----

----

**FORM      10-Q**

| Gateway                Tax Credit Fund III Ltd.                                                                                                                                                                                                                                                                                                                                                        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Exact                name of Registrant as specified in its charter)                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                   |
|                       Florida                                        (State                or other jurisdiction ofincorporation                or organization) |                          59-3090386                        (IRS                Employer No.) |
|                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|                                  880 Carillon                Parkway                               (Address                of principal executive offices)                                                                                  |                       St.                Petersburg,    Florida     33716                                      (Zip                Code) |
|                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| Registrant's                Telephone Number, Including Area Code:                                                                                                                                                                                                                                                                                                                                     |             (727)                567-1000                             |

|                                                                                                                               YES                    X      |                                  NO                             |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                             Large accelerated filer [ ]  | Accelerated                filer [ ]  | Non-accelerated                filer [X] |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|------------------------------------------|

|                                                                                                                 Yes                [ ] |                                   No [X]  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| GATEWAY                TAX CREDIT FUND III LTD.                                                             |   |
|-------------------------------------------------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                                                              |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE                SHEETS                                                                               |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   | SERIES                7 |   |   | SERIES                8 |   |   | SERIES                9 |   |
|                                                                                                        |   | September                30, |   |   | March                31, |   |   | September                30, |   |   | March                31, |   |   | September                30, |   |   | March                31, |   |
|                                                                                                        |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |
| ASSETS                                                                                                      |   | (Unaudited) |   |   | (Audited) |   |   | (Unaudited) |   |   | (Audited) |   |   | (Unaudited) |   |   | (Audited) |   |
| Current                Assets:                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Cash                and Cash Equivalents                                                  |   | $ | 125,477 |   |   | $ | 179,018 |   |   | $ | 121,337 |   |   | $ | 135,130 |   |   | $ | 53,298 |   |   | $ | 70,044 |   |
|    Investments                in Securities                                                  |   |   | 286,610 |   |   |   | 284,519 |   |   |   | 156,003 |   |   |   | 204,835 |   |   |   | 145,349 |   |   |   | 170,233 |   |
|    Receivable                - Other                                                         |   |   | - |   |   |   | - |   |   |   | 24,220 |   |   |   | 24,220 |   |   |   | - |   |   |   | - |   |
|      Total                Current Assets                                           |   |   | 412,087 |   |   |   | 463,537 |   |   |   | 301,560 |   |   |   | 364,185 |   |   |   | 198,647 |   |   |   | 240,277 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Investments                in Securities                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 43,056 |   |   |   | 41,709 |   |
|    Investments                  in Project Partnerships, Net                                 |   |   | 423,940 |   |   |   | 442,787 |   |   |   | 364,657 |   |   |   | 377,733 |   |   |   | 365,675 |   |   |   | 412,287 |   |
|          Total                Assets                           |   | $ | 836,027 |   |   | $ | 906,324 |   |   | $ | 666,217 |   |   | $ | 741,918 |   |   | $ | 607,378 |   |   | $ | 694,273 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES                AND PARTNERS' EQUITY                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                Liabilities:                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Payable                to General Partners                                                |   | $ | 59,373 |   |   | $ | 60,257 |   |   | $ | 53,040 |   |   | $ | 51,149 |   |   | $ | 28,989 |   |   | $ | 29,911 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total                Current Liabilities                                      |   |   | 59,373 |   |   |   | 60,257 |   |   |   | 53,040 |   |   |   | 51,149 |   |   |   | 28,989 |   |   |   | 29,911 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-Term                Liabilities:                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Payable                to General Partners                                                |   |   | 773,150 |   |   |   | 730,352 |   |   |   | 818,186 |   |   |   | 773,676 |   |   |   | 502,424 |   |   |   | 477,891 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Partners'                Equity (Deficit):                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Limited                Partners - 10,395, 9,980, and 6,254                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      units                for Series 7, 8, and 9, respectively,                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      at                September 30, 2007 and March 31, 2007                       |   |   | 94,747 |   |   |   | 205,836 |   |   |   | (115,334 | ) |   |   | 5,547 |   |   |   | 130,041 |   |   |   | 239,442 |   |
|    General                Partners                                                           |   |   | (91,243 | ) |   |   | (90,121 | ) |   |   | (89,675 | ) |   |   | (88,454 | ) |   |   | (54,076 | ) |   |   | (52,971 | ) |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total                Partners' Equity (Deficit)                               |   |   | 3,504 |   |   |   | 115,715 |   |   |   | (205,009 | ) |   |   | (82,907 | ) |   |   | 75,965 |   |   |   | 186,471 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Total                Liabilities and Partners' Equity |   | $ | 836,027 |   |   | $ | 906,324 |   |   | $ | 666,217 |   |   | $ | 741,918 |   |   | $ | 607,378 |   |   | $ | 694,273 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.                                              |   |

----

| GATEWAY                TAX CREDIT FUND III LTD.                                                             |   |
|-------------------------------------------------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                                                              |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE                SHEETS                                                                               |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   | SERIES                10 |   |   | SERIES                11 |   |   | TOTAL                SERIES 7 - 11 |   |
|                                                                                                        |   | September                30, |   |   | March                31, |   |   | September                30, |   |   | March                31, |   |   | September                30, |   |   | March                31, |   |
|                                                                                                        |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |
| ASSETS                                                                                                      |   | (Unaudited) |   |   | (Audited) |   |   | (Unaudited) |   |   | (Audited) |   |   | (Unaudited) |   |   | (Audited) |   |
| Current                Assets:                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Cash                and Cash Equivalents                                                  |   | $ | 61,522 |   |   | $ | 40,351 |   |   | $ | 55,797 |   |   | $ | 53,170 |   |   | $ | 417,431 |   |   | $ | 477,713 |   |
|    Investments                in Securities                                                  |   |   | 84,218 |   |   |   | 133,864 |   |   |   | 165,699 |   |   |   | 190,291 |   |   |   | 837,879 |   |   |   | 983,742 |   |
|    Receivable                - Other                                                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 24,220 |   |   |   | 24,220 |   |
|      Total                Current Assets                                           |   |   | 145,740 |   |   |   | 174,215 |   |   |   | 221,496 |   |   |   | 243,461 |   |   |   | 1,279,530 |   |   |   | 1,485,675 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Investments                in Securities                                                  |   |   | 67,283 |   |   |   | 64,917 |   |   |   | 74,739 |   |   |   | 71,973 |   |   |   | 185,078 |   |   |   | 178,599 |   |
|    Investments                in Project Partnerships, Net                                   |   |   | 1,123,042 |   |   |   | 1,159,544 |   |   |   | 1,426,856 |   |   |   | 1,505,978 |   |   |   | 3,704,170 |   |   |   | 3,898,329 |   |
|          Total                Assets                           |   | $ | 1,336,065 |   |   | $ | 1,398,676 |   |   | $ | 1,723,091 |   |   | $ | 1,821,412 |   |   | $ | 5,168,778 |   |   | $ | 5,562,603 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES                AND PARTNERS' EQUITY                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                Liabilities:                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Payable                to General Partners                                                |   | $ | 30,382 |   |   | $ | 31,747 |   |   | $ | 46,418 |   |   | $ | 34,115 |   |   | $ | 218,202 |   |   | $ | 207,179 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total                Current Liabilities                                      |   |   | 30,382 |   |   |   | 31,747 |   |   |   | 46,418 |   |   |   | 34,115 |   |   |   | 218,202 |   |   |   | 207,179 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-Term                Liabilities:                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Payable                to General Partners                                                |   |   | 95,535 |   |   |   | 78,767 |   |   |   | - |   |   |   | - |   |   |   | 2,189,295 |   |   |   | 2,060,686 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Partners'                Equity (Deficit):                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Limited                Partners - 5,043 and 5,127 units                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      for                Series 10 and 11, respectively, at                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      September                30, 2007 and March 31, 2007                          |   |   | 1,242,225 |   |   |   | 1,319,459 |   |   |   | 1,705,896 |   |   |   | 1,815,414 |   |   |   | 3,057,575 |   |   |   | 3,585,698 |   |
|    General                Partners                                                           |   |   | (32,077 | ) |   |   | (31,297 | ) |   |   | (29,223 | ) |   |   | (28,117 | ) |   |   | (296,294 | ) |   |   | (290,960 | ) |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total                Partners' Equity                                         |   |   | 1,210,148 |   |   |   | 1,288,162 |   |   |   | 1,676,673 |   |   |   | 1,787,297 |   |   |   | 2,761,281 |   |   |   | 3,294,738 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Total                Liabilities and Partners' Equity |   | $ | 1,336,065 |   |   | $ | 1,398,676 |   |   | $ | 1,723,091 |   |   | $ | 1,821,412 |   |   | $ | 5,168,778 |   |   | $ | 5,562,603 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.                                              |   |

