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 September 30, 2010
 
 OR
 
 [ ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the transition period from ________ to ___________
 
 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. Employerincorporation or organization)
Identification No.)17782 Sky Park CircleIrvine, CA
92614-6404(Address of principal executive offices)
(Zip Code)
 
 (714) 662-5565
 (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 X No ___
 
 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 
 Yes___No X
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
  Large accelerated filer___ Accelerated filer___  Non-accelerated filer___X__Smaller reporting company___
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 Yes ___No _X__  WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 INDEX TO FORM 10 – Q
 
 For the Quarterly Period Ended September 30, 2010
 
 PART I. FINANCIAL INFORMATIONItem 1.
Financial StatementsCondensed Balance SheetsAs of September 30, 2010 and March 31, 2010
3Condensed Statements of OperationsFor the Six Months Ended  September  30, 2010 and 2009
4Condensed Statement of Partners' Equity (Deficit)For the Six Months Ended  September  30, 2010
5Condensed Statements of Cash FlowsFor the Six Months Ended  September  30, 2010 and 2009
6Notes to Condensed Financial Statements

7Item 2.
Management's Discussion and Analysis of FinancialCondition and Results of Operations
17Item 3.
Quantitative and Qualitative Disclosures about Market Risks

20Item 4T.
Controls and Procedures

20PART II. OTHER INFORMATIONItem 1.
Legal Proceedings

21Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds

21Item 3.
Defaults Upon Senior Securities

21Item 4.
(Removed and Reserved)

21Item 5.
Other Information

21Item 6.
Exhibits

21Signatures


22
 
  2
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 CONDENSED BALANCE SHEETS
 (Unaudited)
  September 30, 2010

March 31, 2010ASSETSCash
$
21,252
$
12,762Investments in Local Limited Partnerships, net (Notes 2 and 3)

-

-Other assets

4,857

-Total Assets
$
26,109
$
12,762LIABILITIES AND PARTNERS' EQUITY (DEFICIT)Liabilities:Accrued fees and expenses due toGeneral Partner and affiliates (Note 3)
$
735,480
$
707,256Total Liabilities

735,480

707,256Partners’ Equity (Deficit):General Partner

2,570,274

2,570,423Limited Partners (25,000 Partnership Units authorized;18,000 Partnership Units issued and outstanding)

(3,279,645)

(3,264,917)Total Partners’ Equity (Deficit)

(709,371)

(694,494)Total Liabilities and Partners’ Equity (Deficit)
$
26,109
$
12,762
  See accompanying notes to condensed financial statements
 3
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 CONDENSED STATEMENTS OF OPERATIONS
 
 For the Three and Six Months Ended September 30, 2010 and 2009
 (Unaudited)
 2010

2009Three Months

Six Months

Three Months

Six MonthsReporting fees
$
42,057
$
43,489
$
9,799
$
9,799Distribution income

-

-

-

34,031Total operating income

42,057

43,489

9,799

43,830Operating expenses:Asset management fees (Note 3)

12,375

24,750

12,375

24,750Legal and accounting fees

28,895

29,487

11,615

13,315Appraisal expenses

-

-

-

4,000Write off of advances to Local

Limited  Partnerships

-

-

17,103

34,383Other

1,949

4,130

103

5,028Total operating expenses

43,219

58,367

41,196

81,476Loss from operations

(1,162)

(14,878)

(31,397)

(37,646)Interest income

1

1

-

3Net loss
$
(1,161)
$
(14,877)
$
(31,397)
$
(37,643)Net loss allocated to:General Partner
$
(12)
$
(149)
$
(314)
$
(376)Limited Partners
$
(1,149)
$
(14,728)
$
(31,083)
$
(37,267)Net loss per Partnership Unit
$
(0)
$
(1)
$
(2)
$
(2)Outstanding weighted

Partnership Units

18,000

18,000

18,000

18,000
 
 
  See accompanying notes to condensed financial statements
 4
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 CONDENSED STATEMENT OF PARTNERS’ EQUITY (DEFICIT)
 
