UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

(Mark One)

FORM 10-K

[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year endedMarch 31, 2006                                            or
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15[d] OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto
Commission File Number0-21762                         
                         Gateway Tax Credit Fund III Ltd.             (Exact name of Registrant as specified in its charter)Florida                                    59-3090386(State or other jurisdiction of                   (IRS Employer No.)
 incorporation or organization)880 Carillon Parkway,  St. Petersburg,  Florida    33716    (Address of principal executive offices)          (Zip Code)
Registrant's Telephone No., Including Area Code:(727)567-4830Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class:  Beneficial Assignee Certificates
                                                Number of Record Holders
  Title of Each Class                               March 31, 2006Limited Partnership Interest                               2,518
General Partner Interest                                       2
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. 
                                          YES         NOX
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
                                          YES         NOX
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.
                                          YESX         NO
Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulation S-K (Sec. 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-K
or any amendment to this Form 10-K.  XIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerAccelerated filerNon-accelerated filerXIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)  Yes X No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter.
      There is no market for the Registrants Limited Partnership interests.

DOCUMENTS INCORPORATED BY REFERENCEParts III and IV - Form S-11 Registration Statement 
and all amendments and supplements thereto.
File No. 33-44238

---

PART I
Item 1.  Business   Gateway Tax Credit Fund III Ltd. ("Gateway") is a Florida Limited Partnership.  The general partners are Raymond James Tax Credit Funds, Inc., the Managing General Partner, and Raymond James Partners, Inc., both sponsors of Gateway Tax Credit Fund III Ltd. and wholly-owned subsidiaries of Raymond James Financial, Inc.  Gateway was formed October 17, 1991 and commenced operations July 16, 1992 with the first admission of Limited Partners.
   Gateway is engaged in only one industry segment, to acquire limited partnership interests in unaffiliated limited partnerships ("Project Partnerships"), each of which owns and operates one or more apartment complexes eligible for Low-Income Housing Tax Credits under Section 42 of the Internal Revenue Code ("Tax Credits"), received over a ten year period.  Subject to certain limitations, Tax Credits may be used by Gateway's investors to reduce their income tax liability generated from other income sources.  Gateway will terminate on December 31, 2040, or sooner, in accordance with the terms of its Limited Partnership Agreement.  As of March 31, 2006, Gateway received capital contributions of $1,000 from the General Partners and from the Limited Partners, $10,395,000 in Series 7, $9,980,000 from Series 8, $6,254,000 from Series 9, $5,043,000 from Series 10 and $5,127,000 from Series 11.
   Gateway offered Limited Partnership units in series.  Each series is treated as though it were a separate partnership, investing in a separate and distinct pool of Project Partnerships.  Net proceeds from each series are used to acquire Project Partnerships which are specifically allocated to such series.  Income or loss and all tax items from the Project Partnerships acquired by each series are specifically allocated among the limited partners of such series.
   Operating profits and losses, cash distributions from operations and Tax Credits are allocated 99% to the Limited Partners and 1% to the General Partners.  Profit or loss and cash distributions from sales of property will be allocated as described in the Limited Partnership Agreement.
   As of March 31, 2006, Gateway had invested in 133 Project Partnerships in total. Project Partnership investments by Series are as follows:  39 Project Partnerships for Series 7, 43 Project Partnerships for Series 8, 24 Project Partnerships for Series 9, 15 Project Partnerships for Series 10 and 12 Project Partnerships for Series 11.  Gateway acquired its interests in these properties by becoming a limited partner in the Project Partnerships that own the properties.  The primary source of funds for each series is the capital contributions from Limited Partner investors.
   All but eight of the properties are financed with mortgage loans from the Farmers Home Administration (now called United States Department of Agriculture - Rural Development) ("USDA-RD") under Section 515 of the Housing Act of 1949.  These mortgage loans are made at low interest rates for multi-family housing in rural and suburban areas, with the requirement that the interest savings be passed on to low income tenants in the form of lower rents.  A significant portion of the project partnerships also receive rental assistance from USDA-RD to subsidize certain qualifying tenants.  One property in Series 7 received conventional financing.  One property in Series 9, two properties in Series 10 and one property in Series 11 are fully financed through the HOME Investment Partnerships Program.  These HOME Program loans provide financing at rates of 0 % to 0.5% for a period of 15 to 42 years.  One property in Series 11 is partially financed by HOME.  Two properties in Series 11 received conventional financing.
   Risks related to the operations of Gateway are described in detail on pages 29 through 38 of the Prospectus, as supplemented, under the Caption "Risk Factors" which is incorporated herein by reference.  The investment objectives of Gateway are to:
 1) Provide tax benefits to Limited Partners in the form of Tax Credits during      the period in which each Project is eligible to claim tax credits;
  
 2) Preserve and protect the capital of each Series;
   The investment objectives and policies of Gateway are described in detail on pages 39 through 47 of the Prospectus, as supplemented, under the caption "Investment Objectives and Policies" which is incorporated herein by reference.
   Gateway's goal is to invest in a diversified portfolio of Project Partnerships located in rural and suburban locations with a high demand for low income housing. As of March 31, 2006 each Series' investor capital contributions were successfully invested in Project Partnerships which met the investment criteria.  Management anticipates that competition for tenants will only be with other low income housing projects and not with conventionally financed housing.  With a significant number of rural American households living below the poverty level in substandard housing, management believes there will be a continuing demand for affordable low income housing for the foreseeable future.
   Gateway has no direct employees.  Services are performed by the Managing General Partner and its affiliates and by agents retained by it.  The Managing General Partner has full and exclusive discretion in management and control of Gateway.
Item 1A.  Risk Factors     Gateway, as a limited partner in the Project Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility of tax credits.  If the cost of operating a property exceeds the rental income earned thereon, Gateway may deem it in its best interest to voluntarily provide funds in order to protect its investment.
Item 1B.  Unresolved Staff Comments.     None.
Item 2.  Properties   Gateway owns a majority interest in properties through its limited partnership investments in Project Partnerships.  The largest single net investment as of March 31, 2006 in a Project Partnership in Series 7 is 1.3% of the Series' total balance sheet assets, Series 8 is 0.4%, Series 9 is 1.3%, Series 10 is 3.6% and Series 11 is 7.7%.  The following table provides certain summary information regarding the Project Partnerships in which Gateway had an interest as of December 31, 2005:

---

Item 2 - Properties (continued):
SERIES 7

|PARTNERSHIP
-----------                                                                                                                                                                                                                                                                                                                                                                                                   | LOCATION OF.PROPERTY
-----------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | # OF
UNIT
----                                                                                                       | DATE  
ACQUIRED
--------                                                                                                                                                                                 | PROPERTY
COST  
--------                                                                                                                                                                                                                                                                                                                                            | OCCU-PANCY
 RATE
-----                                                                                                                                                           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Nottingham
Cedar Hollow
Sunrise
Mountain City
Burbank
Washington
Brookstone
Tazewell
N. Irvine
Horton
Manchester
Waynesboro
Lakeland II
Mt. Vernon
Meadow Run
Spring Creek II
Warm Springs
Blue Ridge
Walnut
Pioneer
Dilley
Elsa
Clinch View
Jamestown
Leander
Louisa Sr.
Orchard Commons
Vardaman
Heritage Park
BrooksHollow
Cavalry Crossing
Carson City
Matteson
Pembroke
Robynwood
Atoka
Coalgate
Hill Creek
Cardinal | Pisgah, AL
Waterloo, NE
Mission, SD
Mountain City, TN
Falls City, NE
Bloomfield, NE
McCaysville, GA
New Tazewell, TN
Irvine, KY
Horton, KS
Manchester, GA
Waynesboro, GA
Lakeland, GA
Mt. Vernon, GA
Dawson, GA
Quitman, GA
Warm Springs, GA
Blue Ridge, GA
Elk Point, SD
Mountain View, AR
Dilley, TX
Elsa, TX
Gate City, VA
Jamestown, TN
Leander, TX
Louisa, KY
Crab Orchard, KY
Vardaman, MS
Paze, AZ
Jasper, GA
Ft. Scott, KS
Carson City, KS
Capa, KS
Pembroke, KY
Cynthiana, KY
Atoka, OK
Coalgate, OK
West Blocton, AL
Mountain Home, AR | 18
24
44
40
24
24
40
44
24
24
42
24
30
24
48
24
22
41
24
48
28
40
42
40
36
36
12
24
32
40
40
24
24
16
24
24
24
24
32 | 6/92
7/92
7/92
8/92
8/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
11/92
11/92
12/92
12/92
1/93
1/93
11/93
11/93 | 724,630
1,000,186
2,636,346
1,645,556
1,041,380
988,252
1,461,449
1,755,298
1,028,582
932,540
1,474,901
819,325
1,009,647
900,526
1,744,840
808,475
822,966
1,339,143
1,052,945
1,474,198
890,402
1,342,015
1,831,983
1,573,635
1,166,234
1,518,537
479,661
920,682
1,638,285
1,437,907
1,832,532
965,445
957,360
623,304
1,011,684
835,334
828,505
991,547
785,240 | 100%
96%
100%
100%
92%
67%
100%
100%
100%
96%
100%
100%
93%
100%
98%
96%
100%
98%
92%
100%
96%
98%
100%
100%
100%
100%
100%
100%
94%
100%
80%
92%
100%
100%
96%
96%
100%
100%
94%
|                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | ----                                                                                                                 |                                                                                                                                                                                                          | -----------                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 1,195                                                                                                                |                                                                                                                                                                                                          | 46,291,477                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | ====                                                                                                                 |                                                                                                                                                                                                          | ===========                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                  

An average effective rental per unit is $4,119 per year ($343 per month).

---

Item 2 - Properties (continued):
SERIES 8

|PARTNERSHIP
-----------                                                                                                                                                                                                                                                                                                                                                                                                                                                           | LOCATION OF
PROPERTY
-----------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | # OF
UNIT
-----                                                                                                                  | DATE  
ACQUIRED
--------                                                                                                                                                                                                           | PROPERTY
COST  
--------                                                                                                                                                                                                                                                                                                                                                                        | OCCU-
PANCY
RATE
------                                                                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Purdy
Galena
Antlers 2
Holdenville
Wetumka
Mariners Cove
Mariners Cove Sr.
Antlers
Bentonville
Deerpoint
Aurora
Baxter
Arbor Gate
Timber Ridge
Concordia Sr.
Mountainburg
Lincoln
Fox Ridge
Meadow View
Sheridan
Morningside
Grand Isle
Meadowview
Taylor
Brookwood
Pleasant Valley
Reelfoot
River Rest
Kirskville
Cimmaron
Kenton
Lovingston
Pontotoc
So. Brenchley
Hustonville
Northpoint
Brooks Field
Brooks Lane
Brooks Point
Brooks Run
Logan Heights
Lakeshore 2
Cottondale | Purdy, MO
Galena, KS
Antlers, OK
Holdenville, OK
Wetumka, OK
Marine City, MI
Marine City, MI
Antlers, OK
Bentonville, AR
Elgin, AL
Aurora, MO
Baxter Springs, KS
Bridgeport, AL
Collinsville, AL
Concordia, KS
Mountainburg, AR
Pierre, SD
Russellville, AL
Bridgeport, NE
Auburn, NE
Kenton, OH
Grand Isle, ME
Van Buren, AR
Taylor, TX
Gainesboro, TN
Lynchburg, TN
Ridgely, TN
Newport, TN
Kirksville, MO
Arco, ID
Kenton, OH
Lovingston, VA
Pontotoc, MS
Rexburg, ID
Hustonville, KY
Jackson, KY
Louisville, GA
Clayton, GA
Dahlonega, GA
Jasper, GA
Russellville, KY
Tuskegee, AL
Cottondale, FL | 16
24
24
24
24
32
24
36
24
24
28
16
24
24
24
24
25
24
16
16
32
16
29
44
44
33
20
34
24
24
46
64
36
30
16
24
32
36
41
24
24
36
25 | 12/92
12/92
1/93
1/93
1/93
1/93
1/93
3/93
3/93
3/93
3/93
4/93
5/93
5/93
5/93
6/93
5/93
6/93
6/93
6/93
6/93
6/93
8/93
9/93
9/93
9/93
9/93
9/93
9/93
9/93
9/93
9/93
10/93
10/93
10/93
10/93
10/93
10/93
10/93
10/93
11/93
12/93
1/94 | 595,683
802,782
787,859
892,598
812,853
1,316,568
1,025,016
1,321,039
758,489
948,824
932,120
569,153
942,104
926,274
826,389
883,990
1,133,150
902,785
729,735
782,661
1,189,817
1,168,437
994,717
1,529,792
1,817,253
1,358,100
829,848
1,428,001
831,492
1,140,474
1,781,759
2,748,046
1,340,968
1,577,073
697,695
1,090,097
1,177,691
1,355,684
1,659,514
924,701
951,730
1,429,748
948,319 | 94%
100%
96%
96%
92%
100%
100%
72%
96%
88%
89%
100%
92%
88%
88%
88%
100%
100%
100%
94%
94%
63%
100%
98%
80%
97%
100%
97%
100%
100%
91%
100%
100%
93%
94%
96%
100%
100%
98%
100%
96%
97%
96%
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | -----                                                                                                                            |                                                                                                                                                                                                                                    | ----------                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1,207                                                                                                                            |                                                                                                                                                                                                                                    | 47,861,028                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | =====                                                                                                                            |                                                                                                                                                                                                                                    | ==========                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                            

An average effective rental per unit is $3,984 per year ($332 per month).

---

Item 2 - Properties (continued):
SERIES 9

|PARTNERSHIP
-----------                                                                                                                                                                                                                  | LOCATION OF
PROPERTY
-----------                                                                                                                                                                                                                                                                                        | # OF
UNIT
-----                                                         | DATE  
ACQUIRED
--------                                                                                                               | PROPERTY
COST  
--------                                                                                                                                                                                                  | OCCU-PANCY
RATE
------                                                                                      
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------
|Jay
Boxwood
Stilwell 3
Arbor Trace
Arbor Trace 2
Omega
Cornell 2
Elm Creek
Marionville
Lamar
Mt. Glen
Centreville
Skyview
Sycamore
Bradford
Cedar Lane
Stanton
Abernathy
Pembroke
Meadowview
Town Branch
Fox Run
Maple Street
Manchester | Jay, OK
Lexington, TX
Stilwell, OK
Lake Park, GA
Lake Park, GA
Omega, GA
Watertown, SD
Pierre, SD
Marionville, MO
Lamar, AR
Heppner, OR
Centreville, AL
Troy, AL
Coffeyville, KS
Cumberland, KY
London, KY
Stanton, KY
Abernathy, TX
Pembroke, KY
Greenville, AL
Mt. Vernon, KY
Ragland, AL
Emporium, PA
Manchester, GA | 24
24
16
24
42
36
24
24
20
24
24
24
36
40
24
24
24
24
24
24
24
24
32
18 | 9/93
9/93
9/93
11/93
11/93
11/93
11/93
11/93
11/93
12/93
12/93
12/93
12/93
12/93
12/93
12/93
12/93
1/94
1/94
2/94
12/93
3/94
3/94
5/94 | 810,597
770,939
587,132
918,358
1,806,434
1,407,304
1,196,796
1,236,794
743,296
904,325
1,079,806
983,315
1,419,713
1,844,665
1,055,632
1,008,022
1,001,158
781,898
1,006,295
1,137,336
984,410
978,195
1,712,081
735,614 | 100%
100%
94%
100%
98%
100%
100%
88%
100%
96%
83%
96%
92%
95%
100%
100%
100%
100%
92%
88%
100%
96%
100%
100%
|                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                         | -----                                                                   |                                                                                                                                        | -----------                                                                                                                                                                                                               |                                                                                                             
|                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                         | 624                                                                     |                                                                                                                                        | 26,110,115                                                                                                                                                                                                                |                                                                                                             
|                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                         | =====                                                                   |                                                                                                                                        | ===========                                                                                                                                                                                                               |                                                                                                             

An average effective rental per unit is $3,962 per year ($330 per month).

---

Item 2 - Properties (continued):
SERIES 10

|PARTNERSHIP
-----------                                                                                                                            | LOCATION OF
PROPERTY
-----------                                                                                                                                                               | # OF
UNIT
-----                              | DATE  
ACQUIRED
--------                                                    | PROPERTY
COST  
--------                                                                                                                        | OCCU-PANCY
RATE
------                                              
|-------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | --------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------
|Redstone
Albany
Oak Terrace
Wellshill
Applegate
Heatherwood
Peachtree
Donna
Wellsville
Tecumseh
Clay City
Irvine West
New Castle
Stigler
Courtyard | Challis, ID
Albany, KY
Bonifay, FL
West Liberty, KY
Florence, AL
Alexander, AL
Gaffney, SC
Donna, TX
Wellsville, NY
Tecumseh, NE
Clay City, KY
Irvine, KY
New Castle, KY
Stigler, OK
Huron, SD | 24
24
18
32
36
36
28
50
24
24
24
24
24
20
21 | 11/93
1/94
1/94
1/94
2/94
2/94
3/94
1/94
2/94
4/94
5/94
5/94
5/94
7/94
8/94 | 1,159,227
1,042,529
664,480
1,350,944
1,855,885
1,642,814
1,100,996
1,778,667
1,406,344
1,137,261
1,039,008
1,097,187
1,023,606
754,056
779,684 | 88%
100%
100%
100%
97%
100%
100%
96%
92%
79%
100%
100%
96%
100%
100%
|                                                                                                                                                   |                                                                                                                                                                                                | ----                                         |                                                                             | ----------                                                                                                                                      |                                                                     
|                                                                                                                                                   |                                                                                                                                                                                                | 409                                          |                                                                             | 17,832,688                                                                                                                                      |                                                                     
|                                                                                                                                                   |                                                                                                                                                                                                | ====                                         |                                                                             | ==========                                                                                                                                      |                                                                     

An average effective rental per unit is $4,005 per year ($334 per month).

---

Item 2 - Properties (continued):
SERIES 11

|PARTNERSHIP
-----------                                                                                    | LOCATION OF
PROPERTY
-----------                                                                                                                           | # OF
UNIT
-----                    | DATE  
ACQUIRED
--------                                              | PROPERTY
COST  
--------                                                                                      | OCCU-PANCY
RATE
------                            
|---------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------- | --------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | --------------------------------------------------
|Homestead
Mountain Oak
Eloy
Gila Bend
Creekstone
Tifton
Cass Towne
Warsaw
Royston
Red Bud
Cardinal
Parsons | Pinetop, AZ
Collinsville, AL
Eloy, AZ
Gila Bend, AZ
Dallas, GA
Tifton, GA
Cartersville, GA
Warsaw, VA
Royston, GA
Mokane, MO
Mountain Home, AR
Parsons, KS | 32
24
24
36
40
36
10
56
25
8
32
38 | 9/94
9/94
11/94
11/94
12/94
12/94
12/94
12/94
12/94
12/94
12/94
12/94 | 1,811,390
894,455
1,005,245
1,375,267
2,008,604
1,706,886
329,405
3,403,377
935,159
301,564
512,292
1,379,312 | 97%
71%
88%
69%
93%
97%
100%
100%
100%
88%
94%
74%
|                                                                                                           |                                                                                                                                                            | ----                               |                                                                       | -----------                                                                                                   |                                                   
|                                                                                                           |                                                                                                                                                            | 361                                |                                                                       | 15,662,956                                                                                                    |                                                   
|                                                                                                           |                                                                                                                                                            | ====                               |                                                                       | ===========                                                                                                   |                                                   

An average effective rental per unit is $4,273 per year ($356 per month).

---

Item 2 - Properties (continued):
A summary of the book value of the fixed assets of the properties at December 31, 2005, 2004 and 2003 is as follows:

12/31/05

|                                                                                                                                               | SERIES 7                                                                                                         | SERIES 8                                                                                                        | SERIES 9                                                                                                       
|---------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------
|Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net | $ 1,635,366
391,926
42,278,279
1,985,906
0
-----------
46,291,477
19,022,427
-----------
$27,269,050
=========== | $ 1,978,809
424,067
43,481,828
1,976,324
0
-----------
47,861,028
19,218,334
-----------
$28,642,694
========== | $ 1,099,659
207,602
23,676,553
1,126,301
0
-----------
26,110,115
9,640,414
-----------
$16,469,701
===========



|                                                                                                                                               | SERIES 10                                                                                                    | SERIES 11                                                                                                    | TOTAL                                                                                                                    
|---------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------
|Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net | $   648,625
94,649
16,425,612
663,802
0
-----------
17,832,688
5,569,061
-----------
$12,263,627
=========== | $   599,197
22,242
14,415,086
626,431
0
-----------
15,662,956
5,314,654
-----------
$10,348,302
=========== | $  5,961,656
1,140,486
140,277,358
6,378,764
0
------------
153,758,264
58,764,890
------------
$ 94,993,374
============

12/31/04

|                                                                                                                                               | SERIES 7                                                                                                         | SERIES 8                                                                                                         | SERIES 9                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------
|Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net | $ 1,632,366
387,220
42,243,157
1,920,573
0
-----------
46,183,316
17,552,593
-----------
$28,630,723
=========== | $ 1,978,809
416,985
43,408,843
1,915,791
0
-----------
47,720,428
17,821,451
-----------
$29,898,977
=========== | $ 1,099,659
191,080
23,642,433
1,096,825
6,866
-----------
26,036,863
8,872,295
-----------
$17,164,568
===========



|                                                                                                                                               | SERIES 10                                                                                                    | SERIES 11                                                                                                    | TOTAL                                                                                                                        
|---------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------
|Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net | $   648,625
94,649
16,376,552
636,585
0
-----------
17,756,411
5,103,348
-----------
$12,653,063
=========== | $   599,197
18,163
14,401,963
584,385
0
-----------
15,603,708
4,809,337
-----------
$10,794,371
=========== | $  5,958,656
1,108,097
140,072,948
6,154,159
6,866
------------
153,300,726
54,159,024
------------
$ 99,141,702
============

12/31/03

|                                                                                                                                               | SERIES 7                                                                                                         | SERIES 8                                                                                                         | SERIES 9                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------
|Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net | $ 1,725,382
230,375
42,171,835
1,863,080
0
-----------
45,990,672
16,066,571
-----------
$29,924,101
=========== | $ 1,978,809
458,457
43,376,314
1,837,939
0
-----------
47,651,519
16,318,595
-----------
$31,332,924
=========== | $ 1,099,659
191,080
23,642,954
1,080,527
6,866
-----------
26,021,086
8,088,865
-----------
$17,932,221
===========



|                                                                                                                                               | SERIES 10                                                                                                    | SERIES 11                                                                                                    | TOTAL                                                                                                                      
|---------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------
|Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net | $   648,625
62,866
16,354,880
607,108
0
-----------
17,673,479
4,636,704
-----------
$13,036,775
=========== | $   599,197
18,163
14,394,066
560,216
0
-----------
15,571,642
4,302,127
-----------
$11,269,515
=========== | $  6,051,672
960,941
139,940,049
5,948,870
6,866
------------
152,908,398
49,412,862
------------
$103,495,536
============

---

Item 3.  Legal Proceedings   Gateway is not a party to any material pending legal proceedings.
Item 4.  Submission of Matters to a Vote of Security Holders   As of March 31, 2006, no matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise.

