K-1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)

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

For the fiscal year ended                  March 31, 2008
                         --------------------------------------------

                                                         OR

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

For the transition period from            to
                 -------------------------------------------------

                        Commission file number 01-18462

          Boston Financial Qualified Housing Tax Credits L.P.  III
---------------------------------------------------------------------------

               (Exact name of registrant as specified in its charter)

                   Delaware                              04-3032106
---------------------------------------          ---------------------------
      (State or other jurisdiction of      (I.R.S. Employer Identification No.)
       incorporation or organization)

   101 Arch Street, Boston, Massachusetts              02110-1106
---------------------------------------------    -------------------------------
    (Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code    (617) 439-3911
                                                      --------------

Securities registered pursuant to Section 12(b) of the Act:


   Title of each class              Name of each exchange on which registered
      None                                       None

Securities registered pursuant to Section 12(g) of the Act:

                    UNITS OF LIMITED PARTNERSHIP INTEREST
                          (Title of Class)


Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act.  ____

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 .





<PAGE>


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB. X .

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                 Yes No X .

State issuer's revenues for its most recent fiscal year:  $448,748.

State the aggregate sales price of partnership units held by nonaffiliates of
the registrant:  $99,610,000 as of March 31, 2008.
<TABLE>
<CAPTION>
<S>                                                               <C>

                                                                Part of Report on Form 10-KSB into Which the
Documents incorporated by reference                                Document is Incorporated

Post-effective Amendment No. 1 to the Form S-11
  Registration Statement, File # 33-24175                               Part I, Item 1

Supplement No. 4 to the Prospectus dated May 9, 1989                    Part I, Item 1

Report on Form 8-K dated November 21, 1989                              Part I, Item 1

Acquisition Reports                                                     Part I, Item 1

Prospectus - Sections Entitled:

  "Investment Objectives and Policies -
   Principal Investment Policies"                                       Part I, Item 1

  "Estimated Use of Proceeds"                                           Part III, Item 12

  "Management Compensation and Fees"                                    Part III, Item 12

  "Profits and Losses for Tax Purposes, Tax
   Credits and Cash Distributions"                                      Part III, Item 12


</TABLE>

<PAGE>


             BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (a Limited Partnership)

                          ANNUAL REPORT ON FORM 10-KSB
                        FOR THE YEAR ENDED MARCH 31, 2008


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                                                                 <C>


PART I                                                               Page No.

   Item 1    Business                                                  K-4
   Item 2    Properties                                                K-7
   Item 3    Legal Proceedings                                         K-10
   Item 4    Submission of Matters to a
             Vote of Security Holders                                  K-10

PART II

   Item 5     Market for the Registrant's Units
              and Related Security Holder Matters                      K-10
   Item 6     Management's Discussion and Analysis of
              Financial Condition and Results of Operations            K-10
   Item 7     Financial Statements and Supplementary Data              K-15
   Item 8     Changes in and Disagreements with
              Accountants on Accounting and Financial
              Disclosure                                               K-15
   Item 8A    Controls and Procedures                                  K-15
   Item 8B    Other Information                                        K-16

PART III

   Item 9     Directors and Executive Officers
              of the Registrant                                        K-16
   Item 10    Management Remuneration                                  K-17
   Item 11    Security Ownership of Certain Beneficial
              Owners and Management                                    K-17
   Item 12    Certain Relationships and Related
              Transactions                                             K-17
   Item 13    Exhibits, Financial Statement Schedules and
              Reports on Form 8-K                                      K-19
   Item 14.   Principal Accountant Fees and Services                   K-19

SIGNATURES                                                             K-20
----------

CERTIFICATIONS                                                         K-21
--------------
</TABLE>


<PAGE>


                                     PART I

Item 1.  Business

Boston Financial Qualified Housing Tax Credits L.P. III (the "Partnership") is a
limited partnership formed on August 9, 1988 under the Uniform Limited
Partnership Act of the State of Delaware. The Certificate and Agreement of
Limited Partnership ("Partnership Agreement") authorized the sale of up to
100,000 units of Limited Partnership Interest ("Units") at $1,000 per Unit
(Gross Proceeds is $100,000,000), adjusted for certain discounts. The
Partnership raised $99,610,000, net of discounts of $390,000, through the sale
of 100,000 Units. Such amounts exclude five unregistered Units previously
acquired for $5,000 by the Initial Limited Partner, which is also one of the
General Partners. The offering of Units terminated on May 30, 1989. No further
sale of Units is expected.

The Partnership is engaged solely in the business of real estate investment.
Accordingly, a presentation of information about industry segments is not
applicable and would not be material to an understanding of the Partnership's
business taken as a whole.

The Partnership originally invested as a limited partner in sixty-nine other
limited partnerships ("Local Limited Partnerships") which own and operate
residential apartment complexes ("Properties"), some of which benefit from some
form of federal, state or local assistance programs and all of which qualify for
the low-income housing tax credits ("Tax Credits") that were added to the
Internal Revenue Code by the Tax Reform Act of 1986 (the "Code"). The investment
objectives of the Partnership include the following: (i) to provide current tax
benefits in the form of Tax Credits which qualified Limited Partners may use to
offset their federal income tax liability; (ii) to preserve and protect the
Partnership's capital; (iii) to provide limited cash distributions from Property
operations which are not expected to constitute taxable income during the
expected duration of the Partnership's operations; and (iv) to provide cash
distributions from sale or refinancing transactions. There cannot be any
assurance that the Partnership will attain any or all of these investment
objectives. A more detailed discussion of these investment objectives, along
with the risks in achieving them, is contained in the section of the prospectus
entitled "Investment Objectives and Policies - Principal Investment Policies"
which is herein incorporated by this reference.

Table A on the following pages lists the Properties originally acquired by Local
Limited Partnerships in which the Partnership has invested. Item 6 of this
Report contains other significant information with respect to such Local Limited
Partnerships. As required by applicable rules, the terms of the acquisition of
Local Limited Partnership interests have been described in supplements to the
Prospectus and collected in one post-effective amendment to the Registration
Statement and in another supplement to the Prospectus and in a report on Form
8-K (collectively, the "Acquisition Reports"); such descriptions are
incorporated herein by this reference.


<PAGE>


                                     TABLE A

                             SELECTED LOCAL LIMITED
                                PARTNERSHIP DATA

<TABLE>
<CAPTION>
<S>                                                     <C>                                        <C>

                                                                                                     Date
 Properties owned by                                                                                Interest
 Local Limited Partnerships                             Location                                    Acquired
_________________________                              ____________                               ____________
West Dade (1)                                            Miami, FL                                  12/31/88
West Dade II (1)                                         Miami, FL                                  12/31/88
Regency Square (1)                                       Dayton, OH                                 03/13/89
Westwood Manor (1)                                       Flint, MI                                  02/21/89
Rolling Hills (1)                                        Dayton, OH                                 03/13/89
Boulevard Commons II (1)                                 Chicago, IL                                04/04/89
Boulevard Commons IIA (1)                                Chicago, IL                                04/04/89
Fox Run Housing  (1)                                     Victoria, TX                               04/07/89
Waterfront                                               Buffalo, NY                                04/28/89
Shoreline                                                Buffalo, NY                                04/28/89
Colony Apartments (1)                                    Columbia, SC                               05/19/89
Admiral Court (1)                                        Philadelphia, PA                           06/07/89
Crestwood (1)                                            Bridgeport, TX                             06/05/89
Elmwood Delmar (1)                                       Aurora, CO                                 05/16/89
El Jardin (1)                                            Davie, FL                                  06/14/89
Ashley Place (1)                                         Orlando, FL                                06/23/89
Willowick (1)                                            Gainesville, TX                            06/30/89
Kirkendall Heights (1)                                   Ellsworth, KS                              07/19/89
Bentley Hill (1)                                         Syracuse, KS                               06/30/89
Columbia Townhouses (1)                                  Burlington, IA                             07/28/89
Quartermill (1)                                          Richmond, VA                               08/02/89
Ponca Manor (1)                                          Satanta, KS                                07/28/89
Pearl Place (1)                                          Rossville, KS                              07/28/89
Crown Point (1)                                          Venus, TX                                  08/22/89
Godley Arms (1)                                          Godley, TX                                 08/25/89
Pilot Point (1)                                          Pilot Point, TX                            08/22/89
Sherwood Arms (1)                                        Keene, TX                                  08/22/89
South Holyoke (1)                                        Holyoke, MA                                08/29/89
Walker Woods                                             Dover, DE                                  08/30/89
Lakeway Colony (1)                                       Lake Dallas, TX                            08/30/89
One Main Place (1)                                       Little Elm, TX                             08/22/89
Eaglewood (1)                                            Covington, TN                              09/06/89
Harbour View (1)                                         Staten Island, NY                          09/29/89
Georgetown II (1)                                        Georgetown, DE                             09/28/89
Granite V (1)                                            Boston, MA                                 09/29/89
Garden Plain (1)                                         Garden Plain, KS                           08/09/89
Fulton (1)                                               Fulton, KY                                 10/05/89
Lone Oak (1)                                             Graham, TX                                 10/06/89
Hallet West (1)                                          Hallettsville, TX                          11/20/89
Glenbrook (1)                                            St. Jo, TX                                 10/06/89
Eagles Nest (1)                                          Decatur, TN                                10/06/89
Billings Family (1)                                      Billings, MO                               08/09/89
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
<S>                                                     <C>                                         <C>

                                                                                                      Date
Properties owned by                                                                                 Interest
Local Limited Partnerships                               Location                                    Acquired
_____________________                                   ______________                             ____________
Brownsville (1)                                          Brownsville, TN                            08/09/89
Sunnyhill Villa (1)                                      Wayne, NE                                  08/09/89
Longview (1)                                             Humboldt, KS                               10/13/89
Horseshoe Bend (1)                                       Horseshoe Bend, AR                         08/09/89
Briarwood II (1)                                         Lake Havasua, AZ                           10/04/89
Quail Run (1)                                            Iowa Park, TX                              10/06/89
Smithville (1)                                           Smithville, MO                             08/09/89
Aurora East Apartments (1)                               Denver, CO                                 11/06/89
Elver Park II (1)                                        Madison, WI                                11/09/89
Elver Park III (1)                                       Madison, WI                                11/09/89
Tucson Trails I (1)                                      Madison, WI                                11/22/89
Tucson Trails II (1)                                     Madison, WI                                11/23/89
Pleasant Plaza (1)                                       Malden, MA                                 12/01/89
241 Pine Street (1)                                      Manchester, NH                             12/04/89
Heather Oaks (1)                                         Oak Grove, MO                              11/24/89
Riverfront                                               Sunbury, PA                                12/26/89
Susquehanna View                                         Camp Hill, PA                              12/26/89
Breckenridge (1)                                         Duluth, GA                                 12/19/89
Wood Creek                                               Calcium, NY                                12/15/89
Willow Lake (1)                                          Kansas City, MO                            12/20/89
Ashton Heights (1)                                       Bolivar, MO                                12/15/89
Fouche Valley (1)                                        Perryville, AR                             05/01/90
Altheimer (1)                                            Altheimer, AR                              04/18/90
Kyle Hotel (1)                                           Temple, TX                                 06/12/90
Diversey Square (1)                                      Chicago, IL                                12/01/90
Poplar Village (1)                                       Cumberland, KY                             12/30/90
Lexington (1)                                            Lexington, TN                              12/29/90
</TABLE>


(1)   The Partnership no longer has an interest in the Local Limited Partnership
      which owns this Property.


