UNITED STATES
                                SECURITIES AND EXCHANGE COMMISSION
                                       WASHINGTON, DC  20549

                                             FORM 10-Q

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

For The Quarterly Period Ended                  September 30, 1996 

Commission File Number              0-21762              

                       Gateway Tax Credit Fund III Ltd.      
      (Exact name of Registrant as specified in its charter)      
     
            Florida                              59-3090386 
(State or other jurisdiction of    ( I.R.S. Employer No.)
incorporation or organization)

     880 Carillon Parkway, St. Petersburg, Florida   33716  
       (Address of principal executive offices)  (Zip Code)


Registrant's Telephone Number, Including Area Code: (813)573-3800

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          

                                                           Number of Units
      Title of Each Class                                 September 30, 1996
Units of Limited Partnership 
Interest:  $1,000 per unit                                    33,799

                                DOCUMENTS INCORPORATED BY REFERENCE

                          Parts I and II, 1995 Form 10-K, filed with the
                        Securities and Exchange Commission on June 27, 1996
                        Parts III and IV - Form S-11 Registration Statement
                            and all amendments and supplements thereto
                                         File No. 33-44238
<PAGE>
PART I - Financial Information
   Item 1.  Financial Statements

                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                              SEPTEMBER 30,        MARCH 31,
                                                   1996              1996   
                                                 -----------     -----------
SERIES 7                                         (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                     $  224,270      $  259,782 
   Investments in Securities                         43,272          42,189 
   Receivable from Project Partnerships                   0               0 
                                                 -----------     ---------- 
     Total Current Assets                           267,542         301,971 

   Investments in Securities                        451,295         436,329 
   Investments in Project
          Partnerships, Net                       5,011,821       5,464,982 
                                                 -----------     ---------- 
       Total Assets                              $5,730,658      $6,203,282 
                                                 ===========     ========== 

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                   $   50,822      $   53,005 
   Payable to Project Partnerships                        0               0 
                                                  ----------     ---------- 
     Total Current Liabilities                       50,822          53,005 

Long-Term Liabilities:
   Payable to General Partners                      143,028         139,289 

Partners' Equity:
   Limited Partners (10,395 units for
   Series 7, 9,980 for Series 8,
   6,254 for Series 9, 5,043 for
   Series 10 and 5,127 for Series 11
   at September 30, 1996 and
   March 31, 1996)                                5,572,718       6,042,156 
General Partners                                    (35,910)        (31,168)
                                                 -----------     ---------- 
     Total Partners' Equity                       5,536,808       6,010,988 
                                                 -----------     ---------- 
       Total Liabilities and
          Partners Equity                        $5,730,658      $6,203,282 
                                                 ===========     ========== 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                               SEPTEMBER 30,       MARCH 31,
                                                    1996             1996   
                                                 -----------      ----------
SERIES 8                                         (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                     $  351,373      $  295,021 
   Investments in Securities                         38,354          37,407 
   Receivable from Project Partnerships                 453          76,027 
                                                 -----------     ---------- 
     Total Current Assets                           390,180         408,455 

   Investments in Securities                        427,075         413,585 
   Investments in Project
          Partnerships, Net                       5,216,011       5,658,160 
                                                 -----------     ---------- 
       Total Assets                              $6,033,266      $6,480,200 
                                                 ===========     ========== 

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                   $   41,328      $   43,617 
   Payable to Project Partnerships                        0               0 
                                                 -----------     ---------- 
     Total Current Liabilities                       41,328          43,617 

Long-Term Liabilities:
   Payable to General Partners                      173,753         155,249 

Partners' Equity:
   Limited Partners (10,395 units for
   Series 7, 9,980 for Series 8,
   6,254 for Series 9, 5,043 for
   Series 10 and 5,127 for Series 11
   at September 30, 1996 and
   March 31, 1996)                                5,847,628       6,306,146 
   General Partners                                 (29,443)        (24,812)
                                                  ----------     ---------- 
     Total Partners' Equity                       5,818,185       6,281,334 
                                                 -----------     ---------- 
       Total Liabilities and
          Partners Equity                        $6,033,266      $6,480,200 
                                                 ===========     ========== 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                               SEPTEMBER 30,       MARCH 31,
                                                    1996             1996   
                                                 -----------      ----------
SERIES 9                                         (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                     $  101,021      $  112,252 
   Investments in Securities                         26,585          25,978 
   Receivable from Project Partnerships               8,545           8,545 
                                                 -----------     ---------- 
     Total Current Assets                           136,151         146,775 

   Investments in Securities                        288,870         280,586 
   Investments in Project
          Partnerships, Net                       4,162,238       4,397,301 
                                                 -----------     ---------- 
       Total Assets                              $4,587,259      $4,824,662 
                                                 ===========     ========== 

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                   $   23,621      $   25,016 
   Payable to Project Partnerships                        0               0 
                                                 -----------     ---------- 
     Total Current Liabilities                       23,621          25,016 

Long-Term Liabilities:
   Payable to General Partners                       94,725          78,117 

Partners' Equity:
   Limited Partners (10,395 units for
   Series 7, 9,980 for Series 8,
   6,254 for Series 9, 5,043 for
   Series 10 and 5,127 for Series 11
   at September 30, 1996 and
   March 31, 1996)                                4,479,061       4,729,151 
   General Partners                                 (10,148)         (7,622)
                                                 -----------     ---------- 
     Total Partners' Equity                       4,468,913       4,721,529 
                                                 -----------     ---------- 
       Total Liabilities and
          Partners Equity                        $4,587,259      $4,824,662 
                                                 ===========     ========== 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                               SEPTEMBER 30,       MARCH 31,
                                                    1996             1996   
                                                 -----------      ----------
SERIES 10                                        (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                     $  164,535      $  162,576 
   Investments in Securities                         19,646          19,125 
   Receivable from Project Partnerships                   0          13,059 
                                                 -----------     ---------- 
     Total Current Assets                           184,181         194,760 

   Investments in Securities                        227,973         220,599 
   Investments in Project
          Partnerships, Net                       3,677,467       3,788,041 
                                                 -----------     ---------- 
       Total Assets                              $4,089,621      $4,203,400 
                                                 ===========     ========== 

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                   $   27,444      $   28,549 
   Payable to Project Partnerships                    7,712           7,713 
                                                 -----------     ---------- 
     Total Current Liabilities                       35,156          36,262 

Long-Term Liabilities:
   Payable to General Partners                       22,457          18,327 

Partners' Equity:
   Limited Partners (10,395 units for
   Series 7, 9,980 for Series 8,
   6,254 for Series 9, 5,043 for
   Series 10 and 5,127 for Series 11
   at September 30, 1996 and
   March 31, 1996)                                4,035,868       4,151,503 
   General Partners                                  (3,860)         (2,692)
                                                 -----------     ---------- 
     Total Partners' Equity                       4,032,008       4,148,811 
                                                 -----------     ---------- 
       Total Liabilities and
          Partners Equity                        $4,089,621      $4,203,400 
                                                 ===========     ========== 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                               SEPTEMBER 30,       MARCH 31,
                                                    1996             1996   
                                                 -----------      ----------
SERIES 11                                        (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                     $  104,332      $  365,027 
   Investments in Securities                         19,595          18,995 
   Receivable from Project Partnerships                   0           8,250 
                                                 -----------     ---------- 
     Total Current Assets                           123,927         392,272 

   Investments in Securities                        238,611         230,179 
   Investments in Project
          Partnerships, Net                       4,345,576       4,340,316 
                                                 -----------     ---------- 
       Total Assets                              $4,708,114      $4,962,767 
                                                 ===========     ========== 


LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                   $   23,143      $   32,148 
   Payable to Project Partnerships                        0         279,887 
                                                 -----------     ---------- 
     Total Current Liabilities                       23,143         312,035 

Long-Term Liabilities:
   Payable to General Partners                            0           3,707 

Partners' Equity:
   Limited Partners (10,395 units for
   Series 7, 9,980 for Series 8,
   6,254 for Series 9, 5,043 for
   Series 10 and 5,127 for Series 11
   at September 30, 1996 and
   March 31, 1996)                                4,684,113       4,646,546 
   General Partners                                     858             479 
                                                 -----------     ---------- 
     Total Partners' Equity                       4,684,971       4,647,025 
                                                 -----------      --------- 
       Total Liabilities and
          Partners Equity                        $4,708,114      $4,962,767 
                                                 ===========      ========= 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                               SEPTEMBER 30,       MARCH 31,
                                                    1996             1996   
                                                 -----------      ----------
TOTAL SERIES 7 - 11                              (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                    $   945,531     $ 1,194,658 
   Investments in Securities                        147,452         143,694 
   Receivable from Project Partnerships               8,998         105,881 
                                                ------------    ----------- 
     Total Current Assets                         1,101,981       1,444,233 