PART II

Item 5.  Market for the Registrant's Securities and Related Security Holder Matters   (a)   Gateway's Limited Partnership interests are not publicly traded.  There is no market for Gateway's Limited Partnership interests and it is unlikely that any will develop.  No transfers of Limited Partnership Interests are permitted without the prior written consent of the Managing General Partner.  There have been several transfers from inception to date with most being from individuals to their trusts or heirs.  The Managing General Partner is not aware of the price at which Limited Partnership units are transferred.  The criteria for and the details regarding transfers are found on pages A-28 and A-29 of the Limited Partnership Agreement under ARTICLE XII under the caption "Transfers of Units" found in the Prospectus, which is incorporated herein by reference.
   There have been no distributions to Limited Partner investors from inception to date.
   (b)   Approximate Number of Equity Security Holders:
                                               Number of Holders
     Title of Class                           as of March 31, 2006Limited Partner Interest                              2,518
General Partner Interest                                  2
Item 6.  Selected Financial DataFOR THE YEARS ENDED MARCH 31,

|SERIES 7                                                                                       | 2006
----            | 2005
----             | 2004
----             | 2003
----            | 2002
----            
|---------------------------------------------------------------------------------------------- | -------------------- | --------------------- | --------------------- | -------------------- | ---------------------
|Total Revenues                                                                                 | $  21,470            | $  24,233             | $  14,725             | $  23,088            | $  24,734            
|Net Loss                                                                                       | (467,796)            | (261,487)             | (261,362)             | (233,056)            | (390,210)            
|Equity in Losses of Project Partnerships                                                       | (92,380)             | (139,599)             | (130,277)             | (137,118)            | (317,296)            
|Total Assets                                                                                   | 1,186,879            | 1,561,768             | 1,737,330             | 1,979,828            | 2,171,233            
|Investments In Project Partnerships                                                            | 641,745              | 965,655               | 1,127,941             | 1,278,834            | 1,436,847            
|Per Weighted Average Limited Partnership Unit: (A)
Tax Credits
Portfolio
  Income
Passive Loss | 8.05 
6.16 
(100.77) | 21.36 
4.56 
(109.79) | 92.87 
5.38 
(121.02) | 163.08
6.94
(113.17) | 163.08
11.28
(129.83)
|Net Loss                                                                                       | (44.55)              | (24.90)               | (24.89)               | (22.20)              | (37.16)              

---

FOR THE YEARS ENDED MARCH 31,

|SERIES 8                                                                                       | 2006
----             | 2005
----             | 2004
----              | 2003
----              | 2002
----               
|---------------------------------------------------------------------------------------------- | --------------------- | --------------------- | ---------------------- | ---------------------- | ------------------------
|Total Revenues                                                                                 | $   16,963            | $   16,447            | $   20,098             | $   19,195             | $   10,297              
|Net Loss                                                                                       | (216,489)             | (179,166)             | (176,442)              | (193,325)              | (365,765)               
|Equity in Losses of Project
Partnerships                                                       | (29,928)              | (41,395)              | (39,434)               | (82,830)               | (272,241)               
|Total Assets                                                                                   | 893,391               | 1,013,718             | 1,163,295              | 1,305,623              | 1,442,531               
|Investments In Project Partnerships                                                            | 415,344               | 461,161               | 512,795                | 560,231                | 654,569                 
|Per Weighted Average Limited Partnership Unit: (A)
Tax Credits
Portfolio
  Income
Passive Loss | 16.92 
7.30 
(110.88) | 56.12 
5.23 
(121.46) | 140.61 
5.04 
(127.45) | 162.03 
7.29 
(125.60) | 162.38
  
11.09
(142.75)
|Net Loss                                                                                       | (21.48)               | (17.77)               | (17.50)                | (19.18)                | (36.28)                 



---

FOR THE YEARS ENDED MARCH 31,

|SERIES 9                                                                                       | 2006
----           | 2005
----              | 2004
----              | 2003
----              | 2002
----           
|---------------------------------------------------------------------------------------------- | ------------------- | ---------------------- | ---------------------- | ---------------------- | --------------------
|Total Revenues                                                                                 | $   4,437           | $   7,752              | $   4,246              | $   4,433              | $   4,800           
|Net Loss                                                                                       | (341,082)           | (234,846)              | (311,941)              | (346,402)              | (407,619)           
|Equity in Losses of Project Partnerships                                                       | (101,726)           | (157,684)              | (230,291)              | (279,770)              | (355,237)           
|Total Assets                                                                                   | 893,314             | 1,180,228              | 1,395,878              | 1,676,155              | 1,982,691           
|Investments In Project Partnerships                                                            | 550,442             | 798,862                | 967,040                | 1,211,933              | 1,506,444           
|Per Weighted Average Limited Partnership Unit: (A)
Tax Credits
Portfolio
  Income
Passive Loss | 6.34 
5.41 
(90.51) | 102.00 
3.98 
(105.86) | 153.39 
4.44 
(112.92) | 154.93 
6.10 
(127.50) | 154.93
9.42
(136.20)
|Net Loss                                                                                       | (53.99)             | (37.18)                | (49.38)                | (54.84)                | (64.53)             



---

FOR THE YEARS ENDED MARCH 31,

|SERIES 10                                                                                      | 2006
----           | 2005
----              | 2004
----             | 2003
----             | 2002
----           
|---------------------------------------------------------------------------------------------- | ------------------- | ---------------------- | --------------------- | --------------------- | --------------------
|Total Revenues                                                                                 | $   2,561           | $   2,511              | $   1,932             | $     750             | $       0           
|Net Loss                                                                                       | (355,932)           | (186,236)              | (228,743)             | (246,694)             | (227,243)           
|Equity in Losses of Project Partnerships                                                       | (111,553)           | (133,597)              | (175,628)             | (201,773)             | (191,862)           
|Total Assets                                                                                   | 1,626,672           | 1,945,888              | 2,223,393             | 2,442,508             | 2,674,512           
|Investments In Project Partnerships                                                            | 1,360,959           | 1,661,049              | 1,815,475             | 2,014,742             | 2,232,728           
|Per Weighted Average Limited Partnership Unit: (A)
Tax Credits
Portfolio
  Income
Passive Loss | 9.58 
7.55 
(90.73) | 106.09 
6.36 
(111.19) | 151.14 
6.94 
(89.01) | 151.14 
8.34 
(93.89) | 151.14
10.98
(96.98)
|Net Loss                                                                                       | (69.87)             | (36.58)                | (44.91)               | (48.43)               | (44.61)             

---

FOR THE YEARS ENDED MARCH 31,

|SERIES 11                                                                                      | 2006
----             | 2005
----             | 2004
----             | 2003
----             | 2002
----           
|---------------------------------------------------------------------------------------------- | --------------------- | --------------------- | --------------------- | --------------------- | --------------------
|Total Revenues                                                                                 | $   3,382             | $   2,783             | $   2,182             | $       0             | $       0           
|Net Loss                                                                                       | (776,165)             | (153,967)             | (143,577)             | (207,311)             | (209,234)           
|Equity in Losses of Project Partnerships                                                       | (96,562)              | (112,606)             | (101,608)             | (169,857)             | (180,099)           
|Total Assets                                                                                   | 2,271,082             | 3,034,176             | 3,228,629             | 3,377,050             | 3,590,467           
|Investments In Project Partnerships                                                            | 1,926,349             | 2,664,780             | 2,799,412             | 2,914,130             | 3,111,560           
|Per Weighted Average Limited Partnership Unit: (A)
Tax Credits
Portfolio
  Income
Passive Loss | 110.21 
5.75 
(52.47) | 145.72 
4.33 
(99.03) | 147.19 
4.71 
(75.39) | 147.20 
6.21 
(61.45) | 147.20
10.16
(56.98)
|Net Loss                                                                                       | (149.87)              | (29.73)               | (27.72)               | (40.03)               | (40.40)             

1. The tax information is as of December 31, the year end for tax purposes.
The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this report.  This statement is not covered by the auditor's opinion included elsewhere in this report.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations   This item should be read in conjunction with the financial statements and other items contained elsewhere in this report.
   The Managing General Partner monitors developments in the area of legal and regulatory compliance.  For example, the Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas.  In light of these changes, Gateway expects that it will incur higher expenses related to compliance.Results of Operations, Liquidity and Capital Resources
   Operations commenced on July 16, 1992 with the first admission of Limited Partners in Series 7.  The proceeds from Limited Partner investors' capital contributions available for investment are used to acquire interests in Project Partnerships.
   As disclosed on the statement of operations for each Series, except as described below, interest income is comparable for the years ended March 31, 2006, March 31, 2005 and March 31, 2004.
   The capital resources of each Series are used to pay General and Administrative operating costs including personnel, supplies, data processing, travel and legal and accounting associated with the administration and monitoring of Gateway and the Project Partnerships.  The capital resources are also used to pay the Asset Management Fee due the Managing General Partner, but only to the extent that Gateway's remaining resources are sufficient to fund Gateway's ongoing needs.  (Payment of any Asset Management Fee unpaid at the time Gateway sells its interests in the Project Partnerships is subordinated to the investors' return of their original capital contribution.)
   The sources of funds to pay the operating costs of each Series are short-term investments and interest earned thereon, the maturity of U.S. Treasury Security Strips ("Zero Coupon Treasuries"), which were purchased with funds set aside for this purpose, and cash distributed to the Series from the operations of the Project Partnerships.
   Series 7 - Gateway closed this series on October 16, 1992 after receiving $10,395,000 from 635 Limited Partner investors.  As of March 31, 2006, the series had invested $7,732,089 in 39 Project Partnerships located in 14 states containing 1,195 apartment units.  Average occupancy of the Project Partnerships was 96% at December 31, 2005.
   Equity in losses of Project Partnerships for the year ended March 31, 2006 of $92,380 were $47,219 less than the Equity in Losses of Project Partnerships for the year ended March 31, 2005 which amounted to $139,599.  In general, it is common in the real estate industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization.  (These Project Partnerships reported depreciation and amortization of $1,489,791, $1,494,903 and $1,472,897 for the periods ended December 31, 2004, 2005 and 2006, respectively.) As a result, management expects that this Series, as well as the Series described below, will report its equity in Project Partnerships as a loss for tax and financial reporting purposes. Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.  For the fiscal year ended March 31, 2006, impairment expense of $193,195 was recognized.  There was no impairment expense in either fiscal year 2005 or fiscal year 2004.  Overall management believes the Project Partnerships are operating as expected and are generating tax credits which meet projections.
   At March 31, 2006, the Series had $394,030 of short-term investments (Cash and Cash Equivalents).  It also had $151,104 in Zero Coupon Treasuries with annual maturities providing $77,000 in fiscal year 2006 increasing to $86,000 in fiscal year 2008.  Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.
   As disclosed on the statement of cash flows, the Series had a net loss of $467,796 for the year ending March 31, 2006.  However, after adjusting for Equity in Losses of Project Partnerships of $92,380 and the changes in operating assets and liabilities, net cash used in operating activities was $95,514.  Cash provided by investing activities totaled $106,202 consisting of $29,202 in cash distributions from the Project Partnerships and $77,000 from matured Zero Coupon Treasuries.

Series 8 - Gateway closed this Series on June 28, 1993 after receiving $9,980,000 from 664 Limited Partner investors.  As of March 31, 2006, the series had invested $7,586,105 in 43 Project Partnerships located in 18 states containing 1,207 apartment units.  Average occupancy of the Project Partnerships was 93% at December 31, 2005.
   Equity in losses of Project Partnerships for the year ended March 31, 2006 of $29,928 were $11,467 less than the Equity in Losses of Project Partnerships for the year ended March 31, 2005 which amounted to $41,395.  In general, it is common in the real estate industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization.  (These Project Partnerships reported depreciation and amortization of $1,525,330, $1,512,305, and $1,485,669 for the periods ended December 31, 2003, 2004 and 2005, respectively.)  Overall management believes the Project Partnerships are operating as expected and are generating tax credits which meet projections.
   At March 31, 2006, the Series had $309,318 of short-term investments (Cash and Cash Equivalents).  It also had $144,509 in Zero Coupon Treasuries with annual maturities providing $77,000 in fiscal year 2006 increasing to $82,000 in fiscal year 2008.  Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.
   As disclosed on the statement of cash flows, the Series had a net loss of $216,489 for the year ending March 31, 2006.  However, after adjusting for Equity in Losses of Project Partnerships of $29,928 and the changes in operating assets and liabilities, net cash used in operating activities was $108,372.  Cash provided by investing activities totaled $92,028 consisting of $20,029 received in cash distributions from the Project Partnerships and $71,999 from matured Zero Coupon Treasuries.  Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.
   Series 9 - Gateway closed this Series on September 30, 1993 after receiving $6,254,000 from 406 Limited Partner investors.  As of March 31, 2006, the series had invested $4,914,116 in 24 Project Partnerships located in 11 states containing 624 apartment units.  Average occupancy of the Project Partnerships was 96% at December 31, 2005.
   The Equity in Losses of Project Partnerships decreased from $230,291 for the year ended March 31, 2004 to $157,684 for the year ended March 31, 2005 to $101,726 for the year ended March 31, 2006.   In general, it is common in the real estate industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization.  (These Project Partnerships reported depreciation and amortization of $792,503, $786,226 and $767,851 or the years ended December 31, 2003, 2004 and 2005, respectively.)  Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.  For the fiscal year ended March 31, 2006, impairment expense of $127,532 was recognized.  There was no impairment expense in either fiscal year 2005 or fiscal year 2004.  Overall management believes the Project Partnerships are operating as expected and are generating tax credits which meet projections.
   At March 31, 2006, the Series had $222,993 of short-term investments (Cash and Cash Equivalents).  It also had $119,879 in Zero Coupon Treasuries with annual maturities providing $43,000 in fiscal year 2006 increasing to $47,000 in fiscal year 2009.  Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.
   As disclosed on the statement of cash flows, the Series had a net loss of $341,082 for the period ending March 31, 2006.  After adjusting for Equity in Losses of Project Partnerships of $101,726 and the changes in operating assets and liabilities, net cash used in operating activities was $59,309.  Cash provided by investing activities totaled $52,405 consisting of $11,405 received in cash distributions from the Project Partnerships and $41,000 from matured Zero Coupon Treasuries.  Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.
   Series 10 - Gateway closed this Series on January 21, 1994 after receiving $5,043,000 from 325 Limited Partner investors.  As of March 31, 2006, the series had invested $3,914,672 in 15 Project Partnerships located in 10 states containing 409 apartment units.  Average occupancy of the Project Partnerships was 96% at December 31, 2005.
   The Equity in Losses of Project Partnerships decreased from $133,597 for the year ended March 31, 2005 to $111,553 for the year ended March 31, 2006 as a result of not including losses of $140,284, as these losses would reduce the investment in certain Project Partnerships below zero.  Equity in Losses of Project Partnerships decreased from $175,628 for the year ended March 31, 2004 to $133,597 for the year ended March 31, 2005 primarily as a result of not including losses of $73,357, as these losses would reduce the investment in certain Project Partnerships below zero.  (These Project Partnerships reported depreciation and amortization of $465,268, $469,719 and $466,542 for the years ended December 31, 2003, 2004, and 2005 respectively.)  Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.  For the fiscal year ended March 31, 2006, impairment expense of $156,694 was recognized.  There was no impairment expense in either fiscal year 2005 or fiscal year 2004.  Overall management believes the Project Partnerships are operating as expected and are generating tax credits, which meet projections.
   At March 31, 2006, the Series had $144,697 of short-term investments (Cash and Cash Equivalents).  It also had $121,016 in Zero Coupon Treasuries with annual maturities providing $32,000 in fiscal year 2006 increasing to $40,000 in fiscal year 2010.  Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.
   As disclosed on the statement of cash flows, the Series had net loss of $355,932 for the year ending March 31, 2006.  After adjusting for Equity in Losses of Project Partnerships of $111,553 and the changes in operating assets and liabilities, net cash used in operating activities was $38,646.  Cash provided by investing activities totaled $40,705 consisting of $9,703 received in cash distributions from the Project Partnerships and $31,002 from matured Zero Coupon Treasuries.  Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.
   Series 11 - Gateway closed this Series on April 29, 1994 after receiving $5,127,000 from 330 Limited investors.  As of March 31, 2006 the series had invested $4,128,042 in 12 Project Partnerships located in 7 states containing 361 apartment units.  Average occupancy of the Project Partnerships was 89% at December 31, 2005.
   Equity in losses of Project Partnerships were comparable for the years ended March 31, 2004, 2005 and 2006. (These Project Partnerships reported depreciation and amortization of $530,705, $511,998 and $506,550 for the periods ended December 31, 2003, 2004 and 2005.)  Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.  For the fiscal year ended March 31, 2006, impairment expense of $600,802 was recognized.  There was no impairment expense in either fiscal year 2005 or fiscal year 2004.  Overall management believes the Project Partnerships are operating as expected and are generating tax credits which meet projections.
   At March 31, 2006, the Series had $207,490 of short-term investments (Cash and Cash Equivalents).  It also had $137,243 in Zero Coupon Treasuries with annual maturities providing $38,000 in fiscal year 2006 increasing to $44,000 in fiscal year 2010.  Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.
   As disclosed on the statement of cash flows, the Series had net loss of $776,165 for the year ending March 31, 2006.  After adjusting for Equity in Losses of Project Partnerships of $96,562 and the changes in operating assets and liabilities, net cash used in operating activities was $39,396.  Cash provided by investing activities totaled $46,955 consisting of $36,001 from matured Zero Coupon Treasuries and $10,954 received in cash distributions from Project Partnerships.  Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.  Disclosure of Contractual Obligations

|                                                                                   |              | Payment due by period
|---------------------------------------------------------------------------------- | ------------ | ---------------------
|Contractual Obligations                                                            | Total        | Less than 1 year     
|Long-Term Debt Obligations                                                         |              |                      
|Capital Lease Obligations                                                          |              |                      
|Operating Lease Obligations                                                        |              |                      
|Purchase Obligations                                                               |              |                      
|Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP | 1,988,769(1) | 186,265              

(1)  The Other Long-Term Liabilities represent the asset management fees owed to the General Partners as of March 31, 2006.  It is unsecured, due on demand and, in accordance with the limited partnership agreement, non-interest bearing.  As referred to in Note 4, the Managing General Partner does not intend to demand payment of the portion of this balance reflected as due in greater than one year within the next 12 months.Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.     As a small business issuer, no information is required.
Item 8.  Financial Statements and Supplementary Data

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of Gateway Tax Credit Fund III Ltd.
   We have audited the accompanying balance sheet of Gateway Tax Credit Fund III Ltd. (a Florida Limited Partnership) as of March 31, 2006 and the related statements of operations, partners' equity (deficit), and cash flows for the year ended March 31, 2006.  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 certain Project Partnerships for which $1,075,284 of net investment is included in these financial statements as of March 31, 2006 and for which net losses of $64,475 are included in these financial statements for the year ended March 31, 2006.  Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for such underlying partnerships, is based solely on the reports of the other auditors.  The financial statements of Gateway Tax Credit Fund III, Ltd. as of March 31, 2005 and for each of the two years in the period ended March 31, 2005, were audited by other auditors whose report dated September 8, 2005, expressed an unqualified opinion on those statements.
   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.  The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting.  Accordingly we express no such opinion.  An audit also 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, as well as evaluating the overall financial statement presentation.  We believe that our audit and the reports of other auditors provide a reasonable basis for our opinion.
   In our opinion, based on our audit and the reports of other auditors, the 2006 financial statements referred to above present fairly, in all material respects, the financial position of Gateway Tax Credit Fund III Ltd. at March 31, 2006, and the results of its operations and its cash flows for the year ended March 31, 2006 in conformity with accounting principles generally accepted in the United States of America.
   Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole.  The schedules listed under Item 15(a)(2) in the index are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements.  These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, based on our audit and the reports of other auditors, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
                                         /s/ Reznick Group, P.C.
                                         REZNICK GROUP, P.C.
Atlanta, Georgia
July 13, 2006

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of Gateway Tax Credit Fund III Ltd.
   We have audited the accompanying balance sheet of each of the five Series (Series 7 through 11) constituting Gateway Tax Credit Fund III Ltd. (a Florida Limited Partnership) as of March 31, 2005 and the related statements of operations, partners' equity (deficit), and cash flows of each of the five Series for the years ended March 31, 2005 and March 31, 2004, respectively.  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 audits.  We did not audit the financial statements of certain Project Partnerships for which the net investments included on the balance sheet as of March 31, 2005 and net losses included on the statements of operations for the years ended March 31, 2005 and March 31, 2004 are:

|          | Net Investment
March 31,
--------- | Partnership Loss
Year Ended March 31,
---------------------
|--------- | ---------------------------------- | -----------------------------------------------------------
|          |                                    | 2005
----                                                  
|Series 7  |                                    | $       0                                                  
|Series 8  |                                    | 48,806                                                     
|Series 9  |                                    | 378,066                                                    
|Series 10 |                                    | 1,021,150                                                  
|Series 11 |                                    | 0                                                          

Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for such underlying partnerships, is based solely on the reports of the other auditors.
   We conducted our audits 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.  The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting.  Accordingly we express no such opinion.  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 audits and the reports of other auditors provide a reasonable basis for our opinion.
   In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of each of the five Series (Series 7 through 11) constituting Gateway Tax Credit Fund III Ltd. as of March 31, 2005 and the results of their operations and their cash flows for the years ended March 31, 2005 and March 31, 2004, respectively, in conformity with accounting principles generally accepted in the United States of America.
                                         /s/ Spence, Marston, Bunch, Morris & Co.
                                         SPENCE, MARSTON, BUNCH, MORRIS & CO.
                                         Certified Public Accountants
Clearwater, Florida
September 8, 2005

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)BALANCE SHEET
MARCH 31, 2006 AND 2005

|SERIES 7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2006
----                                                                                                                                                                                                                                 | 2005
----                                                                                                                                                                                                                                   
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
  Total Current Assets
 Investments in Securities
 Investments in Project Partnerships, Net
    Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
 Payable to General Partners
  Total Current Liabilities
Long Term Liabilities:
 Payable to General Partners
Partners' Equity (deficit):
Limited Partners (10,395 units for Series 7
at March 31, 2006 and 2005)
General Partners
  Total Partners' Equity
    Total Liabilities and Partners' Equity | $  394,030 
76,135 
-----------
470,165 
74,969 
641,745 
-----------
$1,186,879 
===========
$   60,090 
-----------
60,090 
-----------
644,426 
-----------
568,818 
(86,455)
-----------
482,363 
-----------
$1,186,879 
=========== | $  383,342 
72,445 
-----------
455,787 
140,326 
965,655 
-----------
$1,561,768 
===========
$   53,630 
-----------
53,630 
-----------
557,979 
-----------
1,031,936 
(81,777)
-----------
950,159 
-----------
$1,561,768 
===========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)BALANCE SHEET
MARCH 31, 2006 AND 2005

|SERIES 8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2006
----                                                                                                                                                                                                                             | 2005
----                                                                                                                                                                                                                            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
 Accounts Receivable
  Total Current Assets
 Investments in Securities
 Investments in Project Partnerships, Net
    Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
 Payable to General Partners
  Total Current Liabilities
Long Term Liabilities:
 Payable to General Partners
Partners' Equity (deficit):
Limited Partners (9,980 units for Series 8
at March 31, 2006 and 2005)
General Partners
  Total Partners' Equity
    Total Liabilities and Partners' Equity | $ 309,318 
72,553 
24,220 
----------
406,091 
71,956 
415,344 
---------$  893,391 
==========
$  51,363 
----------
51,363 
----------
684,306 
----------
243,770 
(86,048)
----------
157,722 
----------
$  893,391 
=========== | $ 325,662 
67,927 
24,220 
---------
417,809 
134,748 
461,161 
--------
$1,013,718 
==========
$  45,110 
----------
45,110 
----------
594,397 
----------
458,094 
(83,883)
----------
374,211 
----------
$1,013,718 
===========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)BALANCE SHEET
MARCH 31, 2006 AND 2005

|SERIES 9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2006
----                                                                                                                                                                                                                                    | 2005
----                                                                                                                                                                                                                                    
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
 Accounts Receivable
  Total Current Assets
 Investments in Securities
 Investments in Project Partnerships, Net
    Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
 Payable to General Partners
  Total Current Liabilities
Long Term Liabilities:
 Payable to General Partners
Partners' Equity (deficit):
Limited Partners (6,254 units for Series 9
at March  31, 2006 and 2005)
General Partners
  Total Partners' Equity
    Total Liabilities and Partners' Equity | $  222,993 
40,745 
0 
-----------
263,738 
79,134 
550,442 
-----------
$  893,314 
===========
$   30,066 
-----------
30,066 
-----------
428,649 
-----------
485,089 
(50,490)
-----------
434,599 
-----------
$  893,314 
=========== | $  229,897 
38,890 
0 
-----------
268,787 
112,579 
798,862 
-----------
$1,180,228 
===========
$   25,407 
-----------
25,407 
-----------
379,140 
-----------
822,760 
(47,079)
-----------
775,681 
-----------
$1,180,228 
===========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)BALANCE SHEET
MARCH 31, 2006 AND 2005

|SERIES 10                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 2006
----                                                                                                                                                                                                                                      | 2005
----                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
  Total Current Assets
 Investments in Securities
 Investments in Project Partnerships, Net
    Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
 Payable to General Partners
    Total Current Liabilities
Long Term Liabilities:
 Payable to General Partners
Partners' Equity (deficit):
Limited Partners (5,043 units for Series 10
at March 31, 2006 and 2005)
General Partners
  Total Partners' Equity
    Total Liabilities and Partners' Equity | $  144,697 
30,440 
-----------
175,137 
90,576 
1,360,959 
-----------
$1,626,672 
===========
$   31,675 
-----------
31,675 
-----------
45,123 
-----------
1,578,554 
(28,680)
-----------
1,549,874 
-----------
$1,626,672 
=========== | $  142,638 
29,480 
-----------
172,118 
112,721 
1,661,049 
-----------
$1,945,888 
===========
$   28,777 
-----------
28,777 
-----------
11,305 
-----------
1,930,927 
(25,121)
-----------
1,905,806 
-----------
$1,945,888 
===========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)BALANCE SHEET
MARCH 31, 2006 AND 2005

|SERIES 11                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 2006
----                                                                                                                                                                                                                      | 2005
----                                                                                                                                                                                                                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
 Receivable from General Partner
  Total Current Assets
 Investments in Securities
 Investments in Project Partnerships, Net
    Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
 Payable to General Partners
  Total Current Liabilities
Partners' Equity (deficit):
Limited Partners (5,127 units for Series 11
at March 31, 2006 and 2005)
General Partners
  Total Partners' Equity
    Total Liabilities and Partners' Equity | $  207,490 
35,682 
0 
-----------
243,172 
101,561 
1,926,349 
-----------
$2,271,082 
===========
$   13,071 
-----------
13,071 
-----------
2,281,421 
(23,410)
-----------
2,258,011 
-----------
$2,271,082 
=========== | $  199,931 
33,838 
8,291 
-----------
242,060 
127,336 
2,664,780 
-----------
$3,034,176 
===========
$        0 
-----------
0 
----------
3,049,825 
(15,649)
-----------
3,034,176 
-----------
$3,034,176 
===========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)BALANCE SHEET
MARCH 31, 2006 AND 2005

|TOTAL SERIES 7 -11                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 2006
----                                                                                                                                                                                                                                                                  | 2005
----                                                                                                                                                                                                                                                                     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ASSETS
Current Assets:
 Cash and Cash Equivalents
 Investments in Securities
 Accounts Receivable
 Receivable from General Partner
  Total Current Assets
 Investments in Securities
 Investments in Project Partnerships, Net
    Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
 Payable to General Partners
  Total Current Liabilities
Long Term Liabilities:
 Payable to General Partners
Partners' Equity (deficit):
Limited Partners (10,395 units for Series 7, 9,980 for Series 8, 6,254 for Series 9, 5,043 for Series 10 and 5,127 for Series 11 at March 31, 2006 and 2005)
General Partners
  Total Partners' Equity
    Total Liabilities and Partners' Equity | $ 1,278,528 
255,555 
24,220 
0 
------------
1,558,303 
418,196 
4,894,839 
------------
$ 6,871,338 
============
$   186,265 
-----------
186,265 
-----------
1,802,504 
-----------
5,157,652 
(275,083)
-----------
4,882,569 
-----------
$ 6,871,338 
============ | $ 1,281,470 
242,580 
24,220 
8,291 
------------
1,556,561 
627,710 
6,551,507 
------------
$ 8,735,778 
============
$   152,924 
-----------
152,924 
-----------
1,542,821 
-----------
7,293,542 
(253,509)
-----------
7,040,033 
-----------
$ 8,735,778 
============

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

|SERIES 7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2006
----                                                                                                                                                                                                                                                                         | 2005
----                                                                                                                                                                                                                                                                   | 2004
----                                                                                                                                                                                                                                                                 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Revenues:
  Distribution Income
  Total Revenues
Expenses:
 Asset Management Fee-General Partner
 General and Administrative:
  General Partner
  Other
 Amortization
 Impairment of Investment in Project   Partnerships
  Total Expenses
Loss Before Equity in Losses of  Project Partnerships and Other  Income
Equity in Losses of Project  Partnerships
Interest Income 
Net Loss
Allocation of Net Loss:
 Assignees
 General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee Certificates Outstanding | $  21,470 
----------
21,470 
----------
86,447 
84,526 
28,296 
30,603 
193,195 
----------
423,067 
----------
(401,597)
(92,380)
26,181 
----------
$ (467,796)
===========
$ (463,118)
(4,678)
----------
$ (467,796)
===========
$   (44.55)
===========
10,395 
=========== | $  24,233 
----------
24,233 
----------
86,447 
56,857 
18,197 
7,089 
0 
----------
168,590 
----------
(144,357)
(139,599)
22,469 
----------
$ (261,487)
===========
$ (258,872)
(2,615)
----------
$ (261,487)
===========
$   (24.90)
===========
10,395 
=========== | $  14,725 
----------
14,725 
----------
86,749 
56,842 
19,538 
6,643 
0 
----------
169,772 
----------
(155,047)
(130,277)
23,962 
----------
$(261,362)
===========
$ (258,748)
(2,614)
----------
$ (261,362)
===========
$   (24.89)
===========
10,395 
===========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

|SERIES 8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2006
----                                                                                                                                                                                                                                                          | 2005
----                                                                                                                                                                                                                                                         | 2004
----                                                                                                                                                                                                                                                        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Revenues:
  Distribution Income
  Total Revenues
Expenses:
 Asset Management Fee-General Partner
 General and Administrative:
  General Partner
  Other
 Amortization
 Impairment of Investment in Project   Partnerships
  Total Expenses
Loss Before Equity in Losses of  Project Partnerships and Other  Income
Equity in Losses of Project  Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
 Assignees
 General Partners
Net Loss Per Beneficial
Assignee Certificate
Number of Beneficial Assignee
Certificates Outstanding | $  16,963 
----------
16,963 
----------
89,908 
93,195 
30,409 
12,823 
0 
----------
226,335 
----------
(209,372)
(29,928)
22,811 
----------
$(216,489)
==========
$(214,324)
(2,165)
----------
$(216,489)
==========
$  (21.48)
==========
9,980 
========== | $  16,447 
----------
16,447 
----------
89,908 
62,689 
19,352 
2,553 
0 
----------
174,502 
----------
(158,055)
(41,395)
20,284 
----------
$(179,166)
==========
$(177,374)
(1,792)
----------
$(179,166)
==========
$  (17.77)
==========
9,980 
========== | $  20,098 
----------
20,098 
----------
90,313 
62,671 
22,850 
3,072 
0 
----------
178,906 
----------
(158,808)
(39,434)
21,800 
----------
$(176,442)
==========
$(174,678)
(1,764)
----------
$(176,442)
==========
$  (17.50)
==========
9,980 
==========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

|SERIES 9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2006
----                                                                                                                                                                                                                                                               | 2005
----                                                                                                                                                                                                                                                      | 2004
----                                                                                                                                                                                                                                                     
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Revenues:
  Distribution Income
  Total Revenues
Expenses:
 Asset Management Fee-General Partner
 General and Administrative:
  General Partner
  Other
 Amortization
 Impairment of Investment in Project   Partnerships
  Total Expenses
Loss Before Equity in Losses of  Project Partnerships and Other  Income
Equity in Losses of Project 
 Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
 Assignees
 General Partners
Net Loss Per Beneficial
Assignee Certificate
Number of Beneficial Assignee
Certificates Outstanding | $  4,437 
----------
4,437 
----------
49,509 
52,016 
18,273 
12,194 
127,532 
----------
259,524 
----------
(255,087)
(101,726)
15,731 
----------
$(341,082)
==========
$(337,671)
(3,411)
----------
$(341,082)
==========
$  (53.99)
==========
6,254 
========== | $  7,752 
----------
7,752 
----------
49,509 
34,990 
11,260 
2,377 
0 
----------
98,136 
----------
(90,384)
(157,684)
13,222 
----------
$(234,846)
==========
$(232,498)
(2,348)
----------
$(234,846)
==========
$  (37.18)
==========
6,254 
========== | $  4,246 
----------
4,246 
----------
49,711 
34,979 
11,731 
3,082 
0 
----------
99,503 
----------
(95,257)
(230,291)
13,607 
----------
$(311,941)
==========
$(308,822)
(3,119)
----------
$(311,941)
==========
$  (49.38)
==========
6,254 
==========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

|SERIES 10                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2006
----                                                                                                                                                                                                                                                             | 2005
----                                                                                                                                                                                                                                                     | 2004
----                                                                                                                                                                                                                                                     | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Revenues:
  Distribution Income
  Total Revenues
Expenses:
 Asset Management Fee-General Partner
 General and Administrative:
  General Partner
  Other
 Amortization
 Impairment of Investment in Project   Partnerships
  Total Expenses
Loss Before Equity in Losses of  Project Partnerships and Other 
 Income
Equity in Losses of Project
 Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
 Assignees
 General Partners
Net Loss Per Beneficial Assignee Certificate
Number of Beneficial Assignee Certificates Outstanding | $  2,561 
----------
2,561 
----------
33,819 
32,510 
13,039 
24,700 
156,694 
---------
260,762 
---------
(258,201)
(111,553)
13,822 
----------
$(355,932)
==========
$(352,373)
(3,559)
----------
$(355,932)
==========
$  (69.87)
==========
5,043 
========== | $  2,511 
----------
2,511 
----------
33,819 
21,868 
8,149 
4,141 
0 
----------
67,977 
----------
(65,466)
(133,597)
12,737 
----------
$(186,326)
==========
$(184,463)
(1,863)
----------
$(186,326)
==========
$  (36.58)
==========
5,043 
========== | $  1,932 
----------
1,932 
----------
33,890 
21,863 
7,968 
4,578 
0 
----------
68,299 
----------
(66,367)
(175,628)
13,252 
----------
$(228,743)
==========
$(226,456)
(2,287)
----------
$(228,743)
==========
$  (44.91)
==========
5,043 
========== | 

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

|SERIES 11                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2006
----                                                                                                                                                                                                                                                               | 2005
----                                                                                                                                                                                                                                                     | 2004
----                                                                                                                                                                                                                                                    
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Revenues:
  Distribution Income
  Total Revenues
Expenses:
 Asset Management Fee-General Partner
 General and Administrative:
  General Partner
  Other
 Amortization
 Impairment of Investment in Project   Partnerships
  Total Expenses
Loss Before Equity in Losses of  Project Partnerships and Other  Income
Equity in Losses of Project
 Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
 Assignees
 General Partners
Net Loss Per Beneficial
Assignee Certificate
Number of Beneficial Assignee
Certificates Outstanding | $  3,382 
----------
3,382 
----------
28,021 
26,008 
12,519 
33,495 
600,802 
----------
700,845 
----------
(697,463)
(96,562)
17,860 
----------
$(776,165)
==========
$(768,404)
(7,761)
----------
$(776,165)
==========
$  (149.87)
==========
5,127 
========== | $  2,783 
----------
2,783 
----------
28,021 
17,494 
7,404 
6,343 
0 
----------
59,262 
----------
(56,479)
(112,606)
15,118 
----------
$(153,967)
==========
$(152,427)
(1,540)
----------
$(153,967)
==========
$  (29.73)
==========
5,127 
========== | $  2,182 
----------
2,182 
----------
28,254 
17,491 
7,549 
6,726 
0 
----------
60,020 
----------
(57,838)
(101,608)
15,869 
----------
$(143,577)
==========
$(142,141)
(1,436)
----------
$(143,577)
==========
$  (27.72)
==========
5,127 
==========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,

|TOTAL SERIES 7 - 11                                                                                                                                                                                                                                                                                                                                                                                                                         | 2006
----                                                                                                                                                                                                                                                       | 2005
----                                                                                                                                                                                                                                         | 2004
----                                                                                                                                                                                                                                        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Revenues:
  Distribution Income
  Total Revenues
Expenses:
 Asset Management Fee-General Partner
 General and Administrative:
  General Partner
  Other
 Amortization
 Impairment of Investment in Project    Partnerships
  Total Expenses
Loss Before Equity in Losses
 of Project Partnerships and Other  Income
Equity in Losses of Project
 Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
 Assignees
 General Partners | $    48,813 
-----------
48,813 
-----------
287,704 
288,255 
102,536 
113,815 
1,078,223 
-----------
1,870,533 
-----------
(1,821,720)
(432,149)
96,405 
-----------
$(2,157,464)
============
$(2,135,890)
(21,574)
------------
$(2,157,464)
============ | $    53,726 
-----------
53,726 
-----------
287,704 
193,898 
64,362 
22,503 
0 
-----------
568,467 
-----------
(514,741)
(584,881)
83,830 
-----------
$(1,015,792)
============
$(1,005,634)
(10,158)
------------
$(1,015,792)
============ | $    43,183 
-----------
43,183 
-----------
288,917 
193,846 
69,636 
24,101 
0 
-----------
576,500 
-----------
(533,317)
(677,238)
88,490 
-----------
$(1,122,065)
============
$(1,110,845)
(11,220)
------------
$(1,122,065)
============

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|SERIES 7                                                                                                                           | Limited
Partners
---------                                                                                                  | General
Partners
--------                                                                                         | Total
-----                                                                                                              
|---------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------
|Balance at March 31, 2003
Net Loss
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006 | $1,549,556 
(258,748)
-----------
1,290,808 
(258,872)
-----------
1,031,936 
(463,118)
-----------
$  568,818 
=========== | $  (76,548)
(2,614)
-----------
(79,162)
(2,615)
-----------
(81,777)
(4,678)
-----------
$  (86,455)
=========== | $1,473,008 
(261,362)
-----------
1,211,646 
(261,487)
-----------
950,159 
(467,796)
-----------
$  482,363 
===========



See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|SERIES 8                                                                                                                           | Limited
Partners
---------                                                                                              | General
Partners
--------                                                                                   | Total
-----                                                                                                            
|---------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------
|Balance at March 31, 2003
Net Loss
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006 | $  810,146 
(174,678)
-----------
635,468 
(177,374)
-----------
458,094 
(214,324)
-----------
$  243,770 
=========== | $ (80,327)
(1,764)
----------
(82,091)
(1,792)
----------
(83,883)
(2,165)
----------
$ (86,048)
========== | $  729,819 
(176,442)
-----------
553,377 
(179,166)
-----------
374,211 
(216,489)
-----------
$  157,722 
===========



See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|SERIES 9                                                                                                                           | Limited
Partners
---------                                                                                                | General
Partners
--------                                                                                  | Total
-----                                                                                                              
|---------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------
|Balance at March 31, 2003
Net Loss
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006 | $1,364,080 
(308,822)
-----------
1,055,258 
(232,498)
-----------
822,760 
(337,671)
-----------
$  485,089 
=========== | $(41,612)
(3,119)
----------
(44,731)
(2,348)
----------
(47,079)
(3,411)
----------
$ (50,490)
========== | $1,322,468 
(311,941)
-----------
1,010,527 
(234,846)
-----------
775,681 
(341,082)
-----------
$  434,599 
===========



See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|SERIES 10                                                                                                                          | Limited
Partners
---------                                                                                                  | General
Partners
--------                                                                                   | Total
-----                                                                                                                
|---------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------
|Balance at March 31, 2003
Net Loss
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006 | $2,341,846 
(226,456)
-----------
2,115,390 
(184,463)
-----------
1,930,927 
(352,373)
-----------
$1,578,554 
=========== | $ (20,971)
(2,287)
----------
(23,258)
(1,863)
----------
(25,121)
(3,559)
----------
$ (28,680)
========== | $2,320,875 
(228,743)
-----------
2,092,132 
(186,326)
-----------
1,905,806 
(355,932)
-----------
$1,549,874 
===========



See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|SERIES 11                                                                                                                          | Limited
Partners
---------                                                                                                  | General
Partners
--------                                                                                   | Total
-----                                                                                                                
|---------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------
|Balance at March 31, 2003
Net Loss
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006 | $3,344,393 
(142,141)
-----------
3,202,252 
(152,427)
-----------
3,049,825 
(768,404)
-----------
$2,281,421 
=========== | $ (12,673)
(1,436)
----------
(14,109)
(1,540)
----------
(15,649)
(7,761)
----------
$ (23,410)
========== | $3,331,720 
(143,577)
-----------
3,188,143 
(153,967)
-----------
3,034,176 
(776,165)
-----------
$2,258,011 
===========



See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|TOTAL SERIES 7 - 11                                                                                                                | Limited
Partners
---------                                                                                                              | General
Partners
--------                                                                                        | Total
-----                                                                                                                      
|---------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------
|Balance at March 31, 2003
Net Loss
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006 | $ 9,410,021 
(1,110,845)
------------
8,299,176 
(1,005,634)
------------
7,293,542 
(2,135,890)
------------
$ 5,157,652 
============ | $(232,131)
(11,220)
----------
(243,351)
(10,158)
----------
(253,509)
(21,574)
----------
$(275,083)
========== | $9,177,890 
(1,122,065)
-----------
8,055,825 
(1,015,792)
-----------
7,040,033 
(2,157,464)
-----------
$4,882,569 
===========