----

| GATEWAY                TAX CREDIT FUND III LTD.                       |   |
|-----------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                        |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                OF OPERATIONS                               |   |
| FOR                THE THREE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 |   |
| (Unaudited)                                                           |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   | SERIES                7 |   |   | SERIES                8 |   |   | SERIES                9 |   |
|                                                                  |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| Revenues:                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Distribution                Income                        |   | $ | 3,934 |   |   | $ | 11,320 |   |   | $ | 7,302 |   |   | $ | 800 |   |   | $ | - |   |   | $ | - |   |
|     Total                Revenues                 |   |   | 3,934 |   |   |   | 11,320 |   |   |   | 7,302 |   |   |   | 800 |   |   |   | - |   |   |   | - |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Asset                Management Fee - General Partner     |   |   | 21,399 |   |   |   | 21,509 |   |   |   | 22,255 |   |   |   | 22,371 |   |   |   | 12,267 |   |   |   | 12,325 |   |
|   General                and Administrative:                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     General                Partner                |   |   | 30,165 |   |   |   | 31,402 |   |   |   | 33,258 |   |   |   | 34,623 |   |   |   | 18,562 |   |   |   | 19,325 |   |
|     Other                                         |   |   | 18,626 |   |   |   | 21,778 |   |   |   | 21,132 |   |   |   | 22,449 |   |   |   | 12,913 |   |   |   | 13,509 |   |
|   Amortization                                              |   |   | 6,535 |   |   |   | 7,651 |   |   |   | 3,206 |   |   |   | 3,206 |   |   |   | 3,013 |   |   |   | 3,013 |   |
|     Total                Expenses                 |   |   | 76,725 |   |   |   | 82,340 |   |   |   | 79,851 |   |   |   | 82,649 |   |   |   | 46,755 |   |   |   | 48,172 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                Before Equity in Losses of Project                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Partnerships                and Other Income              |   |   | (72,791 | ) |   |   | (71,020 | ) |   |   | (72,549 | ) |   |   | (81,849 | ) |   |   | (46,755 | ) |   |   | (48,172 | ) |
| Equity                in Losses of Project Partnerships               |   |   | (5,340 | ) |   |   | (13,056 | ) |   |   | (10,031 | ) |   |   | (6,065 | ) |   |   | (21,359 | ) |   |   | (32,758 | ) |
| Interest                Income                                        |   |   | 6,002 |   |   |   | 7,410 |   |   |   | 4,039 |   |   |   | 5,926 |   |   |   | 3,396 |   |   |   | 4,451 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                               |   | $ | (72,129 | ) |   | $ | (76,666 | ) |   | $ | (78,541 | ) |   | $ | (81,988 | ) |   | $ | (64,718 | ) |   | $ | (76,479 | ) |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allocation                of Net Loss:                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Limited                Partners                           |   | $ | (71,408 | ) |   | $ | (75,899 | ) |   | $ | (77,756 | ) |   | $ | (81,168 | ) |   | $ | (64,071 | ) |   | $ | (75,714 | ) |
|   General                Partners                           |   |   | (721 | ) |   |   | (767 | ) |   |   | (785 | ) |   |   | (820 | ) |   |   | (647 | ) |   |   | (765 | ) |
|                                                                  |   | $ | (72,129 | ) |   | $ | (76,666 | ) |   | $ | (78,541 | ) |   | $ | (81,988 | ) |   | $ | (64,718 | ) |   | $ | (76,479 | ) |
| Net                Loss Per Number of Limited                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Partnership                Units                          |   | $ | (6.87 | ) |   | $ | (7.30 | ) |   | $ | (7.79 | ) |   | $ | (8.13 | ) |   | $ | (10.24 | ) |   | $ | (12.11 | ) |
| Number                of Limited Partnership Units                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Outstanding                                               |   |   | 10,395 |   |   |   | 10,395 |   |   |   | 9,980 |   |   |   | 9,980 |   |   |   | 6,254 |   |   |   | 6,254 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.        |   |

----

| GATEWAY                TAX CREDIT FUND III LTD.                       |   |
|-----------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                        |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                OF OPERATIONS                               |   |
| FOR                THE THREE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 |   |
| (Unaudited)                                                           |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   | SERIES                10 |   |   | SERIES                11 |   |   | TOTAL                SERIES 7 - 11 |   |
|                                                                  |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| Revenues:                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Distribution                Income                        |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 2,182 |   |   | $ | 11,236 |   |   | $ | 14,302 |   |
|     Total                Revenues                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,182 |   |   |   | 11,236 |   |   |   | 14,302 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Asset                Management Fee - General Partner     |   |   | 8,384 |   |   |   | 8,420 |   |   |   | 7,254 |   |   |   | 6,938 |   |   |   | 71,559 |   |   |   | 71,563 |   |
|   General                and Administrative:                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     General                Partner                |   |   | 11,602 |   |   |   | 12,078 |   |   |   | 9,281 |   |   |   | 9,663 |   |   |   | 102,868 |   |   |   | 107,091 |   |
|     Other                                         |   |   | 9,155 |   |   |   | 10,578 |   |   |   | 9,166 |   |   |   | 10,735 |   |   |   | 70,992 |   |   |   | 79,049 |   |
|   Amortization                                              |   |   | 6,027 |   |   |   | 6,027 |   |   |   | 8,374 |   |   |   | 8,374 |   |   |   | 27,155 |   |   |   | 28,271 |   |
|     Total                Expenses                 |   |   | 35,168 |   |   |   | 37,103 |   |   |   | 34,075 |   |   |   | 35,710 |   |   |   | 272,574 |   |   |   | 285,974 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                Before Equity in Losses of Project                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Partnerships                and Other Income              |   |   | (35,168 | ) |   |   | (37,103 | ) |   |   | (34,075 | ) |   |   | (33,528 | ) |   |   | (261,338 | ) |   |   | (271,672 | ) |
| Equity                in Losses of Project Partnerships               |   |   | (14,240 | ) |   |   | (38,392 | ) |   |   | (24,137 | ) |   |   | (14,953 | ) |   |   | (75,107 | ) |   |   | (105,224 | ) |
| Interest                Income                                        |   |   | 3,237 |   |   |   | 3,948 |   |   |   | 4,395 |   |   |   | 5,037 |   |   |   | 21,069 |   |   |   | 26,772 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                               |   | $ | (46,171 | ) |   | $ | (71,547 | ) |   | $ | (53,817 | ) |   | $ | (43,444 | ) |   | $ | (315,376 | ) |   | $ | (350,124 | ) |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allocation                of Net Loss:                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Limited                Partners                           |   | $ | (45,709 | ) |   | $ | (70,832 | ) |   | $ | (53,279 | ) |   | $ | (43,010 | ) |   | $ | (312,223 | ) |   | $ | (346,623 | ) |
|   General                Partners                           |   |   | (462 | ) |   |   | (715 | ) |   |   | (538 | ) |   |   | (434 | ) |   |   | (3,153 | ) |   |   | (3,501 | ) |
|                                                                  |   | $ | (46,171 | ) |   | $ | (71,547 | ) |   | $ | (53,817 | ) |   | $ | (43,444 | ) |   | $ | (315,376 | ) |   | $ | (350,124 | ) |
| Net                Loss Per Number of Limited                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Partnership                Units                          |   | $ | (9.06 | ) |   | $ | (14.05 | ) |   | $ | (10.39 | ) |   | $ | (8.39 | ) |   |   |   |   |   |   |   |   |
| Number                of Limited Partnership Units                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Outstanding                                               |   |   | 5,043 |   |   |   | 5,043 |   |   |   | 5,127 |   |   |   | 5,127 |   |   |   |   |   |   |   |   |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.        |   |