   Investments in Securities                      1,633,824       1,581,278 
   Investments in Project
          Partnerships, Net                      22,413,113      23,648,800 
                                                ------------    ----------- 
       Total Assets                             $25,148,918     $26,674,311 
                                                ============    =========== 

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                  $   170,348     $   182,335 
   Payable to Project Partnerships                    7,712         287,600 
                                                ------------    ----------- 
     Total Current Liabilities                      178,060         469,935 

Long-Term Liabilities:
   Payable to General Partners                      429,973         394,689 
Partners' Equity:
   Limited Partners (10,395 units for
   Series 7, 9,980 for Series 8,
   6,254 for Series 9, 5,043 for
   Series 10 and 5,127 for Series 11
   at September 30, 1996 and
   March 31, 1996)                               24,619,388      25,875,502 
   General Partners                                 (78,503)        (65,815)
                                                ------------    ----------- 
     Total Partners' Equity                      24,540,885      25,809,687 
                                                ------------    ----------- 
       Total Liabilities and
          Partners Equity                       $25,148,918     $26,674,311 
                                                ============    =========== 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                     1996            1995   
SERIES 7                                         -----------      ----------
Revenues:
   Interest Income                               $   11,059      $   15,281 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 19,500          19,500 
   General and Administrative-
     General Partner                                  2,970           1,699 
   General and Administrative-
     Other                                            8,614           9,226 
   Amortization                                       5,486           5,379 
                                                 -----------     -----------
     Total Expenses                                  36,570          35,804 

Loss Before Equity in Losses of
 Project Partnerships                               (25,511)        (20,523)
Equity in Income (Losses) of Project
 Partnerships                                      (197,028)       (238,034)
                                                 -----------     -----------
Net Loss                                         $ (222,539)     $ (258,557)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (220,314)     $ (255,971)
   General Partners                                  (2,225)         (2,586)
                                                 -----------     -----------
                                                 $ (222,539)     $ (258,557)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (21.19)     $   (24.62)
   
Number of Limited
 Partnership Units Outstanding                       10,395          10,395 


                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                      1996            1995  
SERIES 8                                         -----------      ----------
Revenues:
   Interest Income                               $    14,448     $   14,399 
                                                 -----------     ---------- 
Expenses:
   Asset Management Fee-
     General Partner                                 21,500          21,500 
   General and Administrative-
     General Partner                                  3,275           1,923 
   General and Administrative-
     Other                                            9,464          10,149 
   Amortization                                       3,745           3,888 
                                                 -----------     -----------
     Total Expenses                                  37,984          37,460 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (23,536)        (23,061)
Equity in Income (Losses) of Project
 Partnerships                                      (213,171)       (285,312)
                                                 -----------     -----------
Net Loss                                         $ (236,707)     $ (308,373)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (234,340)     $ (305,289)
   General Partners                                  (2,367)         (3,084)
                                                 -----------     -----------
                                                 $ (236,707)     $ (308,373)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (23.48)     $   (30.59)
   
Number of Limited
 Partnership Units Outstanding                        9,980           9,980 


                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                      1996            1995  
SERIES 9                                         -----------      ----------
Revenues:
   Interest Income                               $    5,780      $    8,133 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 12,000          12,000 
   General and Administrative-
     General Partner                                  1,828           1,073 
   General and Administrative-
     Other                                            5,391           5,718 
   Amortization                                       1,779           1,507 
                                                 -----------     -----------
     Total Expenses                                  20,998          20,298 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (15,218)        (12,165)
Equity in Income (Losses) of Project
 Partnerships                                      (110,687)        (40,489)
                                                 -----------     -----------
Net Loss                                         $ (125,905)     $  (52,654)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (124,646)     $  (52,127)
   General Partners                                  (1,259)           (527)
                                                 -----------     -----------
                                                 $ (125,905)     $  (52,654)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (19.93)     $    (8.33)
   
Number of Limited
 Partnership Units Outstanding                        6,254           6,254 


                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                      1996            1995  
SERIES 10                                        -----------      ----------
Revenues:
   Interest Income                               $    6,025      $    6,834 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                  7,500           7,500 
   General and Administrative-
     General Partner                                  1,142             672 
   General and Administrative-
     Other                                            3,602           2,801 
   Amortization                                       1,476           1,453 
                                                 -----------     -----------
     Total Expenses                                  13,720          12,426 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                                (7,695)         (5,592)
Equity in Income (Losses) of Project
 Partnerships                                       (55,725)        (40,713)
                                                 -----------     -----------
Net Loss                                         $  (63,420)     $  (46,305)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $  (62,786)     $  (45,842)
   General Partners                                    (634)           (463)
                                                 -----------     -----------
                                                 $  (63,420)     $  (46,305)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (12.45)     $    (9.09)
   
Number of Limited 
 Partnership Units Outstanding                        5,043           5,043 


                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                      1996            1995  
SERIES 11                                        -----------      ----------
Revenues:
   Interest Income                               $    7,392      $   20,284 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                  6,000           5,155 
   General and Administrative-
     General Partner                                    915             993 
   General and Administrative-
     Other                                            3,008           3,219 
   Amortization                                       1,663           1,198 
                                                 -----------     -----------
     Total Expenses                                  11,586          10,565 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                                (4,194)          9,719 
Equity in Income (Losses) of Project
 Partnerships                                        23,411         (43,847)
                                                 -----------     -----------
Net Loss                                         $   19,217      $  (34,128)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $   19,025        $(33,787)
   General Partners                                     192            (341)
                                                 -----------     -----------
                                                 $   19,217      $  (34,128)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $     3.71      $    (6.59)
   
Number of Limited 
 Partnership Units Outstanding                        5,127           5,127 


                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                     1996            1995   
TOTAL SERIES 7 - 11                              -----------      ----------
Revenues:
   Interest Income                               $   44,704      $   64,931 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 66,500          65,655 
   General and Administrative-
     General Partner                                 10,130           6,360 
   General and Administrative-
     Other                                           30,079          31,113 
   Amortization                                      14,149          13,425 
                                                 -----------     -----------
     Total Expenses                                 120,858         116,553 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (76,154)        (51,622)
Equity in Income (Losses) of Project
 Partnerships                                      (553,200)       (648,395)
                                                 -----------     -----------
Net Loss                                         $ (629,354)     $ (700,017)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (623,061)     $ (693,016)
   General Partners                                  (6,293)         (7,001)
                                                 -----------     -----------
                                                 $ (629,354)     $ (700,017)
                                                 ===========     ===========






                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                     1996            1995   
SERIES 7                                         -----------      ----------
Revenues:
   Interest Income                               $   21,940      $   32,887 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 39,000          38,500 
   General and Administrative-
     General Partner                                  5,920           5,560 
   General and Administrative-
     Other                                           12,316          13,435 
   Amortization                                      10,946          11,026 
                                                 -----------     -----------
     Total Expenses                                  68,182          68,521 

Loss Before Equity in Losses of
 Project Partnerships                               (46,242)        (35,634)
Equity in Income (Losses) of Project
 Partnerships                                      (427,938)       (516,035)
                                                 -----------     -----------
Net Loss                                         $ (474,180)     $ (551,669)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (469,438)     $ (546,152)
   General Partners                                  (4,742)         (5,517)
                                                 -----------     -----------
                                                 $ (474,180)     $ (551,669)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (45.16)     $   (52.54)
   
Number of Limited
 Partnership Units Outstanding                       10,395          10,395 


                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                      1996            1995  
SERIES 8                                         -----------      ----------
Revenues:
   Interest Income                               $    25,776     $   25,342 
                                                 -----------     ---------- 
Expenses:
   Asset Management Fee-
     General Partner                                 43,000          43,000 
   General and Administrative-
     General Partner                                  6,528           6,305 
   General and Administrative-
     Other                                           13,391          14,345 
   Amortization                                       6,060           6,337 
                                                 -----------     -----------
     Total Expenses                                  68,979          69,987 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (43,203)        (44,645)
Equity in Income (Losses) of Project
 Partnerships                                      (419,946)       (413,351)
                                                 -----------     -----------
Net Loss                                         $ (463,149)     $ (457,996)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (458,518)     $ (453,416)
   General Partners                                  (4,631)         (4,580)
                                                 -----------     -----------
                                                 $ (463,149)     $ (457,996)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (45.94)     $   (45.43)
   
Number of Limited
 Partnership Units Outstanding                        9,980           9,980 


