GTWY2

                               UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC  20549
                                     
                                 FORM 10-Q

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

For The Quarterly Period Ended             June 30, 1998

Commission File Number              0-21762

                       Gateway Tax Credit Fund III Ltd.
      (Exact name of Registrant as specified in its charter)

            Florida                              59-3090386
(State or other jurisdiction of            ( I.R.S. Employer No.)
incorporation or organization)

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

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

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

                      YES     X         NO

                                                 Number of Units
      Title of Each Class                         June 30, 1998
Units of Limited Partnership
Interest:  $1,000 per unit                            33,799

DOCUMENTS INCORPORATED BY REFERENCE

              Parts I and II, 1998 Form 10-K, filed with the
            Securities and Exchange Commission on July 13, 1998
            Parts III and IV - Form S-11 Registration Statement
                and all amendments and supplements thereto
                             File No. 33-44238
<PAGE>
PART I - Financial Information
 Item 1.  Financial Statements
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 7                                      JUNE 30,        MARCH 31,
                                                1998            1998
                                               -------         -------
                                             (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                     $   294,245     $   286,106
 Investments in Securities                          48,382          47,675
 Receivable from Project Partnerships                    0               0
                                               ------------    ------------
  Total Current Assets                         $   342,627     $   333,781
                                                                          
 Investments in Securities                         411,235         404,220
 Investments in Project Partnerships, Net        3,278,737       3,517,852
                                               -----------     -----------
    Total Assets                               $ 4,032,599     $ 4,255,853
                                               ===========     ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                   $    52,016     $    55,760
 Payable to Project Partnerships                         0               0
                                               -----------     -----------
  Total Current Liabilities                         52,016          55,760
                                               -----------     -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                       247,948         226,886
                                               -----------     -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series                                  
11 at June 30, 1998 and March 31,1998)           3,786,587       4,024,753
General Partners                                   (53,952)        (51,546)
                                               -----------     -----------
  Total Partners' Equity                       $ 3,732,635     $ 3,973,207
                                               -----------     -----------
    Total Liabilities and Partners' Equity     $ 4,032,599     $ 4,255,853
                                               ===========     ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 8                                       JUNE 30,       MARCH 31,
                                                 1998            1998
                                                -------        -------
                                              (Unaudited)     (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   410,251    $   410,727
 Investments in Securities                           43,573         42,967
 Receivable from Project Partnerships                     0              0
                                                ------------    ------------
  Total Current Assets                          $   453,824    $   453,694
                                                                          
 Investments in Securities                          391,229        384,906
 Investments in Project Partnerships, Net         3,333,228      3,608,229
                                                -----------    -----------
    Total Assets                                $ 4,178,281    $ 4,446,829
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    42,859    $    46,515
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          42,859         46,515
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        291,000        269,107
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at June 30, 1998 and March 31,1998)               3,893,603      4,177,520
General Partners                                    (49,181)       (46,313)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,844,422    $ 4,131,207
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 4,178,281    $ 4,446,829
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 9                                       JUNE 30,        MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   182,044    $   180,104
 Investments in Securities                           28,159         27,803
 Receivable from Project Partnerships                     0              0
                                                ------------    ------------
  Total Current Assets                          $   210,203    $   207,907
                                                                          
 Investments in Securities                          263,026        259,181
 Investments in Project Partnerships, Net         3,221,161      3,363,377
                                                -----------    -----------
    Total Assets                                $ 3,694,390    $ 3,830,465
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    24,469    $    26,911
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          24,469         26,911
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        163,737        151,733
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at June 30, 1998 and March 31,1998)               3,525,959      3,670,140
General Partners                                    (19,775)       (18,319)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,506,184    $ 3,651,821
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 3,694,390    $ 3,830,465
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 10                                      JUNE 30,        MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   205,962    $   202,435
 Investments in Securities                           23,207         22,865
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $   229,169    $   225,300
                                                                          
 Investments in Securities                          210,017        206,525
 Investments in Project Partnerships, Net         3,288,575      3,352,669
                                                -----------    -----------
    Total Assets                                $ 3,727,761    $ 3,784,494
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    27,909    $    30,279
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          27,909         30,279
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                         53,229         45,106
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at June 30, 1998 and March 31,1998)               3,654,337      3,716,198
General Partners                                     (7,714)        (7,089)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,646,623    $ 3,709,109
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 3,727,761    $ 3,784,494
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 11                                      JUNE 30,        MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   208,647    $   208,198
 Investments in Securities                           22,155         21,794
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $   230,802    $   229,992
                                                                          
 Investments in Securities                          226,812        222,768
 Investments in Project Partnerships, Net         3,797,733      3,861,731
                                                -----------    -----------
    Total Assets                                $ 4,255,347    $ 4,314,491
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    27,443    $    29,179
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          27,443         29,179
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                         23,996         17,499
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at June 30, 1998 and March 31,1998)               4,207,860      4,271,126
General Partners                                     (3,952)        (3,313)
                                                -----------    -----------
  Total Partners' Equity                        $ 4,203,908    $ 4,267,813
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 4,255,347    $ 4,314,491
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
TOTAL SERIES 7 - 11                            JUNE 30,        MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $ 1,301,149    $ 1,287,570
 Investments in Securities                          165,476        163,104
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $ 1,466,625    $ 1,450,674
                                                                          
 Investments in Securities                        1,502,319      1,477,600
 Investments in Project Partnerships, Net        16,919,434     17,703,858
                                                -----------    -----------
    Total Assets                                $19,888,378    $20,632,132
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $   174,696    $   188,644
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                         174,696        188,644
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        779,910        710,331
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at June 30, 1998 and March 31,1998)              19,068,346     19,859,737
General Partners                                   (134,574)      (126,580)
                                                -----------    -----------
  Total Partners' Equity                        $18,933,772    $19,733,157
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $19,888,378    $20,632,132
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>

                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)

SERIES 7                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    11,180    $    11,163
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               22,108         19,500
 General and Administrative:                                             
  General Partner                                    3,282          3,318
  Other                                              2,827          2,373
 Amortization                                        5,551          5,136
                                               -----------    -----------
  Total Expenses                                    33,768         30,327
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (22,588)       (19,164)
Equity in Losses of Project                                              
 Partnerships                                     (217,984)      (242,513)
                                                ----------     ----------
Net Loss                                       $  (240,572)   $  (261,677)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (238,166)   $  (259,060)
 General Partners                                   (2,406)        (2,617)
                                               -----------    -----------
                                               $  (240,572)   $  (261,677)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (22.91)   $    (24.92)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                         10,395         10,395
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.