----

| GATEWAY                TAX CREDIT FUND III LTD.                     |   |
|---------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                      |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                OF OPERATIONS                             |   |
| FOR                THE SIX MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 |   |
| (Unaudited)                                                         |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   | SERIES                7 |   |   | SERIES                8 |   |   | SERIES                9 |   |
|                                                                |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| Revenues:                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Distribution                Income                      |   | $ | 19,434 |   |   | $ | 15,946 |   |   | $ | 15,607 |   |   | $ | 8,329 |   |   | $ | 4,003 |   |   | $ | 4,809 |   |
|     Total                Revenues               |   |   | 19,434 |   |   |   | 15,946 |   |   |   | 15,607 |   |   |   | 8,329 |   |   |   | 4,003 |   |   |   | 4,809 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Asset                Management Fee - General Partner   |   |   | 42,798 |   |   |   | 43,018 |   |   |   | 44,510 |   |   |   | 44,743 |   |   |   | 24,534 |   |   |   | 24,650 |   |
|   General                and Administrative:              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     General                Partner              |   |   | 59,122 |   |   |   | 55,340 |   |   |   | 65,185 |   |   |   | 61,016 |   |   |   | 36,382 |   |   |   | 34,056 |   |
|     Other                                       |   |   | 23,002 |   |   |   | 24,661 |   |   |   | 23,489 |   |   |   | 25,070 |   |   |   | 15,847 |   |   |   | 14,729 |   |
|   Amortization                                            |   |   | 13,070 |   |   |   | 16,372 |   |   |   | 6,411 |   |   |   | 6,412 |   |   |   | 6,026 |   |   |   | 6,026 |   |
|     Total                Expenses               |   |   | 137,992 |   |   |   | 139,391 |   |   |   | 139,595 |   |   |   | 137,241 |   |   |   | 82,789 |   |   |   | 79,461 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                Before Equity in (Losses) Income of             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Project                Partnerships and Other Income    |   |   | (118,558 | ) |   |   | (123,445 | ) |   |   | (123,988 | ) |   |   | (128,912 | ) |   |   | (78,786 | ) |   |   | (74,652 | ) |
| Equity                in (Losses) Income of Project                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Partnerships                                            |   |   | (5,777 | ) |   |   | (21,850 | ) |   |   | (6,665 | ) |   |   | 1,155 |   |   |   | (38,861 | ) |   |   | (44,363 | ) |
| Interest                Income                                      |   |   | 12,124 |   |   |   | 14,313 |   |   |   | 8,551 |   |   |   | 11,653 |   |   |   | 7,141 |   |   |   | 8,649 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                             |   | $ | (112,211 | ) |   | $ | (130,982 | ) |   | $ | (122,102 | ) |   | $ | (116,104 | ) |   | $ | (110,506 | ) |   | $ | (110,366 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allocation                of Net Loss:                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Limited                Partners                         |   | $ | (111,089 | ) |   | $ | (129,672 | ) |   | $ | (120,881 | ) |   | $ | (114,943 | ) |   | $ | (109,401 | ) |   | $ | (109,262 | ) |
|   General                Partners                         |   |   | (1,122 | ) |   |   | (1,310 | ) |   |   | (1,221 | ) |   |   | (1,161 | ) |   |   | (1,105 | ) |   |   | (1,104 | ) |
|                                                                |   | $ | (112,211 | ) |   | $ | (130,982 | ) |   | $ | (122,102 | ) |   | $ | (116,104 | ) |   | $ | (110,506 | ) |   | $ | (110,366 | ) |
| Net                Loss Per Number of Limited                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Partnership                Units                        |   | $ | (10.69 | ) |   | $ | (12.47 | ) |   | $ | (12.11 | ) |   | $ | (11.52 | ) |   | $ | (17.49 | ) |   | $ | (17.47 | ) |
| Number                of Limited Partnership Units                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Outstanding                                             |   |   | 10,395 |   |   |   | 10,395 |   |   |   | 9,980 |   |   |   | 9,980 |   |   |   | 6,254 |   |   |   | 6,254 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.      |   |

----

| GATEWAY                TAX CREDIT FUND III LTD.                     |   |
|---------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                      |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                OF OPERATIONS                             |   |
| FOR                THE SIX MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 |   |
| (Unaudited)                                                         |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   | SERIES                10 |   |   | SERIES                11 |   |   | TOTAL                SERIES 7 - 11 |   |
|                                                                |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| Revenues:                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Distribution                Income                      |   | $ | 1,380 |   |   | $ | 1,381 |   |   | $ | 2,182 |   |   | $ | 2,182 |   |   | $ | 42,606 |   |   | $ | 32,647 |   |
|     Total                Revenues               |   |   | 1,380 |   |   |   | 1,381 |   |   |   | 2,182 |   |   |   | 2,182 |   |   |   | 42,606 |   |   |   | 32,647 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Asset                Management Fee - General Partner   |   |   | 16,768 |   |   |   | 16,840 |   |   |   | 14,192 |   |   |   | 13,876 |   |   |   | 142,802 |   |   |   | 143,127 |   |
|   General                and Administrative:              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     General                Partner              |   |   | 22,739 |   |   |   | 21,285 |   |   |   | 18,191 |   |   |   | 17,028 |   |   |   | 201,619 |   |   |   | 188,725 |   |
|     Other                                       |   |   | 10,860 |   |   |   | 12,023 |   |   |   | 11,124 |   |   |   | 11,668 |   |   |   | 84,322 |   |   |   | 88,151 |   |
|   Amortization                                            |   |   | 12,053 |   |   |   | 12,054 |   |   |   | 16,748 |   |   |   | 16,748 |   |   |   | 54,308 |   |   |   | 57,612 |   |
|     Total                Expenses               |   |   | 62,420 |   |   |   | 62,202 |   |   |   | 60,255 |   |   |   | 59,320 |   |   |   | 483,051 |   |   |   | 477,615 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                Before Equity in (Losses) Income of             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Project                Partnerships and Other Income    |   |   | (61,040 | ) |   |   | (60,821 | ) |   |   | (58,073 | ) |   |   | (57,138 | ) |   |   | (440,445 | ) |   |   | (444,968 | ) |
| Equity                in (Losses) Income of Project                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Partnerships                                            |   |   | (23,699 | ) |   |   | (47,904 | ) |   |   | (61,574 | ) |   |   | 227 |   |   |   | (136,576 | ) |   |   | (112,735 | ) |
| Interest                Income                                      |   |   | 6,725 |   |   |   | 7,638 |   |   |   | 9,023 |   |   |   | 9,717 |   |   |   | 43,564 |   |   |   | 51,970 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                             |   | $ | (78,014 | ) |   | $ | (101,087 | ) |   | $ | (110,624 | ) |   | $ | (47,194 | ) |   | $ | (533,457 | ) |   | $ | (505,733 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allocation                of Net Loss:                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Limited                Partners                         |   | $ | (77,234 | ) |   | $ | (100,077 | ) |   | $ | (109,518 | ) |   | $ | (46,722 | ) |   | $ | (528,123 | ) |   | $ | (500,676 | ) |
|   General                Partners                         |   |   | (780 | ) |   |   | (1,010 | ) |   |   | (1,106 | ) |   |   | (472 | ) |   |   | (5,334 | ) |   |   | (5,057 | ) |
|                                                                |   | $ | (78,014 | ) |   | $ | (101,087 | ) |   | $ | (110,624 | ) |   | $ | (47,194 | ) |   | $ | (533,457 | ) |   | $ | (505,733 | ) |
| Net                Loss Per Number of Limited                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Partnership                Units                        |   | $ | (15.32 | ) |   | $ | (19.84 | ) |   | $ | (21.36 | ) |   | $ | (9.11 | ) |   |   |   |   |   |   |   |   |
| Number                of Limited Partnership Units                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Outstanding                                             |   |   | 5,043 |   |   |   | 5,043 |   |   |   | 5,127 |   |   |   | 5,127 |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.      |   |