                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                      1996            1995  
SERIES 9                                         -----------     -----------
Revenues:
   Interest Income                               $   11,449      $   17,475 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 24,000          24,000 
   General and Administrative-
     General Partner                                  3,644           3,519 
   General and Administrative-
     Other                                            7,519           8,228 
   Amortization                                       3,558           3,073 
                                                 -----------     -----------
     Total Expenses                                  38,721          38,820 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (27,272)        (21,345)
Equity in Income (Losses) of Project
 Partnerships                                      (225,344)        (55,941)
                                                 -----------     -----------
Net Loss                                         $ (252,616)     $  (77,286)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (250,090)     $  (76,513)
   General Partners                                  (2,526)           (773)
                                                 -----------     -----------
                                                 $ (252,616)     $  (77,286)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (39.99)     $   (12.23)
   
Number of Limited
 Partnership Units Outstanding                        6,254           6,254 


                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                      1996            1995  
SERIES 10                                        -----------     -----------
Revenues:
   Interest Income                               $   13,033      $   14,417 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 15,000          15,000 
   General and Administrative-
     General Partner                                  2,276           2,198 
   General and Administrative-
     Other                                            5,057           4,610 
   Amortization                                       2,936           2,848 
                                                 -----------     -----------
     Total Expenses                                  25,269          24,656 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (12,236)        (10,239)
Equity in Income (Losses) of Project
 Partnerships                                      (104,567)        (25,769)
                                                 -----------     -----------
Net Loss                                         $ (116,803)     $  (36,008)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (115,635)     $  (35,648)
   General Partners                                  (1,168)           (360)
                                                 -----------     -----------
                                                 $ (116,803)     $  (36,008)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (22.93)     $    (7.07)
   
Number of Limited 
 Partnership Units Outstanding                        5,043           5,043 


                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                      1996            1995  
SERIES 11                                        -----------     -----------
Revenues:
   Interest Income                               $   15,996      $   45,089 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 12,000           9,655 
   General and Administrative-
     General Partner                                  1,820           1,699 
   General and Administrative-
     Other                                            4,276           4,542 
   Amortization                                       3,525           1,852 
                                                 -----------     -----------
     Total Expenses                                  21,621          17,748 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                                (5,625)         27,341 
Equity in Income (Losses) of Project
 Partnerships                                        43,571         (29,488)
                                                 -----------     -----------
Net Loss                                         $   37,946      $   (2,147)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $   37,567      $   (2,126)
   General Partners                                     379             (21)
                                                 -----------     -----------
                                                 $   37,946      $   (2,147)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $     7.33      $    (0.41)
   
Number of Limited 
 Partnership Units Outstanding                        5,127           5,127 


                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:


                                                     1996            1995   
TOTAL SERIES 7 - 11                              -----------    ------------
Revenues:
   Interest Income                              $    88,194     $   135,210 
                                                ------------    ------------
Expenses:
   Asset Management Fee-
     General Partner                                133,000         130,155 
   General and Administrative-
     General Partner                                 20,188          19,281 
   General and Administrative-
     Other                                           42,559          45,160 
   Amortization                                      27,025          25,136 
                                                ------------    ------------
     Total Expenses                                 222,772         219,732 
                                                ------------    ------------
Loss Before Equity in Losses of
 Project Partnerships                              (134,578)        (84,522)
Equity in Income (Losses) of Project
 Partnerships                                    (1,134,224)     (1,040,584)
                                                ------------    ------------
Net Loss                                        $(1,268,802)    $(1,125,106)
                                                ============    ============
Allocation of Net Loss:
   Limited Partners                             $(1,256,114)    $(1,113,855)
   General Partners                                 (12,688)        (11,251)
                                                ------------    ------------
                                                $(1,268,802)    $(1,125,106)
                                                ============    ============






                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
SERIES 7                       -----------       -----------        -----------

Balance at
 March 31, 1995               $ 7,046,659         $ (21,021)       $ 7,025,638 

Distributions                           0                 0                  0 

Net Loss                         (546,152)           (5,517)          (551,669)
                               -----------        ----------        -----------
Balance at
 September 30, 1995           $ 6,500,507         $ (26,538)       $ 6,473,969 
                               ===========        ==========        ===========

Balance at
 March 31, 1996               $ 6,042,156         $ (31,168)       $ 6,010,988 

Net Loss                         (469,438)           (4,742)          (474,180)
                               -----------        ----------        -----------
Balance at
 September 30, 1996           $ 5,572,718         $ (35,910)       $ 5,536,808 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
SERIES 8                       -----------       -----------        -----------

Balance at
 March 31, 1995               $ 7,495,677         $ (12,797)       $ 7,482,880 

Distributions                           0                 0                  0 

Net Loss                         (453,416)           (4,580)          (457,996)
                               -----------        ----------        -----------
Balance at
 September 30, 1995           $ 7,042,261         $ (17,377)       $ 7,024,884 
                               ===========        ==========        ===========

Balance at
 March 31, 1996               $ 6,306,146         $ (24,812)       $ 6,281,334 

Net Loss                         (458,518)           (4,631)          (463,149)
                               -----------        ----------        -----------
Balance at
 September 30, 1996           $ 5,847,628         $ (29,443)       $ 5,818,185 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
SERIES 9                       -----------       -----------        -----------

Balance at
 March 31, 1995               $ 5,228,817          $ (2,575)       $ 5,226,242 

Distributions                           0                 0                  0 

Net Loss                          (76,513)             (773)           (77,286)
                               -----------        ----------        -----------
Balance at
 September 30, 1995           $ 5,152,304          $ (3,348)       $ 5,148,956 
                               ===========        ==========        ===========

Balance at
 March 31, 1996               $ 4,729,151          $ (7,622)       $ 4,721,529 

Net Loss                         (250,090)           (2,526)          (252,616)
                               -----------        ----------        -----------
Balance at
 September 30, 1996           $ 4,479,061          $(10,148)       $ 4,468,913 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
SERIES 10                      -----------       -----------        -----------

Balance at
 March 31, 1995               $ 4,338,647         $    (802)       $ 4,337,845 

Distributions                           0                 0                  0 

Net Loss                          (35,648)             (360)           (36,008)
                               -----------        ----------        -----------
Balance at
 September 30, 1995           $ 4,302,999         $  (1,162)       $ 4,301,837 
                               ===========        ==========        ===========

Balance at
 March 31, 1996               $ 4,151,503          $ (2,692)       $ 4,148,811 

Net Loss                         (115,635)           (1,168)          (116,803)
                               -----------        ----------        -----------
Balance at
 September 30, 1996           $ 4,035,868          $ (3,860)       $ 4,032,008 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
SERIES 11                      -----------       -----------        -----------

Balance at
 March 31, 1995               $ 4,800,616         $   1,564        $ 4,802,180 

Distributions                     (46,690)                0            (46,690)

Net Loss                           (2,126)              (21)            (2,147)
                               -----------        ----------        -----------
Balance at
 September 30, 1995           $ 4,751,800         $   1,543        $ 4,753,343 
                               ===========        ==========        ===========

Balance at
 March 31, 1996               $ 4,646,546         $     479        $ 4,647,025 

Net Income (Loss)                  37,567               379             37,946 
                               -----------        ----------        -----------
Balance at
 September 30, 1996           $ 4,684,113         $     858        $ 4,684,971 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED September 30, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
TOTAL SERIES 7-11              -----------       -----------        -----------

Balance at
 March 31, 1995               $28,910,416        $  (35,631)       $28,874,785 

Distributions                     (46,690)                0            (46,690)

Net Loss                       (1,113,855)          (11,251)        (1,125,106)
                               -----------        ----------        -----------
Balance at
 September 30, 1995           $27,749,871        $  (46,882)       $27,702,989 
                               ===========        ==========        ===========
Balance at
 March 31, 1996               $25,875,502        $  (65,815)       $25,809,687 