<PAGE>


Although the Partnership's investments in Local Limited Partnerships are not
subject to seasonal fluctuations, the Partnership's equity in losses of Local
Limited Partnerships, to the extent they reflect the operations of individual
Properties, may vary from quarter to quarter based upon changes in occupancy and
operating expenses as a result of seasonal factors.

Each Local Limited Partnership has as its general partners ("Local General
Partners") one or more individuals or entities not affiliated with the
Partnership or its General Partners. In accordance with the partnership
agreements under which such entities are organized ("Local Limited Partnership
Agreements"), the Partnership depends on the Local General Partners for the
management of each Local Limited Partnership. As of March 31, 2008, the
following Local Limited Partnerships have a common Local General Partner or
affiliated group of Local General Partners accounting for the specified
percentage of the total capital contributions made to Local Limited
Partnerships: (i) Riverfront Apartments, L.P. and Susquehanna View, L.P.,
representing 34.37%, have AIMCO Properties as Local General Partner; (ii)
Waterfront Limited Partnership and Shoreline Limited Partnership, representing
38.46%, have M.B. Associates as Local General Partner. The Local General
Partners of the remaining Local Limited Partnerships are identified in the
Acquisition Reports, which are incorporated herein by reference.

The Properties owned by Local Limited Partnerships in which the Partnership has
invested are and will continue to be subject to competition from existing and
future properties in the same areas. The continued success of the Partnership
will depend on many factors, most of which are beyond the control of the
Partnership and cannot be predicted at this time. Such factors include general
economic and real estate market conditions, both on a national basis and in
those areas where the Properties are located, the availability and cost of
borrowed funds, real estate tax rates, operating expenses, energy costs and
government regulations. In addition, other risks inherent in real estate
investment may influence the ultimate success of the Partnership, including: (i)
possible reduction in rental income due to an inability to maintain high
occupancy levels or adequate rental levels; (ii) possible adverse changes in
general economic conditions and adverse local conditions, such as competitive
overbuilding, a decrease in employment rates or adverse changes in real estate
laws, including building codes; and (iii) possible future adoption of rent
control legislation which would not permit increased costs to be passed on to
the tenants in the form of rent increases or which would suppress the ability of
the Local Limited Partnership to generate operating cash flow. Since most of the
Properties benefit from some form of government assistance, the Partnership is
subject to the risks inherent in that area including decreased subsidies,
difficulties in finding suitable tenants and obtaining permission for rent
increases. In addition, any Tax Credits allocated to investors with respect to a
Property are subject to recapture to the extent that the Property or any portion
thereof ceases to qualify for the Tax Credits. Other future changes in federal
and state income tax laws affecting real estate ownership or limited
partnerships could have a material and adverse affect on the business of the
Partnership.

The Partnership is managed by Arch Street III, Inc., the Managing General
Partner of the Partnership. The other General Partner of the Partnership is Arch
Street III Limited Partnership. The Partnership, which does not have any
employees, reimburses MMA Financial, Inc. ("MMA"), an affiliate of the General
Partners, for certain expenses and overhead costs. A complete discussion of the
management of the Partnership is set forth in Item 9 of this Report.

Item 2.  Properties

The Partnership currently owns limited partnership interests in six Local
Limited Partnerships which own and operate Properties, some of which benefit
from some form of federal, state or local assistance programs and all of which
qualify for the Tax Credits added to the Code by the Tax Reform Act of 1986. The
Partnership's ownership interest in each Local Limited Partnership is 99%.

Each of the Local Limited Partnerships has received an allocation of Tax Credits
from its relevant state tax credit agency. In general, the Tax Credits run for
ten years from the date the Property is placed in service. The required holding
period (the "Compliance Period") of the Properties is fifteen years. During
these fifteen years, the Properties must satisfy rent restrictions, tenant
income limitations and other requirements, as promulgated by the Code, in order
to maintain eligibility for the Tax Credits, at all times during the Compliance
Period. Once a Local Limited Partnership has become eligible for the Tax
Credits, it may lose such eligibility and suffer an event of recapture if its
Property fails to remain in compliance with the requirements.
<PAGE>
In addition, some of the Local Limited Partnerships have obtained one or a
combination of different types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the Property is located at favorable terms; and iii) loans which have repayment
terms that are based on a percentage of cash flow.

The schedule on the following pages provides certain key information on the
Local Limited Partnership interests acquired by the Partnership.


<PAGE>

<TABLE>
<CAPTION>
<S>                            <C>               <C>                <C>             <C>                 <C>            <C>

                                                  Capital Contributions
Local Limited Partnership                        Total              Paid           Mtge. Loans                       Occupancy at
Property Name                 Number of        Committed at         Through         Payable at           Type of        March 31,
Property Location             Apts Units      March 31, 2008     March 31, 2008   December 31, 2007     Subsidy *          2008
 -----------------------------------------------------------  ------------------ -----------------  ------------------ ---------

Shoreline Limited Partnership
Shoreline
Buffalo, NY                      142             1,079,318           1,079,318           9,475,509          None           37%

Waterfront Limited Partnership
Waterfront
Buffalo, NY                       472            3,597,307            3,597,307         32,863,612          None           60%

Walker Woods Partners, L.P.
Walker Woods
Dover, DE                          52            1,452,380           1,452,380          2,816,578           None           96%

Wood Creek Associates
     (A New York Limited Partnership)
Wood Creek
Calcium, NY                       104            1,850,000           1,850,000         2,330,890            None           99%

Riverfront Apartments, L.P.
Riverfront
Sunbury, PA                       199            1,984,908           1,984,908         5,359,715         Section 8        100%

Susquehanna View, L.P.
Susquehanna View. L.P.
Camp Hill, PA                    201             2,194,314           2,194,314         7,705,286         Section 8         100%
                                 ------       --------------        -------------   --------------

                                 1,170       $  12,158,227         $ 12,158,227    $ 60,551,590
                                ======        =============         =============  ===============
</TABLE>


 Section   8 This subsidy, which is authorized under Section 8 of Title II of
           the Housing and Community Development Act of 1974, allows qualified
           low-income tenants to pay 30% of their monthly income as rent with
           the balance paid by the federal government.





<PAGE>




The Partnership does not guarantee any of the mortgages or other debt of the
Local Limited Partnerships.

Duration of leases for occupancy in the Properties described above is generally
six to twelve months. The Managing General Partner believes the Properties
described herein are adequately covered by insurance.

Additional information required under this item, as it pertains to the
Partnership, is contained in Items 1, 6 and 7 of this Report.

Item 3.  Legal Proceedings

The Partnership is not a party to any pending legal or administrate proceeding,
and to the best of its knowledge, no legal or administrative proceeding is
threatened or contemplated against it.

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

None.

                                     PART II


Item 5.  Market for the Registrant's Units and Related Security Holder Matters

There is no public market for the Units, and it is not expected that a public
market will develop. If a Limited Partner desires to sell Units, the buyer of
those Units will be required to comply with the minimum purchase and retention
requirements and investor suitability standards imposed by applicable federal or
state securities laws and the minimum purchase and retention requirements
imposed by the Partnership. The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers, will be subject
to negotiation by the Limited Partner seeking to sell his Units. Units will not
be redeemed or repurchased by the Partnership.

The Partnership Agreement does not impose on the Partnership or its General
Partners any obligation to obtain periodic appraisals of assets or to provide
Limited Partners with any estimates of the current value of Units.

As of March 31, 2008, there were 4,973 record holders of Units of the
Partnership.

Cash distributions, when made, are paid annually. During the year ended March
31, 2008, a cash distribution of $9,772,329 was paid. No cash distribution was
paid in the year ended March 31, 2007.

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations
--------------------------------------------------------------------------

Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The use of
words like "anticipate," "estimate," "intend," "project," "plan," "expect,"
"believe," "could," and similar expressions are intended to identify such
forward-looking statements. The Partnership intends such forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements and is including this statement for purposes of complying with these
safe harbor provisions. Although the Partnership believes the forward-looking
statements are based on reasonable assumptions and current expectations, the
Partnership can give no assurance that its expectations will be attained. Actual
results and timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due to a number
of factors, including, without limitation, general economic and real estate
conditions and interest rates.