----

| GATEWAY                TAX CREDIT FUND III LTD.                     |   |
|---------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                      |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                OF PARTNERS' EQUITY (DEFICIT)             |   |
| FOR                THE SIX MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 |   |
| (Unaudited)                                                         |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   | SERIES                7 |   |   | SERIES                8 |   |
|                                                                |   | Limited |   |   | General |   |   |   |   |   | Limited |   |   | General |   |   |   |   |
|                                                                |   | Partners |   |   | Partners |   |   | Total |   |   | Partners |   |   | Partners |   |   | Total |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at March 31, 2006                            |   | $ | 568,818 |   |   | $ | (86,455 | ) |   | $ | 482,363 |   |   | $ | 243,770 |   |   | $ | (86,048 | ) |   | $ | 157,722 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                             |   |   | (129,672 | ) |   |   | (1,310 | ) |   |   | (130,982 | ) |   |   | (114,943 | ) |   |   | (1,161 | ) |   |   | (116,104 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at September 30, 2006                        |   | $ | 439,146 |   |   | $ | (87,765 | ) |   | $ | 351,381 |   |   | $ | 128,827 |   |   | $ | (87,209 | ) |   | $ | 41,618 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at March 31, 2007                            |   | $ | 205,836 |   |   | $ | (90,121 | ) |   | $ | 115,715 |   |   | $ | 5,547 |   |   | $ | (88,454 | ) |   | $ | (82,907 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                             |   |   | (111,089 | ) |   |   | (1,122 | ) |   |   | (112,211 | ) |   |   | (120,881 | ) |   |   | (1,221 | ) |   |   | (122,102 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at September 30, 2007                        |   | $ | 94,747 |   |   | $ | (91,243 | ) |   | $ | 3,504 |   |   | $ | (115,334 | ) |   | $ | (89,675 | ) |   | $ | (205,009 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.      |   |

----

| GATEWAY                TAX CREDIT FUND III LTD.                     |   |
|---------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                      |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                OF PARTNERS' EQUITY (DEFICIT)             |   |
| FOR                THE SIX MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 |   |
| (Unaudited)                                                         |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   | SERIES                9 |   |   | SERIES                10 |   |
|                                                                |   | Limited |   |   | General |   |   |   |   |   | Limited |   |   | General |   |   |   |   |
|                                                                |   | Partners |   |   | Partners |   |   | Total |   |   | Partners |   |   | Partners |   |   | Total |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at March 31, 2006                            |   | $ | 485,089 |   |   | $ | (50,490 | ) |   | $ | 434,599 |   |   | $ | 1,578,554 |   |   | $ | (28,680 | ) |   | $ | 1,549,874 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                             |   |   | (109,262 | ) |   |   | (1,104 | ) |   |   | (110,366 | ) |   |   | (100,077 | ) |   |   | (1,010 | ) |   |   | (101,087 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at September 30, 2006                        |   | $ | 375,827 |   |   | $ | (51,594 | ) |   | $ | 324,233 |   |   | $ | 1,478,477 |   |   | $ | (29,690 | ) |   | $ | 1,448,787 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at March 31, 2007                            |   | $ | 239,442 |   |   | $ | (52,971 | ) |   | $ | 186,471 |   |   | $ | 1,319,459 |   |   | $ | (31,297 | ) |   | $ | 1,288,162 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                             |   |   | (109,401 | ) |   |   | (1,105 | ) |   |   | (110,506 | ) |   |   | (77,234 | ) |   |   | (780 | ) |   |   | (78,014 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at September 30, 2007                        |   | $ | 130,041 |   |   | $ | (54,076 | ) |   | $ | 75,965 |   |   | $ | 1,242,225 |   |   | $ | (32,077 | ) |   | $ | 1,210,148 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.      |   |

----

| GATEWAY                TAX CREDIT FUND III LTD.                     |   |
|---------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                      |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                OF PARTNERS' EQUITY (DEFICIT)             |   |
| FOR                THE SIX MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 |   |
| (Unaudited)                                                         |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   | SERIES                11 |   |   | TOTAL                SERIES 7 - 11 |   |
|                                                                |   | Limited |   |   | General |   |   |   |   |   | Limited |   |   | General |   |   |   |   |
|                                                                |   | Partners |   |   | Partners |   |   | Total |   |   | Partners |   |   | Partners |   |   | Total |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at March 31, 2006                            |   | $ | 2,281,421 |   |   | $ | (23,410 | ) |   | $ | 2,258,011 |   |   | $ | 5,157,652 |   |   | $ | (275,083 | ) |   | $ | 4,882,569 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                             |   |   | (46,722 | ) |   |   | (472 | ) |   |   | (47,194 | ) |   |   | (500,676 | ) |   |   | (5,057 | ) |   |   | (505,733 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at September 30, 2006                        |   | $ | 2,234,699 |   |   | $ | (23,882 | ) |   | $ | 2,210,817 |   |   | $ | 4,656,976 |   |   | $ | (280,140 | ) |   | $ | 4,376,836 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at March 31, 2007                            |   | $ | 1,815,414 |   |   | $ | (28,117 | ) |   | $ | 1,787,297 |   |   | $ | 3,585,698 |   |   | $ | (290,960 | ) |   | $ | 3,294,738 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                             |   |   | (109,518 | ) |   |   | (1,106 | ) |   |   | (110,624 | ) |   |   | (528,123 | ) |   |   | (5,334 | ) |   |   | (533,457 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at September 30, 2007                        |   | $ | 1,705,896 |   |   | $ | (29,223 | ) |   | $ | 1,676,673 |   |   | $ | 3,057,575 |   |   | $ | (296,294 | ) |   | $ | 2,761,281 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.      |   |

----

| GATEWAY                TAX CREDIT FUND III LTD.                                                                                     |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                                                                                      |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                OF CASH FLOWS                                                                                             |   |
| FOR                THE SIX MONTHS ENDED SEPTEMBER 30, 2007 AND 2006                                                                 |   |
| (Unaudited)                                                                                                                         |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                |   | SERIES                7 |   |   | SERIES                8 |   |
|                                                                                                                                |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| Cash                Flows from Operating Activities:                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net                Loss                                                                                                 |   | $ | (112,211 | ) |   | $ | (130,982 | ) |   | $ | (122,102 | ) |   | $ | (116,104 | ) |
|   Adjustments                to Reconcile Net Loss to Net Cash                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Used                in Operating Activities:                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Amortization                                                                                    |   |   | 13,070 |   |   |   | 16,372 |   |   |   | 6,411 |   |   |   | 6,412 |   |
|       Accreted                Interest Income on Investments in Securities                       |   |   | (3,061 | ) |   |   | (7,942 | ) |   |   | (2,761 | ) |   |   | (6,548 | ) |
|       Accreted                Discount on Investments in Securities                                   |   |   | (768 | ) |   |   | - |   |   |   | (494 | ) |   |   | - |   |
|       Equity                in Losses (Income) of Project Partnerships                                |   |   | 5,777 |   |   |   | 21,850 |   |   |   | 6,665 |   |   |   | (1,155 | ) |
|       Distribution                Income                                                              |   |   | (19,434 | ) |   |   | (15,946 | ) |   |   | (15,607 | ) |   |   | (8,329 | ) |
|       Changes                in Operating Assets and Liabilities:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         (Increase)                Decrease in Interest Receivable                           |   |   | (996 | ) |   |   | - |   |   |   | 187 |   |   |   | - |   |
|         Increase                in Payable to General Partners                              |   |   | 41,914 |   |   |   | 41,369 |   |   |   | 46,401 |   |   |   | 42,602 |   |
|           Net                Cash Used In Operating Activities                    |   |   | (75,709 | ) |   |   | (75,279 | ) |   |   | (81,300 | ) |   |   | (83,122 | ) |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                Flows from Investing Activities:                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Distributions                Received from Project Partnerships                                                         |   |   | 19,434 |   |   |   | 21,237 |   |   |   | 15,607 |   |   |   | 12,553 |   |
|   Redemption                of Investment Securities                                                                      |   |   | 203,000 |   |   |   | - |   |   |   | 127,000 |   |   |   | - |   |
|   Purchase                of Investment Securities                                                                        |   |   | (200,266 | ) |   |   | (200,084 | ) |   |   | (75,100 | ) |   |   | (125,177 | ) |
|           Net                Cash Provided by (Used in) Investing Activities |   |   | 22,168 |   |   |   | (178,847 | ) |   |   | 67,507 |   |   |   | (112,624 | ) |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Decrease                in Cash and Cash Equivalents                                                                                |   |   | (53,541 | ) |   |   | (254,126 | ) |   |   | (13,793 | ) |   |   | (195,746 | ) |
| Cash                and Cash Equivalents at Beginning of Year                                                                       |   |   | 179,018 |   |   |   | 394,030 |   |   |   | 135,130 |   |   |   | 309,318 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                and Cash Equivalents at End of Period                                                                           |   | $ | 125,477 |   |   | $ | 139,904 |   |   | $ | 121,337 |   |   | $ | 113,572 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.                                                                      |   |