Net Loss                       (1,256,114)          (12,688)        (1,268,802)
                               -----------        ----------        -----------
Balance at
 September 30, 1996           $24,619,388        $  (78,503)       $24,540,885 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED September 30, 1996 AND 1995:
                                                           1996          1995  
SERIES 7                                              -----------     ---------
Cash Flows from Operating Activities:
   Net Income (Loss)                                  $ (474,180)   $ (551,669)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                         10,946        11,026 
     Accreted Interest Income
      on Investments in Securities                       (16,048)      (15,916)
     Equity in (Income)/Losses of
      Project Partnerships                               427,938       516,035 
     Interest Income from
      Changes in Operating Assets and Liabilities:
       Increase in Payable to
         General Partners                                  1,556         7,100 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Operating Activities                            (49,788)      (33,424)
                                                      -----------   -----------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                    (3,333)     (421,182)
   (Increase) Decrease in Receivable
     from Project Partnerships                                 0             0 
   Acquisition Fees and Expenses                            (272)       (2,142)
   Distributions Received from
     Project Partnerships                                 17,881        15,104 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0             0 
     Project Partnerships                                      0             0 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                             14,276      (408,220)
                                                      -----------   -----------
Cash Flows from Financing Activities:
   Distributions                                               0             0 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                                  0             0 
                                                      -----------   -----------
Increase (Decrease) in Cash and 
 Cash Equivalents                                        (35,512)     (441,644)
Cash and Cash Equivalents at
 Beginning of Year                                       259,782       656,686 
                                                      -----------   -----------
Cash and Cash Equivalents at
 End of Year                                          $  224,270    $  215,042 
                                                      ===========   ===========
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED September 30, 1996 AND 1995:
                                                           1996          1995  
SERIES 8                                              -----------     ---------
Cash Flows from Operating Activities:
   Net Income (Loss)                                  $ (463,149)   $ (457,996)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                          6,060         6,337 
     Accreted Interest Income
      on Investments in Securities                       (14,436)      (14,351)
     Equity in (Income)/Losses of
      Project Partnerships                               419,946       413,351 
     Interest Income from
      Changes in Operating Assets and Liabilities:
       Increase in Payable to
         General Partners                                 16,215        21,943 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Operating Activities                            (35,364)      (30,716)
                                                      -----------   -----------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                       453        20,897 
   (Increase) Decrease in Receivable
     from Project Partnerships                            75,574       141,139 
   Acquisition Fees and Expenses                               0             0 
   Distributions Received from
     Project Partnerships                                 15,689         9,891 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0             0 
     Project Partnerships                                      0      (241,400)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                             91,716       (69,473)
                                                      -----------   -----------
Cash Flows from Financing Activities:
   Distributions                                               0             0 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                                  0             0 
                                                      -----------   -----------
Increase (Decrease) in Cash and 
 Cash Equivalents                                         56,352      (100,189)
Cash and Cash Equivalents at
 Beginning of Year                                       295,021       343,908 
                                                      -----------   -----------
Cash and Cash Equivalents at
 End of Year                                          $  351,373    $  243,719 
                                                      ===========   ===========
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED September 30, 1996 AND 1995:
                                                           1996          1995  
SERIES 9                                              -----------   -----------
Cash Flows from Operating Activities:
   Net Income (Loss)                                  $ (252,616)   $  (77,286)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                          3,558         3,073 
     Accreted Interest Income
      on Investments in Securities                        (8,891)       (8,907)
     Equity in (Income)/Losses of
      Project Partnerships                               225,344        55,941 
     Interest Income from
      Changes in Operating Assets and Liabilities:
       Increase in Payable to
         General Partners                                 15,213        14,865 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Operating Activities                            (17,392)      (12,314)
                                                      -----------   -----------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                         0        21,012 
   (Increase) Decrease in Receivable
     from Project Partnerships                                 0        14,382 
   Acquisition Fees and Expenses                               0        (5,124)
   Distributions Received from
     Project Partnerships                                  6,161         3,653 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0         5,124 
     Project Partnerships                                      0      (257,128)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                              6,161      (218,081)
                                                      -----------   -----------
Cash Flows from Financing Activities:
   Distributions                                               0             0 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                                  0             0 
                                                      -----------   -----------
Increase (Decrease) in Cash and 
 Cash Equivalents                                        (11,231)     (230,395)
Cash and Cash Equivalents at
 Beginning of Year                                       112,252       386,116 
                                                      -----------   -----------
Cash and Cash Equivalents at
 End of Year                                          $  101,021    $  155,721 
                                                      ===========   ===========
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED September 30, 1996 AND 1995:
                                                           1996          1995  
SERIES 10                                             -----------     ---------
Cash Flows from Operating Activities:
   Net Income (Loss)                                  $ (116,803)   $  (36,008)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                          2,936         2,848 
     Accreted Interest Income
      on Investments in Securities                        (7,896)       (7,828)
     Equity in (Income)/Losses of
      Project Partnerships                               104,567        25,769 
     Interest Income from
      Changes in Operating Assets and Liabilities: 
       Increase in Payable to
         General Partners                                  3,026        (5,266)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Operating Activities                            (14,170)      (20,485)
                                                      -----------   -----------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                         1        (8,198)
   (Increase) Decrease in Receivable
     from Project Partnerships                            13,059       (18,598)
   Acquisition Fees and Expenses                               0           (96)
   Distributions Received from
     Project Partnerships                                  3,070         1,073 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0             0 
     Project Partnerships                                     (1)      (61,812)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                             16,129       (87,631)
                                                      -----------   -----------
Cash Flows from Financing Activities:
   Distributions                                               0             0 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                                  0             0 
                                                      -----------   -----------
Increase (Decrease) in Cash and 
 Cash Equivalents                                          1,959      (108,116)
Cash and Cash Equivalents at
 Beginning of Year                                       162,576       318,131 
                                                      -----------   -----------
Cash and Cash Equivalents at
 End of Year                                          $  164,535    $  210,015 
                                                      ===========   ===========
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED September 30, 1996 AND 1995:
                                                           1996          1995  
SERIES 11                                             -----------     ---------
Cash Flows from Operating Activities:
   Net Income (Loss)                                  $   37,946    $   (2,147)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                          3,525         1,852 
     Accreted Interest Income
      on Investments in Securities                        (9,033)       (8,911)
     Equity in (Income)/Losses of
      Project Partnerships                               (43,571)       29,488 
     Interest Income from
      Changes in Operating Assets and Liabilities:
       Increase in Payable to
         General Partners                                (12,711)      (49,988)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Operating Activities                            (23,844)      (29,706)
                                                      -----------   -----------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                    33,464      (614,224)
   (Increase) Decrease in Receivable
     from Project Partnerships                             8,250             0 
   Acquisition Fees and Expenses                            (178)     (105,529)
   Distributions Received from
     Project Partnerships                                  1,500             0 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0             0 
     Project Partnerships                               (279,887)      (19,486)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                           (236,851)     (739,239)
                                                      -----------   -----------
Cash Flows from Financing Activities:
   Distributions                                               0       (46,690)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                                  0       (46,690)
                                                      -----------   -----------
Increase (Decrease) in Cash and 
 Cash Equivalents                                       (260,695)     (815,635)
Cash and Cash Equivalents at
 Beginning of Year                                       365,027     1,598,884 
                                                      -----------   -----------
Cash and Cash Equivalents at
 End of Year                                          $  104,332    $  783,249 
                                                      ===========   ===========
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)

                       FOR THE SIX MONTHS ENDED September 30, 1996 AND 1995:
                                                           1996          1995  
TOTAL SERIES 7 - 11                                   -----------     ---------
Cash Flows from Operating Activities:
   Net Income (Loss)                                 $(1,268,802)  $(1,125,106)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                         27,025        25,136 
     Accreted Interest Income
      on Investments in Securities                       (56,304)      (55,913)
     Equity in (Income)/Losses of
      Project Partnerships                             1,134,224     1,040,584 
     Interest Income from
      Changes in Operating Assets and Liabilities:
       Increase in Payable to
         General Partners                                 23,299       (11,346)
                                                     ------------  ------------
         Net Cash Provided by (Used in)
         Operating Activities                           (140,558)     (126,645)
                                                     ------------  ------------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                    30,585    (1,001,695)
   (Increase) Decrease in Receivable
     from Project Partnerships                            96,883       136,923 
   Acquisition Fees and Expenses                            (450)     (112,891)
   Distributions Received from
     Project Partnerships                                 44,301        29,721 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0         5,124 
     Project Partnerships                               (279,888)     (579,826)
                                                     ------------  ------------
         Net Cash Provided by (Used in)
         Investing Activities                           (108,569)   (1,522,644)
                                                     ------------  ------------
Cash Flows from Financing Activities:
   Distributions                                               0       (46,690)
                                                     ------------  ------------
         Net Cash Provided by (Used in)
         Investing Activities                                  0       (46,690)
                                                     ------------  ------------
Increase (Decrease) in Cash and 
 Cash Equivalents                                       (249,127)   (1,695,979)
Cash and Cash Equivalents at
 Beginning of Year                                     1,194,658     3,303,725 
                                                     ------------  ------------
Cash and Cash Equivalents at
 End of Year                                         $   945,531   $ 1,607,746 
                                                     ============  ============
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)              

                                   NOTES TO FINANCIAL STATEMENTS
                                            (Unaudited)
                                        September 30, 1996

NOTE 1 - ORGANIZATION:

   Gateway Tax Credit Fund III Ltd. ("Gateway"), a Florida Limited
Partnership, was formed October 17, 1991 under the laws of Florida. 
Gateway offered its limited partnership interests in Series.  The
first Series for Gateway is Series 7.  Operations commenced on July
16, 1992 for Series 7, January 4, 1993 for Series 8, September 30,
1993 for Series 9, January 21, 1994 for Series 10 and April 29,
1994 for Series 11.  Each Series invests, as a limited partner, in
other limited partnerships ("Project Partnerships"), each of which
owns and operates apartment complexes eligible for Low-Income
Housing Tax Credits ("Tax Credits"), provided for in Section 42 of
the Internal Revenue Code of 1986.  Gateway will terminate on
December 31, 2040 or sooner, in accordance with the terms of the
Limited Partnership Agreement.  Gateway received capital
contributions of $1,000 from the General Partners and $36,799,000
from the investor Limited Partners.