Executive Level Overview

The Partnership was formed on August 9, 1988 under the laws of the State of
Delaware for the primary purpose of investing, as a limited partner, in Local
Limited Partnerships, which own and operate apartment complexes, most of which
benefit from some form of federal, state or local assistance program and each of
which qualify for low-income housing tax credits. The Partnership's objectives
are to: (i) provide current tax benefits in the form of tax credits which
qualified investors may use to offset their federal income tax liability; (ii)
preserve and protect the Partnership's capital; (iii) provide limited cash
distributions which are not expected to constitute taxable income during
Partnership operations; and (iv) provide cash distributions from sale or
refinancing transactions. The General Partners of the Partnership are Arch
Street III, Inc., which serves as the Managing General Partner, and Arch Street
III L.P., which also serves as the Initial Limited Partner. Both of the General
Partners are affiliates of MMA Financial, Inc. ("MMA"). The fiscal year of the
Partnership ends on March 31.
<PAGE>
As of March 31, 2008, the Partnership's investment portfolio consisted of
limited partnership interests in six Local Limited Partnerships, each of which
owns and operates a multi-family apartment complex and each of which has
generated Tax Credits. Since inception, the Partnership generated Tax Credits,
net of recapture, of approximately $1,342 per Limited Partner Unit. The
aggregate amount of Tax Credits generated by the Partnership was consistent with
the objective specified in the Partnership's prospectus.

In October 2007, the Partnership distributed $9,674,581, or $96.77 per Unit to
Limited Partners, representing a distribution from the proceeds of previously
reported dispositions of sixty-three Properties and/or the Partnership's
investment in the Local Limited Partnerships owning these Properties. The
Managing General Partner anticipates making additional distributions in the
future.

Properties that receive low income housing Tax Credits must remain in compliance
with rent restriction and set-aside requirements for at least 15 calendar years
from the date the Property is placed in service. Failure to do so would result
in recapture of a portion of the Property's Tax Credits. The Compliance Period
of the six Properties in which the Partnership has an interest expired by
December 31, 2004. The Managing General Partner has negotiated agreements that
will ultimately allow the Partnership to dispose of its interest in two Local
Limited Partnerships. The Partnership disposed of one Local Limited Partnership
interest during the twelve month period ending March 31, 2008.

The Managing General Partner will continue to pursue the disposition of the
Partnership's remaining Local Limited Partnership interests. The Partnership
shall dissolve and its affairs shall be wound up upon the disposition of the
final Local Limited Partnership interest and other assets of the Partnership.
Investors will continue to be Limited Partners, receiving K-1s and quarterly and
annual reports, until the Partnership is dissolved.

Critical Accounting Policies

The Partnership's accounting policies include those that relate to its
recognition of investments in Local Limited Partnerships using the equity method
of accounting. The Partnership's policy is as follows:

The Local Limited Partnerships in which the Partnership invests are Variable
Interest Entities ("VIE"s). The Partnership is involved with the VIEs as a
non-controlling limited partner equity holder. Because the Partnership is not
the primary beneficiary of these VIEs, it accounts for its investments in the
Local Limited Partnerships using the equity method of accounting. As a result of
its involvement with the VIEs, the Partnership's exposure to economic and
financial statement losses is limited to its investments in the VIEs ($116,428
at March 31, 2008). The Partnership may be subject to additional losses to the
extent of any financial support that the Partnership voluntarily provides in the
future. Under the equity method, the investment is carried at cost, adjusted for
the Partnership's share of net income or loss and for cash distributions from
the Local Limited Partnerships; equity in income or loss of the Local Limited
Partnerships is included currently in the Partnership's operations. A liability
is recorded for delayed equity capital contributions to Local Limited
Partnerships. Under the equity method, a Local Limited Partnership investment
will not be carried below zero. To the extent that equity in losses are incurred
when the Partnership's carrying value of the respective Local Limited
Partnership has been reduced to a zero balance, the losses will be suspended and
offset against future income. Income from Local Limited Partnerships, where
cumulative equity in losses plus cumulative distributions have exceeded the
total investment in Local Limited Partnerships, will not be recorded until all
of the related unrecorded losses have been offset. To the extent that a Local
Limited Partnership with a carrying value of zero distributes cash to the
Partnership, that distribution is recorded as income on the books of the
Partnership and is included in "other revenue" in the accompanying financial
statements.

The Partnership has implemented policies and practices for assessing
other-than-temporary declines in values of its investments in Local Limited
Partnerships. Periodically, the carrying values of the investments are compared
to their respective fair values. If an other-than-temporary decline in carrying
value exists, a provision to reduce the asset to fair value, as calculated based
primarily on remaining tax benefits, will be recorded in the Partnership's
financial statements.  The tax benefits for each Local Limited Partnership
consist of future tax losses, tax credits, and residual receipts at dosposition.
Included in the residual receipts calculation is current net operating income
capitalized at the regional rate specific to each Local Limited Partnership.
During the year ended March 31, 2008, the Partnership concluded that one of the
Local Limited Partnerships, Riverfront had experienced an other-than-temporary
decline in its carrying value and impairment losses of $730,476 were recorded.
Generally, the carrying value of most Local Limited Partnerships will decline
through losses and distributions in amounts sufficient to prevent
other-than-temporary impairments. However, the Partnership may record
similar impairment losses in the future if the expiration of tax credits
outpaces losses and distributions from any of the Local Limited Partnerships.
<PAGE>
Liquidity and Capital Resources

At March 31, 2008, the Partnership has cash and cash equivalents of $1,424,937
as compared with $10,969,239 at March 31, 2007. The decrease is mainly
attributable to the payment of a cash distribution, offset by cash provided by
operations.

The Managing General Partner initially designated 3.00% of the Gross Proceeds as
Reserves as defined in the Partnership Agreement. The Reserves were established
to be used for working capital of the Partnership and contingencies related to
the ownership of Local Limited Partnership interests. The Managing General
Partner may increase or decrease such Reserves from time to time, as it deems
appropriate. During the year ended March 31, 1993, the Managing General Partner
increased the Reserve level to 3.75%. At March 31, 2008, $1,424,937 has been
designated as Reserves.

To date, professional fees relating to various Property issues totaling
approximately $2,379,000 have been paid from Reserves. To date, Reserve funds in
the amount of approximately $534,000 also have been used to make additional
capital contributions to four Local Limited Partnerships and the Partnership has
paid approximately $452,000 (net of paydowns) to purchase the mortgage of The
Kyle Hotel. In the event a Local Limited Partnership encounters operating
difficulties requiring additional funds, the Partnership's management might deem
it in its best interest to voluntarily provide such funds in order to protect
its investment. As of March 31, 2008, the Partnership has advanced approximately
$1,578,000 to Local Limited Partnerships to fund operating deficits.

The Managing General Partner believes that the investment income earned on the
Reserves, along with cash distributions received from Local Limited
Partnerships, to the extent available, will be sufficient to fund the
Partnership's ongoing operations. Reserves may be used to fund Partnership
operating deficits, if the Managing General Partner deems funding appropriate.
If Reserves are not adequate to cover the Partnership's operations, the
Partnership will seek other financing sources including, but not limited to, the
deferral of Asset Management Fees paid to an affiliate of the Managing General
Partner or working with Local Limited Partnerships to increase cash
distributions. To date, the Partnership has used approximately $2,618,000 of
operating funds and proceeds from sales of investments in Local Limited
Partnerships to replenish Reserves.

Since the Partnership invests as a limited partner, the Partnership has no
contractual duty to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, as of March 31, 2008, the Partnership had
no contractual or other obligation to any Local Limited Partnership which had
not been paid or provided for.

Cash Distributions

A cash distribution of $9,772,329 was made during the year ended March 31, 2008.
No cash distributions were made during the year ended March 31, 2007. The
Partnership is currently working on disposing of its interest in certain Local
Limited Partnerships during the next twelve months. These dispositions may
result in cash available for distribution, but due to the uncertainty of the
sales, no guarantees can be made as to the extent of their outcome on
distributions. Based on the results of 2007 Property operations, the Local
Limited Partnerships are not expected to distribute significant amounts of cash
to the Partnership because such amounts will be needed to fund Property
operating costs. In addition, many of the Properties benefit from some type of
federal or state subsidy and, as a consequence, are subject to restrictions on
cash distributions.


<PAGE>


Results of Operations

The Partnership's results of operations for the year ended March 31, 2008
resulted in net loss of $884,571 compared to net income of $1,995,791 for the
year ended March 31, 2007. The change to net loss is primarily due to a decrease
in gain on sale of investments in Local Limited Partnerships, an increase in
impairment on investments in Local Limited Partnerships and an increase in
general and administrative expenses. The decrease in gain on
sale of investments in Local Limited Partnerships is due to the transfer of four
Local Limited Partnerships during the prior year compared to the transfer of one
Local Limited Partnership during the current year. Impairment on investments
in Local Limited Partnerships increased due to the Partnership recording an
impairment for its investments in certain Local Limited Partnerships in the
current year. General and administrative costs increased primarily due to a
reversal of an accounting monitoring fees in the prior period offset by
decreased legal expenses associated with ligation in which the Partnership is
involved.

Low-Income Housing Tax Credits

The Tax Credits per Limited Partner stabilized in 1991. The credits have ended
as all Properties have reached the end of the ten year credit period.

Property Discussions

Four Properties in which the Partnership currently has an interest had
stabilized operations and operated above break-even as of December 31, 2007. Two
Properties generate cash flow deficits that the Local General Partner funds
through project expense loans, subordinated loans or operating escrows. However,
some Properties have had persistent operating difficulties that could either:
(i) have an adverse impact on the Partnership's liquidity; (ii) result in their
foreclosure; or (iii) result in the Managing General Partner deeming it
appropriate for the Partnership to dispose of its interest in the Local Limited
Partnership. Also, the Managing General Partner, in the normal course of the
Partnership's business, may arrange for the future disposition of its interest
in certain Local Limited Partnerships. The following Property discussions focus
only on such Properties.

As previously reported, the Managing General Partner planned to exercise the
Partnership's put option and transfer its interest in the Local Limited
Partnership that owns and operates Fourche Valley, located in Perryville,
Arkansas, in January 2008. Effective January 1, 2008, the Managing General
Partner exercised the Partnership's right to transfer the Partnership's interest
in Fourche Valley, for $5,000, or $.05 per Unit. The proceeds from this transfer
have been retained in Reserves in accordance with and as permitted by the
Partnership Agreement. The Managing General Partner estimates this transaction
will result in 2008 taxable income projected to be approximately $223,000, or
$2.23 per Unit. The Partnership no longer has an interest in this Local Limited
Partnership.