See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|SERIES 7
--------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2006
----                                                                                                                                                                                     | 2005
----                                                                                                                                                                               | 2004
----                                                                                                                                                                               
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Cash Flows from Operating Activities:
  Net Loss
  Adjustments to Reconcile Net Loss
  to Net Cash Used in Operating   Activities:
   Amortization
   Impairment of Investment in Project     Partnerships
   Accreted Interest Income on    Investments in Securities
   Equity in Losses of Project    Partnerships
   Distributions Included in
   Other Income
   Changes in Operating Assets and    Liabilities:
    Increase in Payable to General     Partners
     Net Cash Used in Operating      Activities
Cash Flows from Investing Activities:
 Distributions Received from Project  Partnerships
 Redemption of Investment in Securities
     Net Cash Provided by Investing      Activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year | $(467,796)
30,603 
193,195 
(15,333)
92,380 
(21,470)
92,907 
----------
(95,514)
----------
29,202 
77,000 
----------
106,202 
----------
10,688 
383,342 
----------
$ 394,030 
========== | $(261,487)
7,089 
0 
(19,255)
139,599 
(23,983)
85,925 
----------
(72,112)
----------
39,581 
72,000 
----------
111,581 
----------
39,469 
343,873 
----------
$ 383,342 
========== | $(261,362)
6,643 
0 
(22,530)
130,277 
(14,725)
18,864 
----------
(142,833)
----------
28,698 
68,000 
----------
96,698 
----------
(46,135)
390,008 
----------
$ 343,873 
==========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|SERIES 8
--------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2006
----                                                                                                                                                                                   | 2005
----                                                                                                                                                                                  | 2004
----                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Cash Flows from Operating Activities:
  Net Loss
  Adjustments to Reconcile Net Loss
  to Net Cash Used in Operating   Activities:
   Amortization
   Impairment of Investment in Project    Partnerships
   Accreted Interest Income on    Investments in Securities
   Equity in Losses of Project    Partnerships
   Distributions Included in Other    Income
   Changes in Operating Assets and    Liabilities:
    Increase in Accounts Receivable
    Increase in Payable to General     Partners
     Net Cash Used in Operating      Activities
Cash Flows from Investing Activities:
  Distributions Received from Project   Partnerships
  Redemption of Investment in Securities
     Net Cash Provided by Investing      Activities
Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year | $(216,489)
12,823 
0 
(13,833)
29,928 
(16,963)
0 
96,162 
----------
(108,372)
----------
20,029 
71,999 
----------
92,028 
----------
(16,344)
325,662 
----------
$ 309,318 
========== | $(179,166)
2,553 
0 
(17,293)
41,395 
(16,447)
0 
29,589 
----------
(139,369)
----------
24,132 
67,000 
----------
91,132 
----------
(48,237)
373,899 
----------
$ 325,662 
========== | $(176,442)
3,072 
0 
(20,197)
39,434 
(20,098)
(24,220)
34,114 
----------
(164,337)
----------
25,030 
63,000 
----------
88,030 
----------
(76,307)
450,206 
----------
$ 373,899 
==========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|SERIES 9
--------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 2006
----                                                                                                                                                                                      | 2005
----                                                                                                                                                                                   | 2004
----                                                                                                                                                                                  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Cash Flows from Operating Activities:
  Net Loss
  Adjustments to Reconcile Net Loss
  to Net Cash Used in Operating   Activities:
   Amortization
   Impairment of Investment in Project    Partnerships
   Accreted Interest Income on    Investments in Securities
   Equity in Losses of Project    Partnerships
   Distributions Included in Other    Income
   Changes in Operating Assets and    Liabilities:
    Decrease (Increase) in Accounts     Receivable
    Increase in Payable to General     Partners
     Net Cash Used in Operating      Activities
Cash Flows from Investing Activities:
  Distributions Received from Project   Partnerships
  Redemption of Investment in Securities
     Net Cash Provided by Investing      Activities
Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year | $(341,082)
12,194 
127,532 
(9,410)
101,726 
(4,437)
0 
54,168 
----------
(59,309)
----------
11,405 
41,000 
----------
52,405 
----------
(6,904)
229,897 
----------
$ 222,993 
========== | $(234,846)
2,377 
0 
(11,133)
157,684 
(7,752)
600 
19,196 
----------
(73,874)
----------
15,869 
39,000 
----------
54,869 
----------
(19,005)
248,902 
----------
$ 229,897 
========== | $(311,941)
3,082
0 
(12,599)
230,291 
(4,246)
(600)
31,664 
----------
(64,349)
----------
15,767 
36,999 
----------
52,766 
----------
(11,583)
260,485 
----------
$ 248,902 
==========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|SERIES 10
--------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 2006
----                                                                                                                                                                                 | 2005
----                                                                                                                                                                                 | 2004
----                                                                                                                                                                           
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Cash Flows from Operating Activities:
  Net Loss
  Adjustments to Reconcile Net Loss
  to Net Cash Used in Operating   Activities:
   Amortization
   Impairment of Investment in Project     Partnerships
   Accreted Interest Income on    Investments in Securities
   Equity in Losses of Project    Partnerships
   Distributions Included in Other    Income
   Changes in Operating Assets and    Liabilities:
    Increase (Decrease) in Payable to     General Partners
     Net Cash Used in Operating      Activities
Cash Flows from Investing Activities:
  Distributions Received from Project   Partnerships
  Redemption of Investment in Securities
     Net Cash Provided by Investing      Activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year | $(355,932)
24,700 
156,694 
(9,816)
111,553 
(2,561)
36,716 
----------
(38,646)
----------
9,703 
31,002 
----------
40,705 
----------
2,059 
142,638 
----------
$ 144,697 
========== | $(186,326)
4,141 
0 
(11,128)
133,597 
(2,511)
(91,179)
----------
(153,406)
----------
19,197 
29,000 
----------
48,197 
----------
(105,209)
247,847 
----------
$ 142,638 
========== | $(228,743)
4,578 
0 
(12,243)
175,628 
(1,932)
9,628 
----------
(53,084)
----------
20,992 
27,998 
----------
48,990 
----------
(4,094)
251,941 
----------
$ 247,847 
==========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|SERIES 11
--------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2006
----                                                                                                                                                                                      | 2005
----                                                                                                                                                                                     | 2004
----                                                                                                                                                                            
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Cash Flows from Operating Activities:
  Net Loss
  Adjustments to Reconcile Net Loss
  to Net Cash Used in Operating   Activities:
   Amortization
   Impairment of Investment in Project    Partnerships
   Accreted Interest Income on    Investments in Securities
   Equity in Losses of Project    Partnerships
   Distributions Included in Other    Income
   Changes in Operating Assets and    Liabilities:
    Increase in Accounts Receivable
    Increase (Decrease) in Payable to     General Partners
     Net Cash Used in Operating      Activities
Cash Flows from Investing Activities:
  Distributions Received from Project   Partnerships
  Redemption of Investment in Securities
     Net Cash Provided by Investing      Activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year | $(776,165)
33,495 
600,802 
(12,070)
96,562 
(3,382)
8,291 
13,071 
----------
(39,396)
----------
10,954 
36,001 
---------
46,955 
---------
7,559 
199,931 
---------
$ 207,490 
========== | $(153,967)
6,343 
0 
(13,595)
112,606 
(2,783)
(8,291)
(40,486)
----------
(100,173)
----------
18,466 
34,000 
---------
52,466 
---------
(47,707)
247,638 
---------
$ 199,931 
========== | $(143,577)
6,726 
0 
(14,856)
101,608 
(2,182)
0 
(4,844)
----------
(57,125)
----------
8,564 
32,001 
---------
40,565 
---------
(16,560)
264,198 
---------
$ 247,638 
==========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2006, 2005 AND 2004:

|TOTAL SERIES 7 - 11
--------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2006
----                                                                                                                                                                                                                | 2005
----                                                                                                                                                                                                       | 2004
----                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Cash Flows from Operating Activities:
  Net Loss
  Adjustments to Reconcile Net Loss 
  to Net Cash Used in Operating   Activities:
   Amortization
   Impairment of Investment in Project    Partnerships
   Accreted Interest Income on    Investments in Securities
   Equity in Losses of Project    Partnerships
   Distributions Included in Other    Income
   Changes in Operating Assets and    Liabilities:
    (Increase) Decrease in Receivable
    From General Partners 
    Increase in Payable to General     Partners
     Net Cash Used in Operating      Activities
Cash Flows from Investing Activities:
  Distributions Received from Project   Partnerships
  Redemption of Investment in Securities
     Net Cash Provided by Investing      Activities
Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year | $  (2,157,464)
113,815 
1,078,223 
(60,462)
432,149 
(48,813)
8,291 
293,024 
-----------
(341,237)
-----------
81,293 
257,002 
-----------
338,295 
-----------
(2,942)
1,281,470 
-----------
$1,278,528 
=========== | $(1,015,792)
22,503 
0 
(72,404)
584,881 
(53,476)
(7,691)
3,045 
-----------
(538,934)
-----------
117,245 
241,000 
-----------
358,245 
-----------
(180,689)
1,462,159 
-----------
$1,281,470 
=========== | $(1,122,065)
24,101 
0 
(82,425)
677,238 
(43,183)
(24,820)
89,426 
-----------
(481,728)
-----------
99,051 
227,998 
-----------
327,049 
-----------
(154,679)
1,616,838 
-----------
$1,462,159 
===========

See accompanying notes to financial statements.

---

GATEWAY TAX CREDIT FUND III LTD.(A Florida Limited Partnership)NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006, 2005 AND 2004

NOTE 1 - ORGANIZATION:   Gateway Tax Credit Fund III Ltd. ("Gateway"), a Florida Limited Partnership, was formed October 17, 1991 under the laws of Florida.  Gateway offered its limited partnership interests in Series.  The first Series for Gateway is Series 7.  Operations commenced on July 16, 1992 for Series 7, January 4, 1993 for Series 8, September 30, 1993 for Series 9, January 21, 1994 for Series 10 and April 29, 1994 for Series 11.  Each Series invests, as a limited partner, in other limited partnerships ("Project Partnerships"), each of which owns and operates apartment complexes eligible for Low-Income Housing Tax Credits ("Tax Credits"), provided for in Section 42 of the Internal Revenue Code of 1986.  Gateway will terminate on December 31, 2040 or sooner, in accordance with the terms of the Limited Partnership Agreement.  As of March 31, 2006, Gateway had received capital contributions of $1,000 from the General Partners and $36,799,000 from the investor Limited Partners.
   Raymond James Partners, Inc. and Raymond James Tax Credit Funds, Inc., wholly-owned subsidiaries of Raymond James Financial, Inc., are the General Partner and Managing General Partner, respectively.
   Gateway received capital contributions of $10,395,000, $9,980,000, $6,254,000, $5,043,000 and $5,127,000 from the investor Limited Partners in Series 7, 8, 9, 10 and 11, respectively.  Each Series will be treated as though it were a separate partnership, investing in a separate and distinct pool of Project Partnerships.  Income or loss and all tax items from the Project Partnerships acquired by each Series will be specifically allocated among the limited partners of such Series.
   Operating profits and losses, cash distributions from operations and Tax Credits from each Series are generally allocated 99% to the Limited Partners in that Series and 1% to the General Partners.  Profit or loss and cash distributions from sales of property by each Series are allocated as formulated in the Limited Partnership Agreement.NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting   Gateway utilizes an accrual basis of accounting whereby revenues are recognized as earned and expenses are recognized as obligations are incurred.
   Gateway accounts for its investments as the limited partner in Project Partnerships ("Investments in Project Partnerships"), using the equity method of accounting, because management believes that Gateway does not have a majority control of the major operating and financial policies of the Project Partnerships in which it invests, and reports the equity in losses of the Project Partnerships on a 3-month lag in the Statements of Operations.  Under the equity method, the Investments in Project Partnerships initially include:
   1)  Gateway's capital contribution,
   2)  Acquisition fees paid to the General Partner for services rendered in        selecting properties for acquisition, and
   3)  Acquisition expenses including legal fees, travel and other miscellaneous        costs relating to acquiring properties.
Quarterly the Investments in Project Partnerships are increased or decreased as follows:
   1)  Increased for equity in income or decreased for equity in losses of the        Project Partnerships,
   2)  Decreased for cash distributions received from the Project Partnerships, and
   3)  Decreased for the amortization of the acquisition fees and expenses.
   For the fiscal year ended March 31, 2006, Gateway changed the period over which the intangible acquisition fees and expenses are amortized.  In all prior years, the period in which such intangible assets had been amortized was 35 years.  In

the fiscal year ended March 31, 2006, this amortization period was changed to 15 years to better approximate the period over which the benefits of these investments are realized.  As a result of this change in estimate, an additional amortization expense of $24,835 for Series 7, $10,553 for Series 8, $9,817 for Series 9, $19,964 for Series 10 and $27,587 for Series 11, or $92,756 for all Series of Gateway, was recognized during the year-ended March 31, 2006, as compared to the amortization expense amount which would have been realized had the estimated amortization period not changed during the year.  The amortization expense is shown on the Statements of Operations.
   Pursuant to the limited partnership agreements for the Project Partnerships, cash losses generated by the Project Partnerships are allocated to the general partners of those partnerships.  In subsequent years, cash profits, if any, are first allocated to the general partners to the extent of the allocation of prior years' cash losses.
   Since Gateway invests as a limited partner, and therefore is not obligated to fund losses or make additional capital contributions, it does not recognize losses from individual Project Partnerships to the extent that these losses would reduce the investment in those Project Partnerships below zero.  The suspended losses will be used to offset future income from the individual Project Partnerships.  Any cash distributions received from Project Partnerships which have a zero investment balance are accounted for as distribution income in the period the cash distribution is received by Gateway.
   Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.  If the sum of the expected future cash flows is less than the carrying amount of the investment, Gateway recognizes an impairment loss.  For the fiscal year ended March 31, 2006, impairment expense was recognized in the statement of operations in the following Series and in the following amounts:  Series 7 - $193,195, Series 9 - $127,532, Series 10 - $156,694, Series 11 - $600,802.  The total impairment expense for all Series in Gateway for fiscal year 2006 was $1,078,223.  There was no impairment expense in fiscal years 2005 or 2004.  Refer to Note 5
- Investment in Project Partnerships for further details regarding the components of the Investment in Project Partnership balance.
   Gateway, as a limited partner in the Project Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility for tax credits.  If the cost of operating a property exceeds the rental income earned thereon, Gateway may deem it in its best interest to voluntarily provide funds in order to protect its investment.  Gateway does not guarantee any of the mortgages or other debt of the Project Partnerships.Variable Interest Entities
   In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN46"), "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51" which was subsequently revised in December, 2003.  Gateway has adopted FIN 46 and applied its requirements to all Project Partnerships in which Gateway holds an interest.  Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics, (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights.  FIN 46 requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE.  The primary beneficiary, as is applicable to Gateway's circumstances, is the party in the Project Partnership equity group that is most closely associated with the Project Partnership.
   Gateway holds variable interests in 128 VIEs, which consist of Project Partnerships, of which Gateway is not the primary beneficiary.  Five of Gateways Project Partnership investments were determined not to be VIEs.  Gateway's maximum exposure to loss as a result of its involvement with unconsolidated VIEs is limited to Gateway's recorded investments in and receivables from those VIEs, which is approximately $5,530,357 at March 31, 2006. Gateway may be subject to additional losses to the extent of any financial support that Gateway voluntarily provides to those Project Partnerships in the future.Cash and Cash Equivalents   It is Gateway's policy to include short-term investments with an original maturity of three months or less in Cash and Cash Equivalents.  Short-term investments are comprised of money market mutual funds.Concentrations of Credit Risk   Financial instruments which potentially subject Gateway to concentrations of credit risk consist of cash investments in a money market mutual fund that is a wholly-owned subsidiary of Raymond James Financial, Inc.Use of Estimates in the Preparation of Financial Statements   The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates that affect certain reported amounts and disclosures.  These estimates are based on management's knowledge and experience.  Accordingly, actual results could differ from these estimates.Investment in Securities   Gateway applies Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities ("FAS 115").  Under FAS 115, Gateway is required to categorize its debt securities as held-to-maturity, available-for-sale or trading securities, dependent upon Gateway's intent in holding the securities.  Gateway's intent is to hold all of its debt securities (U. S. Treasury Security Strips) until maturity and to use these reserves to fund Gateway's ongoing operations.  Interest income is recognized ratably on the U.S. Treasury Strips using the effective yield to maturity.Offering and Commission Costs   Offering and commission costs are charged against Limited Partners' Equity upon admission of Limited Partners.Income Taxes   No provision for income taxes has been made in these financial statements, as income taxes are a liability of the partners rather than of Gateway.Reclassifications
   For comparability, certain 2004 and 2005 balances have been reclassified, where appropriate, to conform with the fiscal year 2006 financial statement presentation.

---

NOTE 3 - INVESTMENT IN SECURITIES:   The Investment in Securities as of March 31, 2006 consists of U.S. Treasury Security Strips presented at their cost, plus accreted interest income of $128,446 for Series 7, $115,115 for Series 8, $77,077 for Series 9, $77,070 for Series 10 and $89,646 for Series 11.

|          | Estimated Market
Value     
--------------- | Cost Plus Accreted
Interest    
---------------- | Gross Unrealized 
Gains and (Losses)
----------------
|--------- | ------------------------------------------- | ------------------------------------------------ | -----------------------------------------------------
|Series 7  | $ 156,442                                   | $ 151,104                                        | $  5,338                                             
|Series 8  | 148,942                                     | 144,509                                          | 4,433                                                
|Series 9  | 123,429                                     | 119,879                                          | 3,550                                                
|Series 10 | 126,499                                     | 121,016                                          | 5,483                                                
|Series 11 | 146,308                                     | 137,243                                          | 9,065                                                

|                                                                                                                 |                      |                      |                       
|---------------------------------------------------------------------------------------------------------------- | -------------------- | -------------------- | ----------------------
|As of March 31, 2006, the cost and accreted interest of debt securities by contractual maturities is as follows: | Series 7
--------    | Series 8
--------    | Series 9
--------     
|Due within 1 year                                                                                                | $  76,135            | $  72,553            | $  40,745             
|After 1 year through 5 years                                                                                     | 74,969               | 71,956               | 79,134                
|After 5 years through 10 years                                                                                   | 0                    | 0                    | 0                     
|                                                                                                                 | ---------            | ---------            | ---------             
|Total amount recorded on Balance   Sheet                                                                         | $ 151,104 
========= | $ 144,509 
========= | $ 119,879 
=========  
|                                                                                                                 | Series 10
--------   | Series 11
--------   | Total
--------        
|Due within 1 year                                                                                                | $  30,440            | $  35,682            | $  255,555            
|After 1 year through 5 years                                                                                     | 90,576               | 101,561              | 418,196               
|After 5 years through 10 years                                                                                   | 0                    | 0                    | 0                     
|                                                                                                                 | ---------            | ---------            | ---------             
|Total amount recorded on Balance   Sheet                                                                         | $ 121,016 
========= | $ 137,243 
========= | $  673,751 
==========

---

NOTE 4 - RELATED PARTY TRANSACTIONS:   The Payable to General Partners primarily represents the asset management fees owed to the General Partners at the end of the period.  It is unsecured, due on demand and, in accordance with the limited partnership agreement, non-interest bearing.  Within the next 12 months, the Managing General Partner does not intend to demand payment on the portion of Asset Management Fees payable classified as long-term on the Balance Sheet.
   Value Partners, Inc., an affiliate of Gateway, acquired the general partner interest in Logan Heights, one of the Project Partnerships in Series 8, in 2003.
   For the periods ended March 31, 2006, 2005, and 2004 the General Partners and affiliates are entitled to compensation and reimbursement for costs and expenses incurred by Gateway as follows: 
   Asset Management Fee - The Managing General Partner is entitled to receive an annual asset management fee equal to the greater of (i) $2,000 for each limited partnership in which Gateway invests, as adjusted by the Consumer Price Index, or (ii) 0.275% of Gateway's gross proceeds from the sale of limited partnership interests.  In either event (i) or (ii), the maximum amount may not exceed 0.2% of the aggregate cost (Gateway's capital contribution plus Gateway's share of the Properties' mortgage) of Gateway's interest in properties owned by the Project Partnerships.  The asset management fee will be paid only after all other expenses of Gateway have been paid.  These fees are included in the Statement of Operations.

|          | 2006 
----           | 2005 
----           | 2004 
----          
|--------- | -------------------- | -------------------- | --------------------
|Series 7  | $ 86,447             | $ 86,447             | $ 86,749            
|Series 8  | 89,908               | 89,908               | 90,313              
|Series 9  | 49,509               | 49,509               | 49,711              
|Series 10 | 33,819               | 33,819               | 33,890              
|Series 11 | 28,021 
---------    | 28,021 
---------    | 28,254 
---------   
|Total     | $ 287,704 
========= | $ 287,704 
========= | $ 288,917 
=========

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

|          | 2006 
----          | 2005 
----          | 2004 
----         
|--------- | ------------------- | ------------------- | -------------------
|Series 7  | $ 84,526            | $ 56,857            | $ 56,842           
|Series 8  | 93,195              | 62,689              | 62,671             
|Series 9  | 52,016              | 34,990              | 34,979             
|Series 10 | 32,510              | 21,868              | 21,863             
|Series 11 | 26,008 
---------   | 17,494 
---------   | 17,491 
---------  
|Total     | $288,255 
========= | $193,898 
========= | $193,846 
=========

Total unpaid asset management fees and administrative expenses payable to the General Partners, which are included on the Balance Sheet as of March 31, 2006 and 2005 are as follows.

|          | March 31, 2006
-------------- | March 31, 2005
-------------- | 
|--------- | ----------------------------- | ----------------------------- | 
|Series 7  | $  704,516                    | $  611,609                    | 
|Series 8  | 735,669                       | 639,507                       | 
|Series 9  | 458,715                       | 404,547                       | 
|Series 10 | 76,798                        | 40,082                        | 
|Series 11 | 13,071 
-----------           | 0 
-----------                | 
|Total     | $1,988,769 
===========       | $1,695,745 
===========       | 

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:SERIES 7
   As of March 31, 2006, the Partnership had acquired a 99% interest in the profits, losses and tax credits as a limited partner in 39 Project Partnerships which own and operate government assisted multi-family housing complexes.
   Cash flows from operations are allocated according to each Partnership agreement.  Upon dissolution proceeds will be distributed according to each Partnership agreement.
   The following is a summary of Investments in Project Partnerships as of:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | MARCH 31, 2006
--------------                                                                                              | MARCH 31, 2005
--------------                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------
|Capital Contributions to Project Partner-  ships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships (1) 
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition  fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships | $ 7,732,089 
(7,224,499)
(241,747)
-----------
265,843 
793,335 
(224,238)
(193,195)
-----------
$   641,745 
============ | $ 7,732,089 
(7,132,119)
(234,015)
-----------
365,955 
793,335 
(193,635)
0 
-----------
$   965,655 
============

(1) In accordance with the Partnership's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $4,825,178 for the year ended March 31, 2006 and cumulative suspended losses of $4,140,409 for the year ended March 31, 2005 are not included.