<PAGE>

                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)
SERIES 8                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    11,888    $    11,924
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               23,047         21,500
 General and Administrative:                                             
  General Partner                                    3,618          3,659
  Other                                              3,319          2,594
 Amortization                                        2,492          2,314
                                               -----------    -----------
  Total Expenses                                    32,476         30,067
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (20,588)       (18,143)
Equity in Losses of Project                                              
 Partnerships                                     (266,197)      (265,543)
                                                ----------     ----------
Net Loss                                       $  (286,785)   $  (283,686)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (283,917)   $  (280,849)
 General Partners                                   (2,868)        (2,837)
                                               -----------    -----------
                                               $  (286,785)   $  (283,686)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (28.45)   $    (28.14)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                          9,980          9,980
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.


<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)

SERIES 9                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $     6,388   $     6,306
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                12,648        12,000
 General and Administrative:                                             
  General Partner                                     2,020         2,042
  Other                                               1,902         1,387
 Amortization                                         1,743         1,779
                                                -----------   -----------
  Total Expenses                                     18,313        17,208
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (11,925)      (10,902)
Equity in Losses of Project                                              
 Partnerships                                      (133,712)      (95,998)
                                                 ----------    ----------
Net Loss                                        $  (145,637)  $  (106,900)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $  (144,181)  $  (105,831)
 General Partners                                    (1,456)       (1,069)
                                                -----------   -----------
                                                $  (145,637)  $  (106,900)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                               $    (23.05)  $    (16.92)
                                               ============  ============
Number of Limited Partnership Units                                      
Outstanding                                           6,254         6,254
                                               ============  ============
                                                                         
                                                                         


              See accompanying notes to financial statements.


<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)
SERIES 10                                       1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $     6,295    $     6,327
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner                8,525          7,500
 General and Administrative:                                             
  General Partner                                    1,262          1,276
  Other                                              1,445            963
 Amortization                                        1,460          1,460
                                               -----------    -----------
  Total Expenses                                    12,638         11,199
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (6,343)        (4,872)
Equity in Losses of Project                                              
 Partnerships                                      (56,143)       (37,779)
                                                ----------     ----------
Net Loss                                       $   (62,486)   $   (42,651)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $   (61,861)   $   (42,224)
 General Partners                                     (625)          (427)
                                               -----------    -----------
                                               $   (62,486)   $   (42,651)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (12.27)   $     (8.37)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                          5,043          5,043
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.

<PAGE>

                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)
SERIES 11                                       1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $     6,914   $     6,530
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                 6,820         6,000
 General and Administrative:                                             
  General Partner                                     1,010         1,021
  Other                                               1,173           871
 Amortization                                         2,074         1,797
                                                -----------   -----------
  Total Expenses                                     11,077         9,689
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                             (4,163)       (3,159)
Equity in Losses of Project                                              
 Partnerships                                       (59,742)      (46,367)
                                                 ----------    ----------
Net Loss                                        $   (63,905)  $   (49,256)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $   (63,266)  $   (49,031)
 General Partners                                      (639)         (495)
                                                -----------   -----------
                                                $   (63,905)  $   (49,526)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                               $    (12.34)  $     (9.56)
                                               ============  ============
Number of Limited Partnership Units                                      
Outstanding                                           5,127         5,127
                                               ============  ============
                                                                         
                                                                         


              See accompanying notes to financial statements.

<PAGE>

                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)

TOTAL SERIES 7 - 11                             1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    42,665   $    42,250
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                73,148        66,500
 General and Administrative:                                             
  General Partner                                    11,192        11,316
  Other                                              10,666         8,188
 Amortization                                        13,266        12,486
                                                -----------   -----------
  Total Expenses                                    108,272        98,490
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (65,607)      (56,240)
Equity in Losses of Project                                              
 Partnerships                                      (733,778)     (688,200)
                                                 ----------    ----------
Net Loss                                        $  (799,385)  $  (744,440)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $  (791,391)  $  (736,996)
 General Partners                                    (7,994)       (7,444)
                                                -----------   -----------
                                                $  (799,385)  $  (744,440)
                                                ===========   ===========
                                                                         
                                                                         


              See accompanying notes to financial statements.

<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
            FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:



                                Limited         General            
SERIES 7                        Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $ 5,025,507    $   (41,437)     $ 4,984,070
                                                                           
Net Loss                           (259,060)        (2,617)        (261,677)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1997        $ 4,766,447    $   (44,054)     $ 4,722,393
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 4,024,753    $   (51,546)     $ 3,973,207
                                                                           
Net Loss                           (238,166)        (2,406)        (240,572)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1998        $ 3,786,587    $   (53,952)     $ 3,732,635
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.


<PAGE>


                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
            FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:



                                Limited         General            
SERIES 8                        Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $ 5,277,849    $   (35,704)     $ 5,192,145
                                                                           
Net Loss                           (280,849)        (2,837)        (283,686)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1997        $ 4,947,000    $   (38,541)     $ 4,908,459
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 4,177,520    $   (46,313)     $ 4,131,207
                                                                           
Net Loss                           (283,917)        (2,868)        (286,785)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1998        $ 3,893,603    $   (49,181)     $ 3,844,422
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.