As previously reported, Waterfront and Shoreline, both located in Buffalo, New
York, continue to have operating deficits as a result of a soft rental market,
low occupancy and deferred maintenance, which impacts the marketability of the
developments. The mortgage loans on both Properties are payable only out of
available cash flow and neither Property has made mortgage payments in several
years. The Managing General Partner and the Local General Partner commenced
discussions regarding the options available to improve operations at, or dispose
of, the Properties. An agreement was reached whereby the Managing General
Partner would allow the Local General Partner to transfer its Local General
Partner interest to a developer that will re-syndicate the Properties. In
return, the Partnership obtained both a put option allowing the Partnership to
transfer its interests in the Local Limited Partnerships for a nominal sum and a
pledge by the incoming Local General Partner to pay any Tax Credit recapture
incurred due to the transfer of the Local Limited Partnerships prior to the end
of the Compliance Period. These transfers of the Local General Partner interests
occurred during April 2005. The transfer of the Partnerships' interests are
currently expected to occur in the fiscal year ending March 31, 2009. The
Managing General Partner does not expect these transactions to result in net
sales proceeds to the Partnership. These transactions are expected to result in
taxable income projected to be approximately $44,000,000, or $440 per Unit.

As previously reported, the Managing General Partner and Local General Partner
of Wood Creek, located in Calcium, New York, were exploring an exit strategy
that might have resulted in the 2007 disposal of the Partnership's interest in
the Local Limited Partnership. The Managing General Partner is now estimating a
mid - 2008 disposal. In accordance with the terms of the initial listing
agreement, the Managing General Partner estimated this transaction would result
in net proceeds to the Partnership of approximately $700,000, or $7.00, per
Unit. The Managing General Partner is now estimating net proceeds of
approximately $1,300,000, or $13.00, per Unit, as the conversion from low
income, to market rate units, has increased the value of the underlying
Property. The Managing General Partner estimates this sale will result in 2008
taxable income projected to be approximately $1,300,000, or $13.00, per Unit.
<PAGE>
As previously reported, with respect to the Partnership, a Settlement Agreement
providing options, subject to various conditions, to purchase the Partnership's
interests in River Front Apartments, L.P., located in Sunbury, PA, and
Susquehanna View, L.P., located in Camp Hill, PA, for an aggregate price of
$1,500,000, were not exercised. The Managing General Partner will explore
alternative exit strategies for these Local Limited Partnership interests.

In accordance with the terms of their respective Partnership Agreements, the
Managing General Partner, effective November 28, 2007, transferred the
Partnership's interest in the Local Limited Partnerships that owned River Front
Apartments, L.P., located in Sunbury, PA, and Susquehanna View, L.P., located in
Camp Hill, PA. The interests in the aforementioned Partnerships were transferred
to MMA River Front, L.P., and MMA Susquehanna View, L.P. (together, the
"Transferee Partnerships"). The Partnership is the sole Limited Partner of each
of the Transferee Partnerships. An affiliate of the Partnership is the general
partner of each of the Transferee Partnerships and has obtained a 1% interest in
each of the Transferee Partnerships in exchange for a promissory note in favor
of the Partnership.

In processing these transactions, the Managing General Partner acted out of
necessity, due to the impending expiration of the Partnership's ability to
transfer its interest in the above-mentioned Local Limited Partnerships without
the Local General Partner's consent. As previously disclosed, these Local
Limited Partnership Interests were originally expected to be sold as part of a
settlement agreement between the Partnership, QH IV, QH V, QH VII, and certain
of their affiliates on the one hand, and on the other hand, Everest Housing
Investors 2, LP, certain of its affiliates, Park GP, Inc., Bond Purchase, L.L.C,
Anise, L.L.C., and Paco Development, L.L.C. (together, the "Everest and Park
Parties"). When the Everest and Park Parties failed to exercise their option to
purchase these Local Limited Partnership Interests, the above-described
transfers were carried out. The Managing General Partner may now have
flexibility in being able to dispose of the Partnership's interest in the Local
Limited Partnerships without the Local General Partners' consent, expediting the
Managing General Partner's ability to liquidate the assets of, and dissolve, the
Partnership. It is possible that such Local General Partner may contest this
right to free transferability.

As previously reported, the Managing General Partner anticipated the Fund's
interest in the Local Limited Partnership that owns Walker Woods, located in
Dover, Delaware, would be terminated upon the sale of the Property in 2008. Due
to the potential buyer's inability to receive a credit allocation, this
transaction will not occur as originally anticipated. The Managing General
Partner now estimates a late 2008 sale. Net proceeds, if any, are inestimable at
this time.

As previously reported, Elmwood Delmar, located in Aurora, Colorado, has a first
mortgage with a prohibition of prepayment prior to December 2008. Given this
major impediment to sale and the Partnership's desire to transfer its interest
in the Local Limited Partnership since the Property's Compliance Period ended on
December 31, 2003, the Managing General Partner entered into a put option
agreement with an unaffiliated entity that would allow for the transfer of the
Partnership's interest in the Local Limited Partnership to the unaffiliated
entity for a nominal amount. On September 15, 2005, the Partnership effectively
disposed of its interest in Elmwood Delmar when the Partnership received $2,083
in exchange for the sale of a Contingent Note that was created in conjunction
with the put option entered into with the unaffiliated third party. Based on the
operating performance of the Property, the Managing General Partner determined
that there was very little value above debt in the Property. The Managing
General Partner, in accordance with and as permitted by the Partnership
Agreement, retained the entire amount of net proceeds from this transfer in
Reserves. HUD's June 6, 2006 approval to a Transfer of Physical Assets
application completed the transfer of the Partnership's interest in this Local
Limited Partnership to the third party. This transfer of Partnership interest
resulted in 2006 taxable income of $829,245, or $8.29 per Unit. The Partnership
no longer has an interest in this Local Limited Partnership.
<PAGE>


As previously reported, the Managing General Partner had reached an agreement
with the Local General Partner of West Dade and West Dade II, located in Miami,
Florida, to sell the Partnership's interests in both Local Limited Partnerships,
pending HUD's approval to a Modified Transfer of Physical Assets application.
Upon further review, HUD's approval was not required. In June 2006, the
Partnership received $1,502,777, or $15 per Unit, in exchange for the
Partnership's interest in these Local Limited Partnerships. The proceeds from
this transfer have been retained in Reserves in accordance with and as permitted
by the Partnership Agreement. These transfer of interests resulted in 2006
taxable income of $3,040,190, or $30.40 per Unit. The Partnership no longer has
an interest in these Local Limited Partnerships.

As previously reported, increased competition for Georgetown II, located in
Georgetown, Delaware, negatively impacted the Property's operations. Although
the Property maintained a high level of occupancy, the Property's chronic below
breakeven status was attributable to stagnant rental rates and high maintenance
expenses. In 2003, the non-profit affiliate of the state housing finance agency
that holds the Property's long-term ground lease offered to transfer the land at
little cost to the Partnership. The Managing General Partner gave its consent to
the transfer and, in order to reduce potential risk to the Partnership and
provide an exit strategy, concurrently executed a put agreement for the
Partnership's interest in the Local Limited Partnership with the Local General
Partner. The Partnership executed its put option on August 18, 2006, effectively
transferring its interest to the Local General Partner for $5,000. This transfer
resulted in a 2006 taxable loss of $1,340,871, or $13.41 per Unit. The
Compliance Period expired on December 31, 2004. The Partnership no longer has an
interest in this Local Limited Partnership.

Inflation and Other Economic Factors

Inflation had no material impact on the Partnership's operations or financial
condition for the years ended March 31, 2008 and 2007.

Since most Properties benefit from some form of government assistance, the
Partnership is subject to the risks inherent in that area including decreased
subsidies, difficulties in finding suitable tenants and obtaining permission for
rent increases. In addition, the Tax Credits allocated to investors with respect
to a Property are subject to recapture to the extent that a Property or any
portion thereof ceases to qualify for Tax Credits.

Certain Properties in which the Partnership has invested are located in areas
suffering from poor economic conditions. Such conditions could have an adverse
effect on the rent or occupancy levels at such Properties. Nevertheless, the
Managing General Partner believes that the generally high demand for below
market rate housing will tend to negate such factors. However, no assurance can
be given in this regard.

Item 7.  Financial Statements and Supplementary Data

Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.

Item 8.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure
----------------------------------------------------------------------------
None.

Item 8A.  Controls and Procedures

Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange
Act, to ensure that information required to be disclosed by us in the reports
filed or submitted by us under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities
Exchange Commission's rules and forms, including to ensure that information
required to be disclosed by us in the reports filed or submitted by us under the
Exchange Act is accumulated and communicated to management to allow timely
decisions regarding required disclosure. Based on that evaluation, management
has concluded that as of March 31, 2008, our disclosure controls and procedures
were effective.
<PAGE>
Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rules
13a-15(f) and 15d-15(f). Our management conducted an assessment of the
effectiveness of our internal control over financial reporting. This assessment
was based upon the criteria for effective internal control over financial
reporting established in Internal Control -- Integrated Framework, issued by the
Committee of Sponsoring Organizations of the Treadway Commission.

The Partnership's internal control over financial reporting involves a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. Internal control over
financial reporting includes the controls themselves, as well as monitoring of
the controls and internal auditing practices and actions to correct deficiencies
identified. Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements.

Management assessed the effectiveness of the Partnership's internal control over
financial reporting as of March 31, 2008. Based on this assessment, management
concluded that, as of March 31, 2008, the Partnership's internal control over
financial reporting was effective.

Item 8B.  Other Information

     None.

                                    PART III

Item 9.  Directors and Executive Officers of the Registrant

The Managing  General  Partner of the  Partnership  is Arch Street III,  Inc.,
 a  Massachusetts  corporation  (the  "Managing  General Partner"),
 an affiliate of MMA. The  Managing  General  Partner was  incorporated  in
August  1988.  The  Investment  Committee of the Managing  General  Partner
approved all  investments.  The names and  positions  of the  principal officers
and the  directors of the Managing General Partner are set forth below.

     Name                                           Position

Greg Judge                                       Executive Vice President
Michael H. Gladstone                             Principal, Member

The other General  Partner of the  Partnership is Arch Street III Limited
Partnership,  a  Massachusetts  limited  partnership  ("Arch Street III L.P.")
that was organized in August 1988.  The General Partner of Arch Street III L.P.
is Arch Street III, Inc.