   Raymond James Partners, Inc. and RJ Credit Partners, Inc.,
wholly-owned subsidiaries of Raymond James Financial, Inc., are the
General Partner and Managing General Partner, respectively.  The
Managing General Partner manages and controls the business of
Gateway. 

   Gateway received capital contributions of $10,395,000,
$9,980,000, $6,254,000, $5,043,000 and $5,127,000 from the investor
Limited Partners in Series 7, 8, 9, 10 and 11, respectively.  Each
Series is treated as though it were a separate partnership,
investing in a separate and distinct pool of Project Partnerships. 
Income or loss and all tax items from the Project Partnerships
acquired by each Series are  specifically allocated among the
limited partners of such Series.

   Operating profits and losses, cash distributions from operations
and Tax Credits from each Series are allocated 99% to the Limited
Partners in that Series and 1% to the General Partners.  Profit or
loss and cash distributions from sales of property by each Series
are allocated as formulated in the Limited Partnership Agreement.


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

   Gateway utilizes an accrual basis of accounting whereby revenues
are recognized as earned and expenses are recognized as obligations
are incurred.

   Gateway accounts for its investments as the limited partner in
Project Partnerships ("Investments in Project Partnerships") using
the equity method of accounting and reports the equity in losses of
the Project Partnerships on a 3-month lag in the Statement of
Operations.  Under the equity method, the Investments in Project
Partnerships initially include:

   1)  Gateway's capital contribution,
   2)  Acquisition fees paid to the General Partner for services
   rendered in selecting properties for acquisition, and
   3)  Acquisition expenses including legal fees, travel and
   other miscellaneous costs relating to acquiring properties.

Quarterly the Investments in Project Partnerships are increased or
decreased as follows:

   1)  Increased for equity in income or decreased for equity in
   losses of the Project Partnerships, 
   2)  Decreased for cash distributions received from the Project
   Partnerships,
   3)  Decreased for the amortization of the acquisition fees and
   expenses,
   4)  In certain Project Partnerships, where Gateway's
   investment was greater than Gateway's pro-rata share of the
   book value of the underlying assets, decreased for the
   amortization of the difference; and 
   5)  In certain Project Partnerships, where Gateway's investment
   was less than Gateway's pro-rata share of the book value of the
   underlying assets, increased for the accretion of the
   difference.

   Amortization and accretion is calculated on a straight line basis
over 35 years, as this is the average estimated useful life of the
underlying assets.  The net amortization and accretion is shown as
amortization expense on the Statements of Operations.  

   Pursuant to the limited partnership agreements for the Project
Partnerships, cash losses generated by the Project Partnerships are
allocated to the general partners of those partnerships.  In
subsequent years, cash profits, if any, are first allocated to the
general partners to the extent of the allocation of prior years'
cash losses.

   Since Gateway invests as a limited partner, and therefore is not
obligated to fund losses or make additional capital contributions,
it does not recognize losses from individual Project Partnerships
to the extent that these losses would reduce the investment in
those Project Partnerships below zero.  The suspended losses will
be used to offset future income from the individual Project
Partnerships.
<PAGE>
Cash and Cash Equivalents

     It is Gateway's policy to include short-term investments with
an original maturity of three months or less in Cash and Cash
Equivalents.  Short-term investments are comprised of money market
mutual funds.

Concentrations of Credit Risk

     Financial instruments which potentially subject Gateway to
concentrations of credit risk consist of cash investments in a
money market mutual fund that is a wholly-owned subsidiary of
Raymond James Financial, Inc.

Use of Estimates in the Preparation of Financial Statements

     The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of
estimates that affect certain reported amounts and disclosures. 
These estimates are based on management's knowledge and experience. 
Accordingly, actual results could differ from these estimates.

Investment in Securities

     Effective April 1, 1994, Gateway adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities ("FAS 115").  Under FAS 115, Gateway is
required to categorize its debt securities as held-to-maturity,
available-for-sale or trading securities, dependent upon Gateway's
intent in holding the securities.  Gateway's intent is to hold all
of its debt securities (U. S. Treasury Security Strips) until
maturity and to use these reserves to fund Gateway's ongoing
operations.  Interest income is recognized ratably on the U.S.
Treasury Strips using the effective yield to maturity.

Receivable from Project Partnerships

     Receivable from Project Partnerships represents amounts due from
the Project Partnerships due to a change in the amount Gateway
agreed to pay the Project Partnerships and is secured with cash in
restricted escrow accounts.

Offering and Commission Costs

     Offering and commission costs are charged against Limited
Partners' Equity upon admission of Limited Partners.

Income Taxes

     No provision for income taxes has been made in these financial
statements, as income taxes are a liability of the partners rather
than of Gateway.

Fair Value of Financial Instruments

     The fair value of investment securities is discussed in Note 3. 
The fair value of current assets and current liabilities is assumed
to be equal to their reported carrying amounts due to their short
term nature.  It is not practicable to estimate the fair value of
the long term payable to the general partner because it is
attributable to a related party transaction for which there would
be no fair market equivalent.

Basis of Preparation

     The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and note disclosures required by
generally accepted accounting principles.  These statements should
be read in conjunction with the financial statements and notes
thereto included with the Partnership's Form 10-K for the year
ended March 31, 1996.  In the opinion of management these financial
statements include adjustments, consisting only of normal recurring
adjustments, necessary to fairly summarize the Partnership's
financial position and results of operations.  The results of
operations for the periods may not be indicative of the results to
be expected for the year.


NOTE 3 - INVESTMENT IN SECURITIES:

  The September 30, 1996 Balance Sheet includes Investment in
Securities consisting of U.S. Treasury Security Strips which
represents their cost, plus accreted interest income of $114,349
for Series 7, $92,364 for Series 8, $47,031 for Series 9, $37,734
for Series 10 and $39,485 for Series 11.  

                               Estimated        Cost Plus      Gross Unrealized
                                 Market          Accreted           Gains and  
                                  Value    Accreted Interest           (Losses)
                               ----------- -----------------    ---------------
Series 7                         $ 503,885          $494,567          $  9,318 
Series 8                           464,485           465,429              (944)
Series 9                           302,594           315,455           (12,861)
Series 10                          248,034           247,619               415 
Series 11                          268,220           258,206            10,014 
<PAGE>
   As of September 30, 1996 the cost and accreted interest of debt
securities by contractual maturities is as follows:

                                  Series 7          Series 8           Series 9
                                ----------        ----------         ----------
Due within 1 year                $  43,272         $  38,354         $   26,585
After 1 year
 through 5 years                   173,713           159,475            103,102
After 5 years
 through 10 years                  202,904           193,361            119,874
After 10 years                      74,678            74,239             65,894
                                ----------        ----------         ----------
  Total Amount Carried on
    Balance Sheet                $ 494,567         $ 465,429          $ 315,455
                                ==========        ==========         ==========

                                 Series 10         Series 11              Total
                                ----------        ----------         ----------
Due within 1 year                $  19,646         $  19,595         $  147,452
After 1 year
 through 5 years                    79,975            77,494            593,759
After 5 years
 through 10 years                   86,357            93,889            696,385
After 10 years                      61,641            67,228            343,680
                                ----------        ----------         ----------
  Total Amount Carried on
    Balance Sheet                $ 247,619         $ 258,206         $1,781,276
                                ==========        ==========         ==========

NOTE 4 - RELATED PARTY TRANSACTIONS:

  The Payable to General Partners primarily represents the asset
management fees owed to the General Partners at the end of the
period.  It is unsecured, due on demand and, in accordance with the
limited partnership agreement, non-interest bearing.  Within the
next twelve months, the Managing General Partner does not intend to
demand payment on the portion of Asset Management fees payable
classified as long-term on the balance sheet.
 
  The Payable to Project Partnerships represents unpaid capital
contributions to the Project Partnerships and will be paid after
certain performance criteria are met.  Such contributions are in
turn payable to the general partners of the Project Partnerships.

  For the periods ended September 30, 1996 and 1995 the General
Partners and affiliates are entitled to compensation and
reimbursement for costs and expenses incurred by Gateway as
follows: 

  Acquisition Fees - Acquisition fees are paid for services
rendered by the Managing General Partner in selecting properties
for acquisition and providing other services in connection with the
acquisition of interests in Project Partnerships.  The acquisition
fees paid or payable to the General Partners will not exceed the
amount that is equal to 8% of the gross proceeds.  For Series 11
the fees will not exceed an amount that is equal to 5% of the gross
proceeds.  The fees paid are included in Investments in Project
Partnerships on the Balance Sheet. 