----

| GATEWAY                  TAX CREDIT FUND III LTD.                                                                                     |
|---------------------------------------------------------------------------------------------------------------------------------------|
| (A                  Florida Limited Partnership)                                                                                      |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                  OF CASH FLOWS                                                                                             |
| FOR                  THE SIX MONTHS ENDED SEPTEMBER 30, 2007 AND 2006                                                                 |
| (Unaudited)                                                                                                                           |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                  |   | SERIES                  9 |   |   | SERIES                  10 |
|                                                                                                                                  |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |
| Cash                  Flows from Operating Activities:                                                                                |   |   |   |   |   |   |   |   |   |   |   |
|   Net                  Loss                                                                                                 |   | $ | (110,506 | ) |   | $ | (110,366 | ) |   | $ | (78,014 | ) |   | $ | (101,087 | ) |
|   Adjustments                  to Reconcile Net Loss to Net Cash                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Used                  in Operating Activities:                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Amortization                                                                                      |   |   | 6,026 |   |   |   | 6,026 |   |   |   | 12,053 |   |   |   | 12,054 |   |
|       Accreted                  Interest Income on Investments in Securities                       |   |   | (2,709 | ) |   |   | (5,231 | ) |   |   | (3,532 | ) |   |   | (5,492 | ) |
|       Accreted                  Discount on Investments in Securities                                   |   |   | (486 | ) |   |   | - |   |   |   | (396 | ) |   |   | - |   |
|       Equity                  in Losses of Project Partnerships                                         |   |   | 38,861 |   |   |   | 44,363 |   |   |   | 23,699 |   |   |   | 47,904 |   |
|       Distribution                  Income                                                              |   |   | (4,003 | ) |   |   | (4,809 | ) |   |   | (1,380 | ) |   |   | (1,381 | ) |
|       Changes                  in Operating Assets and Liabilities:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         (Increase)                  Decrease in Interest Receivable                           |   |   | (135 | ) |   |   | - |   |   |   | 274 |   |   |   | - |   |
|         Increase                  in Payable to General Partners                              |   |   | 23,611 |   |   |   | 22,552 |   |   |   | 15,403 |   |   |   | 15,157 |   |
|           Net                  Cash Used In Operating Activities                    |   |   | (49,341 | ) |   |   | (47,465 | ) |   |   | (31,893 | ) |   |   | (32,845 | ) |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  Flows from Investing Activities:                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Distributions                  Received from Project Partnerships                                                         |   |   | 5,728 |   |   |   | 7,934 |   |   |   | 2,130 |   |   |   | 12,889 |   |
|   Redemption                  of Investment Securities                                                                      |   |   | 127,000 |   |   |   | - |   |   |   | 101,000 |   |   |   | - |   |
|   Purchase                  of Investment Securities                                                                        |   |   | (100,133 | ) |   |   | (125,177 | ) |   |   | (50,066 | ) |   |   | (99,551 | ) |
|           Net                  Cash Provided by (Used in) Investing Activities |   |   | 32,595 |   |   |   | (117,243 | ) |   |   | 53,064 |   |   |   | (86,662 | ) |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Decrease)                  Increase in Cash and Cash Equivalents                                                                     |   |   | (16,746 | ) |   |   | (164,708 | ) |   |   | 21,171 |   |   |   | (119,507 | ) |
| Cash                  and Cash Equivalents at Beginning of Year                                                                       |   |   | 70,044 |   |   |   | 222,993 |   |   |   | 40,351 |   |   |   | 144,697 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  and Cash Equivalents at End of Period                                                                           |   | $ | 53,298 |   |   | $ | 58,285 |   |   | $ | 61,522 |   |   | $ | 25,190 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                  accompanying notes to financial                  statements.                                                     |

----

| GATEWAY                TAX CREDIT FUND III LTD.                                                                                     |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|
| (A                Florida Limited Partnership)                                                                                      |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS                OF CASH FLOWS                                                                                             |   |
| FOR                THE SIX MONTHS ENDED SEPTEMBER 30, 2007 AND 2006                                                                 |   |
| (Unaudited)                                                                                                                         |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                |   | SERIES                11 |   |   | TOTAL                SERIES 7 - 11 |   |
|                                                                                                                                |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| Cash                Flows from Operating Activities:                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net                Loss                                                                                                 |   | $ | (110,624 | ) |   | $ | (47,194 | ) |   | $ | (533,457 | ) |   | $ | (505,733 | ) |
|   Adjustments                to Reconcile Net Loss to Net Cash                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Used                in Operating Activities:                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Amortization                                                                                    |   |   | 16,748 |   |   |   | 16,748 |   |   |   | 54,308 |   |   |   | 57,612 |   |
|       Accreted                Interest Income on Investments in Securities                       |   |   | (4,197 | ) |   |   | (6,922 | ) |   |   | (16,260 | ) |   |   | (32,135 | ) |
|       Accreted                Discount on Investments in Securities                                   |   |   | (582 | ) |   |   | - |   |   |   | (2,726 | ) |   |   | - |   |
|       Equity                in Losses (Income) of Project Partnerships                                |   |   | 61,574 |   |   |   | (227 | ) |   |   | 136,576 |   |   |   | 112,735 |   |
|       Distribution                Income                                                              |   |   | (2,182 | ) |   |   | (2,182 | ) |   |   | (42,606 | ) |   |   | (32,647 | ) |
|       Changes                in Operating Assets and Liabilities:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Increase                in Interest Receivable                                      |   |   | (229 | ) |   |   | - |   |   |   | (899 | ) |   |   | - |   |
|         Increase                in Payable to General Partners                              |   |   | 12,303 |   |   |   | 4,982 |   |   |   | 139,632 |   |   |   | 126,662 |   |
|           Net                Cash Used In Operating Activities                    |   |   | (27,189 | ) |   |   | (34,795 | ) |   |   | (265,432 | ) |   |   | (273,506 | ) |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                Flows from Investing Activities:                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Distributions                Received from Project Partnerships                                                         |   |   | 2,982 |   |   |   | 3,969 |   |   |   | 45,881 |   |   |   | 58,582 |   |
|   Redemption                of Investment Securities                                                                      |   |   | 152,000 |   |   |   | - |   |   |   | 710,000 |   |   |   | - |   |
|   Purchase                of Investment Securities                                                                        |   |   | (125,166 | ) |   |   | (149,818 | ) |   |   | (550,731 | ) |   |   | (699,807 | ) |
|           Net                Cash Provided by (Used in) Investing Activities |   |   | 29,816 |   |   |   | (145,849 | ) |   |   | 205,150 |   |   |   | (641,225 | ) |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase                (Decrease) in Cash and Cash Equivalents                                                                     |   |   | 2,627 |   |   |   | (180,644 | ) |   |   | (60,282 | ) |   |   | (914,731 | ) |
| Cash                and Cash Equivalents at Beginning of Year                                                                       |   |   | 53,170 |   |   |   | 207,490 |   |   |   | 477,713 |   |   |   | 1,278,528 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                and Cash Equivalents at End of Period                                                                           |   | $ | 55,797 |   |   | $ | 26,846 |   |   | $ | 417,431 |   |   | $ | 363,797 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.                                                                      |   |

----

| 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. |
|--------|--------------------------------------------------|

| 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,                and |
|----------------|------------------------------------------------------------------------------------------------------------|

----

----

|                     |   | Estimated                MarketValue |    |   | Cost                Plus Accreted Interest and Unamortized Premiums |   |    | Gross                UnrealizedGains                and (Losses) |   |
|--------------------------|--------|--------------------------------------|---------|--------|---------------------------------------------------------------------|--------|---------|------------------------------------------------------------------|--------|
| Series                7  |   | $                                    | 286,213 |   |                                                                | $      | 286,610 |                                                             |   | $ | (397 | ) |
| Series                8  |   |                                 | 156,380 |   |                                                                |   | 156,003 |                                                             |   |   | 377 |   |
| Series                9  |   |                                 | 189,658 |   |                                                                |   | 188,405 |                                                             |   |   | 1,253 |   |
| Series                10 |   |                                 | 154,480 |   |                                                                |   | 151,501 |                                                             |   |   | 2,979 |   |
| Series                11 |   |                                 | 245,265 |   |                                                                |   | 240,438 |                                                             |   |   | 4,827 |   |