<PAGE>


                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
            FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:



                                Limited         General            
SERIES 9                        Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $ 4,177,521    $   (13,194)     $ 4,164,327
                                                                           
Net Loss                           (105,831)        (1,069)        (106,900)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1997        $ 4,071,690    $   (14,263)     $ 4,057,427
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 3,670,140    $   (18,319)     $ 3,651,821
                                                                           
Net Loss                           (144,181)        (1,456)        (145,637)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1998        $ 3,525,959    $   (19,775)     $ 3,506,184
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
            FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:



                                Limited         General            
SERIES 10                       Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $ 3,938,729    $    (4,841)     $ 3,933,888
                                                                           
Net Loss                            (42,224)          (427)         (42,651)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1997        $ 3,896,505    $    (5,268)     $ 3,891,237
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 3,716,198    $    (7,089)     $ 3,709,109
                                                                           
Net Loss                            (61,861)          (625)         (62,486)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1998        $ 3,654,337    $    (7,714)     $ 3,646,623
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
            FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:



                                Limited         General            
SERIES 11                       Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $ 4,452,477    $    (1,481)     $ 4,450,996
                                                                           
Net Loss                            (49,031)          (495)         (49,526)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1997        $ 4,403,446    $    (1,976)     $ 4,401,470
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 4,271,126    $    (3,313)     $ 4,267,813
                                                                           
Net Loss                            (63,266)          (639)         (63,905)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1998        $ 4,207,860    $    (3,952)     $ 4,203,908
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.


<PAGE>


                                     
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
            FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:



                                Limited         General            
TOTAL SERIES 7 - 11             Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $22,822,083    $   (96,657)     $22,725,426
                                                                           
Net Loss                           (736,996)        (7,444)        (744,440)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1997        $22,085,087    $  (104,101)     $21,980,986
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $19,859,737    $  (126,580)     $19,733,157
                                                                           
Net Loss                           (791,391)        (7,994)        (799,385)
                                -----------     -----------     -----------
                                                                           
Balance at June 30, 1998        $19,068,346    $  (134,574)     $18,933,772
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.



<PAGE>

                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)
                                     
SERIES 7                                         1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                     $  (240,572)  $  (261,677)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                      5,551         5,136
   Accreted Interest Income on Investments                               
in Securities                                       (7,722)       (7,898)
   Equity in Losses of Project Partnerships        217,984       242,513
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners         17,318        19,025
                                                -----------   -----------
     Net Cash Used in Operating Activities          (7,441)       (2,901)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                    0             0
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                     0             0
  Acquisition Fees and Expenses                          0             0
  Distributions Received from Project                                    
Partnerships                                        15,580        12,351
  Increase (Decrease) in Payable to Project                              
Partnerships - Capital Contributions                     0             0
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                15,580        12,351
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                          8,139         9,450
Cash and Cash Equivalents at Beginning of                                
Year                                               286,106       267,980
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $  294,245   $   277,430
                                                ===========   ===========
                                                                         



              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)
SERIES 8                                         1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                     $  (286,785)  $  (283,686)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                      2,492         2,314
   Accreted Interest Income on Investments                               
in Securities                                       (6,929)       (7,100)
   Equity in Losses of Project Partnership         266,197       265,543
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners         18,237        21,088
                                                -----------   -----------
     Net Cash Used in Operating Activities          (6,788)       (1,841)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                    0             0
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                     0             0
  Acquisition Fees and Expenses                          0             0
  Distributions Received from Project                                    
Partnerships                                         6,312         4,407
  Increase (Decrease) in Payable to Project                              
Partnerships - Capital Contributions                     0             0
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                 6,312         4,407
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                           (476)        2,566
Cash and Cash Equivalents at Beginning of                                
Year                                               410,727       396,038
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $  410,251   $   398,604
                                                ===========   ===========
                                                                         


              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)
SERIES 9                                         1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                     $  (145,637)  $  (106,900)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                      1,743         1,779
   Accreted Interest Income on Investments                               
in Securities                                       (4,201)       (4,336)
   Equity in Losses of Project Partnerships        133,712        95,998
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          9,562        11,603
                                                -----------   -----------
     Net Cash Used in Operating Activities          (4,821)       (1,856)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                    0             0
  Increase in Receivable from Other Series          (2,208)             0
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                 2,208       (2,208)
  Acquisition Fees and Expenses                          0             0
  Distributions Received from Project                                    
Partnerships                                         6,761         3,216
  Increase (Decrease) in Payable -                                       
    Other Series                                     1,003             0
    Project Partnerships - Capital                                      
Contributions                                       (1,003)        1,003
                                                -----------   -----------
     Net Cash Provided by (Used in)                  6,761         2,011
Investing Activities                            -----------   -----------
                                                                         
Increase (Decrease) in Cash and Cash                                     
Equivalents                                          1,940           155
Cash and Cash Equivalents at Beginning of                                
Year                                               180,104       161,813
                                                -----------   -----------
Cash and Cash Equivalents at End of Year       $   182,044   $   161,968
                                                ===========   ===========
                                                                         

              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)
SERIES 10                                        1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (62,486)  $   (42,651)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                      1,406         1,460
   Accreted Interest Income on Investments                               
in Securities                                       (3,834)       (3,885)
   Equity in Losses of Project Partnerships         56,143        37,779
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          5,753         6,916
                                                -----------   -----------
     Net Cash Used in Operating Activities          (3,018)         (381)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                    0             0
  Increase in Receivable from Other Series          (1,003)            0
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                 1,003        (1,003)
  Acquisition Fees and Expenses                          0             0
  Distributions Received from Project                                    
Partnerships                                         6,545         2,383
  Increase (Decrease) in Payable -                                       
    Other Series                                     2,208             0
    Project Partnerships - Capital                                       
Contributions                                       (2,208)        2,208
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                 6,545         3,588
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                          3,527         3,207
Cash and Cash Equivalents at Beginning of                                
Year                                               202,435       199,743
                                                -----------   -----------
Cash and Cash Equivalents at End of Year       $   205,962   $   202,950
                                                ===========   ===========
                                                                         