 For the Six Months Ended September 30, 2010
 (Unaudited)
  
 General

LimitedPartner

Partners

TotalPartners’ equity (deficit) at March 31, 2010
$
2,570,423
$
(3,264,917)
$
(694,494)Net loss

(149)

(14,728)

(14,877)Partners’ equity (deficit) at September 30, 2010
$
2,570,274
$
(3,279,645)
$
(709,371)
  See accompanying notes to condensed financial statements
 5
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 CONDENSED STATEMENTS OF CASH FLOWS
 
 For the Six Months Ended September 30, 2010 and 2009
 (Unaudited)
 
 2010

2009Cash flows from operating activities:Net loss
$
(14,877)
$
(37,643)Adjustments to reconcile net loss to netcash provided by operating activities:Increase in other assets

(4,857)

-Increase in accrued fees and expenses due toGeneral Partner and affiliates

28,224

38,594Net cash provided by operating activities

8,490

951Cash flows from investing activities:Advances to Local Limited Partnerships

-

(34,383)Write off of advances to Local Limited Partnerships

-

34,383Net cash used in investing activities

-

-Net increase in cash

8,490

951Cash, beginning of period

12,762

9,498Cash, end of period
$
21,252
$
10,449SUPPLEMENTAL DISCLOSURE OF

CASH FLOW INFORMATIONTaxes paid
$
-
$
-
 
 See accompanying notes to condensed financial statements
 6
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 
 For the Quarterly Period Ended September 30, 2010
 (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 six months ended September 30, 2010 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2011.  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, 2010.
 
 Organization
 
 WNC Housing Tax Credit Fund V, L.P., Series 3 (the "Partnership"), is a California Limited Partnership formed under the laws of the State of California on March 28, 1995.  The Partnership was formed to invest in other limited partnerships (“Local Limited Partnerships”) which own multi-family or senior housing complexes (“Housing Complexes”) that are eligible for Federal low income housing tax credits (“Low Income Housing Tax Credits”).  The local general partners (the “Local General Partners”) of each Local Limited Partnership retain responsibility for maintaining, operating and managing the Housing 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., a California corporation (the “General Partner” or “Associates”). The chairman and president of Associates own all of the outstanding stock of Associates.  The business of the Partnership is conducted primarily through Associates, as the Partnership has no employees of its own.
 
 The Partnership shall continue 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.
 
 The Partnership Agreement authorized the sale of up to 25,000 units of limited partnership interests (“Partnership Units”) at $1,000 per Partnership Unit. The offering of Partnership Units concluded in January 1996, at which time 18,000 Partnership Units representing subscriptions in the amount of $17,558,985, net of $441,015 of discounts for volume purchases, had been accepted.  The General Partner has a 1% interest in operating profits and losses, taxable income and losses, cash available for distribution from the Partnership and Low Income Housing Tax Credits of the Partnership. The investors (the “Limited Partners”) will be allocated the remaining 99% of these items in proportion to their respective investments.
 
  7
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended September 30, 2010
 (Unaudited)
  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 The proceeds from the disposition of any of the Local Limited Partnership’s 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) and the General Partners would then be entitled to receive proceeds equal to its 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 Housing Complexes, and neighborhood conditions, among others.
  8
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended September 30, 2010
 (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 Limited Partners could be reduced if the IRS were successful in such a challenge.  The alternative minimum tax could reduce tax benefits from an investment in the Partnership.  Changes in tax laws could also impact the tax benefits from an investment in the Partnership and/or the value of the Housing Complexes.
 
 All of the Low Income Housing Tax Credits anticipated to be realized from the Local Limited Partnerships have been realized. The Partnership does not anticipate being allocated any Low Income Housing Tax Credits from the Local Limited Partnerships in the future.  Until the Local Limited Partnerships have completed the Compliance Period, risks exist for potential recapture of prior Low Income Housing Tax Credits received.
 
 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 November 30, 2011.
 
 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 Compliance Period for a Housing Complex is generally 15 years following construction or rehabilitation completion. Associates was one of the first in the industry to offer syndicated investments in Low Income Housing Tax Credits.  The initial programs are completing their Compliance Periods.
 