----

|                                                             |   | Series                7 |                                                                          |   | Series                8 |   |                                                                          | Series                9 |   |
|------------------------------------------------------------------|--------|-------------------------|-------------------------------------------------------------------------------|--------|-------------------------|--------|-------------------------------------------------------------------------------|-------------------------|--------|
| Due                within 1 year                                 |   | $                       | 286,610                                                                       |   |                    | $      | 156,003                                                                       |                    |   | $ | 145,349 |   |
| After                1 year through 5 years                      |   |                    |                           0 |   |                    |   |                           0 |                    |   |   |                  43,056 |   |
|   Total                Amount Carried on Balance Sheet |   | $                       | 286,610                                                                       |   |                    | $      | 156,003                                                                       |                    |   | $ | 188,405 |   |

|                                                             |   |                     |                         |   |                     |   |               |   |   |
|------------------------------------------------------------------|--------|--------------------------|------------------------------|--------|--------------------------|--------|--------------------|--------|--------|
|                                                             |   |                     |                         |   |                     |   |               |   |   |
|                                                             |   | Series                10 |                         |   | Series                11 |   |               | Total  |   |
| Due                within 1 year                                 |   | $                        | 84,218                       |   |                     | $      | 165,699            |   |   | $ | 837,879 |   |
| After                1 year through 5 years                      |   |                     |                  67,283 |   |                     |   |   74,739 |   |   |   |                   185,078 |   |
|   Total                Amount Carried on Balance Sheet |   | $                        | 151,501                      |   |                     | $      | 240,438            |   |   | $ | 1,022,957 |   |

|                     |   | 2007   |    |   | 2006   |   |
|--------------------------|--------|--------|---------|--------|--------|--------|
| Series                7  |   | $      | 42,798  |   |   | $      | 43,018 |   |
| Series                8  |   |   | 44,510  |   |   |   | 44,743 |   |
| Series                9  |   |   | 24,534  |   |   |   | 24,650 |   |
| Series                10 |   |   | 16,768  |   |   |   | 16,840 |   |
| Series                11 |   |   | 14,192  |   |   |   | 13,876 |   |
| Total                    |   | $      | 142,802 |   |   | $      | 143,127 |   |
|                     |   |   |    |   |   |   |   |   |

|                     |   |   |    |   |   |   |
|--------------------------|--------|--------|---------|--------|--------|--------|
|                     |   | 2007   |    |   | 2006   |   |
| Series                7  |   | $      | 59,122  |   |   | $      | 55,340 |   |
| Series                8  |   |   | 65,185  |   |   |   | 61,016 |   |
| Series                9  |   |   | 36,382  |   |   |   | 34,056 |   |
| Series                10 |   |   | 22,739  |   |   |   | 21,285 |   |
| Series                11 |   |   | 18,191  |   |   |   | 17,028 |   |
| Total                    |   | $      | 201,619 |   |   | $      | 188,725 |   |
|                     |   |   |    |   |   |   |   |   |

----

| NOTE                5 - INVESTMENTS IN PROJECT                PARTNERSHIPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                of September 30, 2007, Gateway had acquired a 99% interest in the                profits,                losses, and Tax Credits as a limited partner in Project Partnerships                (Series 7 - 39, Series 8 - 43, and Series 9 - 24) which own and operate                government assisted multi-family housing complexes. Cash flows from                operations are allocated according to each Partnership                agreement. Upon dissolution, proceeds will be distributed according                to each Partnership agreement. |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The                following is a summary of Investments in Project Partnerships as                of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | SERIES                7 |   |   | SERIES                8 |   |   | SERIES                9 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | September                30, |   |   | March                31, |   |   | September                30, |   |   | March                31, |   |   | September                30, |   |   | March                31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |
| Capital                Contributions to Project Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and                purchase price paid for limited partner                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| interests                in Project Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $ | 7,732,089 |   |   | $ | 7,732,089 |   |   | $ | 7,586,105 |   |   | $ | 7,586,105 |   |   | $ | 4,914,116 |   |   | $ | 4,914,116 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative                equity in losses of Project                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Partnerships                (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | (7,308,795 | ) |   |   | (7,303,018 | ) |   |   | (7,437,031 | ) |   |   | (7,430,366 | ) |   |   | (4,416,852 | ) |   |   | (4,377,991 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative                distributions received from                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Project                Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | (254,317 | ) |   |   | (254,317 | ) |   |   | (183,684 | ) |   |   | (183,684 | ) |   |   | (158,695 | ) |   |   | (156,970 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                in Project Partnerships before                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 168,977 |   |   |   | 174,754 |   |   |   | (34,610 | ) |   |   | (27,945 | ) |   |   | 338,569 |   |   |   | 379,155 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Excess                of investment cost over the underlying                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| assets                acquired:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Acquisition                fees and expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 793,335 |   |   |   | 793,335 |   |   |   | 549,773 |   |   |   | 549,773 |   |   |   | 244,087 |   |   |   | 244,087 |   |
|   Accumulated                amortization of acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   fees                and expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | (268,981 | ) |   |   | (255,911 | ) |   |   | (150,506 | ) |   |   | (144,095 | ) |   |   | (89,449 | ) |   |   | (83,423 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Reserve                for Impairment of Investment in                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Project                Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | (269,391 | ) |   |   | (269,391 | ) |   |   | - |   |   |   | - |   |   |   | (127,532 | ) |   |   | (127,532 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investments                in Project Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $ | 423,940 |   |   | $ | 442,787 |   |   | $ | 364,657 |   |   | $ | 377,733 |   |   | $ | 365,675 |   |   | $ | 412,287 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1)                In accordance with Gateway's accounting policy to not carry Investments                in                Project Partnerships below zero, cumulative suspended losses of $5,567,767                in Series 7, $6,369,514 in Series 8, and $2,135,412 in Series 9 for                the                period ended September 30, 2007; and cumulative suspended losses                of                $5,388,453 in Series 7, $6,190,831 in Series 8, and $2,054,048 in                Series 9                for the year ended March 31, 2007 are not included. |   |

----

| NOTE                5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                of September 30, 2007, Gateway had acquired a 99% interest in the                profits,                losses, and Tax Credits as a limited partner in Project Partnerships                (Series 10 - 15 and Series 11 - 12) which own and operate government                assisted multi-family housing complexes. Cash flows from operations                are allocated according to each Partnership agreement. Upon                dissolution, proceeds will be distributed according to each Partnership                agreement. |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The                following is a summary of Investments in Project Partnerships as                of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | SERIES                10 |   |   | SERIES                11 |   |   | TOTAL                SERIES 7 - 11 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | September                30, |   |   | March                31, |   |   | September                30, |   |   | March                31, |   |   | September                30, |   |   | March                31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |   | 2007 |   |
| Capital                Contributions to Project Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and                purchase price paid for limited partner                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| interests                in Project Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $ | 3,914,672 |   |   | $ | 3,914,672 |   |   | $ | 4,128,042 |   |   | $ | 4,128,042 |   |   | $ | 28,275,024 |   |   | $ | 28,275,024 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative                equity in losses of Project                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Partnerships                (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | (2,455,966 | ) |   |   | (2,432,267 | ) |   |   | (1,698,718 | ) |   |   | (1,637,144 | ) |   |   | (23,317,362 | ) |   |   | (23,180,786 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative                distributions received from                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Project                Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | (210,118 | ) |   |   | (209,368 | ) |   |   | (181,937 | ) |   |   | (181,137 | ) |   |   | (988,751 | ) |   |   | (985,476 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                in Project Partnerships before                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 1,248,588 |   |   |   | 1,273,037 |   |   |   | 2,247,387 |   |   |   | 2,309,761 |   |   |   | 3,968,911 |   |   |   | 4,108,762 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Excess                of investment cost over the underlying                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| assets                acquired:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Acquisition                fees and expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 196,738 |   |   |   | 196,738 |   |   |   | 290,335 |   |   |   | 290,335 |   |   |   | 2,074,268 |   |   |   | 2,074,268 |   |
|   Accumulated                amortization of acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   fees                and expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | (119,461 | ) |   |   | (107,408 | ) |   |   | (164,743 | ) |   |   | (147,995 | ) |   |   | (793,140 | ) |   |   | (738,832 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Reserve                for Impairment of Investment in                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Project                Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | (202,823 | ) |   |   | (202,823 | ) |   |   | (946,123 | ) |   |   | (946,123 | ) |   |   | (1,545,869 | ) |   |   | (1,545,869 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investments                in Project Partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $ | 1,123,042 |   |   | $ | 1,159,544 |   |   | $ | 1,426,856 |   |   | $ | 1,505,978 |   |   | $ | 3,704,170 |   |   | $ | 3,898,329 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1)                In accordance with Gateway's accounting policy to not carry Investments                in                Project Partnerships below zero, cumulative suspended losses of $426,527                in Series 10 and $991,504 in Series 11 for the period ended September                30,                2007; and cumulative suspended losses of $421,709 in Series 10 and                $941,227 in Series 11 for the year ended March 31, 2007 are not                included.                                                                       |   |