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):SERIES 8
   As of March 31, 2006, the Partnership had acquired a 99% interest in the profits, losses and tax credits as a limited partner in 43 Project Partnerships which own and operate government assisted multi-family housing complexes.
   Cash flows from operations are allocated according to each Partnership agreement.
Upon dissolution proceeds will be distributed according to each Partnership agreement.
   The following is a summary of Investments in Project Partnerships as of:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | MARCH 31, 2006
--------------                                                                                     | MARCH 31, 2005
--------------                                                                                    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------
|Capital Contributions to Project Partner-  ships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships (1) 
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition  fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships | $ 7,586,105 
(7,414,683)
(174,579)
-----------
(3,157)
549,773 
(131,272)
0 
-----------
$   415,344 
=========== | $ 7,586,105 
(7,384,755)
(171,513)
-----------
29,837 
549,773 
(118,449)
0 
-----------
$   461,161 
===========

(1) In accordance with the Partnership's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $5,547,391 for the year ended March 31, 2006 and cumulative suspended losses of $4,846,424 for the year ended March 31, 2005 are not included.

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):SERIES 9
   As of March 31, 2006, the Partnership had acquired a 99% interest in the profits, losses and tax credits as a limited partner in 24 Project Partnerships which own and operate government assisted multi-family housing complexes.
   Cash flows from operations are allocated according to each Partnership agreement.
Upon dissolution proceeds will be distributed according to each Partnership agreement.
   The following is a summary of Investments in Project Partnerships as of:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | MARCH 31, 2006
--------------                                                                                            | MARCH 31, 2005
--------------                                                                                    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------
|Capital Contributions to Project Partner-  ships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships (1)
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition  fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships | $ 4,914,116 
(4,260,098)
(148,761)
-----------
505,257 
244,087 
(71,370)
(127,532)
-----------
$   550,442 
=========== | $ 4,914,116 
(4,158,372)
(141,793)
-----------
613,951 
244,087 
(59,176)
0 
-----------
$   798,862 
===========

(1) In accordance with the Partnership's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $1,792,373 for the year ended March 31, 2006 and cumulative suspended losses of $1,528,748 for the year ended March 31, 2005 are not included.

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):SERIES 10
   As of March 31, 2006, the Partnership had acquired a 99% interest in the profits, losses and tax credits as a limited partner in 15 Project Partnerships which own and operate government assisted multi-family housing complexes.
   Cash flows from operations are allocated according to each Partnership agreement.
Upon dissolution proceeds will be distributed according to each Partnership agreement.
   The following is a summary of Investments in Project Partnerships as of:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | MARCH 31, 2006
--------------                                                                                              | MARCH 31, 2005
--------------                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------
|Capital Contributions to Project Partner-  ships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships (1)
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition  fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships | $ 3,914,672 
(2,318,920)
(191,535)
-----------
1,404,217 
196,738 
(83,302)
(156,694)
-----------
$ 1,360,959 
=========== | $ 3,914,672 
(2,207,367)
(184,392)
-----------
1,522,913 
196,738 
(58,602)
0 
-----------
$ 1,661,049 
===========

(1) In accordance with the Partnership's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $346,072 for the year ended March 31, 2006 and cumulative suspended losses of $204,444 for the year ended March 31, 2005 are not included.

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):SERIES 11
   As of March 31, 2006, the Partnership had acquired a 99% interest in the profits, losses and tax credits as a limited partner in 12 Project Partnerships which own and operate government assisted multi-family housing complexes.
   Cash flows from operations are allocated according to each Partnership agreement.
Upon dissolution proceeds will be distributed according to each Partnership agreement.
   The following is a summary of Investments in Project Partnerships as of:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | MARCH 31, 2006
--------------                                                                                               | MARCH 31, 2005
--------------                                                                                      
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------
|Capital Contributions to Project Partner-  ships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships 
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition  fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships | $ 4,128,042 
(1,604,163)
(172,565)
-----------
2,351,314 
290,335 
(114,498)
(600,802)
-----------
$ 1,926,349 
=========== | $ 4,128,042 
(1,507,601)
(164,993)
-----------
2,455,448 
290,335 
(81,003)
0 
-----------
$ 2,664,780 
===========

(1) In accordance with the Partnership's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $546,725 for the year ended March 31, 2006 are not included and cumulative suspended losses of $372,590 for the year ended March 31, 2005 are not included.

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):   The following is a summary of Investments in Project Partnerships:

|TOTAL SERIES 7 - 11                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | MARCH 31, 2006
--------------                                                                                                    | MARCH 31, 2005
--------------                                                                                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------
|Capital Contributions to Project Partner-ships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships 
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
 Acquisition fees and expenses
 Accumulated amortization of acquisition  fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships | $28,275,024 
(22,822,363)
(929,187)
-----------
4,523,474 
2,074,268 
(624,680)
(1,078,223)
-----------
$ 4,894,839 
=========== | $28,275,024 
(22,390,214)
(896,706)
-----------
4,988,104 
2,074,268 
(510,865)
0 
-----------
$ 6,551,507 
===========

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):   In accordance with the Partnership's policy of presenting the financial information 
of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | DECEMBER 31,                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|SERIES 7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 2005
----                                                                                                                                                                                                                                                                                                                                                                                                                          
|SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
    Total assets
Liabilities and Partners' Equity:
  Current liabilities
  Long-term debt
    Total liabilities
Partners' equity
  Gateway
  General Partners
    Total Partners' equity
    Total liabilities and partners'     equity
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
    Total expenses
      Net loss
Other partners' share of net loss
Partnership's share of net loss
Suspended losses
Equity in Losses of Project Partnerships | $ 4,085,716 
27,269,050 
21,083 
-----------
$31,375,849 
===========
$   831,051 
35,642,424 
-----------
36,473,475 
-----------
(4,746,260)
(351,366)
-----------
(5,097,626)
-----------
$31,375,849 
===========
$ 6,906,393 
-----------
3,610,427 
2,611,771 
1,472,897 
-----------
7,695,095 
-----------
$  (788,702)
============
$   (11,553)
============
$  (777,149)
684,769 
------------
$   (92,380)
============

(1)  As of December 31, 2005, the largest Project Partnership constituted 5.0% and 5.4%, and as of December 31, 2004 the largest Project Partnership constituted 5.1% and 5.7% of the combined total assets by series and combined total revenues by series, respectively.

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):   In accordance with the Partnership's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | DECEMBER 31,                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|SERIES 8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 2005
----                                                                                                                                                                                                                                                                                                                                                                                                                          
|SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
    Total assets
Liabilities and Partners' Equity:
  Current liabilities
  Long-term debt
    Total liabilities
Partners' equity
  Gateway
  General Partners
    Total Partners' equity
    Total liabilities and partners'     equity
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
    Total expenses
      Net loss
Other partners' share of net loss
Partnership's share of net loss
Suspended losses
Equity in Losses of Project Partnerships | $ 4,016,344 
28,642,694 
15,794 
-----------
$32,674,832 
===========
$ 1,270,463 
37,532,816 
-----------
38,803,279 
-----------
(5,424,268)
(704,179)
-----------
(6,128,447)
-----------
$32,674,832 
===========
$ 6,808,514 
-----------
3,427,081 
2,635,945 
1,485,669 
-----------
7,548,695 
-----------
$  (740,181)
============
$    (9,286)
============
$  (730,895)
700,967 
------------
$   (29,928)
============

(1)  As of December 31, 2005, the largest Project Partnership constituted 5.1% and 5.5%, and as of December 31, 2004 the largest Project Partnership constituted 5.3% and 4.0% of the combined total assets by series and combined total revenues by series, respectively.

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):   In accordance with the Partnership's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | DECEMBER 31,                                                                                                                                                                                                                                                                                                                                                                                                                      
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|SERIES 9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 2005
----                                                                                                                                                                                                                                                                                                                                                                                                                         
|SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
    Total assets
Liabilities and Partners' Equity:
  Current liabilities
  Long-term debt
    Total liabilities
Partners' equity
  Gateway
  General Partners
    Total Partners' equity
    Total liabilities and     partners' equity
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
    Total expenses
      Net loss
Other partners' share of net loss
Partnership's share of net loss
Suspended losses
Equity in Losses of Project Partnerships | $ 2,109,283 
16,469,701 
4,788 
-----------
$18,583,772 
===========
$   321,281 
19,934,839 
-----------
20,256,120 
-----------
(1,339,512)
(332,836)
-----------
(1,672,348)
-----------
$18,583,772 
===========
$ 3,496,332 
-----------
1,715,590 
1,381,933 
767,851 
------------
3,865,374 
------------
$  (369,042)
============
$    (3,691)
============
$  (365,351)
263,625 
------------
$  (101,726)
============

(1)  As of December 31, 2005, the largest Project Partnership constituted 7.9% and 8.3%, and as of December 31, 2004 the largest Project Partnership constituted 7.7% and 6.5% of the combined total assets by series and combined total revenues by series, respectively.

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):   In accordance with the Partnership's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | DECEMBER 31,                                                                                                                                                                                                                                                                                                                                                                                                         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|SERIES 10                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 2005
----                                                                                                                                                                                                                                                                                                                                                                                                            
|SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
    Total assets
Liabilities and Partners' Equity:
  Current liabilities
  Long-term debt
    Total liabilities
Partners' equity
  Gateway
  General Partners
    Total Partners' equity
    Total liabilities and partners'     equity
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
    Total expenses
      Net loss
Other partners' share of net loss
Partnership's share of net loss
Suspended losses
Equity in Losses of Project Partnerships | $ 1,772,233 
12,263,627 
2,013 
-----------
$14,037,873 
===========
$   340,730 
13,054,976 
-----------
13,395,706 
-----------
1,046,051 
(403,884)
-----------
642,167 
-----------
$14,037,873 
===========
$ 2,149,462 
-----------
1,240,546 
697,764 
466,542 
-----------
2,404,852 
-----------
$ (255,390)
===========
$   (3,553)
===========
$ (251,837)
140,284 
------------
$  (111,553)
============

(1)  As of December 31, 2005, the largest Project Partnership constituted 11.4% and 12.8%, and as of December 31, 2004 the largest Project Partnership constituted 10.6% and 12.0% of the combined total assets by series and combined total revenues by series, respectively.

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):   In accordance with the Partnership's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | DECEMBER 31,                                                                                                                                                                                                                                                                                                                                                                                                         
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|SERIES 11                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2005
----                                                                                                                                                                                                                                                                                                                                                                                                            
|SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
    Total assets
Liabilities and Partners' Equity:
  Current liabilities
  Long-term debt
    Total liabilities
Partners' equity
  Limited Partner
  General Partners
    Total Partners' equity
    Total liabilities and     partners' equity
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
    Total expenses
      Net loss
Other partners' share of net loss
Partnership's share of net loss
Suspended losses
Equity in Losses of Project Partnerships | $ 1,029,906 
10,348,302 
238,281 
-----------
$11,616,489 
===========
$   240,533 
9,847,071 
-----------
10,087,604 
-----------
1,809,656 
(280,771)
-----------
1,528,885 
-----------
$11,616,489 
===========
$ 1,945,641 
-----------
1,150,195 
576,977 
506,550 
-----------
2,233,722 
-----------
$ (288,081)
===========
$  (17,384)
===========
$ (270,697)
174,135 
-----------
$  (96,562)
===========

(1)  As of December 31, 2005, the largest Project Partnership constituted 19.7% and 19.8%, and as of December 31, 2004 the largest Project Partnership constituted 19.9% and 20.2% of the combined total assets by series and combined total revenues by series, respectively.

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):   In accordance with the Partnership's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | DECEMBER 31,                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|TOTAL SERIES 7 - 11                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2005
----                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|SUMMARIZED BALANCE SHEETS
Assets:
  Current assets
  Investment properties, net
  Other assets
    Total assets
Liabilities and Partners' Equity:
  Current liabilities
  Long-term debt
    Total liabilities
Partners' equity
  Limited Partner
  General Partners
    Total Partners' equity
    Total liabilities and     partners' equity
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income
Expenses:
  Operating expenses
  Interest expense
  Depreciation and amortization
    Total expenses
      Net loss
Other partners' share of net loss
Partnership's share of net loss
Suspended losses
Equity in Losses of Project Partnerships | $ 13,013,482 
94,993,374 
281,959 
------------
$108,288,815 
============
$  3,004,058 
116,012,126 
------------
119,016,184 
------------
(8,654,333)
(2,073,036)
------------
(10,727,369)
------------
$108,288,815 
============
$ 21,306,342 
------------
11,143,839 
7,904,390 
4,699,509 
------------
23,747,738 
------------
$(2,441,396)
============
$   (45,467)
============
$(2,395,929)
1,963,780 
------------
$  (432,149)
============

---

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):The Partnership's equity by Series as reflected by the Project Partnerships differs from the Partnership's Investments in Partnerships before acquisition fees and expenses and amortization by Series primarily because of suspended losses on the Partnership's books.

|                                               | Equity Per Project Partnership   
-----------------       | Equity Per  
Partnership
-----------             
|---------------------------------------------- | --------------------------------------------------------- | -------------------------------------------------
|Series 7
Series 8
Series 9
Series 10
Series 11 | $(4,746,260)
(5,424,268)
(1,339,512)
1,046,051 
1,809,656 | $  265,843 
(3,157)
505,257 
1,404,217 
2,351,314

---

NOTE 6 - TAXABLE INCOME (LOSS):   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Partnership income (loss) for tax purposes:

|SERIES 7                                                                                                                     | 2006
----                         | 2005
----                         | 2004
----                        
|---------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | --------------------------------- | ---------------------------------
|Net Loss per Financial Statements                                                                                            | $(467,796)                        | $(261,487)                        | $(261,362)                       
|Equity in Losses of Project Partnerships for tax purposes less than (in excess of) losses for financial statement purposes   | (851,825)                         | (923,850)                         | (1,006,515)                      
|Adjustments to convert March 31, fiscal year end to December 31, taxable year end                                            | 232,618                           | (17,690)                          | 22,774                           
|Items Expensed for Financial Statement purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense | 86,222 
6,431 
-----------        | 91,474 
6,643 
-----------        | 24,255 
6,655 
-----------       
|Partnership loss for tax purposes as of December 31                                                                          | $  (994,350)
============         | $(1,104,910)
============         | $(1,214,193)
============        
|                                                                                                                             | December 31,
2005   
------------ | December 31,
2004   
------------ | December 31,
2003   
------------
|Federal Low Income Housing Tax Credits  (Unaudited)                                                                          | $    84,568 
===========          | $   224,290 
===========          | $   975,096 
===========         

The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2006 are as follows:

Financial         	Tax
                             	Reporting         	Reporting
                             	Purposes	#9;          	Purposes        		DifferencesInvestments in Local
Limited Partnerships          $  641,745         $(6,129,479)        $ 6,771,224
Other Assets                  $  545,134         $ 1,758,373         $(1,213,239)
Liabilities                   $  704,516         $    (9,226)        $   713,742

---

NOTE 6 - TAXABLE INCOME (LOSS)(Continued):   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Partnership income (loss) for tax purposes:

|SERIES 8                                                                                                                     | 2006
----                         | 2005
----                         | 2004
----                        
|---------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | --------------------------------- | ---------------------------------
|Net Loss per Financial Statements                                                                                            | $  (216,489)                      | $  (179,166)                      | $  (176,442)                     
|Equity in Losses of Project Partnerships for tax purposes less than (in excess of) losses for financial statement purposes   | (942,518)                         | (1,018,059)                       | (1,119,372)                      
|Adjustments to convert March 31, fiscal year end to December 31, taxable year end                                            | 22,154                            | (8,575)                           | 16,451                           
|Items Expensed for Financial Statement purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense | 89,605 
1,950 
-----------        | 31,002 
3,072 
-----------        | 43,926 
3,489 
-----------       
|Partnership loss for tax purposes as of December 31                                                                          | $(1,045,298)
============         | $(1,171,726)
============         | $(1,231,948)
============        
|                                                                                                                             | December 31,
2005   
------------ | December 31,
2004   
------------ | December 31,
2003   
------------
|Federal Low Income Housing Tax Credits  (Unaudited)                                                                          | $   170,591 
===========          | $   565,711 
===========          | $ 1,417,434 
===========         

The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2006 are as follows:

Financial          Tax
                               Reporting          Reporting
                               Purposes          Purposes      Differences
Investments in Local
Limited Partnerships           $  415,344         $(6,618,582)     $ 7,033,926
Other Assets                   $  478,047         $ 1,688,984      $(1,210,937)
Liabilities                    $  735,669         $   (10,047)     $   745,716

---

NOTE 6 - TAXABLE INCOME (LOSS)(Continued):   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Partnership income (loss) for tax purposes:

|SERIES 9                                                                                                                     | 2006
----                         | 2005
----                         | 2004
----                        
|---------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | --------------------------------- | ---------------------------------
|Net Loss per Financial Statements                                                                                            | $  (341,082)                      | $  (234,846)                      | $  (311,941)                     
|Equity in Losses of Project Partnerships for tax purposes less than (in excess of) losses for financial statement purposes   | (395,751)                         | (421,291)                         | (423,589)                        
|Adjustments to convert March 31, fiscal year end to December 31, taxable year end                                            | 148,091                           | (7,265)                           | 6,255                            
|Items Expensed for Financial Statement purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense | 49,357 
1,846 
-----------        | 16,737 
3,082 
-----------        | 40,841 
3,127 
-----------       
|Partnership loss for tax purposes as of December 31                                                                          | $  (537,539)
============         | $  (643,583)
============         | $  (685,307)
============        
|                                                                                                                             | December 31,
2005   
------------ | December 31,
2004   
------------ | December 31,
2003   
------------
|Federal Low Income Housing Tax Credits  (Unaudited)                                                                          | $    40,080 
============         | $   644,340 
============         | $   968,960 
============        

The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2006 are as follows:

Financial         Tax
                               Reporting         Reporting
                               Purposes         Purposes        Differences

Investments in Local
Limited Partnerships          $   550,442        $(2,462,071)      $ 3,012,513
Other Assets                  $   342,872        $ 1,103,082       $  (760,210)
Liabilities                   $   458,715        $     5,709       $   453,006

---

NOTE 6 - TAXABLE INCOME (LOSS)(Continued):   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Partnership income (loss) for tax purposes:

|SERIES 10                                                                                                                    | 2006
----                         | 2005
----                         | 2004
----                        
|---------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | --------------------------------- | ---------------------------------
|Net Loss per Financial Statements                                                                                            | $  (355,932)                      | $  (186,326)                      | $  (228,743)                     
|Equity in Losses of Project Partnerships for tax purposes less than (in excess of) losses for financial statement purposes   | (286,871)                         | (260,311)                         | (208,567)                        
|Adjustments to convert March 31, fiscal year end to December 31, taxable year end                                            | 181,059                           | (2,089)                           | 1,856                            
|Items Expensed for Financial Statement purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense | 33,768 
4,281 
-----------        | (89,867)
4,578 
-----------       | 12,745 
4,639 
-----------       
|Partnership loss for tax purposes as of December 31                                                                          | $  (423,695)
============         | $  (534,015)
============         | $  (418,070)
============        
|                                                                                                                             | December 31,
2005   
------------ | December 31,
2004   
------------ | December 31,
2003   
------------
|Federal Low Income Housing Tax Credits  (Unaudited)                                                                          | $    48,806 
============         | $   540,394 
============         | $   762,218 
============        

The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2006 are as follows:

Financial          Tax
                               Reporting          Reporting
                               Purposes           Purposes        Differences

Investments in Local
Limited Partnerships           $ 1,360,959        $  (606,180)     $ 1,967,139
Other Assets                   $   265,713        $   876,122      $  (610,409)
Liabilities                    $    76,798        $     3,777      $    73,021

---

NOTE 6 - TAXABLE INCOME (LOSS)(Continued):   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Partnership income (loss) for tax purposes:

|SERIES 11                                                                                                                    | 2006
----                         | 2005
----                         | 2004
----                        
|---------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | --------------------------------- | ---------------------------------
|Net Loss per Financial Statements                                                                                            | $  (776,165)                      | $  (153,967)                      | $  (143,577)                     
|Equity in Losses of Project Partnerships for tax purposes less than (in excess of) losses for financial statement purposes   | (218,806)                         | (207,948)                         | (225,717)                        
|Adjustments to convert March 31, fiscal year end to December 31, taxable year end                                            | 632,332                           | (3,760)                           | 1,662                            
|Items Expensed for Financial Statement purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense | 114,970 
5,725 
-----------       | (131,503)
6,726 
-----------      | (5,493)
7,123 
-----------       
|Partnership loss for tax purposes as of December 31                                                                          | $  (241,944)
============         | $  (490,452)
============         | $  (366,002)
============        
|                                                                                                                             | December 31,
2005   
------------ | December 31,
2004   
------------ | December 31,
2003   
------------
|Federal Low Income Housing Tax Credits  (Unaudited)                                                                          | $   570,762 
============         | $   754,678 
============         | $   754,678 
============        

The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2006 are as follows:

Financial         Tax
                                Reporting         Reporting
                                Purposes         Purposes         Differences

Investments in Local
Limited Partnerships            $ 1,926,349       $ 1,499,099       $   427,250
Other Assets                    $   344,733       $   815,985       $  (471,252)
Liabilities                     $    13,071       $    60,223       $   (47,152)