 Upon the sale of a Local Limited Partnership interest or Housing Complex after the end of the Compliance Period, there would be no recapture of Low Income Housing Tax Credits. A sale prior to the end of the Compliance Period could result in recapture if certain conditions are not met.
 
 With that in mind, the General Partner is continuing its review of the Housing Complexes. The review considers many factors, including extended use requirements (such as those due to mortgage restrictions or state compliance agreements), the condition of the Housing Complexes, and the tax consequences to the Limited Partners from the sale of the Housing Complexes.
  9
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended September 30, 2010
 (Unaudited)
  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Upon identifying those Housing Complexes with the highest potential for a successful sale, refinancing or re-syndication, the Partnership expects to proceed with efforts to liquidate them. The objective is to maximize the Limited Partners’ return wherever possible and, ultimately, to wind down the Partnership as Low Income Housing Tax Credits are no longer available.Local Limited Partnership interests may be disposed of any time by the General Partner in its discretion. While liquidation of the Housing Complexes continues to be evaluated, the dissolution of the Partnership was not imminent as of September 30, 2010. As of September 30, 2010, none of the Housing Complexes had completed their Compliance Period.
 
 Upon management of the Partnership identifying a Local Limited Partnership for disposition, costs incurred by the Partnership in preparation for the disposition are deferred. Upon the sale of the Local Limited Partnership interest, the Partnership nets the costs that had been deferred against the proceeds from the sale in determining the gain or loss on sale of the Local Limited Partnership. Deferred disposition costs are included in other assets on the balance sheets.
 
 Prior to the quarter ended September 30, 2010, the Partnership sold the Housing Complex of three Local Limited Partnerships, Cascade Pines II, L.P. (“Cascade Pines”), Evergreen Apartments I Limited Partnership, (“Evergreen”) and Raymond S, King Apartments L.P. (“Raymond S. King”). The Partnership has identified one Local Limited Partnership, Patten Towers, L.P. II 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 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 account and were being amortized over 27.5 years (see Note 2).
 
 “Equity in losses of Local Limited Partnerships” for the periods ended September 30, 2010 and 2009 have been recorded by the Partnership. Management’s estimate for the six-month period 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 of Local Limited Partnerships allocated to the Partnership are not recognized to the extent that the investment balance would be adjusted below zero.  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).
  10
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended September 30, 2010
 (Unaudited)
  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 In accordance with the accounting guidance for the consolidation of variable interest entities, the Partnership determines when it should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements, and when it should disclose information about its relationship with a VIE. The analysis that must be performed to determine which entity should consolidate a VIE focuses on control and economic factors. A VIE is a legal structure used to conduct activities or hold assets, which must be consolidated by a company if it is the primary beneficiary because it has (1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the guidance requires continual reconsideration of the primary beneficiary of a VIE.
 
 Based on this guidance, the Local Limited Partnerships in which the Partnership invests meet the definition of a VIE. However, management does not consolidate the Partnership's interests in these VIEs, as it is not considered to be the primary beneficiary. The Partnership currently records the amount of its investment in these Local Limited Partnerships as an asset on its balance sheets, recognizes its share of partnership income or losses in the statements of operations, and discloses how it accounts for material types of these investments in its financial statements. The Partnership's balance in investment in Local Limited Partnerships, plus the risk of recapture of tax credits previously recognized on these investments, represents its maximum exposure to loss. The Partnership's exposure to loss on these 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 guarantee against 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 income.  As of September 30, 2010, all of the investment balances had reached zero.
 
 Use of Estimates
 
 The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could materially differ from those estimates.
 
 Cash and Cash Equivalents
 
 The Partnership considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.  As of September 30, 2010 and March 31, 2010, the Partnership had no cash equivalents.
 
