, 2006 was $5,000
compared to net cash used during the six months ended December 31, 2005 of
$(7,000), reflecting a change of $12,000. During the nine months ended December
31, 2006, the Partnership received an advance of $724,000 from General Partner
while a $261,000 advance was received from General Partner during the nine
months ended December 31, 2005. During the nine months ended December 31, 2006,
the Partnerships made advances to Local Limited Partnerships of $(730,000)
compared to a $(283,000) advance was made to Local Limited Partnerships during
the nine months ended December 31, 2005. The advances were due to several Local
Limited Partnerships experiencing cash flow issues. The Partnership collected
$16,000 in distributions for the nine months ended December 31, 2006 compared to
$11,000 for the nine months ended December 31, 2005 which contributed to the
increase in net cash provided by investing activities.

During the three, six and nine months ended June 30, 2006, September 30, 2006
and December 31, 2006, accrued payables, which consist primarily of related
party management fees and advances due to the General Partner, increased by
$418,000, $620,000 and $761,000. The General Partner does not anticipate that
these accrued fees and advances will be paid until such time as capital reserves
are in excess of foreseeable working capital requirements of the Partnership.

The Partnership expects its future cash flows, together with its net available
assets as of December 31, 2006, to be insufficient to meet all currently
foreseeable future cash requirements. Associates have agreed to continue
providing advances sufficient enough to fund the operations and working capital
requirements of the Partnership through September 30, 2010.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         NOT APPLICABLE

ITEM 4.  CONTROLS AND PROCEDURES

(a)      Disclosure controls and procedures
         ----------------------------------

         As of the end of the periods covered by this report, the Partnership's
         General Partner, under the supervision and with the participation of
         the Chief Executive Officer and Chief Financial Officer of Associates,
         carried out an evaluation of the effectiveness of the Partnership's
         "disclosure controls and procedures" as defined in Securities Exchange
         Act of 1934 Rule 13a-15 and 15d-15. Based on that evaluation, the Chief
         Executive Officer and Chief Financial Officer have concluded that, as
         of the end of the period covered by this report, the Partnership's
         disclosure controls and procedures were not effective to ensure that
         material information required to be disclosed in the Partnership's
         periodic report filings with SEC is recorded, processed, summarized and
         reported within the time period specified by the SEC's rules and forms,
         consistent with the definition of "disclosure controls and procedures"
         under the Securities Exchange Act of 1934.

         The Partnership must rely on the Local Limited Partnerships to provide
         the Partnership with certain information necessary to the timely filing
         of the Partnership's periodic reports. Factors in the accounting at the
         Local Limited Partnerships have caused delays in the provision of such
         information during past reporting periods, and resulted in the
         Partnership's inability to file its periodic reports in a timely
         manner.

         Once the Partnership has received the necessary information from the
         Local Limited Partnerships, the Chief Executive Officer and the Chief
         Financial Officer of Associates believe that the material information
         required to be disclosed in the Partnership's periodic report filings
         with SEC is effectively recorded, processed, summarized and

                                       26
<PAGE>

         reported, albeit not in a timely manner. Going forward, the Partnership
         will use the means reasonably within its power to impose procedures
         designed to obtain from the Local Limited Partnerships the information
         necessary to the timely filing of the Partnership's periodic reports.

(b)      Changes in internal controls
         ----------------------------

         There were no changes in the Partnership's internal control over
         financial reporting that occurred during the quarters ended June 30,
         2006, September 30, 2006 and December 31, 2006 that materially
         affected, or are reasonably likely to materially affect, the
         Partnership's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         NONE

ITEM 1A. RISK FACTORS

         No material changes in risk factors as previously disclosed in the
         Partnership's Form 10-K.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

         NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         NONE

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         NONE

ITEM 5.  OTHER INFORMATION

         NONE

ITEM 6.   EXHIBITS

31.1     Certification of the Principal Executive Officer pursuant to Rule
         13a-14 and 15d-14, as adopted pursuant to section 302 of the
         Sarbanes-Oxley Act of 2002. (filed herewith)

31.2     Certification of the Principal Financial Officer pursuant to Rule
         13a-14 and 15d-14, as adopted pursuant to section 302 of the
         Sarbanes-Oxley Act of 2002. (filed herewith)

32.1     Section 1350 Certification of the Chief Executive Officer. (filed
         herewith)

32.2     Section 1350 Certification of the Chief Financial Officer. (filed
         herewith)

                                       27
<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3


By:  WNC & ASSOCIATES, INC.                 General Partner




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

Date: October 5, 2009




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

Date: October 5, 2009



                                       28