----

| NOTE                5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):                                                                                                                                                                                                                                                                                                                                                                                |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| In                accordance with Gateway's policy of presenting the financial information                of the Project Partnerships on a three month lag, below is the summarized                balance sheets for the Project Partnerships of Series 7 and Series                8 as of                June 30 and the respective summarized statements of operations for                the six                months ended June 30 of each year: |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | SERIES                7 |   |   | SERIES                8 **(1)** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| SUMMARIZED                BALANCE SHEETS                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|     Current                assets                                                                                                                                                                                                                                                                                                                                                                                                   |   | $ | 4,693,312 |   |   | $ | 4,389,278 |   |   | $ | 4,699,867 |   |   | $ | 4,235,582 |   |
|     Investment                properties, net                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 25,259,955 |   |   |   | 26,532,590 |   |   |   | 26,528,571 |   |   |   | 27,900,068 |   |
|     Other                assets                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 29,591 |   |   |   | 56,584 |   |   |   | 65,254 |   |   |   | 62,851 |   |
|         Total                assets                                                                                                                                                                                                                                                                                                                                                                             |   | $ | 29,982,858 |   |   | $ | 30,978,452 |   |   | $ | 31,293,692 |   |   | $ | 32,198,501 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                and Partners' Deficit:                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Current                liabilities                                                                                                                                                                                                                                                                                                                                                                                              |   | $ | 587,276 |   |   | $ | 673,983 |   |   | $ | 1,034,193 |   |   | $ | 1,010,337 |   |
|     Long-term                debt                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 35,409,985 |   |   |   | 35,642,424 |   |   |   | 37,297,268 |   |   |   | 37,532,816 |   |
|         Total                liabilities                                                                                                                                                                                                                                                                                                                                                                        |   |   | 35,997,261 |   |   |   | 36,316,407 |   |   |   | 38,331,461 |   |   |   | 38,543,153 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Partners'                deficit                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Limited                Partner                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | (5,603,349 | ) |   |   | (4,975,425 | ) |   |   | (6,288,087 | ) |   |   | (5,631,359 | ) |
|     General                Partners                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | (411,054 | ) |   |   | (362,530 | ) |   |   | (749,682 | ) |   |   | (713,293 | ) |
|         Total                partners' deficit                                                                                                                                                                                                                                                                                                                                                                  |   |   | (6,014,403 | ) |   |   | (5,337,955 | ) |   |   | (7,037,769 | ) |   |   | (6,344,652 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Total                liabilities and partners' deficit                                                                                                                                                                                                                                                                                                                                                  |   | $ | 29,982,858 |   |   | $ | 30,978,452 |   |   | $ | 31,293,692 |   |   | $ | 32,198,501 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| SUMMARIZED                STATEMENTS OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                      |   |
| Rental                and other income                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $ | 2,696,523 |   |   | $ | 2,616,827 |   |   | $ | 2,727,454 |   |   | $ | 2,632,965 |   |
| Expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Operating                expenses                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 1,767,414 |   |   |   | 1,732,943 |   |   |   | 1,750,175 |   |   |   | 1,679,205 |   |
|     Interest                expense                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 378,457 |   |   |   | 381,079 |   |   |   | 407,102 |   |   |   | 415,395 |   |
|     Depreciation                and amortization                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 737,612 |   |   |   | 736,460 |   |   |   | 757,577 |   |   |   | 742,626 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Total                expenses                                                                                                                                                                                                                                                                                                                                                                           |   |   | 2,883,483 |   |   |   | 2,850,482 |   |   |   | 2,914,854 |   |   |   | 2,837,226 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|             Net                loss                                                                                                                                                                                                                                                                                                                                                         |   | $ | (186,960 | ) |   | $ | (233,655 | ) |   | $ | (187,400 | ) |   | $ | (204,261 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                partners' share of net loss                                                                                                                                                                                                                                                                                                                                                                                                        |   | $ | (1,870 | ) |   | $ | (2,337 | ) |   | $ | (2,052 | ) |   | $ | (3,268 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gateway's                share of net loss                                                                                                                                                                                                                                                                                                                                                                                                              |   | $ | (185,090 | ) |   | $ | (231,318 | ) |   | $ | (185,348 | ) |   | $ | (200,993 | ) |
| Suspended                losses                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 179,313 |   |   |   | 209,468 |   |   |   | 178,683 |   |   |   | 202,148 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                in (Losses) Income of Project Partnerships                                                                                                                                                                                                                                                                                                                                                                                        |   | $ | (5,777 | ) |   | $ | (21,850 | ) |   | $ | (6,665 | ) |   | $ | 1,155 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| NOTE                  5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |
| **(1)**    As                  discussed in Note 4, an affiliate of the General Partner (Value                  Partners,                  Inc.) is the operating general partner in one of the Project Partnerships                  included in Series 8 above (Logan Heights).  The Logan Heights                  Project Partnership is not consolidated in Gateway's financial                  statements                  as Gateway's investment in Logan Heights is accounted for under                  the equity                  method.  The Project Partnership's financial information for the                  periods ending June 2007 and June 2006 is as                  follows: |

|                                   |   |                     |     |   |                     |   |
|----------------------------------------|--------|--------------------------|----------|--------|--------------------------|--------|
|                                   |   | June                2007 |     |   | June                2006 |   |
| Total                Assets            |   | $                        | 517,329  |   |                     | $      | 576,837 |   |
| Total                Liabilities       |   |                     | 806,572  |   |                     |   | 823,000 |   |
| Gateway                Deficit         |   |                     | (172,522 | )      |                     |   | (129,873 | ) |
| Other                Partner's Deficit |   |                     | (116,721 | )      |                     |   | (116,290 | ) |
| Total                Revenue           |   |                     | 55,642   |   |                     |   | 56,009 |   |
| Net                Loss                |   | $                        | (3,999   | )      |                     | $      | (3,568 | ) |
|                                   |   |                     |     |   |                     |   |   |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|--------|--------------------------|--------|------------|--------|--------|--------|------------|--------|
| NOTE                5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |
| In                accordance with Gateway's policy of presenting the financial information                of the Project Partnerships on a three month lag, below is the summarized                balance sheets for the Project Partnerships of Series 9 and Series                10 as                of June 30 and the respective summarized statements of operations                for the                six months ended June 30 of each year: |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | SERIES                9 |       |   | SERIES                10 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2007                    |       |   | 2006                     |   |       | 2007   |   |   | 2006       |   |
| SUMMARIZED                BALANCE SHEETS                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                    |       |   |                     |   |       |   |   |   |       |   |
| Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                    |       |   |                     |   |       |   |   |   |       |   |
|     Current                assets                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                       | 2,339,497  |   |                     | $      | 2,263,082  |   |   | $      | 1,961,982  |   |   | $ | 1,856,453 |   |
|     Investment                properties, net                                                                                                                                                                                                                                                                                                                                                                                        |   |                    | 15,412,985 |   |                     |   | 16,085,769 |   |   |   | 11,658,429 |   |   |   | 12,030,765 |   |
|     Other                assets                                                                                                                                                                                                                                                                                                                                                                                                      |   |                    | 24,303     |   |                     |   | 5,364      |   |   |   | 13,486     |   |   |   | 2,180 |   |
|         Total                assets                                                                                                                                                                                                                                                                                                                                                                              |   | $                       | 17,776,785 |   |                     | $      | 18,354,215 |   |   | $      | 13,633,897 |   |   | $ | 13,889,398 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
| Liabilities                and Partners' Equity (Deficit):                                                                                                                                                                                                                                                                                                                                                                                               |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
|     Current                liabilities                                                                                                                                                                                                                                                                                                                                                                                               |   | $                       | 176,646    |   |                     | $      | 252,977    |   |   | $      | 263,530    |   |   | $ | 283,456 |   |
|     Long-term                debt                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    | 19,818,860 |   |                     |   | 19,934,839 |   |   |   | 12,982,207 |   |   |   | 13,054,976 |   |
|         Total                liabilities                                                                                                                                                                                                                                                                                                                                                                         |   |                    | 19,995,506 |   |                     |   | 20,187,816 |   |   |   | 13,245,737 |   |   |   | 13,338,432 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
| Partners'                equity (deficit)                                                                                                                                                                                                                                                                                                                                                                                                                |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
|     Limited                Partner                                                                                                                                                                                                                                                                                                                                                                                                   |   |                    | (1,854,034 | )      |                     |   | (1,496,234 | )      |   |   | 815,328    |   |   |   | 956,738 |   |
|     General                Partners                                                                                                                                                                                                                                                                                                                                                                                                  |   |                    | (364,687   | )      |                     |   | (337,367   | )      |   |   | (427,168   | )      |   |   | (405,772 | ) |
|         Total                partners' equity (deficit)                                                                                                                                                                                                                                                                                                                                                          |   |                    | (2,218,721 | )      |                     |   | (1,833,601 | )      |   |   | 388,160    |   |   |   | 550,966 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
|         Total                liabilities and partners' equity (deficit)                                                                                                                                                                                                                                                                                                                                     |   | $                       | 17,776,785 |   |                     | $      | 18,354,215 |   |   | $      | 13,633,897 |   |   | $ | 13,889,398 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
| SUMMARIZED                STATEMENTS OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                       |   |
| Rental                and other income                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                       | 1,370,582  |   |                     | $      | 1,288,287  |   |   | $      | 932,995    |   |   | $ | 874,031 |   |
| Expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
|     Operating                expenses                                                                                                                                                                                                                                                                                                                                                                                                |   |                    | 896,898    |   |                     |   | 845,850    |   |   |   | 615,055    |   |   |   | 606,314 |   |
|     Interest                expense                                                                                                                                                                                                                                                                                                                                                                                                  |   |                    | 207,659    |   |                     |   | 212,526    |   |   |   | 113,955    |   |   |   | 118,098 |   |
|     Depreciation                and amortization                                                                                                                                                                                                                                                                                                                                                                                     |   |                    | 387,464    |   |                     |   | 383,932    |   |   |   | 232,982    |   |   |   | 232,946 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
|         Total                expenses                                                                                                                                                                                                                                                                                                                                                                            |   |                    | 1,492,021  |   |                     |   | 1,442,308  |   |   |   | 961,992    |   |   |   | 957,358 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
|             Net                loss                                                                                                                                                                                                                                                                                                                                                          |   | $                       | (121,439   | )      |                     | $      | (154,021   | )      |   | $      | (28,997    | )      |   | $ | (83,327 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
| Other                partners' share of net loss                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                       | (1,214     | )      |                     | $      | (1,540     | )      |   | $      | (480       | )      |   | $ | (1,888 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
| Gateway's                share of net loss                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                       | (120,225   | )      |                     | $      | (152,481   | )      |   | $      | (28,517    | )      |   | $ | (81,439 | ) |
| Suspended                losses                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                    | 81,364     |   |                     |   | 108,118    |   |   |   | 4,818      |   |   |   | 33,535 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |       |   |                     |   |       |   |   |   |       |   |   |   |   |   |
| Equity                in Losses of Project Partnerships                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                       | (38,861    | )      |                     | $      | (44,363    | )      |   | $      | (23,699    | )      |   | $ | (47,904 | ) |