The Managing General Partner provides day-to-day management of the Partnership.
Compensation is discussed in Item 10 of this report. Such day-to-day management
does not include the management of the Properties.

The business experience of each of the persons listed above is described below.
There is no family relationship between any of the persons listed in this
section.

Greg Judge, age 43, Executive Vice President, Head of the Affordable Housing
Group of MMA Financial since February 2008. As head of the Company's Affordable
Housing Group, Mr. Judge is responsible for both the affordable tax exempt and
taxable lending and equity businesses. Prior to his appointment as EVP, Mr.
Judge was responsible for tax credit equity investments and underwriting of
equity and debt investments for the Affordable Housing Group. Mr. Judge joined
MMA as a result of the Boston Financial and Lend Lease HCI acquisitions,
starting with Boston Financial in 1989 as an asset manager. Mr. Judge is a
frequent speaker on affordable housing and tax credit industry issues. Mr. Judge
is a graduate of Colorado College (BA) and Boston University (MBA).
<PAGE>
Michael H. Gladstone, age 51, Senior Vice President. Mr. Gladstone is
responsible for capital transactions work in the Asset Management group of MMA
Financial. He joined MMA as a result of the Boston Financial and Lend Lease HCI
acquisitions, starting with Boston Financial in 1985 as the firm's General
Counsel. Prior to joining Boston Financial, Mr. Gladstone was associated with
the law firm of Herrick & Smith and served on the advisory board of the Housing
and Development Reporter. Mr. Gladstone has lectured at Harvard University and
Cornell University on affordable housing matters and is a member of the Cornell
Real Estate Council and the Massachusetts Bar. Mr. Gladstone is a graduate of
Emory University (BA) and Cornell University (J.D. & MBA).

The Partnership is organized as a Limited Partnership solely for the purpose of
real estate investment and does not have any employees. Therefore the
Partnership has not adopted a Code of Ethics.

The Partnership is structured as a Limited Partnership that was formed
principally for real estate investment and is not a "listed" issuer as defined
by Rule 10A-3 of the Securities Exchange Act of 1934. Accordingly, neither an
audit committee nor a financial expert to serve on such a committee has been
established by the Partnership.

Item 10.  Management Remuneration

Neither the directors nor officers of Arch Street III, Inc., the partners of
Arch Street III L.P. nor any other individual with significant involvement in
the business of the Partnership receives any current or proposed remuneration
from the Partnership.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

As of March 31, 2008, the following is the only entity known to the Partnership
to be the beneficial owner of more than 5% of the total number of Units
outstanding:
<TABLE>
<CAPTION>
<S>                        <C>                               <C>                  <C>

                                                              Amount
 Title of                Name and Address of                Beneficially
  Class                  Beneficial Owner                      Owned              Percent of Class
__________               _______________                     ____________         ______________
   Limited               Danford M. Baker                    10,005 Units           10.01%
   Partner               600 Orange Grove Circle
                         Pasadena, CA 91105
</TABLE>

The equity securities registered by the Partnership under Section 12(g) of the
Act of 1934 consist of 100,000 Units, all of which have been sold to the public
as of March 31, 2008. Holders of Units are permitted to vote on matters
affecting the Partnership only in certain unusual circumstances and do not
generally have the right to vote on the operation or management of the
Partnership.

Arch Street III L.P. owns five (unregistered) Units not included in the 100,000
Units sold to the public.

Except as described in the preceding paragraph, neither Arch Street III, Inc.,
Arch Street III L.P., MMA nor any of their executive officers, directors,
partners or affiliates is the beneficial owner of any Units. None of the
foregoing persons possesses a right to acquire beneficial ownership of Units.

The Partnership does not know of any existing arrangement that might at a later
date result in a change in control of the Partnership.

Item 12.  Certain Relationships and Related Transactions

The Partnership was required to pay certain fees to and reimburse certain
expenses of the Managing General Partner or its affiliates in connection with
the organization of the Partnership and the offering of Units. The Partnership
is also required to pay certain fees to and reimburse certain expenses of the
Managing General Partner or its affiliates in connection with the administration
of the Partnership and its acquisition and disposition of investments in Local
Limited Partnerships. In addition, the General Partners are entitled to certain
Partnership distributions under the terms of the Partnership Agreement. Also, an
affiliate of the General Partners will receive up to $10,000 from the sale or
refinancing proceeds of each Local Limited Partnership, if it is still a limited
partner at the time of such transaction. All such fees and distributions are
more fully described in the sections entitled "Estimated Use of Proceeds",
"Management Compensation and Fees" and "Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" of the Prospectus. Such sections are
incorporated herein by reference.
<PAGE>
The Partnership is permitted to enter into transactions involving affiliates of
the Managing General Partner, subject to certain limitations established in the
Partnership Agreement.

Information regarding the fees paid and expense reimbursements made in the two
years ended March 31, 2008 is presented as follows:

Organizational Fees and Expenses

In accordance with the Partnership Agreement, affiliates of the General Partners
were reimbursed by the Partnership for organizational, offering and selling
expenses advanced on behalf of the Partnership by its affiliates and for
salaries and direct expenses of certain employees of the Managing General
Partner and its affiliates in connection with the registration and organization
of the Partnership. Such expenses include printing expenses and legal,
accounting, escrow agent and depository fees and expenses. Such expenses also
include a non-accountable expense allowance for marketing expenses equal to
1.00% of Gross Proceeds. Organization fees and expenses and selling expenses
incurred on behalf of the Partnership of $11,832,395 were paid and reimbursed to
an affiliate of the Managing General Partner. Total organization and offering
expenses did not exceed 5.50% of the Gross Proceeds. There were no organization
fees and offering expenses paid in the two years ended March 31, 2008.

Acquisition Fees and Expenses

In accordance with the Partnership Agreement, the Partnership is required to pay
acquisition fees to and reimburse acquisition expenses of the Managing General
Partner or its affiliates for selecting, evaluating, structuring, negotiating
and closing the Partnership's investments in Local Limited Partnerships.
Acquisition fees totaled 7.50% of the Gross Proceeds. Acquisition expenses,
which include such expenses as legal fees and expenses, travel and
communications expenses, costs of appraisals, accounting fees and expenses did
not exceed 2.00% of the Gross Proceeds. Acquisition fees totaling $7,500,000 for
the closing of the Partnership's Local Limited Partnership investments have been
paid to an affiliate of the Managing General Partner. Acquisition expenses
totaling $1,587,834 were incurred and have been reimbursed to an affiliate of
the Managing General Partner. There were no acquisition fees or expenses paid in
the two years ended March 31, 2008.

Asset Management Fees

In accordance with the Partnership Agreement, an affiliate of the Managing
General Partner is paid an annual fee for services in connection with the
administration of the affairs of the Partnership. The affiliate receives the
base amount of $5,000 (annually adjusted by the CPI factor) per Local Limited
Partnership as the annual Asset Management Fee. Asset Management Fees incurred
in each of the two years ended March 31, 2008 are as follows:
<TABLE>
<CAPTION>
<S>                                                                                <C>                 <C>

                                                                                     2008               2007
                                                                                -------------        ----------

Asset management fees                                                              $ 61,427           $ 97,824

Salaries and Benefits Expense Reimbursements

An affiliate of the Managing General Partner is reimbursed for the cost of the
Partnership's salaries and benefits expenses. The reimbursements are based upon
the size and complexity of the Partnership's operations. Reimbursements paid or
payable in each of the two years ended March 31, 2008 are as follows:

                                                                                     2008                  2007
                                                                                  --------------        ----------

Salaries and benefits expense reimbursements                                       $ 65,255             $ 73,537
</TABLE>
<PAGE>
Cash Distributions Paid to the General Partners

In accordance with the Partnership Agreement, the General Partners of the
Partnership, Arch Street III, Inc. and Arch Street III L.P., receive 1% of cash
distributions paid to partners. A cash distribution of $97,748 was made to the
General Partners during the year ended March 31, 2008.

Additional information concerning cash distributions and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to MMA and its affiliates for the two years ended
March 31, 2008 is presented in Note 4 to the Financial Statements.

Item 13.   Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) Documents filed as a part of this Report

In response to this portion of Item 13, the financial statements and the
auditors' reports relating thereto are submitted as a separate section of this
Report. See Index to the Financial Statements on page F-1 hereof.

All other financial statement schedules and exhibits for which provision is made
in the applicable accounting regulations of the Securities and Exchange
Commission are not required under related instructions or are inapplicable and
therefore have been omitted.

(b)   Exhibits

31.1     Certification of Principal Executive Officer and Principal Financial
         Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2     Certification of Principal Executive Officer and Principal Financial
         Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1     Certification of Principal Executive Officer and Principal Financial
         Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2     Certification of Principal Executive Officer and Principal Financial
         Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Item 14.   Principal Accountant Fees and Services
<TABLE>
<CAPTION>
<S>                                                                                 <C>                <C>

The Partnership paid or accrued fees for services rendered by the principal
accountants for the two years ended March 31, 2008 as follows:

                                                                                     2008               2007
                                                                                 --------------      ---------

Audit fees                                                                          $ 70,268         $  87,530
Tax fees                                                                            $  2,500         $   2,400
</TABLE>

No other fees were paid or accrued to the principal accountants during the two
years ended March 31, 2008.



<PAGE>



                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

      BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III

     By:   Arch Street III, Inc.
           its Managing General Partner


     By:   /s/Greg Judge                                 Date: June 30, 2008
           -------------------------------------              -------------
           Greg Judge
           President
           Arch Street III, Inc.



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Managing General
Partner of the Partnership and in the capacities and on the dates indicated:

     By:   /s/ Greg Judge                                Date:   June 30, 2008
           --------------------------------------               -------------
           Greg Judge
           President
           Arch Street III, Inc.


     By:   /s/Michael H. Gladstone                        Date:  June 30, 2008
           -----------------------------                       -------------
           Michael H. Gladstone
           Vice President
           Arch Street III, Inc.