                                                                         
              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)
SERIES 11                                        1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (63,905)  $   (49,526)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                      2,074         1,797
   Accreted Interest Income on Investments                               
in Securities                                       (4,406)       (4,466)
   Equity in Losses of Project Partnerships         59,742        46,367
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          4,762         5,209
                                                -----------   -----------
     Net Cash Used in Operating Activities          (1,733)         (619)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                    0             0
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                     0             0
  Acquisition Fees and Expenses                          0             0
  Distributions Received from Project                                    
Partnerships                                         2,182         3,682
  Increase (Decrease) in Payable to Project                              
Partnerships - Capital Contributions                     0             0
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                 2,182         3,682
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                            449         3,063
Cash and Cash Equivalents at Beginning of                                
Year                                               208,198       169,385
                                                -----------   -----------
Cash and Cash Equivalents at End of Year       $   208,647   $   172,448
                                                ===========   ===========
                                                                         

              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED JUNE 30,
                                (Unaudited)
TOTAL SERIES 7 - 11                              1998           1997
-------------------                              ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                     $  (799,385)  $  (744,440)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                     13,266        12,486
   Accreted Interest Income on Investments                               
in Securities                                      (27,092)      (27,685)
   Equity in Losses of Project Partnership         733,778       688,200
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners         55,632        63,841
                                                -----------   -----------
     Net Cash Used in Operating Activities         (23,801)       (7,598)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                    0             0
  Increase in Receivable from Other Series          (3,211)            0
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                 3,211        (3,211)
  Acquisition Fees and Expenses                          0             0
  Distributions Received from Project                                    
Partnerships                                        37,380        26,039
  Increase (Decrease) in Payable -                                       
    Other Series                                     3,211             0
    Project Partnerships - Capital                                       
Contributions                                       (3,211)        3,211
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                37,380        26,039
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                         13,579        18,441
Cash and Cash Equivalents at Beginning of                                
Year                                             1,287,570     1,194,959
                                                -----------   -----------
Cash and Cash Equivalents at End of Year       $ 1,301,149   $ 1,213,400
                                                ===========   ===========
                                                                         

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                       NOTES TO FINANCIAL STATEMENTS
                                     
                               JUNE 30, 1998

NOTE 1 - ORGANIZATION:

   Gateway  Tax  Credit  Fund  III  Ltd.  ("Gateway"),  a  Florida  Limited
Partnership,  was  formed  October 17, 1991  under  the  laws  of  Florida.
Gateway  offered  its limited partnership interests in Series.   The  first
Series for Gateway is Series 7.  Operations commenced on July 16, 1992  for
Series  7,  January 4, 1993 for Series 8, September 30, 1993 for Series  9,
January  21,  1994 for Series 10 and April 29, 1994 for  Series  11.   Each
Series  invests,  as  a  limited  partner, in  other  limited  partnerships
("Project  Partnerships"),  each  of  which  owns  and  operates  apartment
complexes  eligible  for  Low-Income Housing Tax Credits  ("Tax  Credits"),
provided  for in Section 42 of the Internal Revenue Code of 1986.   Gateway
will terminate on December 31, 2040 or sooner, in accordance with the terms
of  the  Limited Partnership Agreement.  As of June 30, 1998,  Gateway  had
received  capital  contributions of $1,000 from the  General  Partners  and
$36,799,000 from the investor Limited Partners.

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

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

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


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

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

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

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

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

  1)   Increased for equity in income or decreased for equity in losses  of
  the Project Partnerships,
  2)    Decreased  for  cash  distributions  received  from   the   Project
  Partnerships, and
  3)  Decreased for the amortization of the acquisition fees and expenses.

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

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

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

 Gateway recognizes a decline in the carrying value of its investment in
the Project Partnerships when there is evidence of a non-temporary decline
in the recoverable amount of the investment.  There is a possibility that
the estimates relating to reserves for non-temporary declines in carrying
value of the investments in Project Partnerships may be subject to material
near term adjustments.

 Gateway, as a limited partner in the Project Partnerships, is subject to
risks inherent in the ownership of property which are beyond its control,
such as fluctuations in occupancy rates and operating expenses, variations
in rental schedules, proper maintenance and continued eligibility of tax
credits.  If the cost of operating a property exceeds the rental income
earned thereon, Gateway may deem it in its best interest to voluntarily
provide funds in order to protect its investment.

Cash and Cash Equivalents

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

Concentrations of Credit Risk

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

Use of Estimates in the Preparation of Financial Statements

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

Investment in Securities

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

Receivable from Project Partnerships

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

Offering and Commission Costs

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

Income Taxes

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

Basis of Preparation

  The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by generally accepted  accounting
principles.   These  statements  should be read  in  conjunction  with  the
financial statements and notes thereto included with the Partnership's Form
10-K for the year ended March 31, 1998.  In the opinion of management these
financial  statements  include  adjustments,  consisting  only  of   normal
recurring  adjustments,  necessary to fairly  summarize  the  Partnership's
financial  position and results of operations.  The results  of  operations
for the periods may not be indicative of the results to be expected for the
year.


NOTE 3 - INVESTMENT IN SECURITIES:

  The  June  30,  1998  Balance  Sheet includes  Investment  in  Securities
consisting  of U.S. Treasury Security Strips which represents  their  cost,
plus accreted interest income of $149,831 for Series 7, $126,331 for Series
8, $68,889 for Series 9, $58,111 for Series 10 and $63,772 for Series 11.