                                      September 30,    September 30,
                                             1996             1995  
                                          -----------    -----------
  Series 7                                $        0      $        0
  Series 8                                         0               0
  Series 9                                         0           5,124
  Series 10                                        0           1,496
  Series 11                                        0          86,984
                                           ----------     ----------

  Total                                   $        0      $   93,604
                                           ==========     ==========

  Acquisition Expenses - Affiliates of the General Partners are
reimbursed for acquisition expenses incurred on behalf of Gateway. 
These expenses are included in Investments in Project Partnerships
on the Balance Sheet. 

                                      September 30,    September 30,
                                             1996             1995  
                                           ----------     ----------
  Series 7                                 $     272      $   2,142 
  Series 8                                         0              0 
  Series 9                                         0              0 
  Series 10                                        0         (1,400)
  Series 11                                      178         18,545 
                                           ----------     --------- 
 
  Total                                    $     450      $  19,287 
                                           ==========     ==========

  Asset Management Fee - The Managing General Partner is entitled
to receive an annual asset management fee equal to the greater of
(i) $2,000 for each limited partnership in which Gateway invests,
or (ii) 0.275% of Gateway's gross proceeds from the sale of limited
partnership interests.  In either event (i) or (ii), the maximum
amount may not exceed 0.2% of the aggregate cost (Gateway's capital
contribution plus Gateway's share of the Properties' mortgage) of
Gateway's interest in properties owned by the Project Partnerships. 
The asset management fee will be paid only after all other expenses
of Gateway have been paid.  These fees are included in the
Statement of Operations. 
<PAGE>
                                      September 30,    September 30,
                                             1996             1995  
                                           ----------     ----------

  Series 7                                 $   39,000     $   38,500
  Series 8                                     43,000         43,000
  Series 9                                     24,000         24,000
  Series 10                                    15,000         15,000
  Series 11                                    12,000          9,655
                                           ----------     ----------

  Total                                    $  133,000     $  130,155
                                           ==========     ==========

  General and Administrative Expenses -  The Managing General
Partner is reimbursed for general and administrative expenses of
Gateway on an accountable basis.  This expense is included in the
Statement of Operations.

                                      September 30,    September 30,
                                             1996             1995  
                                           ----------     ----------

  Series 7                                 $    5,920     $    5,560
  Series 8                                      6,528          6,305
  Series 9                                      3,644          3,519
  Series 10                                     2,276          2,198
  Series 11                                     1,820          1,699
                                           ----------     ----------

  Total                                    $   20,188     $   19,281
                                           ==========     ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:

  As of September 30, 1996, the Partnership had acquired an
interest in 39 Project Partnerships for the Series which own and
operate government assisted multi-family housing complexes.  The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
  The following is a summary of Investments in Project Partnerships
as of:

                                        September 30,      MARCH 31,
                                               1996          1996   
SERIES 7                                   ----------     ----------
  
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                    $ 7,732,089    $ 7,728,757 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1)                       1,028            644 

Cumulative equity in losses of
Project Partnerships                      (3,364,689)    (2,936,751)

Cumulative distributions received
from Project Partnerships                    (57,907)       (40,026)

Excess of investment cost over the
underlying assets acquired:
  Acquisition fees and expenses              793,335        793,063 
  Accumulated amortization of
  acquisition fees and expenses              (92,035)       (80,705)
                                         ------------   ------------

Investments in
 Project Partnerships                    $ 5,011,821    $ 5,464,982 
                                         ============   ============

(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price.  At September 30, 1996 these excess costs were
$25,166 and March 31, 1996 these excess costs were $28,498.



<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

  As of September 30, 1996, the Partnership had acquired an
interest in 43 Project Partnerships for the Series which own and
operate government assisted multi-family housing complexes.  The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
  The following is a summary of Investments in Project Partnerships
as of:


                                        SEPTEMBER 30,      MARCH 31,
                                               1996          1996   
SERIES 8                                   ----------     ----------

Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                    $ 7,586,105    $ 7,586,558 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1)                       1,965          1,607 

Cumulative equity in losses of
Project Partnerships                      (2,828,747)    (2,408,801)

Cumulative distributions received
from Project Partnerships                    (43,625)       (27,936)

Excess of investment cost over the
underlying assets acquired:
  Acquisition fees and expenses              549,773        549,773 
  Accumulated amortization of
  acquisition fees and expenses              (49,460)       (43,041)
                                         ------------   ------------

Investments in
 Project Partnerships                    $ 5,216,011    $ 5,658,160 
                                         ============   ============

(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price.  At September 30, 1996 these excess costs were
$25,283 and March 31, 1996 these excess costs were $24,830.


<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

  As of September 30, 1996, the Partnership had acquired an
interest in 24 Project Partnerships for the Series which own and
operate government assisted multi-family housing complexes.  The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
  The following is a summary of Investments in Project Partnerships
as of:

                                        SEPTEMBER 30,      MARCH 31,
                                               1996          1996   
SERIES 9                                   ----------     ----------

Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                    $ 4,932,192    $ 4,932,192 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1)                         799            871 

Cumulative equity in losses of
Project Partnerships                        (970,767)      (745,423)

Cumulative distributions received
from Project Partnerships                    (24,570)       (18,409)

Excess of investment cost over the
underlying assets acquired:
  Acquisition fees and expenses              244,087        244,087 
  Accumulated amortization of
  acquisition fees and expenses              (19,503)       (16,017)
                                         ------------   ------------
Investments in
 Project Partnerships                    $ 4,162,238    $ 4,397,301 
                                         ============   ============

(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price.  At September 30, 1996 and March 31, 1996 these
excess costs were ($5,076).



<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

  As of September 30, 1996, the Partnership had acquired an
interest in 15 Project Partnerships for the Series which own and
operate government assisted multi-family housing complexes.  The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
  The following is a summary of Investments in Project Partnerships
as of:

                                        SEPTEMBER 30,      MARCH 31,
                                               1996          1996   
SERIES 10                                  ----------     ----------
  
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                    $ 3,914,672    $ 3,914,673 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1)                        (406)          (282)

Cumulative equity in losses of
Project Partnerships                        (394,495)      (289,928)

Cumulative distributions received
from Project Partnerships                    (24,082)       (21,012)

Excess of investment cost over the
underlying assets acquired:
  Acquisition fees and expenses              196,738        196,738 
  Accumulated amortization of
  acquisition fees and expenses              (14,960)       (12,148)
                                         ------------   ------------

Investments in
 Project Partnerships                    $ 3,677,467    $ 3,788,041 
                                         ============   ============

(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price.  At September 30, 1996 and March 31, 1996 these
excess costs were ($9,822).



<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

  As of September 30, 1996, the Partnership had acquired an
interest in 12 Project Partnerships for the Series which own and
operate government assisted multi-family housing complexes.  The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
  The following is a summary of Investments in Project Partnerships
as of:

                                        SEPTEMBER 30,      MARCH 31,
                                               1996          1996   
SERIES 11                                  ----------     ----------

Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                    $ 4,170,003    $ 4,203,467 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1)                       1,379            758 

Cumulative equity in losses of
Project Partnerships                        (100,623)      (144,194)

Cumulative distributions received
from Project Partnerships                     (1,500)             0 

Excess of investment cost over the
underlying assets acquired:
  Acquisition fees and expenses              290,335        290,157 
  Accumulated amortization of
  acquisition fees and expenses              (14,018)        (9,872)
                                         ------------   ------------

Investments in
 Project Partnerships                    $ 4,345,576    $ 4,340,316 
                                         ============   ============

(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price.  At September 30, 1996 these excess costs were
$57,589 and March 31, 1996 these excess costs were $29,433.