<PAGE>





             BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                          Annual Report on Form 10-KSB
                        For the Year Ended March 31, 2008

                                      Index
<TABLE>
<CAPTION>
<S>                                                                         <C>


                                                                             Page No.

Report of Independent Registered Public Accounting Firm
   for the years ended March 31, 2008                                             F-2

Report of Independent Registered Public Accounting Firm
   for the years ended March 31, 2007                                             F-3

Report of Independent Registered Public Accounting Firm for
   the year ended December 31, 2007 for Riverfront Apartments
   Limited Partnership (A Limited Partnership)                                    F-4

Financial Statements

     Balance Sheet - March 31, 2008                                               F-5

     Statements of Operations - For the years ended
       March 31, 2008 and 2007                                                    F-6

     Statements of Changes in Partners' Equity
       (Deficiency) - For the years ended March 31, 2008 and 2007                 F-7

     Statements of Cash Flows - For the years ended
       March 31, 2008 and 2007                                                    F-8

     Notes to the Financial Statements                                            F-9
</TABLE>



<PAGE>





   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Partners of
Boston Financial Qualified Housing Tax Credits L.P. III

         We have audited the accompanying balance sheet of Boston Financial
Qualified Housing Tax Credits L.P. III as of March 31, 2008, and the related
statements of operations, changes in partners' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit. We did not audit the financial
statements of two operating limited partnerships as of and for the ended March
31, 2008 in which the Partnership owns limited partnership interest. The
investment in such partnerships is stated at $100,463 at March 31, 2008 and the
Parnership's equity in loss in those operating limited partnerships is stated at
$619,613 for the year then ended. The financial statements of these operaing
limited partnerships were audited by other auditors whose report has been
furnished to us, and our opinion, insofar as it relates to the information
relating to these operating limited partnerships, is based solely on the reports
of the other auditors.

         We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

         In our opinion, based on our audit and the reports of the other
auditors, the financial statements referred to above present fairly, in all
material respects, the financial position of Boston Financial Qualified Housing
Tax Credits L.P. III as of March 31, 2008, and the results of its operations and
its cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.


/s/ Reznick Group, P.C.

Vienna, Virginia
June 30, 2008






<PAGE>





             Report of Independent Registered Public Accounting Firm

To the Partners of Boston Financial Qualified Housing Credits Limited
Partnership III

In our opinion, based on our audits and the report of other auditors, the
financial statements listed in the accompanying index present fairly, in all
material respects, the financial position of Boston Financial Qualified Housing
Tax Credits Limited Partnership III ("the Partnership") at March 31, 2007, and
the results of its operations and its cash flows for the year ended March 31,
2007 in conformity with accounting principles generally accepted in the United
States of America. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.


/s/ PricewaterhouseCoopers, LLP


Boston, Massachusetts
June 22, 2007


<PAGE>




Carter & Company
Certified Public Accountants, LLC
                                                 548 Highway 98 Fast
                                                 Suite 201
                                                 Destin, Florida 82b41
                                                 Phone 850-650-0125
                                                 Fax 850-650-016



                         Report of Independent Auditors

    To the Partners
    River Front Apartments Limited Partnership


    In our opinion, the accompanying balance sheet and the related statement of
    operations, changes in partners' equity (deficiency) and cash flows present
    fairly, in all material aspects, the financial position of River Front
    Apartments Limited Partnership as of December 31, 2007 and the results of
    its operations and its cash flows for the year ended in conformity with
    accounting principles generally accepted in the United States of America.
    These financial statements are the responsibility of the Company's
    management. Our responsibility is to express an opinion on these financial
    statements based on our audit. We conducted our audit of these statements in
    accordance with the standards of the Public Company Accounting Oversight
    Board (United States). Those standards require that we plan and perform the
    audit to obtain reasonable assurance about whether the financial statements
    are free of material misstatement. An audit includes examining, on a test
    basis, evidence supporting the amounts and disclosures in the financial
    statements, assessing the accounting principles used and significant
    estimates made by management, and evaluating the overall financial statement
    presentation. We believe that our audit provides a reasonable basis for our
    opinion.





    Destin, Florida January 21, 2008

<PAGE>



Carter & Company
Certified Public Accountants, LLC
                                                     548 Highway 98 East
                                                     Suite 201
                                                     Destin, Florida  32541
                                                     Phone 850-650-0125
                                                    Fax 850-650-0126

Report of Independent Auditors

    To the Partners
    Susquehanna View Limited Partnership (A Limited Partnership)


    In our opinion, the accompanying balance sheet and the related statement of
    operations, changes in partners' equity (deficiency) and cash flows present
    fairly, in all material aspects, the financial position of Susquehanna View
    Limited Partnership (A Limited Partnership) as of December 31, 2007 and the
    results of its operations and its cash flows for the year ended in
    conformity with accounting principles generally accepted in the United
    States of America. These financial statements are the responsibility of the
    Company's management. Our responsibility is to express an opinion on these
    financial statements based on our audit. We conducted our audit of these
    statements in accordance with the standards of the Public Company Accounting
    Oversight Board (United States). Those standards require that we plan and
    perform the audit to obtain reasonable assurance about whether the financial
    statements are free of material misstatement. An audit includes examining,
    on a test basis, evidence supporting the amounts and disclosures in the
    financial statements, assessing the accounting principles used and
    significant estimates made by management, and evaluating the overall
    financial statement presentation. We believe that our audit provides a
    reasonable basis for our opinion.





    Destin, Florida
    January 20, 2008


<PAGE>


             BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)



                                  BALANCE SHEET
                                 March 31, 2008


<TABLE>
<CAPTION>
<S>                                                                                              <C>


Assets

Cash and cash equivalents                                                                         $     1,424,937
Investments in Local Limited Partnerships (Note 3)                                                        116,428
Due from affiliate (Note 3)                                                                                 5,000
                                                                                                  ---------------
   Total Assets                                                                                   $     1,546,365
                                                                                                  ===============

Liabilities and Partners' Equity

Due to affiliate (Note 4)                                                                                 108,876
Accrued expenses                                                                                           45,387
                                                                                                  ---------------
   Total Liabilities                                                                                      154,263

General, Initial and Investor Limited Partners' Equity                                                  1,392,102
                                                                                                  ---------------
   Total Liabilities and Partners' Equity                                                         $     1,546,365
                                                                                                  ===============
</TABLE>

    The accompanying notes are an integral part of these financial statements.

<PAGE>

                 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                             STATEMENTS OF OPERATIONS
                   For the Years Ended March 31, 2008 and 2007

<TABLE>
<CAPTION>
<S>                                                                                 <C>                    <C>


                                                                                   2008                     2007
                                                                             ----------------       ----------------
         Revenue:
   Investment                                                                $        447,853      $        389,754
   Other                                                                                  895                 2,756
                                                                             ----------------      ----------------
     Total Revenue                                                                    448,748               392,510
                                                                             ----------------      ----------------

Expense:
   Asset management fees, affiliate  (Note 4)                                          61,427                97,824
   Impairment on investments in Local
     Limited Partnerships (Note 3)                                                    770,476                     -
   General and administrative (includes
     reimbursements to an affiliate in the amount
     of  $65,255 and  $73,537 in 2008 and
     2007, respectively) (Note 4)                                                     234,711               119,382
   Amortization                                                                         2,157                 2,157
                                                                             ----------------      ----------------
     Total Expenses                                                                 1,068,771               219,363
                                                                             ----------------      ----------------

Income (loss) before equity in losses of Local Limited Partnerships
   and gain on sale of investments in Local Limited Partnerships                     (620,023)              173,147

Equity in losses of Local Limited Partnerships (Note 3)                              (269,548)             (223,810)

Gain on sale of investments in Local Limited Partnerships (Note 3)                      5,000             2,046,454
                                                                             ----------------      ----------------

Net Income (Loss)                                                            $       (884,571)     $      1,995,791
                                                                             ================      ================

Net Income (Loss) allocated:
   General Partners                                                          $         (8,846)     $         19,958
   Limited Partners                                                                  (875,725)            1,975,833
                                                                             ----------------      ----------------
                                                                             $       (884,571)     $      1,995,791
                                                                             ================      ================
Net Income (Loss) per Limited Partner Unit
   (100,000 Units)                                                           $         (8.76)      $          19.76
                                                                             ===============       ================
</TABLE>

The accompanying notes are an integral part of these financial statements.




<PAGE>

               BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                      STATEMENTS OF CHANGES IN PARTNERS' EQUITY
                   For the Years Ended March 31, 2008 and 2007



<TABLE>
<CAPTION>
<S>                                             <C>                  <C>             <C>              <C>                 <C>


                                                                   Initial          Investor              Net
                                               General             Limited           Limited           Unrealized
                                               Partners            Partners         Partners              Losses            Total

Balance at March 31, 2006                      $ 100,491          $ 5,000         $  9,947,720          $ (4,135)      $ 10,049,076
                                               -------------     --------------    --------------     -------------     -----------

Comprehensive Income:
  Change in net unrealized
       losses on investment securities
       available for sale                               -                -                   -               4,135            4,135
  Net Income                                        19,958               -            1,975,833                  -         1,995,791
                                               -------------     --------------     --------------     --------------  -------------
Comprehensive Income                                19,958               -             1,975,833              4,135        1,999,926
                                               -------------     --------------     --------------     --------------  ------------

Balance at March 31, 2007                           120,449          5,000             11,923,553                 -      12,049,002

Cash distribution                                   (97,748)             -             (9,674,581)                -      (9,772,329)

Net Loss                                             (8,846)             -               (875,725)                -        (884,571)
                                               -------------     --------------     - -------------    --------------  -------------

Balance at March 31, 2008                         $  13,855     $    5,000             $ 1,373,247     $          -    $ 1,392,102
                                               =============     ==============      ==============    ==============  ============
</TABLE>



     The accompanying notes are an integral part of these financial statements.
<PAGE>


                 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                   For the Years Ended March 31, 2008 and 2007


<TABLE>
<CAPTION>
<S>                                                                              <C>                     <C>