 Reporting Comprehensive Income
 
 The Partnership had no items of other comprehensive income for all periods presented.
  11
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended September 30, 2010
 (Unaudited)
  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Income Taxes
 
 The Partnership has elected to be treated as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns. The Partnership’s federal tax status as a pass-through entity is based on its legal status as a partnership. Accordingly, the Partnership is not required to take any tax positions in order to qualify as a pass-through entity. The Partnership is required to file and does file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly, these financial statements do not reflect a provision for income taxes and the Partnership has no other tax positions which must be considered for disclosure.
 
 Net Loss Per Partnership Unit
 
 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.
  12
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended September 30, 2010
 (Unaudited)
  NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
 
 As of September 30, 2010 and March 31, 2010, the Partnership owns Local Limited Partnership interests in fifteen Local Limited Partnerships. All of these Local Limited Partnership’s own one Housing Complex consisting of an aggregate of 721 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 require approval from the Partnership. The Partnership, as a Limited Partner, is generally entitled to 99%, as specified in the Local Limited Partnership agreements, of the operating profits and losses, taxable income and losses, and Low Income Housing Tax Credits of the Local Limited Partnerships, except for one of the investments in which it is entitled to 49.49% of such amount.
 
 Selected financial information for the six months ended September 30, 2010 and 2009 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 OPERATIONS2010

2009Revenues
$
2,289,000
$
2,248,000ExpensesInterest expense

377,000

391,000Depreciation and amortization

645,000

652,000Operating expenses

1,622,000

2,012,000Total expenses

2,644,000

3,055,000Net loss

$
(355,000)
$
(807,000)Net loss allocable to the Partnership
$
(366,000)
$
(793,000)Net loss recorded by the Partnership
$
-
$
-
 
 Certain Local Limited Partnerships have incurred significant 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 may be required to sustain operations of such Local Limited Partnerships.  If additional capital contributions are not made when they are required, the Partnership's investments 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.
  13
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended September 30, 2010
 (Unaudited)
  NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued
 
 Troubled Housing Complexes
 
 After receiving a passing inspection score from HUD in January 2009, one Local Limited Partnership, Patten Towers L.P. II (“Patten Towers”), has not yet had its annual HUD inspection for 2010. The property is currently in good standing with HUD at this point, but is subject to an annual HUD inspection. HUD 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 an acceptable inspection score is not received. 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 the necessary monthly revenue it needs to pay all costs and expenses. The property was listed for sale with a national brokerage firm from July of 2008 thru September 2009. No acceptable offers were presented, therefore when the listing contract expired it was not renewed. The Partnership is currently reviewing its options and will decide at a later date if they want to relist the property. The Partnership did not anticipate proceeds from the sale. Any sale transaction contemplated would require that the property maintain compliance with the Section 42 tax credit provisions, thereby avoiding recapture of any previously claimed tax credits. As of September 30, 2010, the Partnership’s investment balance in Patten Towers was $0. The tax credit compliance period for this property ends December 31, 2011.
 
 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 was $0 at September 30, 2010. Loss of the Heritage investment could result in the cessation and recapture of tax credits and certain prior tax deductions. As of September 30, 2010, no losses have been recognized and management does not expect losses to occur.  The tax credit compliance period for this property ends December 31, 2011.
  14
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended September 30, 2010
 (Unaudited)
  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 the following fees:
 
 (a)
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 Local Limited 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 $24,750 were incurred during each of the six months ended September 30, 2010 and 2009. The Partnership paid the General Partner and or its affiliates $0 of those fees during each of the six months ended September 30, 2010 and 2009.
 
 (b)
The Partnership reimburses the General Partner or its affiliates for operating expenses incurred by the Partnership and paid for by the General Partner or its affiliates on behalf of the Partnership. Operating expense reimbursements were $35,000 and $0 during the six months ended September 30, 2010 and 2009, respectively.
 