---

NOTE 6 - TAXABLE INCOME (LOSS)(Continued):   The following is a reconciliation between Net Income (Loss) as described in the financial statements and the Partnership income (loss) for tax purposes:

|TOTAL SERIES 7 -11                                                                                                           | 2006
----                    | 2005
----                    | 2004
----                   
|---------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | ---------------------------- | ----------------------------
|Net Loss per Financial Statements                                                                                            | $  (2,157,464)               | $(1,015,792)                 | $(1,122,065)                
|Equity in Losses of Project Partnerships for tax purposes less than (in excess of) losses for financial statement purposes   | (2,695,771)                  | (2,831,459)                  | (2,983,760)                 
|Adjustments to convert March 31, fiscal year end to December 31, taxable year end                                            | 1,216,254                    | (39,379)                     | 48,998                      
|Items Expensed for Financial Statement purposes not expensed for Tax purposes:
  Asset Management Fee
  Amortization Expense | 373,921 
20,233 
----------- | (82,157)
24,101 
----------- | 116,274 
25,032 
-----------
|Partnership loss for tax purposes as of December 31                                                                          | $(3,242,827)
============    | $(3,944,686)
============    | $(3,915,521)
============   

The difference in the total value of the Partnership's Investment in Project Partnerships is approximately $6,989,254 higher for Series 7, $7,444,479 higher for Series 8, $3,149,862 higher for Series 9, $2,143,797 higher for Series 10 and $1,055,639 higher for Series 11 for financial reporting purposes than for tax purposes because (i) there were depreciation differences between financial reporting purposes and tax return purposes and (ii) certain expenses are not deductible for tax return purposes.
   The differences in the assets and liabilities of the Fund for financial reporting purposes and tax reporting purposes for the year ended March 31, 2006 are as follows:

Financial         Tax
                               Reporting         Reporting
                               Purposes         Purposes        Differences

Investments in Local
Limited Partnerships           $ 4,894,839       $(14,317,214)       $19,212,053
Other Assets                   $ 1,976,499       $  6,242,546        $(4,266,047)
Liabilities                    $ 1,988,769       $     50,436        $ 1,938,333

---

NOTE 7 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):
Series 7Year 2006                Quarter 1	     Quarter 2     Quarter 3     Quarter 4
                         6/30/2005     9/30/2005     12/31/2005     3/31/2006
Total Revenues           $  10,434     $   15,550    $   10,586     $   11,081
Net Income (Loss)        $ (63,480)    $  (54,304)   $ (49,060)    $  (300,952)
Earnings (Loss) Per
Weighted Average
Beneficial Assignee
Certificates Outstanding $   (6.05)    $    (5.17)   $   (4.67)    $    (28.66)
Series 8Year 2006               Quarter 1     Quarter 2     Quarter 3     Quarter 4
                         6/30/2005     9/30/2005     2/31/2005     3/31/2006Total Revenues           $  14,880     $   5,808     $   7,765     $  11,321
Net Income (Loss)        $ (29,217)    $ (48,636)    $ (39,117)    $ (99,519)
Earnings (Loss) Per
Weighted Average
Beneficial Assignee
Certificates Outstanding $   (2.90)    $   (4.82)    $   (3.88)    $   (9.87)
Series 9Year 2006                Quarter 1     Quarter 2	     Quarter 3     Quarter 4
                         6/30/2005     9/30/2005     12/31/2005     3/31/2006
Total Revenues           $   6,693     $   3,981     $   4,867     $   4,627
Net Income (Loss)        $ (44,724)    $ (50,604)    $ (51,742)    $ (194,012)
Earnings (Loss) Per
Weighted Average
Beneficial Assignee
Certificates Outstanding $   (7.08)    $   (8.01)    $   (8.19)    $   (30.71)

---

NOTE 7 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)(Continued):Series 10
Year 2006                Quarter 1     Quarter 2     Quarter 3     Quarter 4
                         6/30/2005     9/30/2005     12/31/2005     3/31/2006
Total Revenues           $   4,695     $   3,580     $   3,663      $   4,445
Net Income (Loss)        $ (34,070)    $ (52,849)    $ (42,389)     $ (226,624)
Earnings (Loss) Per
Weighted Average
Beneficial Assignee
Certificates Outstanding $   (6.69)    $  (10.37)    $   (8.32)     $  (44.49)

---

NOTE 7 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Continued):
Series 7Year 2005                Quarter 1	     Quarter 2     Quarter 3     Quarter 4
                         6/30/2004     9/30/2004     12/31/2004     3/31/2005
Total Revenues           $   8,614     $   15,568    $    9,642     $   12,878
Net Income (Loss)        $ (70,712)    $  (57,558)   $  (65,174)    $ (68,043)
Earnings (Loss) Per
Weighted Average
Beneficial Assignee
Certificates Outstanding $   (6.73)    $    (5.48)   $    (6.21)    $   (6.48)
Series 8Year 2005               Quarter 1     Quarter 2     Quarter 3     Quarter 4
                         6/30/2004     9/30/2004     2/31/2004     3/31/2005Total Revenues           $   9,239     $   7,382     $  12,156     $   7,954
Net Income (Loss)        $ (46,021)    $ (52,110)    $ (47,086)    $ (33,949)
Earnings (Loss) Per
Weighted Average
Beneficial Assignee
Certificates Outstanding $   (4.57)    $   (5.17)    $   (4.67)    $   (3.37)
Series 9Year 2005                Quarter 1     Quarter 2	     Quarter 3     Quarter 4
                         6/30/2004     9/30/2004     12/31/2004     3/31/2005
Total Revenues           $   5,465     $   3,252     $   6,518     $   5,739
Net Income (Loss)        $ (67,293)    $ (68,821)    $ (14,543)    $ (84,189)
Earnings (Loss) Per
Weighted Average
Beneficial Assignee
Certificates Outstanding $  (10.65)    $  (10.89)    $   (2.30)    $  (13.33)

---

NOTE 7 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)(Continued):Series 10
Year 2005                Quarter 1     Quarter 2     Quarter 3     Quarter 4
                         6/30/2004     9/30/2004     12/31/2004     3/31/2005
Total Revenues           $   4,428     $   4,026     $   4,177      $   2,617
Net Income (Loss)        $ (50,165)    $ (50,258)    $ (63,785)     $ (22,118)
Earnings (Loss) Per
Weighted Average
Beneficial Assignee
Certificates Outstanding $   (9.85)    $   (9.87)    $  (12.52)     $   (4.34)

---

Donald W. Causey & Associates, P.C.
516 Walnut Street-P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707 
FAX:  256-543-9800

INDEPENDENT AUDITORS' REPORT
                             -------------------------------

To the Partners 
Lakeshore II, Ltd.
Tuskegee, Alabama
We have audited the accompanying balance sheets of Lakeshore II, Ltd., a limited partnership, RHS Project No: 01-044-631056927 as of December 31, 2005 and 2004, and the related statements of operations, partners' capital and cash flows for the years 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 audits.
We conducted the audits in accordance with standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States, the U.S. Department of Agriculture, Farmers Home Administration Audit Program, and the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits 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 the audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lakeshore II, Ltd., RHS Project No: 01-044-631056927 as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
The audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental information on pages 11 through 14 is presented for purposes of additional analysis and is not a required part of the basic financial statements.  The supplemental information presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA 1930-8) Parts I and II for the years ended December 31, 2005 and 2004, is presented for purposes of complying with the requirements of the Rural Housing Services and is also not a required part of the basic financial statements.  Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report dated February 21, 2006 on our consideration of Lakeshore II, Ltd.'s, internal control over financial reporting and on our tests of its compliance with certain provisions of laws and regulations.  That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.  However, the partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included only the consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting.  Accordingly, we express no such opinion.
/s/ Donald W. Causey & Associates, P.C.
Certified Public Accountants
Gadsden, Alabama
February 21, 2006

---

Donald W. Causey & Associates, P.C.
516 Walnut Street-P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707
FAX: 256-543-9800

INDEPENDENT AUDITORS' REPORT
                          -----------------------------------

To the Partners 
Skyview Apartments, Ltd.
Troy, Alabama
We have audited the accompanying balance sheets of Skyview Apartments, Ltd., a limited partnership, as of December 31, 2005 and 2004, and the related statements of operations, partners' capital and cash flows for the years 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 audits.
We conducted the audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion.  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 the audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Skyview Apartments, Ltd., as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
The audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental information on pages 10 and 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements.  Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Donald W. Causey & Associates, P.C.
Certified Public Accountants
Gadsden, Alabama
February 6, 2006

---

Donald W. Causey & Associates, P.C.
516 Walnut Street-P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707
FAX: 256-543-9800

INDEPENDENT AUDITORS' REPORT
                              --------------------------------

To the Partners 
Meadowview Apartments, Ltd.
Greenville, Alabama
We have audited the accompanying balance sheets of Meadowview Apartments, Ltd., a limited partnership, as of December 31, 2005 and 2004, and the related statements of operations, partners' capital and cash flows for the years 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 audits.
We conducted the audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion.  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 the audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Meadowview Apartments, Ltd., a limited partnership, as of December 31, 2005 and 2004, and the results of its operations, changes in partners capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
/s/ Donald W. Causey and Associates, P.C.
Certified Public Accountant
Gadsden, Alabama
February 23, 2006

---

Donald W. Causey & Associates, P.C.
516 Walnut Street-P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707
FAX: 256-543-9800

INDEPENDENT AUDITORS' REPORT
                              --------------------------------

To the Partners 
Applegate Apartments, Ltd.
Florence, Alabama
We have audited the accompanying balance sheets of Applegate Apartments, Ltd., a limited partnership, as of December 31, 2005 and 2004, and the related statements of operations, partners' capital and cash flows for the years 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 audits.
We conducted the audits in accordance with standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion.  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 the audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Applegate Apartments, Ltd., as of December 31, 2005 and 2004, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
The audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental information on pages 10 and 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements.  Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Donald W. Causey & Associates, P.C.
Certified Public Accountants
Gadsden, Alabama
February 20, 2006

---

Donald W. Causey & Associates, P.C.
516 Walnut Street-P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707
FAX: 256-543-9800

INDEPENDENT AUDITORS' REPORT
                          	 -----------------------------------

To the Partners 
Heatherwood Apartments, Ltd.
Alexander City, Alabama
We have audited the accompanying balance sheets of Heatherwood Apartments, Ltd., a limited partnership, as of December 31, 2005 and 2004, and the related statements of operations, partners' capital and cash flows for the years 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 audits.
We conducted the audits in accordance with standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting.  Accordingly, we express no such opinion.  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 the audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Heatherwood Apartments, Ltd., as of December 31, 2005 and 2004, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental information on pages 9 and 10 is presented for the purposes of additional analysis and is not a required part of the basic financial statements.  Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Donald W. Causey & Associates, P.C.
Certified Public Accountants
Gadsden, Alabama
February 28, 2006

---

Item 9.  Changes in and disagreements with Accountants on Accounting and Financial         Disclosures   On or about January 3, 2006, Spence, Marston, Bunch, Morris & Co., Certified Public Accountants, P.C. ("SMBM") resigned as the principal independent accountant of Gateway.  As explained to the Registrant by SMBM, the Registrant and its two affiliated funds were the only clients of SMBM required to file reports as a public company under the Securities Exchange Act of 1934.  SMBM decided to resign due to the economic unfeasibility of providing auditing services to a small number of public company clients.
   During the years ended March 31, 2005 and March 31, 2004, and the subsequent interim periods through January 3, 2006, there were no disagreements with SMBM on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of SMBM, would have caused them to make reference to the subject matter of the disagreement in connection with their report.  In addition, none of the reportable events listed in Item 304(a)(1)(v) of Regulation S-K occurred with respect to the Registrant during the Registrant's two most recent fiscal years and the subsequent interim periods preceding the resignation of SMBM.
   The audit reports of SMBM on the financial statements of the Registrant for the two most recent fiscal years ended March 31, 2005 and March 31, 2004 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.
   On January 11, 2006, Gateway engaged the firm of Reznick Group, P.C. ("Reznick") as its independent registered public accounting firm.  The engagement was authorized by Gateway's audit committee.  From January 1, 2004 to such date of engagement, neither Gateway nor anyone on behalf of Gateway consulted with Reznick regarding any matter requiring disclosure under Item 304(a)(2) of Regulation S-K.
Item 9a.  Controls and Procedures   Within 90 days prior to the filing of this report, under the supervision and with the participation of the Partnership's management, including the chief executive and chief financial officers of the Partnership's Managing General Partner, an evaluation of the effectiveness of the Partnership's disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities and Exchange Act of 1934) was performed.  Based on this evaluation, such officers have concluded that the Partnership's disclosure controls and procedures were effective as of the date of that evaluation in alerting them in a timely manner to material information relating to the Partnership required to be included in this report and the Partnership's other reports that it files or submits under the Securities Exchange Act of 1934.  There were no significant changes in the Partnership's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.
Item 9B.  Other Information   None.

---

PART III

Item 10.  Directors and Executive Officers of Gateway   Gateway has no directors or executive officers.  Gateway's affairs are managed and controlled by the Managing General Partner.  Certain information concerning the directors and certain officers of the Managing General Partner are set forth below.

Raymond James Tax Credit Funds, Inc. - Managing General Partner
   Raymond James Tax Credit Funds, Inc. is the Managing General Partner and is responsible for decisions pertaining to the acquisition and sale of Gateway's interests in the Project Partnerships and other matters related to the business operations of Gateway.  Certain officers and the directors of the Managing General Partner are as follows:
Ronald M. Diner, age 62, is President and a Director.  He is a Senior Vice President of Raymond James & Associates, Inc., with whom he has been employed since June 1983. Mr. Diner received an MBA degree from Columbia University (1968) and a BS degree from Trinity College (1966).  Prior to joining Raymond James & Associates, Inc., he managed the broker-dealer activities of Pittway Real Estate, Inc., a real estate development firm. He was previously a loan officer at Marine Midland Realty Credit Corp., and spent three years with Common, Dann & Co., a New York regional investment firm.  He has served as a member of the Board of Directors of the Council for Rural Housing and Development, a national organization of developers, managers and syndicators of properties developed under the RECD Section 515 program, and is a member of the Board of Directors of the Florida Council for Rural Housing and Development.  Mr. Diner  has been a speaker and panel member at state and national seminars relating to the low-income housing credit.
	J. Davenport Mosby, age 50, is a Vice President and a Director.  He is a Senior Vice President of Raymond James & Associates, Inc. which he joined in 1982.  Mr. Mosby received an MBA from the Harvard Business School (1982).  He graduated magna cum laude with a BA from Vanderbilt University where he was elected to Phi Beta Kappa.
Raymond James Partners, Inc. -

Raymond James Partners, Inc. has been formed to act as the general partner, with affiliated corporations, in limited partnerships sponsored by Raymond James Financial, Inc.  Raymond James Partners, Inc. is a general partner for purposes of assuring that Gateway and other partnerships sponsored by affiliates have sufficient net worth to meet the minimum net worth requirements of state securities administrators.
   	Information regarding the officers and directors of Raymond James Partners, Inc. is included on page 68 of the Prospectus under the section captioned "Management" (consisting of pages 66 through 69 of the Prospectus) which is incorporated herein by reference.
Item 11.  Executive Compensation   	Gateway has no directors or officers.
Item 12.  Security Ownership of Certain Beneficial Owners and Management   	Neither of the General Partners own any units of the outstanding securities of Gateway as of March 31, 2006.  Ronald M. Diner, President of Raymond James Tax Credit Funds, Inc. owns 5 units of Series 7.  None of the other directors and officers own any units of the outstanding securities of Gateway as of March 31, 2006.
   	Gateway is a Limited Partnership and therefore does not have voting shares of stock.  To the knowledge of Gateway, no person owns of record or beneficially, more than 5% of Gateway's outstanding units.

---

Item 13.  Certain Relationships and Related Transactions   	Gateway has no officers or directors.  However, under the terms of the public offering, various kinds of compensation and fees are payable to the General Partners and its affiliates during the organization and operations of Gateway.  Additionally, the General Partners will receive distributions from Gateway if there is cash available for distribution or residual proceeds as defined in the Partnership Agreement.  The amounts and kinds of compensation and fees are described on pages 24 to 26 of the Prospectus under the caption "Management Compensation", which is incorporated herein by reference.
   	The Payable to General Partners primarily represents the asset management fees owed to the General Partners at the end of the period.  It is unsecured, due on demand and, in accordance with the limited partnership agreement, non-interest bearing.  Within the next 12 months, the Managing General Partner does not intend to demand payment on the portion of Asset Management Fees payable classified as long-term on the Balance Sheet.
	   For the periods ended March 31, 2006, 2005, and 2004 the General Partners and affiliates are entitled to compensation and reimbursement for costs and expenses incurred by Gateway as follows:
   	Asset Management Fee - The Managing General Partner is entitled to receive an annual asset management fee equal to the greater of (i) $2,000 for each limited partnership in which Gateway invests, as adjusted by the Consumer Price Index or (ii) 0.275% of Gateway's gross proceeds from the sale of limited partnership interests.  In either event (i) or (ii), the maximum amount may not exceed 0.2% of the aggregate cost (Gateway's capital contribution plus Gateway's share of the Properties' mortgage) of Gateway's interest in properties owned by the Project Partnerships.  The asset management fee will be paid only after all other expenses of Gateway have been paid.  These fees are included in the Statement of Operations.

|          | 2006
----         | 2005
----         | 2004
----        
|--------- | ----------------- | ----------------- | -----------------
|Series 7  | $ 86,447          | $ 86,447          | $ 86,749         
|Series 8  | 89,908            | 89,908            | 90,313           
|Series 9  | 49,509            | 49,509            | 49,711           
|Series 10 | 33,819            | 33,819            | 33,890           
|Series 11 | 28,021
--------   | 28,021
--------   | 28,254
--------  
|Total     | $287,704
======== | $287,704
======== | $288,917
========

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

|          | 2006
----         | 2005
----         | 2004
----        
|--------- | ----------------- | ----------------- | -----------------
|Series 7  | $ 84,526          | $ 56,857          | $ 56,842         
|Series 8  | 93,195            | 62,689            | 62,671           
|Series 9  | 52,016            | 34,990            | 34,979           
|Series 10 | 32,510            | 21,868            | 21,863           
|Series 11 | 26,008
--------   | 17,494
--------   | 17,491
--------  
|Total     | $288,255
======== | $193,898
======== | $193,846
========

Total unpaid asset management fees and administrative expenses payable to the General Partners, which are included on the Balance Sheet as of March 31, 2006 and 2005 are as follows:

|          | March 31, 2006
-------------- | March 31, 2005
-------------- | 
|--------- | ----------------------------- | ----------------------------- | 
|Series 7  | $  704,516                    | $  611,609                    | 
|Series 8  | 735,669                       | 639,507                       | 
|Series 9  | 458,715                       | 404,547                       | 
|Series 10 | 76,798                        | 40,082                        | 
|Series 11 | 13,071 
-----------           | 0 
-----------                | 
|Total     | $1,988,769 
===========       | $1,695,745 
===========       | 

---

Item 14.  Principal Accounting Fees & Services
  The aggregate fees incurred by the Partnership's principal accounting firm, Reznick Group, P.C., for professional services rendered for the audit of the annual financial statements and review of financial statements included in the Partnership's quarterly report on Form 10-Q for the year ended March 31, 2006 was $70,000.  The aggregate fees incurred by the Partnership's former principal accounting firm, Spence, Marston, Bunch, Morris and Co., during fiscal year 2006 for review of certain quarterly reports on Form 10-Q were $1,575.
  Tax - During fiscal 2006 and 2005, Spence, Marston, Bunch, Morris & Co. was engaged to prepare the Partnership's federal tax return, for which they billed $7,000 and $5,500 for 2006 and 2005, respectively.
  Other Fees - The Company's Audit Committee Charter requires that the Committee approve the engagement of the principal auditing firm prior to the rendering of any audit or non-audit services.  During fiscal 2006, 100% of the audit related and other services and 100% of the tax services were pre-approved by the Audit Committee.

PART IV

Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K   a.(1)  Financial Statements - see accompanying index to financial statements, 
Item 8.
     (2)  Financial Statement Schedules - 
All other schedules are omitted because they are not applicable or not required, or because the required information is shown either in the financial statements or in the notes thereto.
b.        	Exhibit Index -

23         The consent of Reznick Group, P.A. (Filed herewith).

23         The consent of Spence, Marston, Bunch, Morris & Co. (Filed herewith.)

31.1       Certification required by Rule 15d-14(a).  (Filed herewith.)

31.2       Certification required by Rule 15d-14(a).  (Filed herewith.)

Item 4.01 Changes in Registrant's Certifying Accountant, form 8-K (Filed January 5, 2006 and incorporated herein by reference.)

Item 8.01 Other Events, form 8-K (Filed August 12, 2005 and incorporated herein by reference.)