                                                          Gross Unrealized
                   Estimated Market       Cost Plus          Gains and
                         Value        Accreted Interest       (Losses)
                   -----------------  -----------------   ----------------
Series 2                  $  496,985         $  459,617           $  37,368
Series 3                     461,691            434,800              26,891
Series 4                     299,782            291,185               8,597
Series 5                     231,082            233,224             (2,142)
Series 6                     277,211            248,968              28,243

  As of June 30, 1998, the cost and accreted interest of debt securities by
contractual maturities is as follows:

                                  Series 7       Series 8       Series 9
                                  --------       --------       --------
Due with 1 year                    $   48,382     $   43,573     $   28,159
After 1 year through 5 years          190,655        177,749        110,873
After 5 years through 10 years        220,580        213,478        128,246
Over 10 years                               0              0         23,907
                                   ----------     ----------     ----------
  Total Amount Carried on                                                  
Balance Sheet                      $  459,617     $  434,800     $  291,185
                                   ==========     ==========     ==========


                                 Series 10      Series 11        Total
                                  --------       --------       --------
Due with 1 year                    $   23,207     $   22,155     $  165,476
After 1 year through 5 years           83,836         86,872        649,985
After 5 years through 10 years         91,490        102,743        756,537
Over 10 years                          34,691         37,198         95,796
                                   ----------     ----------     ----------
  Total Amount Carried on                                                  
Balance Sheet                      $  233,224     $  248,968     $1,667,794
                                   ==========     ==========     ==========


NOTE 4 - RELATED PARTY TRANSACTIONS:

  The Payable to General Partners primarily represents the asset management
fees  owed  to  the  General Partners at the end  of  the  period.   It  is
unsecured,  due  on demand and, in accordance with the limited  partnership
agreement,  non-interest bearing.  Within the next 12 months, the  Managing
General  Partner does not intend to demand payment on the portion of  Asset
Management Fees payable classified as long-term on the Balance Sheet.

   The   Payable   to  Project  Partnerships  represents   unpaid   capital
contributions  to the Project Partnerships and will be paid  after  certain
performance  criteria are met.  Such contributions are in turn  payable  to
the general partners of the Project Partnerships.

  For the three months ended June 30 1998 and 1997 the General Partners and
affiliates  are entitled to compensation and reimbursement  for  costs  and
expenses incurred by Gateway as follows:

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

 Series 7            $ 22,108       $ 19,500
 Series 8              23,047         21,500
 Series 9              12,648         12,000
 Series 10              8,525          7,500
 Series 11              6,820          6,000
                     --------       --------
 Total               $ 73,148       $ 66,500
                     ========       ========

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

 Series 7           $   3,282      $   3,318
 Series 8               3,618          3,659
 Series 9               2,020          2,042
 Series 10              1,262          1,276
 Series 11              1,010          1,021
                     --------       --------
 Total               $ 11,192       $ 11,316
                     ========       ========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:

   As  of  June  30, 1998, the Partnership had acquired an interest  in  39
Project  Partnerships  for  the Series which  own  and  operate  government
assisted  multi-family housing complexes.  The Partnership, as the Investor
Limited  Partner  pursuant  to  the  Project  Partnership  Agreements   has
generally   acquired  an  ownership  interest  of  99%  in  these   Project
Partnerships.

  The following is a summary of Investments in Project Partnerships as of:

SERIES 7                                        JUNE 30,       MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 7,732,089     $ 7,732,089
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (1)                                 (5,000,910)     (4,782,926)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (116,844)       (101,264)
                                                -----------     -----------
Investment in Project Partnerships before                                  
adjustment                                        2,614,335       2,847,899
                                                                           
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      793,335         793,335
 Accumulated amortization of acquisition                                   
fees and expenses                                  (128,933)       (123,382)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,278,737     $ 3,517,852
                                               ============    ============
                                                                           

(1)  In  accordance with the Partnership's accounting policy to  not  carry
Investments in Project Partnerships below zero, cumulative suspended losses
of  $92,188  for  the  period ended June 30, 1998 and cumulative  suspended
losses of $82,376 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  June  30, 1998, the Partnership had acquired an interest  in  43
Project  Partnerships  for  the Series which  own  and  operate  government
assisted  multi-family housing complexes.  The Partnership, as the Investor
Limited  Partner  pursuant  to  the  Project  Partnership  Agreements   has
generally   acquired  an  ownership  interest  of  99%  in  these   Project
Partnerships.

  The following is a summary of Investments in Project Partnerships as of:

SERIES 8                                        JUNE 30,       MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 7,586,105     $ 7,586,105
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (1)                                 (4,638,286)     (4,372,089)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (91,034)        (84,722)
                                                -----------     -----------
Investment in Project Partnerships before                                  
adjustment                                        2,856,785       3,129,294
                                                                           
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      549,773         549,773
 Accumulated amortization of acquisition                                   
fees and expenses                                   (73,330)        (70,838)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,333,228     $ 3,608,229
                                               ============    ============
                                                                           

(1)  In  accordance with the Partnership's accounting policy to  not  carry
Investments in Project Partnerships below zero, cumulative suspended losses
of  $96,705  for  the  period ended June 30, 1998 and cumulative  suspended
losses of $79,383 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  June  30, 1998, the Partnership had acquired an interest  in  24
Project  Partnerships  for  the Series which  own  and  operate  government
assisted  multi-family housing complexes.  The Partnership, as the Investor
Limited  Partner  pursuant  to  the  Project  Partnership  Agreements   has
generally   acquired  an  ownership  interest  of  99%  in  these   Project
Partnerships.

  The following is a summary of Investments in Project Partnerships as of:

SERIES 9                                        JUNE 30,       MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 4,914,116     $ 4,914,116
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (1)                                 (1,845,571)     (1,711,859)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (61,395)        (54,634)
                                                -----------      ----------
Investment in Project Partnerships before                                  
adjustment                                        3,007,150       3,147,623
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      244,087         244,087
 Accumulated amortization of acquisition                                   
fees and expenses                                   (30,076)        (28,333)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,221,161     $ 3,363,377
                                               ============    ============
                                                           

(1)  In  accordance with the Partnership's accounting policy to  not  carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $0 for the period ended June 30, 1998 and cumulative suspended losses of
$0 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  June  30, 1998, the Partnership had acquired an interest  in  15
Project  Partnerships  for  the Series which  own  and  operate  government
assisted  multi-family housing complexes.  The Partnership, as the Investor
Limited  Partner  pursuant  to  the  Project  Partnership  Agreements   has
generally   acquired  an  ownership  interest  of  99%  in  these   Project
Partnerships.