 (c)
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 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 all periods presented.
  15
 WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
 (A California Limited Partnership)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
 
 For the Quarterly Period Ended September 30, 2010
 (Unaudited)
  NOTE 3 - RELATED PARTY TRANSACTIONS, continued
 
 The accrued fees and expenses due to the General Partner and affiliates consist of the following at:
 
 September 30, 2010

March 31, 2010Expenses paid by the General Partner or affiliates

on behalf of the Partnership
$
218,105
$
214,631Advance made to the Partnership from the General

Partner or affiliates

20,000

20,000Asset management fee payable

497,375

472,625Total
$
735,480
$
707,256
 
  16
  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, the Partnership 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 and analysis compares the results of operations for the three and six months ended September 30, 2010 and 2009, and should be read in conjunction with the condensed unaudited financial statements and accompanying notes included within this report.
 
 Financial Condition
 
 The Partnership’s assets at September 30, 2010 consisted of $21,000 in cash.  Liabilities at September 30, 2010 consisted of $735,000 of accrued fees and payables due to the General Partner and its affiliates.
 
 Results of Operations
 
 Three Months Ended September 30, 2010 Compared to the Three Months Ended September 30, 2009.  The Partnership’s net loss for the three months ended September 30, 2010 was $(1,000), reflecting a decrease of approximately $30,000 from the $(31,000) net loss experienced for the three months ended September 30, 2009.  The decrease in net loss is largely due to the $17,000 decrease in write off of advances to Local Limited Partnerships.  During the three months ended September 30, 2009 there were advances of $(17,000) made to one Local Limited Partnership which were reserved for in full as of September 30, 2009 compared to no advances made and reserved during the three months ended September 30, 2010.  The advances made to the troubled Local Limited Partnerships can vary each year depending on the operations of the individual Local Limited Partnerships.  Additionally there was a increase of $(17,000) in legal and accounting fees for the three months ended September 30, 2010 due to the timing of the accounting work being performed.  Reporting fees increased by approximately $32,000 for the three months ended September 30, 2010.  Reporting fees can fluctuate from year to year due to the fact that Local Limited Partnerships pay those fees to the Partnership when the Local Limited Partnership’s cash flow will allow for the payment.
  17
  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued
 
 Six Months Ended September 30, 2010 Compared to the Six Months Ended September 30, 2009.The Partnership’s net loss for the six months ended September 30, 2010 was $(15,000), reflecting a decrease of approximately $23,000 from the $(38,000) net loss experienced for the six months ended September 30, 2009.  The decrease was primarily due to a $34,000 decrease in write off of advances to Local Limited Partnerships.  During the six months ended September 30, 2010 there were no advances made to Local Limited Partnerships compared to $(34,000) in advances made and reserved for during the six months ended September 30, 2009.  The advances made to the troubled Local Limited Partnerships can vary each year depending on the operations of the individual Local Limited Partnerships.     Additionally there was an increase of $(16,000) in legal and accounting fees due to the timing of the accounting work being performed.  The distribution income and reporting fees increased (decreased) by approximately $(34,000) and $34,000, respectively for the six months ended September 30, 2010.  Distribution income and reporting fees can fluctuate from year to year due to the fact that Local Limited Partnerships pay those fees to the Partnership when the Local Limited Partnership’s cash flow will allow for the payment.  Appraisal expenses and other expenses decreased by $4,000 and $1,000, respectively, for the six months ended September 30, 2010.
 
 Liquidity and Capital Resources
 
 Six Months Ended September 30, 2010 Compared to Six Months Ended September 30, 2009.  The net increase in cash during the six months ended September 30, 2010 was $8,000 compared to a net increase in cash for the six months ended September 30, 2009 of $1,000.  The increase in cash is largely due to the $34,000 decrease in advances made to Local Limited Partnerships for the six months ended September 30, 2010 as compared to the six months ended September 30, 2009.  Additionally, the Partnership paid the General Partner or an affiliate $(39,000) in reimbursement of operating expenses during the six months ended September 30, 2010 while no payments were made during the six months ended September 30, 2009.  The Partnership paid the $39,000 since it earned a large amount of distribution income and reporting fees during the six months ended September 30, 2010.   The Partnership also accrued $5,000 in prepaid expenses during the six months ended September 30, 2010 compared to no prepaid expenses during the six months ended September 30, 2009.
 