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005
SERIES 7
Apartment Properties

|Partnership
-----------                                                                                                                                                                                                                                                                                                                                                                                                   | Location
--------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | # of Units
----------                                                                                                | Mortgage   
Loan Balance
-------------                                                                                                                                                                                                                                                                             
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Nottingham
Cedar Hollow
Sunrise
Mountain City
Burbank
Washington
BrookStone
Tazewell
N. Irvine
Horton
Manchester
Waynesboro
Lakeland II
Mt. Vernon
Meadow Run
Spring Creek II
Warm Springs
Blue Ridge
Walnut
Pioneer
Dilley
Elsa
Clinch View
Jamestown
Leander
Louisa Sr.
Orchard Commons
Vardaman
Heritage Park
BrooksHollow
Cavalry Crossing
Carson City
Matteson
Pembroke
Robynwood
Atoka
Coalgate
Hill Creek
Cardinal | Pisgah, AL
Waterloo, NE
Mission, SD
Mountain City, TN
Falls City, NE
Bloomfield, NE
McCaysville, GA
New Tazewell, TN
Irvine, KY
Horton, KS
Manchester, GA
Waynesboro, GA
Lakeland, GA
Mt. Vernon, GA
Dawson, GA
Quitman, GA
Warm Springs, GA
Blue Ridge, GA
Elk Point, SD
Mountain View, AR
Dilley, TX
Elsa, TX
Gate City, VA
Jamestown, TN
Leander, TX
Louisa, KY
Crab Orchard, KY
Vardaman, MS
Paze, AZ
Jasper, GA
Ft. Scott, KS
Carson City, KS
Capa, KS
Pembroke, KY
Cynthiana, KY
Atoka, OK
Coalgate, OK
West Blocton, AL
Mountain Home. AR | 18
24
44
40
24
24
40
44
24
24
42
24
30
24
48
24
22
41
24
48
28
40
42
40
36
36
12
24
32
40
40
24
24
16
24
24
24
24
32 | $   564,957746,2761,983,6101,290,517790,654784,7551,171,5861,373,467776,407753,6531,178,901658,171816,931724,7161,397,771653,849662,2061,074,215806,4561,187,668711,6171,016,9081,428,5151,197,250898,3221,168,054331,244717,2941,220,5721,156,2861,392,706773,741748,304500,298759,438661,755661,626759,690142,038
|                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                      | ------------                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                      | $35,642,424                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                      | ============                                                                                                                                                                                                                                                                                                       

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 7
Apartment Properties                                                                                                                                                                                                                                                                                                                                                                                             | Cost At Acquisition
--------------------                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Partnership
-----------                                                                                                                                                                                                                                                                                                                                                                                                   | Land
----                                                                                                                                                                                                                                                                        | Buildings, 
Improvements
and Equipment
-------------                                                                                                                                                                                                                                                                                
|Nottingham
Cedar Hollow
Sunrise
Mountain City
Burbank
Washington
BrookStone
Tazewell
N. Irvine
Horton
Manchester
Waynesboro
Lakeland II
Mt. Vernon
Meadow Run
Spring Creek II
Warm Springs
Blue Ridge
Walnut
Pioneer
Dilley
Elsa
Clinch View
Jamestown
Leander
Louisa Sr.
Orchard Commons
Vardaman
Heritage Park
BrooksHollow
Cavalry Crossing
Carson City
Matteson
Pembroke
Robynwood
Atoka
Coalgate
Hill Creek
Cardinal | $   21,070
25,000
30,000
67,000
25,000
30,000
45,000
75,000
27,600
15,615
40,000
45,310
30,000
19,500
20,000
40,000
45,000
0
20,000
30,000
30,000
40,000
99,000
53,800
46,000
90,000
28,789
15,000
199,000
67,155
82,300
86,422
28,438
22,000
35,000
16,000
22,500
29,337
24,207 | $   695,113
889,355
837,000
1,345,826
595,780
401,435
176,183
834,811
696,407
641,460
243,179
107,860
149,453
156,335
241,802
117,323
196,691
234,193
112,079
1,092,918
847,755
1,286,910
409,447
436,875
1,063,200
449,409
452,556
93,877
1,243,700
183,029
894,246
354,778
556,314
190,283
315,110
819,334
806,005
622,291
650,852
|                                                                                                                                                                                                                                                                                                                                                                                                                          | -----------                                                                                                                                                                                                                                                                      | ------------                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                          | $ 1,666,043                                                                                                                                                                                                                                                                      | $21,441,174                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                          | ===========                                                                                                                                                                                                                                                                      | ============                                                                                                                                                                                                                                                                                                                        

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 7
Apartment Properties                                                                                                                                                                                                                                                                                                                                                                                             | Gross Amount At Which Carried At December 31, 2005
--------------------                                                                                                                                                                                                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Partnership
-----------                                                                                                                                                                                                                                                                                                                                                                                                   | Land
----                                                                                                                                                                                                                                                                        
|Nottingham
Cedar Hollow
Sunrise
Mountain City
Burbank
Washington
BrookStone
Tazewell
N. Irvine
Horton
Manchester
Waynesboro
Lakeland II
Mt. Vernon
Meadow Run
Spring Creek II
Warm Springs
Blue Ridge
Walnut
Pioneer
Dilley
Elsa
Clinch View
Jamestown
Leander
Louisa Sr.
Orchard Commons
Vardaman
Heritage Park
BrooksHollow
Cavalry Crossing
Carson City
Matteson
Pembroke
Robynwood
Atoka
Coalgate
Hill Creek
Cardinal | $   21,070
25,000
30,000
67,000
25,000
30,000
45,000
75,000
27,600
15,615
49,455
37,500
29,600
19,500
40,000
30,000
20,000
0
20,000
30,000
30,000
40,000
99,000
53,800
46,000
90,000
28,789
15,000
199,000
67,000
101,365
40,028
39,000
22,000
35,000
16,000
22,500
29,337
24,207
|                                                                                                                                                                                                                                                                                                                                                                                                                          | -----------                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                          | $ 1,635,366                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                          | ===========                                                                                                                                                                                                                                                                      

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 7
Apartment Properties
Partnership
-----------                                                                                                                                                                                                                                                                                                                                                                     | Accumulated
Depreciation
------------                                                                                                                                                                                                                                                                                         | Depreciable
Life
-----------                                                                                                                                                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Nottingham
Cedar Hollow
Sunrise
Mountain City
Burbank
Washington
BrookStone
Tazewell
N. Irvine
Horton
Manchester
Waynesboro
Lakeland II
Mt. Vernon
Meadow Run
Spring Creek II
Warm Springs
Blue Ridge
Walnut
Pioneer
Dilley
Elsa
Clinch View
Jamestown
Leander
Louisa Sr.
Orchard Commons
Vardaman
Heritage Park
BrooksHollow
Cavalry Crossing
Carson City
Matteson
Pembroke
Robynwood
Atoka
Coalgate
Hill Creek
Cardinal | $   252,642
363,693
1,210,552
800,913
410,035
456,323
625,206
830,480
339,920
485,370
593,933
336,383
429,550
368,022
743,930
334,114
353,772
610,282
385,479
502,195
233,520
409,590
846,974
730,475
543,633
502,393
165,078
303,664
721,686
591,998
604,564
448,076
458,587
211,862
336,973
426,063
425,159
408,348
220,990 | 5.0-40.0
7.0-40.0
5.0-27.5
7.0-27.5
5.0-30.0
5.0-30.0
5.0-27.5
7.0-27.5
5.0-40.0
5.0-25.0
5.0-25.0
10.0-30.0
10.0-30.0
5.0-30.0
7.0-27.5
10.0-30.0
5.0-40.0
5.0-25.0
5.0-40.0
12.0-40.0
5.0-50.0
7.0-50.0
7.0-27.5
7.0-27.5
7.0-30.0
5.0-40.0
5.0-40.0
5.0-40.0
7.0-27.5
5.0-27.5
12.0-40.0
7.0-27.5
7.0-27.5
5.0-40.0
5.0-40.0
5.0-25.0
5.0-25.0
7.0-27.5
7.0-27.5
|                                                                                                                                                                                                                                                                                                                                                                                                                          | -----------                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                          | $19,022,427                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                          | ===========                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                    

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 8
Apartment Properties
Partnership
-----------                                                                                                                                                                                                                                                                                                                                                                                                                             | Location
--------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | # of Units
----------                                                                                                            | Mortgage  
Loan Balance
------------                                                                                                                                                                                                                                                                                                                                                 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Purdy
Galena
Antlers 2
Holdenville
Wetumka
Mariners Cove
Mariners Cove Sr.
Antlers
Bentonville
Deerpoint
Aurora
Baxter
Arbor Gate
Timber Ridge
Concordia Sr.
Mountainburg
Lincoln
Fox Ridge
Meadow View
Sheridan
Morningside
Grand Isle
Meadowview
Taylor
Brookwood
Pleasant Valley
Reelfoot
River Rest
Kirskville
Cimmaron
Kenton
Lovingston
Pontotoc
So. Brenchley
Hustonville
Northpoint
Brooks Field
Brooks Lane
Brooks Point
Brooks Run
Logan Heights
Lakeshore 2
Cottondale | Purdy, MO
Galena, KS
Antlers, OK
Holdenville, OK
Wetumka, OK
Marine City, MI
Marine City, MI
Antlers, OK
Bentonville, AR
Elgin, AL
Aurora, MO
Baxter Springs, KS
Bridgeport, AL
Collinsville, AL
Concordia, KS
Mountainburg, AR
Pierre, SD
Russellville, AL
Bridgeiport, NE
Auburn, NE
Kenton, OH
Grand Isle, ME
Van Buren, AR
Taylor, TX
Gainesboro, TN
Lynchburg, TN
Ridgely, TN
Newport, TN
Kirksville, MO
Arco, ID
Kenton, OH
Lovingston, VA
Pontotoc, MS
Rexburg, ID
Hustonville, KY
Jackson, KY
Louisville, GA
Clayton, GA
Dahlonega, GA
Jasper, GA
Russellville, KY
Tuskegee, AL
Cottondale, FL | 16
24
24
24
24
32
24
36
24
24
28
16
24
24
24
24
25
24
16
16
32
16
29
44
44
33
20
34
24
24
46
64
36
30
16
24
32
36
41
24
24
36
25 | $   450,343
596,965
622,036
707,192
641,726
1,017,101
787,740
1,070,515
512,586
727,468
713,544
418,318
738,959
721,281
669,345
697,206
874,306
729,316
580,228
596,273
955,634
925,480
739,890
1,220,584
1,434,693
1,079,152
640,371
1,126,709
671,595
813,385
1,403,872
2,182,713
1,083,829
1,215,746
511,261
880,033
938,919
1,084,729
1,345,533
746,323
773,634
1,134,521
751,762
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                  | ------------                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                  | $37,532,816                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                  | ============                                                                                                                                                                                                                                                                                                                                                                         

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 8                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Cost At Acquisition
--------------------                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                            
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Partnership
-----------                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Land
----                                                                                                                                                                                                                                                                                                               | Buildings, 
Improvements
and Equipment
-------------                                                                                                                                                                                                                                                                                                                       
|Purdy
Galena
Antlers 2
Holdenville
Wetumka
Mariners Cove
Mariners Cove Sr.
Antlers
Bentonville
Deerpoint
Aurora
Baxter
Arbor Gate
Timber Ridge
Concordia Sr.
Mountainburg
Lincoln
Fox Ridge
Meadow View
Sheridan
Morningside
Grand Isle
Meadowview
Taylor
Brookwood
Pleasant Valley
Reelfoot
River Rest
Kirskville
Cimmaron
Kenton
Lovingston
Pontotoc
So. Brenchley
Hustonville
Northpoint
Brooks Field
Brooks Lane
Brooks Point
Brooks Run
Logan Heights
Lakeshore 2
Cottondale | $   64,823
19,200
26,000
15,000
19,977
117,192
72,252
50,529
15,220
33,250
164,350
13,800
43,218
15,145
65,000
20,000
121,000
35,000
29,000
20,100
31,163
20,000
40,000
105,335
28,148
56,269
13,000
50,750
50,000
18,000
61,699
178,985
40,500
99,658
20,000
140,000
45,762
57,500
108,000
50,000
24,600
45,000
36,000 | $   493,596
362,505
761,859
877,598
792,876
1,134,974
901,745
1,270,510
743,269
912,974
716,471
418,296
873,748
879,334
776,131
863,990
933,872
867,785
686,959
373,018
1,152,691
1,180,210
954,717
1,185,923
1,780,090
1,288,452
118,127
431,259
188,140
611,963
785,703
2,215,782
312,296
492,781
672,270
942,599
113,295
123,401
135,053
158,025
422,778
273,501
911,975
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | -----------                                                                                                                                                                                                                                                                                                             | ------------                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $ 2,280,425                                                                                                                                                                                                                                                                                                             | $32,092,541                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | ===========                                                                                                                                                                                                                                                                                                             | ============                                                                                                                                                                                                                                                                                                                                                               

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

SERIES 8

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Gross Amount At Which Carried At December 31, 2005
--------------------                                                                                                                                                                                                                                             
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Partnership
-----------                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Land
----                                                                                                                                                                                                                                                                                                           
|Purdy
Galena
Antlers 2
Holdenville
Wetumka
Mariners Cove
Mariners Cove Sr.
Antlers
Bentonville
Deerpoint
Aurora
Baxter
Arbor Gate
Timber Ridge
Concordia Sr.
Mountainburg
Lincoln
Fox Ridge
Meadow View
Sheridan
Morningside
Grand Isle
Meadowview
Taylor
Brookwood
Pleasant Valley
Reelfoot
River Rest
Kirskville
Cimmaron
Kenton
Lovingston
Pontotoc
So. Brenchley
Hustonville
Northpoint
Brooks Field
Brooks Lane
Brooks Point
Brooks Run
Logan Heights
Lakeshore 2
Cottondale | $   12,200
19,200
26,000
15,000
19,977
64,000
46,216
50,529
15,220
19,500
35,000
14,845
43,218
15,145
65,000
20,000
121,000
35,000
18,000
20,100
31,163
20,000
40,000
105,334
28,148
56,269
13,827
52,062
50,000
6,000
61,699
171,772
40,500
99,658
20,000
140,000
45,761
57,500
108,000
50,366
24,600
45,000
36,000
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | -----------                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $ 1,978,809                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | ===========                                                                                                                                                                                                                                                                                                         

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 8
Apartment Properties
Partnership
-----------                                                                                                                                                                                                                                                                                                                                                                                                                             | Accumulated 
Depreciation
------------                                                                                                                                                                                                                                                                                                                        | Depreciable
Life   
-----------                                                                                                                                                                                                                                                                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Purdy
Galena
Antlers 2
Holdenville
Wetumka
Mariners Cove
Mariners Cove Sr.
Antlers
Bentonville
Deerpoint
Aurora
Baxter
Arbor Gate
Timber Ridge
Concordia Sr.
Mountainburg
Lincoln
Fox Ridge
Meadow View
Sheridan
Morningside
Grand Isle
Meadowview
Taylor
Brookwood
Pleasant Valley
Reelfoot
River Rest
Kirskville
Cimmaron
Kenton
Lovingston
Pontotoc
So. Brenchley
Hustonville
Northpoint
Brooks Field
Brooks Lane
Brooks Point
Brooks Run
Logan Heights
Lakeshore 2
Cottondale | $   323,916
397,956
396,510
442,775
402,133
605,004
466,507
649,474
400,341
259,183
465,327
273,642
294,413
300,584
380,460
435,307
467,742
237,750
292,530
271,134
454,496
525,405
477,359
354,338
770,298
573,714
341,318
564,774
369,698
517,656
645,487
1,166,573
371,008
670,638
219,366
313,658
460,303
527,319
619,368
361,283
387,770
395,175
368,642 | 7.0-27.5
7.0-27.5
5.0-25.0
5.0-25.0
5.0-25.0
7.0-27.5
7.0-27.5
10.0-25.0
5.0-25.0
5.0-50.0
7.0-27.5
7.0-27.5
5.0-40.0
5.0-40.0
5.0-25.0
5.0-25.0
7.0-27.5
5.0-50.0
5.0-30.0
5.0-50.0
5.0-33.0
7.0-27.5
5.0-25.0
5.0-50.0
5.0-50.0
5.0-50.0
7.0-27.5
7.0-50.0
5.0-27.5
7.0-27.5
5.0-33.0
7.0-27.5
5.0-40.0
7.0-27.5
5.0-40.0
5.0-40.0
5.0-40.0
5.0-40.0
5.0-40.0
5.0-40.0
7.0-40.0
5.0-40.0
5.0-27.5
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | -----------                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $19,218,334                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | ===========                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                    

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 9
Apartment Properties
Partnership
-----------                                                                                                                                                                                    | Location
--------                                                                                                                                                                                                                                                                                                       | # of Units
----------                                                   | Mortgage  
Loan Balance
-------------                                                                                                                                                                        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Jay
Boxwood
Stilwell 3
Arbor Trace
Arbor Trace 2
Omega
Cornell 2
Elm Creek
Marionville
Lamar
Mt. Glen
Centreville
Skyview
Sycamore
Bradford
Cedar Lane
Stanton
Abernathy
Pembroke
Meadowview
Town Branch
Fox Run
Maple Street
Manchester | Jay, OK
Lexington, TX
Stilwell, OK
Lake Park, GA
Lake Park, GA
Omega, GA
Watertown, SD
Pierre, SD
Marionville, MO
Lamar, AR
Heppner, OR
Centreville, AL
Troy, AL
Coffeyville, KS
Cumberland, KY
London, KY
Stanton, KY
Abernathy, TX
Pembroke, KY
Greenville, AL
Mt. Vernon, KY
Ragland, AL
Emporium, PA
Manchester, GA | 24
24
16
24
42
36
24
24
20
24
24
24
36
40
24
24
24
24
24
24
24
24
32
18 | $   639,730
604,336
455,670
728,242
1,433,610
1,115,056
906,444
937,874
552,942
700,370
810,023
775,703
1,115,303
1,391,346
778,444
716,274
787,480
609,362
784,605
650,556
756,178
761,718
1,342,623
580,950
|                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                         |                                                                         | ------------                                                                                                                                                                                                 
|                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                         |                                                                         | $19,934,839                                                                                                                                                                                                  
|                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                         |                                                                         | ============                                                                                                                                                                                                 

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 9
Apartment Properties                                                                                                                                                                                                            | Cost At Acquisition
--------------------                                                                                                                                      |                                                                                                                                                                                                       
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Partnership
-----------                                                                                                                                                                                                                  | Land
----                                                                                                                                                                     | Buildings, 
Improvements
and Equipment
-------------                                                                                                                                                  
|Jay
Boxwood
Stilwell 3
Arbor Trace
Arbor Trace 2
Omega
Cornell 2
Elm Creek
Marionville
Lamar
Mt. Glen
Centreville
Skyview
Sycamore
Bradford
Cedar Lane
Stanton
Abernathy
Pembroke
Meadowview
Town Branch
Fox Run
Maple Street
Manchester | $   30,000
22,273
15,567
62,500
100,000
35,000
29,155
71,360
24,900
18,000
23,500
36,000
120,000
64,408
66,000
49,750
41,584
30,000
43,000
46,270
21,000
47,467
85,000
24,100 | $   103,524
718,529
82,347
185,273
361,210
188,863
576,296
233,390
409,497
202,240
480,064
220,952
220,161
415,748
285,025
952,314
959,574
751,898
955,687
1,086,351
942,114
919,296
1,178,856
711,035
|                                                                                                                                                                                                                                         | -----------                                                                                                                                                                   | ------------                                                                                                                                                                                          
|                                                                                                                                                                                                                                         | $1,106,834                                                                                                                                                                    | $13,140,244                                                                                                                                                                                           
|                                                                                                                                                                                                                                         | ===========                                                                                                                                                                   | ============                                                                                                                                                                                          

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 9
Apartment Properties                                                                                                                                                                                                            | Gross Amount At Which Carried At December 31, 2005
--------------------                                                                                                      
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Partnership
-----------                                                                                                                                                                                                                  | Land
----                                                                                                                                                                    
|Jay
Boxwood
Stilwell 3
Arbor Trace
Arbor Trace 2
Omega
Cornell 2
Elm Creek
Marionville
Lamar
Mt. Glen
Centreville
Skyview
Sycamore
Bradford
Cedar Lane
Stanton
Abernathy
Pembroke
Meadowview
Town Branch
Fox Run
Maple Street
Manchester | $   25,000
22,273
10,000
62,500
100,000
35,000
29,155
71,360
25,000
18,000
23,500
36,000
120,000
64,600
66,000
49,750
41,584
30,000
43,000
46,270
21,000
47,467
85,000
27,200
|                                                                                                                                                                                                                                         | -----------                                                                                                                                                                  
|                                                                                                                                                                                                                                         | $1,099,659                                                                                                                                                                   
|                                                                                                                                                                                                                                         | ===========                                                                                                                                                                  

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III -REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 9
Apartment Properties
Partnership
-----------                                                                                                                                                                                    | Accumulated
Depreciation
-------------                                                                                                                                                              | Depreciable
Life   
-----------                                                                                                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Jay
Boxwood
Stilwell 3
Arbor Trace
Arbor Trace 2
Omega
Cornell 2
Elm Creek
Marionville
Lamar
Mt. Glen
Centreville
Skyview
Sycamore
Bradford
Cedar Lane
Stanton
Abernathy
Pembroke
Meadowview
Town Branch
Fox Run
Maple Street
Manchester | $   376,309
375,573
278,346
327,100
651,273
530,210
541,944
516,788
352,292
431,862
490,522
447,226
378,440
528,857
318,169
328,991
326,837
370,246
315,893
308,102
294,675
388,190
488,949
273,620 | 5.0-25.0
5.0-25.0
5.0-25.0
10.0-30.0
10.0-30.0
5.0-50.0
5.0-30.0
5.0-27.5
7.0-27.5
5.0-25.0
7.0-27.5
5.0-40.0
5.0-40.0
12.0-40.0
5.0-40.0
5.0-40.0
5.0-40.0
5.0-25.0
7.0-40.0
5.0-40.0
7.0-40.0
7.0-27.5
7.0-40.0
5.0-27.5
|                                                                                                                                                                                                                                         | -----------                                                                                                                                                                                         |                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                         | $ 9,640,414                                                                                                                                                                                         |                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                         | ===========                                                                                                                                                                                         |                                                                                                                                                                                                                           