  The following is a summary of Investments in Project Partnerships as of:

SERIES 10                                       JUNE 30,       MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 3,914,672     $ 3,914,672
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (1)                                   (731,445)       (675,302)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (65,899)        (59,354)
                                                -----------      ----------
Investment in Project Partnerships before                                  
adjustment                                        3,117,328       3,180,016
                                                                           
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      196,738         196,738
 Accumulated amortization of acquisition                                   
fees and expenses                                   (25,491)        (24,085)
                                              -------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,288,575     $ 3,352,669
                                              =============    ============

(1)  In  accordance with the Partnership's accounting policy to  not  carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $0 for the period ended June 30, 1998 and cumulative suspended losses of
$0 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  June  30, 1998, the Partnership had acquired an interest  in  12
Project  Partnerships  for  the Series which  own  and  operate  government
assisted  multi-family housing complexes.  The Partnership, as the Investor
Limited  Partner  pursuant  to  the  Project  Partnership  Agreements   has
generally   acquired  an  ownership  interest  of  99%  in  these   Project
Partnerships.

  The following is a summary of Investments in Project Partnerships as of:

SERIES 11                                       JUNE 30,       MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 4,128,042     $ 4,128,042
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (1)                                   (549,785)       (490,043)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (45,991)        (43,809)
                                                -----------     -----------
Investment in Project Partnerships before                                  
adjustment                                        3,532,266       3,594,190
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      290,335         290,335
 Accumulated amortization of acquisition                                   
fees and expenses                                   (24,868)        (22,794)
                                               ------------     -----------
                                                                           
Investments in Project Partnerships             $ 3,797,733     $ 3,861,731
                                              =============   =============

(1)  In  accordance with the Partnership's accounting policy to  not  carry
Investments in Project Partnerships below zero, cumulative suspended losses
of  $0  for the period June 30, 1998 and cumulative suspended losses of  $0
for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):



  The following is a summary of Investments in Project Partnerships as of:

TOTAL SERIES 7 - 11                             JUNE 30,       MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $28,275,024     $28,275,024
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (1)                                (12,765,997)    (12,032,219)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (381,163)       (343,783)
                                               ------------     -----------
Investment in Project Partnerships before                                  
adjustment                                       15,127,864      15,899,022
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                    2,074,268       2,074,268
 Accumulated amortization of acquisition                                   
fees and expenses                                  (282,698)       (269,432)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $16,919,434     $17,703,858
                                               ============   =============
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
                                                  1998          1997
SERIES 7                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 2,673,659   $ 2,382,026
  Investment properties, net                     37,570,324    39,061,797
  Other assets                                       61,947        97,380
                                               ------------  ------------
    Total assets                                $40,305,930   $41,541,203
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   948,112   $ 1,115,422
  Long-term debt                                 36,850,924    36,950,678
                                               ------------  ------------
    Total liabilities                            37,799,036    38,066,100
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 2,497,459     3,461,558
  General Partners                                    9,435        13,545
                                                -----------   -----------
    Total Partners' equity                        2,506,894     3,475,103
                                                -----------   -----------
    Total liabilities and partners' equity      $40,305,930   $41,541,203
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 1,064,821   $ 1,073,643
Expenses:                                      ------------  ------------
  Operating expenses                                615,770       619,352
  Interest expense                                  289,173       307,713
  Depreciation and amortization                     389,975       402,267
                                               ------------  ------------
    Total expenses                                1,294,918     1,329,332
                                               ------------  ------------
      Net loss                                  $  (230,097)  $  (255,689)
                                               ============  ============
Other partners' share of net loss               $    (2,301)  $    (2,557)
                                               ============  ============
Partnerships' share of net loss                 $  (227,796)  $  (253,132)
Suspended losses                                      9,812        10,619
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (217,984)  $  (242,513)
                                               ============  ============
                                                                         
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
                                                  1998          1997
SERIES 8                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 2,250,729   $ 1,988,966
  Investment properties, net                     40,395,958    41,981,767
  Other assets                                       61,476        65,566
                                               ------------  ------------
    Total assets                                $42,708,163   $44,036,299
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $ 1,110,445   $ 1,246,574
  Long-term debt                                 38,898,362    38,998,505
                                               ------------  ------------
    Total liabilities                            40,008,807    40,245,079
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 2,815,407     3,843,554
  General Partners                                 (116,051)      (52,334)
                                                -----------   -----------
    Total Partners' equity                        2,699,356     3,791,220
                                                -----------   -----------
    Total liabilities and partners' equity      $42,708,163   $44,036,299
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 1,026,624   $ 1,063,045
Expenses:                                      ------------  ------------
  Operating expenses                                627,548       682,122
  Interest expense                                  278,514       267,830
  Depreciation and amortization                     406,945       385,116
                                               ------------  ------------
    Total expenses                                1,313,007     1,335,068
                                               ------------  ------------
      Net loss                                  $  (286,383)  $  (272,023)
                                               ============  ============
Other partners' share of net loss               $    (2,864)  $    (2,720)
                                               ============  ============
Partnerships' share of net loss                 $  (283,519)  $  (269,303)
Suspended losses                                     17,322         3,760
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (266,197)  $  (265,543)
<PAGE>
                                               ============  ============
                                                                         