 During the six months ended September 30, 2010, accrued payables, which consist primarily of related party management fees and advances due to the General Partner, increased by $28,000.  The General Partner does not anticipate that the balance of the 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 September 30, 2010, to be insufficient to meet all currently foreseeable future cash requirements. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through November 30, 2011.
 
 Recent Accounting Changes
 
 In September 2006, the Financial Accounting Standards Board (the "FASB") issued accounting guidance for Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. This guidance is effective for financial statements issued for fiscal years beginning after November 15, 2007 and shall be applied prospectively except for very limited transactions. In February 2008, the FASB delayed for one year implementation of the guidance as it pertains to certain non-financial assets and liabilities. The Partnership adopted U.S. generally accepted accounting principles ("GAAP") for Fair Value Measurements effective April 1, 2008, except as it applies to those non-financial assets and liabilities, for which the effective date was April 1, 2009. The Partnership has determined that adoption of this guidance has no material impact on the Partnership’s financial statements.
 
 18
  Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations, continued
 In November 2008, the FASB issued accounting guidance on Equity Method Investment Accounting Considerations that addresses how the initial carrying value of an equity method investment should be determined, how an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment should be performed, how an equity method investee’s issuance of shares should be accounted for, and how to account for a change in an investment from the equity method to the cost method. This guidance is effective in fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. The Partnership adopted the guidance for the interim quarterly period beginning April 1, 2009. The impact of adopting it does not have a material impact on the Partnership’s financial condition or results of operations.
 
 In April 2009, the FASB issued accounting guidance for Interim Disclosures about Fair Value of Financial Instruments. This requires disclosure about the method and significant assumptions used to establish the fair value of financial instruments for interim reporting periods as well as annual statements. It became effective for as of and for the interim period ended June 30, 2009 and has no impact on the Partnership’s financial condition or results of operations.
 
 In May 2009, the FASB issued guidance regarding subsequent events, which was subsequently updated in February 2010. This guidance established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This guidance was effective for financial statements issued for fiscal years and interim periods ending after June 15, 2009, and was therefore adopted by the Partnership for the quarter ended June 30, 2009. The adoption did not have a significant impact on the subsequent events that the Partnership reports, either through recognition or disclosure, in the financial statements. In February 2010, the FASB amended its guidance on subsequent events to remove the requirement to disclose the date through which an entity has evaluated subsequent events, alleviating conflicts with current SEC guidance. This amendment was effective immediately and therefore the Partnership did not include the disclosure in this Form 10-Q.
 
 In June 2009, the FASB issued the Accounting Standards Codification (Codification). Effective July 1, 2009, the Codification is the single source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with GAAP. The Codification is intended to reorganize, rather than change, existing GAAP. Accordingly, all references to currently existing GAAP have been removed and have been replaced with plain English explanations of the Partnership’s accounting policies. The adoption of the Codification did not have a material impact on the Partnership’s financial position or results of operations.
  19
  Item 3. Quantitative and Qualitative Disclosures About Market Risks
 
 NOT APPLICABLE
 
 Item 4T. Controls and Procedures
 
 (a)           Disclosure controls and procedures
 
 As of the end of the period covered by this report, the Partnership’s General Partner, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer of Associates, carried out an evaluation of the effectiveness of the Partnership’s “disclosure controls and procedures” as defined in Securities Exchange Act of 1934 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 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 quarter ended September 30, 2010 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.
  20
  
 Part II.    Other Information
 
 Item 1.    Legal Proceedings
 
 NONE
 
 Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
 
 NONE
 
 Item 3.    Defaults Upon Senior Securities
 
 NONE
 
 Item 4.    (Removed and Reserved)
 
 Item 5.    Other Information
 
 NONE
 
 Item 6.    Exhibits
 
 31.1
Certification of the Chief 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 Chief 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)
  21
 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:  November 10, 2010
 
 
 
 
 
 
 By:  /s/ Melanie R. Wenk
 
 Melanie R. Wenk
 Vice-President - Chief Financial Officer of WNC & Associates, Inc.
 
 Date: November 10, 2010
  22