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| NOTE                5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):                                                                                                                                                                                                                                                                                                                                                                             |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| In                accordance with Gateway's policy of presenting the financial information                of the Project Partnerships on a three month lag, below is the summarized                balance sheets for the Project Partnerships of Series 11 and Total                Series                7 - 11 as of June 30 and the respective summarized statements of                operations for the six months ended June 30 of each year: |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | SERIES                11 |   |   | TOTAL                SERIES 7 - 11 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| SUMMARIZED                BALANCE SHEETS                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|     Current                assets                                                                                                                                                                                                                                                                                                                                                                                                |   | $ | 1,127,930 |   |   | $ | 1,076,448 |   |   | $ | 14,822,588 |   |   | $ | 13,820,843 |   |
|     Investment                properties, net                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 10,059,851 |   |   |   | 10,095,642 |   |   |   | 88,919,791 |   |   |   | 92,644,834 |   |
|     Other                assets                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 270,911 |   |   |   | 264,912 |   |   |   | 403,545 |   |   |   | 391,891 |   |
|         Total                assets                                                                                                                                                                                                                                                                                                                                                                          |   | $ | 11,458,692 |   |   | $ | 11,437,002 |   |   | $ | 104,145,924 |   |   | $ | 106,857,568 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                and Partners' Equity (Deficit):                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Current                liabilities                                                                                                                                                                                                                                                                                                                                                                                           |   | $ | 201,438 |   |   | $ | 120,269 |   |   | $ | 2,263,083 |   |   | $ | 2,341,022 |   |
|     Long-term                debt                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 10,300,844 |   |   |   | 9,847,071 |   |   |   | 115,809,164 |   |   |   | 116,012,126 |   |
|         Total                liabilities                                                                                                                                                                                                                                                                                                                                                                     |   |   | 10,502,282 |   |   |   | 9,967,340 |   |   |   | 118,072,247 |   |   |   | 118,353,148 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Partners'                equity (deficit)                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Limited                Partner                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 1,263,319 |   |   |   | 1,753,082 |   |   |   | (11,666,823 | ) |   |   | (9,393,198 | ) |
|     General                Partners                                                                                                                                                                                                                                                                                                                                                                                              |   |   | (306,909 | ) |   |   | (283,420 | ) |   |   | (2,259,500 | ) |   |   | (2,102,382 | ) |
|         Total                partners' equity (deficit)                                                                                                                                                                                                                                                                                                                                                      |   |   | 956,410 |   |   |   | 1,469,662 |   |   |   | (13,926,323 | ) |   |   | (11,495,580 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Total                liabilities and partners' equity (deficit)                                                                                                                                                                                                                                                                                                                                 |   | $ | 11,458,692 |   |   | $ | 11,437,002 |   |   | $ | 104,145,924 |   |   | $ | 106,857,568 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| SUMMARIZED                STATEMENTS OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| Rental                and other income                                                                                                                                                                                                                                                                                                                                                                                                               |   | $ | 830,975 |   |   | $ | 827,452 |   |   | $ | 8,558,529 |   |   | $ | 8,239,562 |   |
| Expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Operating                expenses                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 591,480 |   |   |   | 527,037 |   |   |   | 5,621,022 |   |   |   | 5,391,349 |   |
|     Interest                expense                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 106,387 |   |   |   | 106,178 |   |   |   | 1,213,560 |   |   |   | 1,233,276 |   |
|     Depreciation                and amortization                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 248,725 |   |   |   | 252,660 |   |   |   | 2,364,360 |   |   |   | 2,348,624 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Total                expenses                                                                                                                                                                                                                                                                                                                                                                        |   |   | 946,592 |   |   |   | 885,875 |   |   |   | 9,198,942 |   |   |   | 8,973,249 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|             Net                loss                                                                                                                                                                                                                                                                                                                                                      |   | $ | (115,617 | ) |   | $ | (58,423 | ) |   | $ | (640,413 | ) |   | $ | (733,687 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                partners' share of net loss                                                                                                                                                                                                                                                                                                                                                                                                     |   | $ | (3,766 | ) |   | $ | (2,650 | ) |   | $ | (9,382 | ) |   | $ | (11,683 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gateway's                share of net loss                                                                                                                                                                                                                                                                                                                                                                                                           |   | $ | (111,851 | ) |   | $ | (55,773 | ) |   | $ | (631,031 | ) |   | $ | (722,004 | ) |
| Suspended                losses                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 50,277 |   |   |   | 56,000 |   |   |   | 494,455 |   |   |   | 609,269 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                in (Losses) Income of Project Partnerships                                                                                                                                                                                                                                                                                                                                                                                     |   | $ | (61,574 | ) |   | $ | 227 |   |   | $ | (136,576 | ) |   | $ | (112,735 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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|   | GATEWAY                TAX CREDIT FUND III, LTD.(A                Florida Limited Partnership)By:                Raymond James Tax Credit Funds, Inc.(Managing                General Partner) |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Date:                November 14, 2007 | By:/s/                Ronald M. DinerRonald                M. DinerPresident,                Director                        |
|----------------------------------------|------------------------------------------------------------------------------------------------------------------------------|
|                                   |                                                                                                                         |
|                                   |                                                                                                                         |
|                                   |
| Date:                November 14, 2007 | By:/s/                Jonathan OorlogJonathan                OorlogVice                President and Chief Financial Officer |
|                                   |                                                                                                                         |
|                                   |
|                                   |
| Date:                November 14, 2007 | By:/s/                Sandra C. HumphreysSandra                C. HumphreysSecretary                and Treasurer            |

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