<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

  The following is a summary of Investments in Project
Partnerships:


                                        September 30,      MARCH 31,
                                               1996          1996   
TOTAL SERIES 7 - 11                        ----------     ----------

Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                   $ 28,335,061   $ 28,365,647 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets                           4,765          3,598 

Cumulative equity in losses of
Project Partnerships                      (7,659,321)    (6,525,097)

Cumulative distributions received
from Project Partnerships                   (151,684)      (107,383)

Excess of investment cost over the
underlying assets acquired:
  Acquisition fees and expenses            2,074,268      2,073,818 
  Accumulated amortization of
  acquisition fees and expenses             (189,976)      (161,783)
                                        -------------  -------------

Investments in
 Project Partnerships                   $ 22,413,113   $ 23,648,800 
                                        =============  =============



<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):


  In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of June 30 of each year:

                                               1996           1995  
SERIES 7                                  -----------     ----------
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets                        $  2,339,353   $  1,950,554 
  Investment properties, net              40,149,882     41,600,587 
  Other assets                               113,530         63,604 
                                        -------------  -------------
    Total assets                        $ 42,602,765   $ 43,614,745 
                                        =============  =============
Liabilities and Partners' Equity
  Current liabilities                   $  1,076,455   $  1,340,526 
  Long-term debt                          37,183,790     37,116,251 
                                        -------------  -------------
    Total liabilities                     38,260,245     38,456,777 

Partners' Equity
  Limited Partner                          4,288,875      5,180,762 
  General Partners                            53,645        (22,794)
                                        -------------  -------------
                                           4,342,520      5,157,968 
     Total liabilities and
    partners' equity                    $ 42,602,765   $ 43,614,745 
                                        =============  =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                 $  2,097,627   $  2,050,010 
Expenses:
  Operating expenses                       1,130,538      1,049,666 
  Interest expense                           601,339        692,015 
  Depreciation and amortization              798,011        829,576 
                                        -------------  -------------
    Total expenses                         2,529,888      2,571,257 

      Net loss                          $   (432,261)  $   (521,247)
                                        =============  =============
  Other partners' share
    of net loss                         $     (4,323)  $     (5,212)

  Partnership's share of net loss       $   (427,938)  $   (516,035)
                                        -------------  -------------
  Equity in Loss of
      Project Partnerships              $   (432,261)  $   (521,247)
                                        =============  =============


<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

  In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of June 30 of each year:


                                               1996           1995  
SERIES 8                                  -----------     ----------
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets                        $  1,940,636   $  2,194,959 
  Investment properties, net              43,223,971     42,239,537 
  Other assets                               100,037         76,610 
                                        -------------  -------------
    Total assets                        $ 45,264,644   $ 44,511,106 
                                        =============  =============
Liabilities and Partners' Equity
  Current liabilities                   $  1,503,086   $  1,698,493 
  Long-term debt                          39,051,248     36,790,934 
                                        -------------  -------------
    Total liabilities                     40,554,334     38,489,427 

Partners' Equity
  Limited Partner                          4,746,609      5,974,419 
  General Partners                           (36,299)        47,260 
                                        -------------  -------------
                                           4,710,310      6,021,679 
     Total liabilities and
    partners' equity                    $ 45,264,644   $ 44,511,106 
                                        =============  =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                 $  1,928,743   $  1,866,311 
Expenses:
  Operating expenses                       1,167,315        966,290 
  Interest expense                           419,065        667,665 
  Depreciation and amortization              766,551        649,882 
                                        -------------  -------------
    Total expenses                         2,352,931      2,283,837 

      Net loss                          $   (424,188)  $   (417,526)
                                        =============  =============
  Other partners' share
    of net loss                         $     (4,242)  $     (4,175)

  Partnership's share of net loss       $   (419,946)  $   (413,351)
                                        -------------  -------------
  Equity in Loss of
      Project Partnerships              $   (424,188)  $   (417,526)
                                        =============  =============


<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

  In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of June 30 of each year:


                                               1996           1995  
SERIES 9                                  -----------     ----------
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets                        $  1,327,812   $  2,021,377 
  Investment properties, net              23,963,097     23,872,706 
  Other assets                                11,666         34,505 
                                        -------------  -------------
    Total assets                        $ 25,302,575   $ 25,928,588 
                                        =============  =============
Liabilities and Partners' Equity
  Current liabilities                   $    661,878   $  1,260,757 
  Long-term debt                          20,698,907     20,016,935 
                                        -------------  -------------
    Total liabilities                     21,360,785     21,277,692 

Partners' Equity
  Limited Partner                          3,931,890      4,603,714 
  General Partners                             9,900         47,182 
                                        -------------  ------------ 
                                           3,941,790      4,650,896 
     Total liabilities and
    partners' equity                    $ 25,302,575   $ 25,928,588 
                                        =============  =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                 $  1,072,472   $    937,017 
Expenses:
  Operating expenses                         560,402        444,256 
  Interest expense                           299,612        322,857 
  Depreciation and amortization              440,078        226,410 
                                        -------------  -------------
    Total expenses                         1,300,092        993,523 

      Net loss                          $   (227,620)  $    (56,506)
                                        =============  =============
  Other partners' share
    of net loss                         $     (2,276)  $       (565)

  Partnership's share of net loss       $   (225,344)  $    (55,941)
                                        -------------  -------------
  Equity in Loss of
      Project Partnerships              $   (227,620)  $    (56,506)
                                        =============  =============


<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

  In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of June 30 of each year:


                                               1996           1995  
SERIES 10                                 -----------     ----------
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets                        $  1,083,948   $  1,313,111 
  Investment properties, net              16,438,731     16,717,596 
  Other assets                                25,714         20,256 
                                        -------------  -------------
    Total assets                        $ 17,548,393   $ 18,050,963 
                                        =============  =============
Liabilities and Partners' Equity
  Current liabilities                   $    409,405   $    774,571 
  Long-term debt                          13,595,950     13,462,954 
                                        -------------  -------------
    Total liabilities                     14,005,355     14,237,525 

Partners' Equity
  Limited Partner                          3,503,506      3,757,245 
  General Partners                            39,532         56,193 
                                        -------------  -------------
                                           3,543,038      3,813,438 
     Total liabilities and
    partners' equity                    $ 17,548,393   $ 18,050,963 
                                        =============  =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                 $    686,541   $    624,964 
Expenses:
  Operating expenses                         404,364        338,183 
  Interest expense                           135,606        168,890 
  Depreciation and amortization              252,194        143,920 
                                        -------------  -------------
    Total expenses                           792,164        650,993 

      Net loss                          $   (105,623)  $    (26,029)
                                        =============  =============
  Other partners' share
    of net loss                         $     (1,056)  $       (260)

  Partnership's share of net loss       $   (104,567)  $    (25,769)
                                        -------------  -------------
  Equity in Loss of
      Project Partnerships              $   (105,623)  $    (26,029)
                                        =============  =============


<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

  In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of June 30 of each year:


                                               1996           1995  
SERIES 11                                 -----------     ----------
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets                        $  1,737,682   $  2,902,441 
  Investment properties, net              14,619,930     11,985,313 
  Other assets                               132,098          8,327 
                                        -------------  -------------
    Total assets                        $ 16,489,710   $ 14,896,081 
                                        =============  =============
Liabilities and Partners' Equity
  Current liabilities                   $  1,179,857   $  1,829,751 
  Long-term debt                          11,050,478      8,730,636 
                                        -------------  -------------
    Total liabilities                     12,230,335     10,560 387 

Partners' Equity
  Limited Partner                          4,062,358      4,111,139 
  General Partners                           197,017        224,555 
                                        -------------  -------------
                                           4,259,375      4,335,694 
     Total liabilities and
    partners' equity                    $ 16,489,710   $ 14,896,081 
                                        =============  =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                 $    698,965   $    227,191 
Expenses:
  Operating expenses                         334,443        166,832 
  Interest expense                           202,677         66,164 
  Depreciation and amortization              117,834         23,981 
                                        -------------  -------------
    Total expenses                           654,954        256,977 

      Net loss                          $     44,011   $    (29,786)
                                        =============  =============
  Other partners' share
    of net loss                         $        440   $       (298)

  Partnership's share of net loss       $     43,571   $    (29,488)
                                        -------------  -------------
  Equity in Loss of
      Project Partnerships              $     44,011   $    (29,786)
                                        =============  =============


<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

  In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Project
Partnerships as of June 30 of each year:


                                               1996           1995  
TOTAL SERIES 7 - 11                       -----------     ----------
SUMMARIZED BALANCE SHEETS
Assets:
  Current assets                        $  8,429,431   $ 10,382,442 
  Investment properties, net             138,395,611    136,415,739 
  Other assets                               383,045        203,302 
                                        -------------  -------------
    Total assets                        $147,208,087   $147,001,483 
                                        =============  =============
Liabilities and Partners' Equity
  Current liabilities                   $  4,830,681   $  6,904,098 
  Long-term debt                         121,580,373    116,117,710 
                                        -------------  -------------
    Total liabilities                    126,411,054    123,021,808 

Partners' Equity
  Limited Partner                         20,533,238     23,627,279 
  General Partners                           263,795        352,396 
                                        -------------  -------------
                                          20,797,033     23,979,675 
     Total liabilities and
    partners' equity                    $147,208,087   $147,001,483 
                                        =============  =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                 $  6,484,348   $  5,705,493 
Expenses:
  Operating expenses                       3,597,062      2,965,227 
  Interest expense                         1,658,299      1,917,591 
  Depreciation and amortization            2,374,668      1,873,769 
                                        -------------  -------------
    Total expenses                         7,630,029      6,756,587 

      Net loss                          $ (1,145,681)  $ (1,051,094)
                                        =============  =============
  Other partners' share
    of net loss                         $    (11,457)  $    (10,510)