                                                                                 2008                      2007
                                                                           ----------------         --------------
Cash flows from operating activities:
   Net Income (Loss)                                                       $       (884,571)       $      1,995,791
   Adjustments to reconcile net income to (loss) net
     cash provided by (used for) operating activities:
     Equity in losses of Local Limited Partnerships                                 269,548                 223,810
     Gain on sale of investments in Local Limited Partnerships                       (5,000)             (2,046,454)
     Impairment on investments in
       Local Limited Partnerships                                                   770,476                       -
     Amortization                                                                     2,157                   2,157
     Other non-cash item                                                                  -                    (936)
     Cash distribution included in net income                                             -                  (2,756)
     Increase (decrease) in cash arising from changes
       in operating assets and liabilities:
       Other assets                                                                       -                   7,128
       Due to affiliate                                                              93,675                 (12,339)
       Accrued expenses                                                             (18,258)               (363,561)
                                                                           ----------------        ----------------
Net cash provided by (used for) operating activities                                228,027                (197,160)
                                                                           ----------------        ----------------

Cash flows from investing activities:
   Proceeds from maturities of investment securities                                      -                 725,000
   Cash distributions received from Local Limited Partnerships                            -                   2,756
   Proceeds received from sale of investments in Local
     Limited Partnerships                                                                 -               2,044,371
                                                                           ----------------        ----------------
Net cash provided by investing activities                                                 -               2,772,127
                                                                           ----------------        ----------------

Cash flows from financing activities:
   Cash distribution                                                             (9,772,329)                      -
                                                                           ----------------        ----------------
Net cash used for financing activities                                           (9,772,329)                      -
                                                                           ----------------        ----------------

Net increase (decrease) in cash and cash equivalents                             (9,544,302)              2,574,967

Cash and cash equivalents, beginning                                             10,969,239               8,394,272
                                                                           ----------------        ----------------

Cash and cash equivalents, ending                                          $      1,424,937        $     10,969,239
                                                                           ================        ================
</TABLE>





    The accompanying notes are an integral part of these financial statements.

<PAGE>
                 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)


                        NOTES TO THE FINANCIAL STATEMENTS


1.   Organization

Boston Financial Qualified Housing Tax Credits L.P. III (the "Partnership") was
formed on August 9, 1988 under the laws of the State of Delaware for the primary
purpose of investing, as a limited partner, in other limited partnerships
("Local Limited Partnerships"), which own and operate apartment complexes, most
of which benefit from some form of federal, state or local assistance program
and each of which qualify for low-income housing tax credits. The Partnership's
objectives are to: (i) provide current tax benefits in the form of tax credits
which qualified investors may use to offset their federal income tax liability;
ii) preserve and protect the Partnership's capital; iii) provide limited cash
distributions which are not expected to constitute taxable income during
Partnership operations; and iv) provide cash distributions from sale or
refinancing transactions. The General Partners of the Partnership are Arch
Street III, Inc., which serves as the Managing General Partner, and Arch Street
III L.P., which also serves as the Initial Limited Partner. Both of the General
Partners are affiliates of MMA Financial, Inc. ("MMA"). The fiscal year of the
Partnership ends on March 31.

The Certificate and Agreement of Limited Partnership ("Partnership Agreement")
authorized the sale of up to 100,000 units of Limited Partnership Interest
("Units") at $1,000 per Unit (Gross Proceeds is $100,000,000), adjusted for
certain discounts. The Partnership raised $99,610,000, net of discounts of
$390,000, through the sale of 100,000 Units. Such amounts exclude five
unregistered Units previously acquired for $5,000 by the Initial Limited
Partner, which is also one of the General Partners. The offering of Units
terminated on May 30, 1989. No further sale of Units is expected.

Under the terms of the Partnership Agreement, the Partnership originally
designated 3% of the Gross Proceeds from the sale of Units as a reserve for
working capital of the Partnership and contingencies related to ownership of
Local Limited Partnership interests. During the year ended March 31, 1993, the
Managing General Partner increased the Reserve level to 3.75%. At March 31,
2008, the Managing General Partner has designated $1,424,937 as Reserves.

Generally, profits, losses, tax credits and cash flow from operations are
allocated 99% to the Limited Partners and 1% to the General Partners. Net
proceeds from a sale or refinancing will be allocated 95% to the Limited
Partners and 5% to the General Partners, after certain priority payments. The
General Partners may have an obligation to fund deficits in their capital
accounts, subject to limits set forth in the Partnership Agreement. However, to
the extent that the General Partners' capital accounts are in deficit positions,
certain items of net income may be allocated to the General Partners in
accordance with the Partnership Agreement.

2.       Significant Accounting Policies

Cash Equivalents

Cash equivalents represent short-term, highly liquid instruments with original
maturities of 90 days or less.

Concentration of Credit Risk

The Partnership invests its cash primarily in money market funds with commercial
banks. At times, cash balances at a limited number of banks and financial
institutions may exceed federally insured amounts. Management believes it
mitigates its credit risk by investing in major financial institutions.

Investment Securities

The Partnership's investment securities were classified as "Available for Sale"
securities and are reported at fair value as reported by the brokerage firm at
which the securities were held. All investment securities had fixed maturities.
Realized gains and losses from the sales of securities were based on the
specific identification method. Unrealized gains and losses were excluded from
earnings and reported as a separate component of partners' equity.


<PAGE>
                    BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                  NOTES TO THE FINANCIAL STATEMENTS (continued)


2. Significant Accounting Policies (continued)

Investments in Local Limited Partnerships

The Local Limited Partnerships in which the Partnership invests are Variable
Interest Entities ("VIE"s). The Partnership is involved with the VIEs as a
non-controlling limited partner equity holder. Because the Partnership is not
the primary beneficiary of these VIEs, it accounts for its investments in the
Local Limited Partnerships using the equity method of accounting. As a result of
its involvement with the VIEs, the Partnership's exposure to economic and
financial statement losses is limited to its investments in the VIEs ($116,428
at March 31, 2008). The Partnership may be subject to additional losses to the
extent of any financial support that the Partnership voluntarily provides in the
future. Under the equity method, the investment is carried at cost, adjusted for
the Partnership's share of net income or loss and for cash distributions from
the Local Limited Partnerships; equity in income or loss of the Local Limited
Partnerships is included currently in the Partnership's operations. A liability
is recorded for delayed equity capital contributions to Local Limited
Partnerships. Under the equity method, a Local Limited Partnership investment
will not be carried below zero. To the extent that equity in losses are incurred
when the Partnership's carrying value of the respective Local Limited
Partnership has been reduced to a zero balance, the losses will be suspended and
offset against future income. Income from Local Limited Partnerships, where
cumulative equity in losses plus cumulative distributions have exceeded the
total investment in Local Limited Partnerships, will not be recorded until all
of the related unrecorded losses have been offset. To the extent that a Local
Limited Partnership with a carrying value of zero distributes cash to the
Partnership, that distribution is recorded as income on the books of the
Partnership and is included in "other revenue" in the accompanying financial
statements.

The Tax Credits generated by Local Limited Partnerships are not reflected on the
books of the Partnership as such credits are allocated to partners for use in
offsetting their federal income tax liability.

Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the
Partnership. These fees and expenses are included in the Partnership's
investment in Local Limited Partnerships and are being amortized on a
straight-line basis over 35 years or until a Local Limited Partnership's
respective investment balance has been reduced to zero.

The Partnership may provide advances to the Local Limited Partnerships to
finance operations or to make debt service payments. The Partnership assesses
the collectibility of any advances at the time the advance is made and records a
reserve if collectibility is not reasonably assured.

The Partnership does not guarantee any of the mortgage or other debt of the
Local Limited Partnerships.

The Managing General Partner has elected to report results of the Local Limited
Partnerships on a 90-day lag basis because the Local Limited Partnerships report
their results on a calendar year basis. Accordingly, the financial information
of the Local Limited Partnerships that is included in the accompanying financial
statements is as of December 31, 2007 and 2006 and for the years then ended.

The Partnership, as a limited partner in the Local Limited 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 of facilities and continued
eligibility of tax credits. If the cost of operating a property exceeds the
rental income earned thereon, the Partnership may deem it in its best interest
to voluntarily provide funds in order to protect its investment.

The Partnership has implemented policies and practices for assessing
other-than-temporary declines in values of its investments in Local Limited
Partnerships. Periodically, the carrying values of the investments are compared
to their respective fair values. If an other-than-temporary decline in carrying
value exists, an impairment to reduce the asset to fair value, as calculated
based primarily on remaining tax benefits, will be recorded in the Partnership's
financial statements.


<PAGE>

               BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                   NOTES TO THE FINANCIAL STATEMENTS (continued)


2. Significant Accounting Policies (continued)

Use of Estimates

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

Fair Value of Financial Instruments

Statements of Financial Accounting Standards No. 107 ("SFAS No. 107"),
Disclosures About Fair Value of Financial Instruments, requires disclosure for
the fair value of most on- and off-balance sheet financial instruments for which
it is practicable to estimate that value. The scope of SFAS No. 107 excludes
certain financial instruments, such as trade receivables and payables when the
carrying value approximates the fair value and investments accounted for under
the equity method, and all nonfinancial assets, such as real property. Unless
otherwise described, the fair values of the Partnership's assets and liabilities
which qualify as financial instruments under SFAS No. 107 approximate their
carrying amounts in the accompanying balance sheet.

Income Taxes

No provision for income taxes has been made as the liability for such taxes is
the obligation of the partners of the Partnership.

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

Effect of New Accounting Principles

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"), which provides enhanced guidance for using fair value to
measure assets and liabilities. SFAS No. 157 establishes a common definition of
fair value, provides a framework for measuring fair value under U.S. generally
accepted accounting principles and expands disclosure requirements about fair
value measurements. SFAS No. 157 is effective for financial statements issued in
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. In February 2008, the FASB issued FASB Staff Position ("FSP")
157-2, "Effective Date of FASB Statement No. 157", which delays the effective
date of SFAS No. 157 for all nonfinancial assets and liabilities except those
that are recognized or disclosed at fair value in the financial statements on at
least an annual basis until November 15, 2008. The Partnership will adopt SFAS
No. 157 effective April 1, 2008. The adoption of this standard is not expected
to have a material impact on the Partnership's financial position, operations or
cash flow.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS No. 159"), which permits
entities to choose to measure many financial assets and financial liabilities at
fair value. Unrealized gains and losses on items for which the fair value option
has been elected are reported in earnings. SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years. The Partnership will adopt SFAS No. 159 effective April 1, 2008. The
adoption of this standard is not expected to have a material impact on the
Partnership's financial position, operations or cash flow.