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
                                                  1998          1997
SERIES 9                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 1,440,168   $ 1,333,321
  Investment properties, net                     22,415,702    23,295,181
  Other assets                                       79,712       188,752
                                               ------------  ------------
    Total assets                                $23,935,582   $24,817,254
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   414,327   $   677,625
  Long-term debt                                 20,587,632    20,645,207
                                               ------------  ------------
    Total liabilities                            21,001,959    21,322,832
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,003,272     3,521,357
  General Partners                                  (69,649)      (26,935)
                                                -----------   -----------
    Total Partners' equity                        2,933,623     3,494,422
                                                -----------   -----------
    Total liabilities and partners' equity      $23,935,582   $24,817,254
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $   547,752   $   547,292
Expenses:                                      ------------  ------------
  Operating expenses                                299,498       281,862
  Interest expense                                  157,937       146,617
  Depreciation and amortization                     225,380       215,781
                                               ------------  ------------
    Total expenses                                  682,815       644,260
                                               ------------  ------------
      Net loss                                  $  (135,063)  $   (96,968)
                                               ============  ============
Other partners' share of net loss               $    (1,351)  $      (970)
                                               ============  ============
Partnerships' share of net loss                 $  (133,712)  $   (95,998)
Suspended losses                                          0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (133,712)  $   (95,998)
                                               ============  ============
<PAGE>
                                                                         

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
                                                  1998          1997
SERIES 10                                         ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 1,198,923   $ 1,028,221
  Investment properties, net                     15,579,141    16,079,503
  Other assets                                       23,490        20,402
                                               ------------  ------------
    Total assets                                $16,801,554   $17,128,126
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   261,742   $   240,248
  Long-term debt                                 13,487,607    13,535,883
                                               ------------  ------------
    Total liabilities                            13,749,349    13,776,131
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,130,153     3,364,035
  General Partners                                  (77,948)      (12,040)
                                                -----------   -----------
    Total Partners' equity                        3,052,205     3,351,995
                                                -----------   -----------
    Total liabilities and partners' equity      $16,801,554   $17,128,126
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $   346,480   $   345,176
Expenses:                                      ------------  ------------
  Operating expenses                                200,476       199,620
  Interest expense                                   75,173        60,860
  Depreciation and amortization                     127,541       122,857
                                               ------------  ------------
    Total expenses                                  403,190       383,337
                                               ------------  ------------
      Net loss                                  $   (56,710)  $   (38,161)
                                               ============  ============
Other partners' share of net loss               $      (567)  $      (382)
                                               ============  ============
Partnerships' share of net loss                 $   (56,143)  $   (37,779)
Suspended losses                                          0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships        $   (56,143)  $   (37,779)
                                               ============  ============
<PAGE>
                                                                         

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
                                                  1998          1997
SERIES 11                                         ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $   966,994   $   630,783
  Investment properties, net                     13,865,796    14,350,170
  Other assets                                       12,130        28,421
                                               ------------  ------------
    Total assets                                $14,844,920   $15,009,374
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   404,208   $   194,137
  Long-term debt                                 10,825,000    10,918,640
                                               ------------  ------------
    Total liabilities                            11,229,208    11,112,777
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,543,933     3,759,019
  General Partners                                   71,779       137,578
                                                -----------   -----------
    Total Partners' equity                        3,615,712     3,896,597
                                                -----------   -----------
    Total liabilities and partners' equity      $14,844,920   $15,009,374
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $   343,746   $   376,957
Expenses:                                      ------------  ------------
  Operating expenses                                173,898       179,721
  Interest expense                                  104,158       109,833
  Depreciation and amortization                     126,035       134,238
                                               ------------  ------------
    Total expenses                                  404,091       423,792
                                               ------------  ------------
      Net loss                                  $   (60,345)  $   (46,835)
                                               ============  ============
Other partners' share of net loss               $      (603)  $      (468)
                                               ============  ============
Partnerships' share of net loss                 $   (59,742)  $   (46,367)
Suspended losses                                          0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships        $   (59,742)  $   (46,367)
                                               ============  ============
<PAGE>
                                                                         

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
March 31, of each year:
                                                1998            1997
TOTAL SERIES 7 - 11                             ----            ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                              $  8,530,473   $  7,363,317
  Investment properties, net                   129,826,921    134,768,418
  Other assets                                     238,755        400,521
                                              ------------   ------------
    Total assets                              $138,596,149   $142,532,256
                                              ============   ============
Liabilities and Partners' Equity:                                        
  Current liabilities                         $  3,138,834   $  3,474,006
  Long-term debt                               120,649,525    121,048,913
                                              ------------   ------------
    Total liabilities                          123,788,359    124,522,919
                                              ------------   ------------
Partners' equity                                                         
  Limited Partner                               14,990,224     17,949,523
  General Partners                               (182,434)         59,814
                                               -----------    -----------
    Total Partners' equity                      14,807,790     18,009,337
                                               -----------    -----------
    Total liabilities and partners' equity    $138,596,149   $142,532,256
                                              ============   ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                       $  3,329,423   $  3,406,113
Expenses:                                     ------------   ------------
  Operating expenses                             1,917,190      1,962,677
  Interest expense                                 904,955        892,853
  Depreciation and amortization                  1,275,876      1,260,259
                                              ------------   ------------
    Total expenses                               4,098,021      4,115,789
                                              ------------   ------------
      Net loss                                $   (768,598)  $   (709,676)
                                              ============   ============
Other partners' share of net loss             $     (7,686)  $     (7,097)
                                              ============   ============
Partnerships' share of net loss               $   (760,912)  $   (702,579)
Suspended losses                                    27,134         14,379
                                              ------------   ------------
Equity in Losses of Project Partnerships      $   (733,778)  $   (688,200)
                                              ============   ============
<PAGE>
                                                                         

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

Results of Operations, Liquidity and Capital Resources

   The  proceeds  from  Limited  Partner investors'  capital  contributions
available  for  investment  are  used  to  acquire  interests  in   Project
Partnerships.

  As  disclosed on the statement of operations for each Series,  except  as
described  below, interest income is comparable for the three months  ended
June 30, 1998 and June 30, 1997.  The General and Administrative expenses -
General  Partner and General and Administrative expenses -  Other  for  the
three  months ended June 30, 1998 are comparable to June 30,  1997.   There
were  no  unusual  variations in the operating results  between  these  two
periods.