  Partnership's share of net loss       $ (1,134,224)  $ (1,040,584)
                                        -------------  ------------ 
  Equity in Loss of
      Project Partnerships              $ (1,145,681)  $ (1,051,094)
                                        =============  =============


<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                        September 30, 1996


Results of Operations, Liquidity and Capital Resources

     The proceeds from Limited Partner investors' capital
contributions available for investment are used to acquire
interests in Project Partnerships.  Project Partnership
acquisitions and the status of project operations are shown on the
following table:


                                     As of September 30, 1995
          Under                    Recently            Fully
          Construction            Completed        Operating             Totals

Series 7      1                     -                 38                   39
Series 8      4                     1                 38                   43
Series 9      2                     1                 21                   24
Series 10     1                     3                 11                   15
Series 11     9                     1                  2                   12


                                     As of September 30, 1996

          Under                    Recently            Fully
          Construction            Completed        Operating             Totals

Series 7      -                     1                 38                   39
Series 8      -                     -                 43                   43
Series 9      -                     1                 23                   24
Series 10     -                     -                 15                   15
Series 11     1                     2                  9                   12


     The capital resources of each Series are used to pay General and
Administrative operating costs including personnel, supplies, data
processing, travel and legal and accounting associated with the
administration and monitoring of Gateway and the Project
Partnerships.  The capital resources are also used to pay the Asset
Management Fee due the Managing General Partner, but only to the
extent that Gateway's remaining resources are sufficient to fund
Gateway's ongoing needs. 

     The sources of funds to pay the operating costs of each Series
are short-term investments and interest earned thereon, the
maturity of U.S. Treasury Security Strips ("Zero Coupon
Treasuries") which were purchased with funds set aside for this
purpose, and cash distributed to the Series from the operations of
the Project Partnerships.

     Series 7 - Gateway closed this series on October 16, 1992 after
receiving $10,395,000 from 635 Limited Partner investors.  Equity
in losses of Project Partnerships decreased from $516,035 for the
six months ended September 30,1995 to $427,938 for the six months
ended September 30, 1996.  In general, it is common in the real
estate industry to experience losses for financial and tax
reporting purposes because of the non-cash expenses of depreciation
and amortization.  As a result, management expects that this
Series, as well as the Series described below, will report its
equity in Project Partnerships as a loss for tax and financial
reporting purposes.  Overall management believes the Project
Partnerships are operating as expected and are generating tax
credits which meet projections. 

     At September 30, 1996, the Series had $224,270 of short-term
investments (Cash and Cash Equivalents).  It also had $494,567 in
Zero Coupon Treasuries.  Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee. 
 
     As disclosed on the statement of cash flows, the Series had a
net loss of $474,180 for the six months ending September 30, 1996. 
However, after adjusting for Equity in Losses of Project
Partnerships of $427,938 and the changes in operating assets and
liabilities, net cash used in operating activities was $49,788.
Cash provided by investing activities totaled $14,276 primarily
consisting of cash distributions from the Project Partnerships of
$17,881.  There were no unusual events or trends to describe.

     Expenses for the three and six months ended September 30, 1996
were comparable to the three and six months ended September 30,
1995.   Interest income decreased for the three and six months
ended September 30, 1996 as compared to September 30, 1995 due to
lower interest rates and a decrease in the average balance of cash
available for investment.  There were no unusual variations in the
operating results between these two periods.

     Series 8 - Gateway closed this Series on June 28, 1993 after
receiving $9,980,000 from 664 Limited Partner investors.  Equity in
losses of Project Partnerships were comparable for the three and
six months ended September 30, 1996 to the three and six months
ended September 30, 1995.

     At September 30, 1996, the Series had $351,373 of short-term
investments (Cash and Cash Equivalents).  It also had $465,429 in
Zero Coupon Treasuries.  Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee. 
 
     As disclosed on the statement of cash flows, the Series had a
net loss of $463,149 for the six months ended September 30, 1996. 
However, after adjusting for Equity in Losses of Project
Partnerships of $419,946  and the changes in operating assets and
liabilities, net cash used in operating activities was $35,364. 
Cash provided by investing activities totaled $91,716 and was
primarily due to the reduction of a receivable from the Project
Partnerships and cash distributions from the Project Partnerships
of $15,689.

     Income and expenses for the three and six months ended September
30, 1996 were comparable to the three and six months ended
September 30, 1995.  There were no unusual variations in the
operating results between these two periods.

     Series 9 - Gateway closed this Series on December 31, 1993 after
receiving $6,254,000 from 406 Limited Partner investors.  Equity in
losses of Project Partnerships increased from $55,941 for the six
ended September 30, 1995 to $225,344 for the six months ended
September 30, 1996.  This increase was due to 3 properties moving
from the construction and rent-up phases to fully operating in
1996.

     At September 30, 1996, the Series had $101,021 of short-term
investments (Cash and Cash Equivalents).  It also had $315,455 in
Zero Coupon Treasuries.  Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.
 
     As disclosed on the statement of cash flows, the Series had a
net loss of $252,616 for the six months ended September 30, 1996. 
After adjusting for Equity in Losses of Project Partnerships of
$225,344 and the changes in operating assets and liabilities, net
cash used in operating activities was $17,392.  Cash provided by
investing activities totaled $6,161 received in cash distributions
from the Project Partnerships.  There were no unusual events or
trends to describe.

     Expenses for the three and six months ended September 30, 1996
were comparable to the three and six months ended September 30,
1995.   Interest income decreased for the three and six months
ended September 30, 1996 as compared to September 30, 1995 due to
a decrease in the average balance of cash available for investment. 
There were no unusual variations in the operating results between
these two periods.

     Series 10 - Gateway closed this Series on January 21, 1994 after
receiving $5,043,000 from 325 Limited Partner investors.  Equity in
Losses of Project Partnerships increased from $25,769 for the six
months ended September 30, 1995 to $104,567 for the six months
ended September 30, 1996 as 4 properties moved from the
construction and rent-up phases to fully operating in 1996.   

     At September 30, 1996, the Series had $164,535 of short-term
investments (Cash and Cash Equivalents).  It also had $247,619 in
Zero Coupon Treasuries.  Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.  
 
     As disclosed on the statement of cash flows, the Series had a
net loss of $116,803 for the six months ending September 30, 1996. 
After adjusting for Equity in Losses of Project Partnerships of
$104,567 and the changes in operating assets and liabilities, net
cash used in operating activities was $14,170.  Cash provided by
investing activities totaled $16,129 and was due to a reduction of
receivables from Project Partnerships of $13,059 and cash
distributions from Project Partnerships of $3,070.  There were no
unusual events or trends to describe.

     Interest income and expenses for the three and six months ended
September 30, 1996 were comparable to the three and six months
ended September 30, 1995.  There were no unusual variations in the
operating results between these two periods.

     Series 11 - Gateway closed this Series on April 29, 1994 after
receiving $5,127,000 from 330 Limited investors.  Equity in Losses
of Project Partnerships increased from $29,488 of losses for the
six months ended September 30, 1995 to $43,571 of income for the
six months ended September 30, 1996 as seven properties moved from
the construction and rent-up phases to fully operating in 1996.

     At September 30, 1996, the Series had $104,332 of short-term
investments (Cash and Cash Equivalents).  It also had $258,206 in
Zero Coupon Treasuries.  Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee. 
 
     As disclosed on the statement of cash flows, the Series had net
income of $37,946 for the six months ending September 30, 1996. 
After adjusting for Equity in Income of Project Partnerships of
$43,571 and the changes in operating assets and liabilities, net
cash used in operating activities was $23,844.  Cash used in
investing activities totaled $236,851 and was used for the purchase
of Investments in Project Partnerships.  There were no unusual
events or trends to describe.

     Expenses for the three months ended September 30, 1996 were
comparable to the three months ended September 30, 1995.  Expenses
for the six months ended September 30, 1996 as compared to the six
months ended September 30, 1995 increased mainly due to an increase
in the Asset Management Fee as the number of properties increased
year-to-date.  Interest income decreased for the three and six
months ended September 30, 1996 as compared to September 30, 1995
due to a decrease in the average balance of cash available for
investment. <PAGE>

                                    PART II.  OTHER INFORMATION

ITEM 6 - EXHIBIT AND REPORTS ON FORM 8-K

   a.  Exhibits - NONE

   b.  Reports filed on Form 8-K - NONE

<PAGE>
                                            SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.


                                          GATEWAY TAX CREDIT FUND III LTD.
                                          (A Florida Limited Partnership)
                                          By:  RJ Credit Partners, Inc.
                                          Managing General Partner




Date:  November 11, 1996                  By:/s/ Ronald M. Diner 
                                          Ronald M. Diner
                                          President



Date:  November 11, 1996                  By:/s/ Sandra L. Furey  
                                          Sandra L. Furey
                                          Secretary and Treasurer


<PAGE>