<PAGE>
             BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III

                  NOTES TO THE FINANCIAL STATEMENTS (continued)


3.       Investments in Local Limited Partnerships

The Partnership currently owns limited partnership interests in six Local
Limited Partnerships which were organized for the purpose of owning and
operating multi-family housing complexes, all of which are government-assisted.
The Partnership's ownership interest in each Local Limited Partnership is 99%.
The Partnership may have negotiated or may negotiate options with the local
general partners to purchase or sell the Partnership's interests in the Local
Limited Partnerships at the end of the Compliance Period at nominal prices. In
the event that Properties are sold to third parties, or upon dissolution of the
Local Limited Partnerships, proceeds will be distributed according to the terms
of each Local Limited Partnership agreement.
<TABLE>
<CAPTION>
<S>                                                                                                  <C>

The following is a summary of investments in Local Limited Partnerships at March
31 2008:

Capital contributions paid to Local Limited Partnerships and purchase
   price paid to withdrawing partners of Local Limited Partnerships                                 $    12,158,227

Cumulative equity in losses of Local Limited Partnerships (excluding  cumulative
unrecognized losses of $56,474,725)                                                                      (8,931,366)

Cumulative cash distributions received from Local Limited Partnerships                                   (1,168,959)
                                                                                                    ---------------

Investments in Local Limited Partnerships before adjustments                                              2,057,902

Excess investment costs over the underlying assets acquired:

   Acquisition fees and expenses                                                                            622,467

   Cumulative amortization of acquisition fees and expenses                                                (209,754)
                                                                                                    ---------------

Investments in Local Limited Partnerships before valuation allowance                                      2,470,615

Valuation allowance on investments in Local Limited Partnerships                                         (2,354,187)
                                                                                                    ---------------

Investments in Local Limited Partnerships                                                           $       116,428
                                                                                                    ===============
</TABLE>

The Partnership has recorded a valuation allowance for its investments in
certain Local Limited Partnerships in order to appropriately reflect the
estimated net realizable value of these investments.

Summarized combined financial information of the Local Limited Partnerships in
which the Partnership has invested as of December 31, 2007 and 2006 (due to the
Partnership's policy of reporting the financial information of its Local Limited
Partnership interests on a 90 day lag basis) is as follows:

Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>
<S>                                                                               <C>                  <C>

                                                                                   2007                 2006
                                                                             ----------------    ---------------
Assets:
   Investment property, net                                                  $     19,630,346    $     20,587,018
   Other assets                                                                     3,352,225           3,280,506
                                                                             ----------------    ----------------
     Total Assets                                                            $     22,982,571    $     23,867,524
                                                                             ================    ================

Liabilities and Partners' Deficiency:
   Mortgage notes payable                                                    $     61,454,447    $     62,079,527
   Other liabilities                                                               16,104,205          12,927,320
                                                                             ----------------    ----------------
     Total Liabilities                                                             77,558,652          75,006,847
                                                                             ----------------    ----------------

Partnership's deficiency                                                          (54,743,344)        (51,330,889)
Other partners' equity                                                                167,263             191,566
                                                                             ----------------    ----------------
     Total Partners' Deficiency                                                   (54,576,081)        (51,139,323)
                                                                             ----------------    ----------------
     Total Liabilities and Partners' Deficiency                              $     22,982,571    $     23,867,524
                                                                             ================    ================
</TABLE>
<PAGE>
                BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III

                 NOTES TO THE FINANCIAL STATEMENTS (continued)


3. Investments in Local Limited Partnerships (continued)

Summarized Statements of Operations - for
the year ended December 31,
<TABLE>
<CAPTION>
<S>                                                                                <C>                <C>

                                                                                   2007                 2006
                                                                             ----------------    --------------

Rental and other income                                                      $      6,812,165    $      7,537,984
                                                                             ----------------    ----------------

Expenses:
   Operating                                                                        5,480,692           5,735,175
   Interest                                                                         3,492,197           3,696,730
   Depreciation and amortization                                                    1,286,200           1,446,828
                                                                             ----------------    ----------------
     Total Expenses                                                                10,259,089          10,878,733
                                                                             ----------------    ----------------

Net Loss                                                                     $     (3,446,927)   $     (3,340,749)
                                                                             ================    ================

Partnership's share of Net Loss                                              $     (3,412,455)   $     (3,307,833)
                                                                             ================    ================
Other partners' share of Net Loss                                            $        (34,469)   $        (33,407)
                                                                             ================    ================
</TABLE>

For the years ended March 31, 2008 and 2007, the Partnership has not recognized
$3,142,907 and $3,346,705, respectively, of equity in losses relating to certain
Local Limited Partnerships in which cumulative equity in losses and
distributions exceeded its total investment in these Local Limited Partnerships.
Previously unrecognized losses of $346 were included in losses recognized in the
year ended March 31, 2007. For the year ended March 31, 2007, the Partnership
recognized $262,336 of equity in losses from Local Limited Partnerships whose
financial information is not included in the above financial information.

The Partnership's deficiency as reflected by the Local Limited Partnerships of
($54,743,344) differs from the Partnership's investments in Local Limited
Partnerships before adjustments of $2,057,902 primarily due to cumulative
unrecognized losses as described above and differences in the accounting
treatment of miscellaneous items.

The Partnership's investment in one Local Limited Partnership was sold during
the year ended March 31, 2008 resulting in a gain of $5,000. Proceeds from this
sale of $5,000 were received in April, 2008.

4.   Transactions with Affiliates

An affiliate of the Managing General Partner receives the base amount of $5,000
(annually adjusted by the CPI factor) per Local Limited Partnership as the
annual Asset Management Fee for administering the affairs of the Partnership.
Included in the Statements of Operations are Asset Management Fees of $61,427
and $97,824 for the years ended March 31, 2008 and 2007, respectively. During
the years ended March 31, 2008 and 2007, $60,804 and $110,163, respectively,
were paid out of available cash flow for Asset Management Fees. As of March 31,
2008, $15,824 is payable for Asset Management Fees.

An affiliate of the Managing General Partner is reimbursed for the cost of the
Partnership's salaries and benefits expenses. Included in general and
administrative expenses for the years ended March 31, 2008 and 2007 is $65,255
and $73,537, respectively, that the Partnership has incurred for these expenses.
During the years ended March 31, 2008 and 2007, salaries and benefits of $35,657
and $73,537, respectively, were paid to the affiliate of the Managing General
Partner. As of March 31, 2008, $29,598 is payable for salaries and benefits.


<PAGE>
                BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III

                  NOTES TO THE FINANCIAL STATEMENTS (continued)


4. Transactions with Affiliates (continued)

An affiliate of the General Partner is reimbursed for the actual cost of the
Partnership's operating expenses. As of March 31, 2008, $63,454 is reimbursable
to the affiliate.


5.   Federal Income Taxes

The following schedule reconciles the reported financial statement net income
(loss) for the fiscal years ended March 31, 2008 and 2007 to the net income
(loss) reported on the Form 1065, U.S. Partnership Return of Income for the
years ended December 31, 2007 and 2006:
<TABLE>
<CAPTION>
<S>                                                                                 <C>                   <C>

                                                                                    2008                   2007
                                                                               --------------         -----------

Net Income (Loss)  per financial statements                                    $     (884,571)      $    1,995,791

Equity in losses of Local Limited Partnerships for tax purposes
   in excess of equity in losses for financial reporting purposes                    (928,365)          (3,851,977)

Equity in losses of Local Limited Partnerships not recognized
   for financial reporting purposes                                                (3,142,907)          (3,346,359)

Adjustment to reflect March 31 fiscal year end to December 31
   taxable year end                                                                   (31,356)             (15,805)

Amortization not deductible for tax purposes                                            2,157                2,157

Impairment on investment in Local Limited
  Partnership not deductible for tax purposes                                          770,476                    -

Gain on sale of investments in Local Limited Partnerships for tax (financial
   reporting) purposes in excess of gain on sale for
   financial reporting (tax) purposes                                                  (4,105)          11,760,999

Cash distributions included in net income for financial
   reporting purposes                                                                       -               (2,756)
                                                                               --------------       --------------

Net Income (Loss)  per tax return                                              $   (4,218,671)      $    6,542,050
                                                                               ==============       ==============
</TABLE>


<PAGE>


                  BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                  NOTES TO THE FINANCIAL STATEMENTS (continued)


5. Federal Income Taxes (continued)


The differences in the assets and liabilities of the Partnership for financial
reporting purposes and tax purposes as of March 31, 2008 and December 31, 2007,
respectively, are as follows:
<TABLE>
<CAPTION>
<S>                                                             <C>                <C>            <C>

                                                                Financial
                                                                Reporting            Tax
                                                                Purposes          Purposes           Differences

Investments in Local Limited Partnerships                   $      116,428     $  (48,501,425)     $   48,617,853
                                                            ==============     ==============      ==============
Other assets                                                $    1,429,937     $   13,315,411      $  (11,885,474)
                                                            ==============     ==============      ==============
Liabilities                                                 $      154,263     $      145,587      $        8,676
                                                            ==============     ==============      ==============
</TABLE>

The differences in the assets and liabilities of the Partnership for financial
reporting and tax purposes are primarily attributable to: (i) the cumulative
equity in losses of Local Limited Partnerships for tax purposes is approximately
$51,324,000 greater than for financial reporting purposes, including
approximately $56,475,000 of losses the Partnership has not recognized for
financial reporting purposes relating to Local Limited Partnerships whose
cumulative equity in losses exceeded their total investments; (ii) the
Partnership has provided a valuation allowance of approximately $2,354,000
against its investments in Local Limited Partnerships for financial reporting
purposes; (iii) the cumulative amortization of acquisition fees and expenses for
financial reporting purposes is approximately $210,000; and (iv) organizational
and offering costs of approximately $11,832,000 that have been capitalized for
tax purposes are charged to Limited Partners' equity for financial reporting
purposes.