   The  capital  resources  of each Series are  used  to  pay  General  and
Administrative   operating  costs  including  personnel,   supplies,   data
processing,   travel   and  legal  and  accounting  associated   with   the
administration and monitoring of Gateway and the Project Partnerships.  The
capital  resources are also used to pay the Asset Management  Fee  due  the
Managing  General Partner, but only to the extent that Gateway's  remaining
resources are sufficient to fund Gateway's ongoing needs.  (Payment of  any
Asset Management Fee unpaid at the time Gateway sells its interests in  the
Project  Partnerships  is subordinated to the investors'  return  of  their
original capital contribution.)

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

  Series 7 - Gateway closed this series on October 16, 1992 after receiving
$10,395,000  from  635  Limited Partner investors.   Equity  in  Losses  of
Project  Partnerships were comparable for the three months ended  June  30,
1998  and  June  30,  1997.  In general, it is common in  the  real  estate
industry  to  experience  losses for financial and tax  reporting  purposes
because  of  the non-cash expenses of depreciation and amortization.  As  a
result,  management  expects that this Series, as well as  those  described
below, will report its equity in Project Partnerships as a loss for tax and
financial  reporting  purposes.  Overall, management believes  the  Project
Partnerships are operating as expected and are generating tax credits which
meet projections.

  At June 30, 1998, the Series had $294,245 of short-term investments (Cash
and Cash Equivalents).  It also had $459,617 in Zero Coupon Treasuries with
annual  maturities  providing $50,000 in fiscal  year  1999  increasing  to
$80,000 in fiscal year 2008.  Management believes the sources of funds  are
sufficient  to meet current and ongoing operating costs for the foreseeable
future, and to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of
$240,572  for  the  three  months  ended June  30,  1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $217,984 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $7,441.   Cash  provided by investing  activities  totaled
$15,580, consisting  of cash distributions from the Project Partnerships.

  Series  8  -  Gateway  closed this Series on  September  28,  1993  after
receiving $9,980,000 from 664 Limited Partner investors.  Equity in  Losses
of Project Partnerships were comparable for the three months ended June 30,
1998 and June 30, 1997.  At June 30, 1998, the Series had $410,251 of short-
term investments (Cash and Cash Equivalents).  It also had $434,800 in Zero
Coupon  Treasuries with annual maturities providing $45,000 in fiscal  year
1999  increasing to $82,000 in fiscal year 2008.  Management  believes  the
sources of funds are sufficient to meet current and ongoing operating costs
for the foreseeable future, and to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of
$286,785  for  the  three  months  ended June  30,  1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $266,197 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $6,788.   Cash  provided by investing  activities  totaled
$6,312,  consisting  primarily of cash distributions  of  $6,312  from  the
Project Partnerships.  There were no unusual events or trends to describe.

 Series 9 - Gateway closed this Series on December 31, 1993 after receiving
$6,254,000 from 406 Limited Partner investors.  Equity in Losses of Project
Partnerships  increased from $95,998 for the three months  ended  June  30,
1997  to  $133,712 for the three months ended June 30, 1998.  At  June  30,
1998,  the  Series had $182,044 of short-term investments  (Cash  and  Cash
Equivalents).  It also had $291,185 in Zero Coupon Treasuries  with  annual
maturities  providing $29,000 in fiscal year 1999 increasing to $47,000  in
fiscal  year 2009.  Management believes the sources of funds are sufficient
to meet current and ongoing operating costs for the foreseeable future, and
to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of
$145,637  for  the  three  months  ended June  30,  1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $133,712 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $4,821.   Cash  provided by investing  activities  totaled
$6,761,  consisting  of  cash distributions from the Project  Partnerships.
There were no unusual events or trends to describe.

 Series 10 - Gateway closed this Series on January 21, 1994 after receiving
$5,043,000 from 325 Limited Partner investors.  Equity in Losses of Project
Partnerships  increased from $37,779 for the three months  ended  June  30,
1997  to  $56,143 for the three months ended June 30, 1998.   At  June  30,
1998,  the  Series had $205,962 of short-term investments  (Cash  and  Cash
Equivalents).  It also had $233,224 in Zero Coupon Treasuries  with  annual
maturities  providing $24,000 in fiscal year 1999 increasing to $40,000  in
fiscal  year 2010.  Management believes the sources of funds are sufficient
to meet current and ongoing operating costs for the foreseeable future, and
to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of
$62,486 for the three months ended June 30, 1998.  However, after adjusting
for Equity in Losses of Project Partnerships of $56,143 and the changes  in
operating assets and liabilities, net cash used in operating activities was
$3,018.   Cash provided by investing activities totaled $6,545,  consisting
of cash distributions from the Project Partnerships.  There were no unusual
events or trends to describe.

  Series  11 - Gateway closed this Series on April 29, 1994 after receiving
$5,127,000  from  330  Limited  investors.  Equity  in  losses  of  Project
Partnerships  increased from $46,367 for the three months  ended  June  30,
1997  to  $59,742 for the three months ended June 30, 1998.   At  June  30,
1998,  the  Series had $208,647 of short-term investments  (Cash  and  Cash
Equivalents).  It also had $248,968 in Zero Coupon Treasuries  with  annual
maturities  providing $23,000 in fiscal year 1999 increasing to $44,000  in
fiscal  year 2010.  Management believes the sources of funds are sufficient
to meet current and ongoing operating costs for the foreseeable future, and
to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of
$63,705 for the three months ended June 30, 1998.  However, after adjusting
for Equity in Losses of Project Partnerships of $59,742 and the changes  in
operating assets and liabilities, net cash used in operating activities was
$1,733.   Cash provided by investing activities totaled $2,182,  consisting
of cash distributions from the Project Partnerships.  There were no unusual
events or trends to describe.

<PAGE>

                           SIGNATURES


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


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





Date:  August 21, 1998     By:/s/ Ronald M. Diner
                           Ronald M. Diner
                           President



Date:  August 21, 1998     By:/s/ Sandra L. Furey
                           Sandra L. Furey
                           Secretary and Treasurer
<PAGE>