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 10
Apartment Properties
Partnership
-----------                                                                                             | Location
--------                                                                                                                                                                                   | # of Units
----------                                                                                                                       | Mortgage
Loan Balance
------------                                                                                                 
|-------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------
|Redstone
Albany
Oak Terrace
Wellshill
Applegate
Heatherwood
Peachtree
Donna
Wellsville
Tecumseh
Clay City
Irvine West
New Castle
Stigler
Courtyard | Challis, ID
Albany, KY
Bonifay, FL
West Liberty, KY
Florence, AL
Alexander City, AL
Gaffney, SC
Donna, TX
Wellsville, NY
Tecumseh, NE
Clay City, KY
Irvine, KY
New Castle, KY
Stigler, OK
Huron, SD | 24
24
18
32
36
36
28
50
24
24
24
24
24
20
21                                                                                                | $   827,582
759,138
531,942
1,064,647
1,114,105
874,264
984,690
1,395,814
1,026,078
878,260
797,861
795,940
790,549
582,784
631,322
|                                                                                                                                                   |                                                                                                                                                                                                     |                                                                                                                                             | ------------                                                                                                                       
|                                                                                                                                                   |                                                                                                                                                                                                     |                                                                                                                                             | $13,054,976                                                                                                                        
|                                                                                                                                                   |                                                                                                                                                                                                     |                                                                                                                                             | ============                                                                                                                       
|                                                                                                                                                   | Cost At Acquisition
--------------------                                                                                                                                                            |                                                                                                                                            
|Partnership
-----------                                                                                                                            | Land
----                                                                                                                                                                                           | Buildings, 
Improvements
and Equipment
-------------                                                                                        | Net Improvements
Capitalized
Subsequent to
Acquisition
----------------                                                            
|Redstone
Albany
Oak Terrace
Wellshill
Applegate
Heatherwood
Peachtree
Donna
Wellsville
Tecumseh
Clay City
Irvine West
New Castle
Stigler
Courtyard | $   24,000
39,500
27,200
75,000
125,000
55,000
25,000
112,000
38,000
20,000
22,750
25,000
40,575
24,000
12,000                                                                                      | $   747,591
990,162
633,284
1,270,844
1,467,675
1,551,679
1,021,466
1,661,889
1,286,389
1,038,151
998,334
1,060,585
971,520
730,056
465,936 | $   387,636
12,867
3,996
5,100
263,210
36,135
54,530
4,778
81,955
79,110
17,924
11,602
11,511
0
301,748                            
|                                                                                                                                                   | -------                                                                                                                                                                                             | ------------                                                                                                                                | ------------                                                                                                                       
|                                                                                                                                                   | $665,025                                                                                                                                                                                            | $15,895,561                                                                                                                                 | $ 1,272,102                                                                                                                        
|                                                                                                                                                   | ========                                                                                                                                                                                            | ============                                                                                                                                | ============                                                                                                                       

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 10
Apartment Properties                                                                                                                     | Gross Amount At Which Carried At December 31, 2005
--------------------                                                    
|-------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------
|Partnership
-----------                                                                                                                            | Land
----                                                                                                                  
|Redstone
Albany
Oak Terrace
Wellshill
Applegate
Heatherwood
Peachtree
Donna
Wellsville
Tecumseh
Clay City
Irvine West
New Castle
Stigler
Courtyard | $   7,600
39,500
27,200
75,000
125,000
55,000
25,000
112,000
38,000
20,000
22,750
25,000
40,575
24,000
12,000              
|                                                                                                                                                   | -----------                                                                                                                
|                                                                                                                                                   | $ 648,625                                                                                                                  
|                                                                                                                                                   | ===========                                                                                                                
|Partnership
-----------                                                                                                                            | Accumulated
Depreciation
------------                                                                                      
|Redstone
Albany
Oak Terrace
Wellshill
Applegate
Heatherwood
Peachtree
Donna
Wellsville
Tecumseh
Clay City
Irvine West
New Castle
Stigler
Courtyard | $   536,653
344,592
271,947
405,828
489,002
447,637
314,967
397,295
616,881
317,304
308,582
325,887
296,156
222,875
273,455
|                                                                                                                                                   | -----------                                                                                                                
|                                                                                                                                                   | $5,569,061                                                                                                                 
|                                                                                                                                                   | ===========                                                                                                                

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 11
Apartment Properties
Partnership
-----------                                                     | Location
--------                                                                                                                                          | # of Units
----------              | Mortgage
Loan Balance
-------------                                                                    
|---------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------- | -------------------------------------------------------------------------------------------------------
|Homestead
Mountain Oak
Eloy
Gila Bend
Creekstone
Tifton
Cass Towne
Warsaw
Royston
Red Bud
Cardinal
Parsons | Pinetop, AZ
Collinsville, AL
Eloy, AZ
Gila Bend, AZ
Dallas, GA
Tifton, GA
Cartersville, GA
Warsaw, VA
Royston, GA
Mokane, MO
Mountain Home, AR
Parsons, KS | 32
24
24
36
40
36
10
56
25
8
32
38 | $   1,287,898
666,909
638,056
960,401
685,442
804,766
58,000
2,609,985
731,449
235,124
92,665
1,076,376
|                                                                                                           |                                                                                                                                                            |                                    | ------------                                                                                           
|                                                                                                           |                                                                                                                                                            |                                    | $ 9,847,071                                                                                            
|                                                                                                           |                                                                                                                                                            |                                    | ============                                                                                           

|                                                                                                           | Cost At Acquisition
--------------------                                                  |                                                                                                        
|---------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------
|Partnership
-----------                                                                                    | Land
----                                                                                 | Buildings, 
Improvements
and Equipment
-------------                                                   
|Homestead
Mountain Oak
Eloy
Gila Bend
Creekstone
Tifton
Cass Towne
Warsaw
Royston
Red Bud
Cardinal
Parsons | $   126,000
30,000
12,000
18,000
130,625
17,600
22,690
146,800
36,000
5,500
15,793
45,188 | $   1,628,502
473,033
882,913
945,233
170,655
192,853
301,458
3,200,738
785,602
295,617
424,616
953,512
|                                                                                                           | -----------                                                                               | ------------                                                                                           
|                                                                                                           | $606,196                                                                                  | $10,254,732                                                                                            
|                                                                                                           | ===========                                                                               | ============                                                                                           

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005

|SERIES 11
Apartment Properties                                                                             | Gross Amount At Which Carried At December 31, 2005
--------------------                            
|---------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------
|Partnership
-----------                                                                                    | Land
----                                                                                          
|Homestead
Mountain Oak
Eloy
Gila Bend
Creekstone
Tifton
Cass Towne
Warsaw
Royston
Red Bud
Cardinal
Parsons | $   126,000
30,000
12,000
18,000
130,650
17,327
22,690
146,800
36,000
5,500
15,793
38,437          
|                                                                                                           | -----------                                                                                        
|                                                                                                           | $ 599,197                                                                                          
|                                                                                                           | ===========                                                                                        
|Partnership
-----------                                                                                    | Accumulated
Depreciation
------------                                                              
|Homestead
Mountain Oak
Eloy
Gila Bend
Creekstone
Tifton
Cass Towne
Warsaw
Royston
Red Bud
Cardinal
Parsons | $   523,969
362,601
442,254
592,370
697,115
429,379
89,825
1,263,727
325,335
78,156
144,174
365,749
|                                                                                                           | -----------                                                                                        
|                                                                                                           | $ 5,314,654                                                                                        
|                                                                                                           | ===========                                                                                        

---

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005
GATEWAY TAX CREDIT FUND III LTD.
NOTES TO SCHEDULE III

|SERIES 7
Balance at beginning of period -
December 31, 2004
 Additions during period:
  Acquisitions through foreclosure
  Other acquisitions
  Improvements, etc.
  Other
 Deductions during period:
  Cost of real estate sold | $  108,161 
0 
0 
0 
---------
     0
--------- | $46,183,316 
108,161 
0 
-----------       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | -------------------------------------------
|Balance at end of period -
December 31, 2005                                                                                                                                                                                     |                                                 | $46,291,477 
============                  
|Reconciliation of Accumulated 
Depreciation current year changes:
Balance at beginning of period -
December 31, 2004
  Current year expense
  Less Accumulated Depreciation of 
  real estate sold                               |                                                 | $17,552,593 
1,472,897 
(3,063)
-----------
|Balance at end of period -
December 31, 2005                                                                                                                                                                                     |                                                 | $19,022,427 
============                  

---

SCHEDULE III -REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005
GATEWAY TAX CREDIT FUND III LTD.
NOTES TO SCHEDULE III

|Series 8
Balance at beginning of period -
December 31, 2004
 Additions during period:
  Acquisitions through foreclosure
  Other acquisitions
  Improvements, etc.
  Other
 Deductions during period:
  Cost of real estate sold
  Other | $ 140,600 
0 
0 
0 
-------
0 
0 
------- | $47,720,428 
140,600 
0 
-----------           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------- | -----------------------------------------------
|Balance at end of period -
December 31, 2005                                                                                                                                                                                             |                                           | $47,861,028 
============                      
|Reconciliation of Accumulated 
Depreciation current year changes:
Balance at beginning of period -
December 31, 2004
  Current year expense
  Less Accumulated Depreciation of
  real estate sold
  Other                                |                                           | $17,821,451 
1,485,222 
(88,339)
0 
-----------
|Balance at end of period -
December 31, 2005                                                                                                                                                                                             |                                           | $19,218,334 
============                      

---

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005
GATEWAY TAX CREDIT FUND III LTD.
NOTES TO SCHEDULE III

|Series 9
Balance at beginning of period -
December 31, 2004
 Additions during period:
  Acquisitions through foreclosure
  Other acquisitions
  Improvements, etc.
  Other
 Deductions during period:
  Cost of real estate sold
  Other | $ 73,252 
0 
0 
0 
--------
0 
0 
-------- | $26,036,863 
73,252 
0 
-----------    
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------------------------------------
|Balance at end of period -
December 31, 2005                                                                                                                                                                                             |                                            | $26,110,115 
============              
|Reconciliation of Accumulated
Depreciation current year changes:
Balance at beginning of period -
December 31, 2004
  Current year expense
  Less Accumulated Depreciation 
  of real estate sold
  Other                                |                                            | 8,872,295 
767,851 
268 
0 
-----------
|Balance at end of period -
December 31, 2005                                                                                                                                                                                             |                                            | $ 9,640,414 
============              

---

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005
GATEWAY TAX CREDIT FUND III LTD.
NOTES TO SCHEDULE III

|Series 10
Balance at beginning of period -
December 31, 2004
 Additions during period:
  Acquisitions through foreclosure
  Other acquisitions
  Improvements, etc.
  Other
 Deductions during period:
  Cost of real estate sold
  Other | $ 76,277 
0 
0 
0 
--------
0 
0 
-------- | $17,756,411 
76,277 
0 
----------      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----------------------------------------
|Balance at end of period -
December 31, 2005                                                                                                                                                                                              |                                            | $17,832,688 
============               
|Reconciliation of Accumulated
Depreciation current year changes:
Balance at beginning of period -
December 31, 2004
  Current year expense
  Less Accumulated Depreciation
  of real estate sold
Other                                    |                                            | $ 5,103,348 
465,714 
(1)
0 
-----------
|Balance at end of period -
December 31, 2005                                                                                                                                                                                              |                                            | $ 5,569,061 
============               

---

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2005
GATEWAY TAX CREDIT FUND III LTD.
NOTES TO SCHEDULE III

|Series 11
Balance at beginning of period -
December 31, 2004
 Additions during period:
  Acquisitions through foreclosure
  Other acquisitions
  Improvements, etc.
  Other
 Deductions during period:
  Cost of real estate sold
  Other | $ 59,248 
0 
0 
0 
--------
0 
0 
-------- | $15,603,708 
59,248 
0 
-----------     
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----------------------------------------
|Balance at end of period -
December 31, 2005                                                                                                                                                                                              |                                            | $15,662,956 
===========                
|Reconciliation of Accumulated 
Depreciation current year changes:
Balance at beginning of period -
December 31, 2004
  Current year expense
  Less Accumulated Depreciation of 
  real estate sold
  Other                                |                                            | $ 4,809,337 
505,318 
(1)
0 
-----------
|Balance at end of period -
December 31, 2005                                                                                                                                                                                              |                                            | $ 5,314,654 
===========                

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2005

|SERIES 7
PARTNERSHIP
-----------                                                                                                                                                                                                                                                                                                                                                                                          | # OF
UNITS
-----                                                                                                     | BALANCE
-------                                                                                                                                                                                                                                                                                                                                                       | INTEREST
RATE
--------                                                                                                                                                                                                                    | MONTHLY
DEBT
SERVICE
-------                                                                                                                                                                                                              | TERM
(YEARS)
------                                                                                                 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------
|Nottingham
Cedar Hollow
Sunrise
Mountain City
Burbank
Washington
BrookStone
Tazewell
N. Irvine
Horton
Manchester
Waynesboro
Lakeland II
Mt. Vernon
Meadow Run
Spring Creek II
Warm Springs
Blue Ridge
Walnut
Pioneer
Dilley
Elsa
Clinch View
Jamestown
Leander
Louisa Sr.
Orchard Commons
Vardaman
Heritage Park
BrooksHollow
Cavalry Crossing
Carson City
Matteson
Pembroke
Robynwood
Atoka
Coalgate
Hill Creek
Cardinal | 18
24
44
40
24
24
40
44
24
24
42
24
30
24
48
24
22
41
24
48
28
40
42
40
36
36
12
24
32
40
40
24
24
16
24
24
24
24
32 | $   564,957
746,276
1,983,610
1,290,517
790,654
784,755
1,171,586
1,373,467
776,407
753,653
1,178,901
658,171
816,931
724,716
1,397,771
653,849
662,206
1,074,215
806,456
1,187,668
711,617
1,016,908
1,428,515
1,197,250
898,322
1,168,054
331,244
717,294
1,220,572
1,156,286
1,392,706
773,741
748,304
500,298
759,438
661,755
661,626
759,690
142,038
----------- | 7.75%
7.75%
7.25%
7.75%
8.25%
8.25%
6.50%
7.25%
7.75%
7.75%
6.50%
6.50%
7.25%
6.50%
6.50%
6.50%
7.25%
7.25%
7.75%
8.25%
8.25%
7.75%
8.75%
7.25%
7.75%
7.25%
7.75%
7.25%
7.75%
6.50%
7.75%
7.25%
7.25%
7.25%
7.25%
7.25%
7.25%
6.50%
6.50% | 4,182
3,128
9,226
5,399
2,990
2,923
6,491
6,463
3,164
2,845
6,417
3,398
3,800
3,899
7,564
3,623
2,775
4,869
3,401
4,524
2,650
4,347
7,509
5,565
3,506
6,061
5,732
3,006
5,077
6,294
5,676
3,500
3,500
2,951
5,251
3,917
3,793
3,830
5,200 | 50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
|                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                      | $35,642,424
===========                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                           |                                                                                                                     

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2005

|SERIES 8
PARTNERSHIP
-----------                                                                                                                                                                                                                                                                                                                                                                                                                                                  | # OF
UNITS
-----                                                                                                                 | BALANCE
-------                                                                                                                                                                                                                                                                                                                                                                                   | INTEREST
RATE
--------                                                                                                                                                                                                                                             | MONTHLY
DEBT
SERVICE
-------                                                                                                                                                                                                                                        | TERM
(YEARS)
------                                                                                                             
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------
|Purdy
Galena
Antlers 2
Holdenville
Wetumka
Mariners Cove
Mariners Cove Sr.
Antlers
Bentonville
Deerpoint
Aurora
Baxter
Arbor Gate
Timber Ridge
Concordia Sr.
Mountainburg
Lincoln
Fox Ridge
Meadow View
Sheridan
Morningside
Grand Isle
Meadowview
Taylor
Brookwood
Pleasant Valley
Reelfoot
River Rest
Kirskville
Cimmaron
Kenton
Lovingston
Pontotoc
So. Brenchley
Hustonville
Northpoint
Brooks Field
Brooks Lane
Brooks Point
Brooks Run
Logan Heights
Lakeshore 2
Cottondale | 16
24
24
24
24
32
24
36
24
24
28
16
24
24
24
24
25
24
16
16
32
16
29
44
44
33
20
34
24
24
46
64
36
30
16
24
32
36
41
24
24
36
25 | $   450,343
596,965
622,036
707,192
641,726
1,017,101
787,740
1,070,515
512,586
727,468
713,544
418,318
738,959
721,281
669,345
697,206
874,306
729,316
580,228
596,273
955,634
925,480
739,890
1,220,584
1,434,693
1,079,152
640,371
1,126,709
671,595
813,385
1,403,872
2,182,713
1,083,829
1,215,746
511,261
880,033
938,919
1,084,729
1,345,533
746,323
773,634
1,134,521
751,762
----------- | 7.75%
7.25%
7.25%
6.50%
6.50%
7.25%
7.25%
7.25%
7.75%
7.75%
7.25%
6.50%
6.50%
7.25%
6.50%
6.50%
8.25%
7.25%
7.25%
8.25%
7.25%
8.25%
7.25%
7.50%
6.50%
7.25%
7.25%
7.25%
7.25%
10.75%
7.25%
7.00%
7.25%
7.25%
6.50%
7.25%
7.25%
7.25%
7.25%
7.25%
7.25%
7.75%
7.75% | 2,285
2,776
4,085
4,330
4,314
4,600
3,500
4,619
14,430
6,238
3,236
2,720
4,099
3,446
3,350
3,824
3,351
3,398
2,683
3,211
4,331
8,875
7,575
6,644
7,860
4,893
3,892
4,791
2,591
4,428
6,044
10,920
4,490
5,200
3,187
4,112
4,004
4,297
4,833
2,975
3,072
4,147
2,711 | 50
50
50
50
50
50
50
50
45
50
50
50
50
50
50
50
50
50
50
50
50
50
39
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                  | $37,532,816
===========                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                     |                                                                                                                                 

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2005

SERIES 9

|PARTNERSHIP
-----------                                                                                                                                                                                                                  | # OF
UNITS
-----                                                        | BALANCE
-------                                                                                                                                                                                                           | INTEREST
RATE
--------                                                                                                                          | MONTHLY
DEBT
SERVICE
-------                                                                                                                     | TERM
(YEARS)
------                                                    
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------
|Jay
Boxwood
Stilwell 3
Arbor Trace
Arbor Trace 2
Omega
Cornell 2
Elm Creek
Marionville
Lamar
Mt. Glen
Centreville
Skyview
Sycamore
Bradford
Cedar Lane
Stanton
Abernathy
Pembroke
Meadowview
Town Branch
Fox Run
Maple Street
Manchester | 24
24
16
24
42
36
24
24
20
24
24
24
36
40
24
24
24
24
24
24
24
24
32
18 | $   639,730
604,336
455,670
728,242
1,433,610
1,115,056
906,444
937,874
552,942
700,370
810,023
775,703
1,115,303
1,391,346
778,444
716,274
787,480
609,362
784,605
650,556
756,178
761,718
1,342,623
580,950
----------- | 7.25%
6.50%
7.25%
7.25%
7.25%
7.25%
7.25%
7.25%
6.50%
7.25%
6.50%
7.25%
7.25%
7.25%
7.03%
6.50%
7.25%
6.50%
7.25%
0.50%
7.25%
6.50%
7.25%
7.25% | 2,851
3,894
2,728
3,309
6,157
4,679
4,135
4,223
2,974
11,480
4,344
3,340
4,771
5,914
3,205
5,465
3,892
3,737
3,495
2,162
4,347
3,685
5,421
2,438 | 50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
20
50
50
50
50
|                                                                                                                                                                                                                                         |                                                                         | $19,934,839
===========                                                                                                                                                                                                   |                                                                                                                                                 |                                                                                                                                                  |                                                                        

---

GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2005

|SERIES 10
PARTNERSHIP
-----------                                                                                                                  | # OF
UNITS
-----                             | BALANCE
-------                                                                                                                                 | INTEREST
RATE
--------                                                                    | MONTHLY
DEBT
SERVICE
-------                                                      | TERM
(YEARS)
------                         
|-------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | --------------------------------------------
|Redstone
Albany
Oak Terrace
Wellshill
Applegate
Heatherwood
Peachtree
Donna
Wellsville
Tecumseh
Clay City
Irvine West
New Castle
Stigler
Courtyard | 24
24
18
32
36
36
28
50
24
24
24
24
24
20
21 | $   827,582
759,138
531,942
1,064,647
1,114,105
874,264
984,690
1,395,814
1,026,078
878,260
797,861
795,940
790,549
582,784
631,322
----------- | 6.50%
6.50%
6.50%
7.25%
0.50%
0.50%
7.25%
6.50%
6.50%
7.25%
7.25%
7.25%
7.25%
7.25%
6.50% | 4,505
4,992
2,861
4,437
-
-
4,608
7,509
8,231
3,531
3,619
3,361
5,131
3,813
2,386 | 50
50
50
50
20
20
50
50
50
50
50
50
50
50
50
|                                                                                                                                                   |                                              | $13,054,976
===========                                                                                                                         |                                                                                           |                                                                                   |                                             

---

|SERIES 11
PARTNERSHIP
-----------                                                                          | # OF
UNITS
-----                   | BALANCE
-------                                                                                                   | INTEREST
RATE
--------                                                   | MONTHLY
DEBT
SERVICE
-------                                              | TERM
(YEARS)
------                
|---------------------------------------------------------------------------------------------------------- | ---------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ------------------------------------------------------------------------- | -----------------------------------
|Homestead
Mountain Oak
Eloy
Gila Bend
Creekstone
Tifton
Cass Towne
Warsaw
Royston
Red Bud
Cardinal
Parsons | 32
24
24
36
40
36
10
56
25
8
32
38 | $ 1,287,898
666,909
638,056
960,401
685,442
804,766
58,000
2,609,985
731,449
235,124
92,665
1,076,376
----------- | 6.50%
8.00%
6.00%
8.00%
11.00%
0.00%
3.00%
6.50%
6.75%
7.25%
6.50%
8.00% | 6,408
4,666
2,109
3,070
56,427
24,929
17,000
12,984
3,009
863
3,392
3,943 | 50
50
50
50
30
42
10
50
50
50
50
50
|                                                                                                           |                                    | $ 9,847,071
===========                                                                                           |                                                                          |                                                                           |                                    

---





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

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

Date: July 14, 2006               By:/s/ Ronald M. Diner                                  Ronald M. Diner
                                  President
Date: July 14, 2006               By:/s/ Jonathan Oorlog
                                  Jonathan Oorlog
                                  Vice President and Chief Financial Officer

Date: July 14, 2006               By:/s/ Sandra C. Humphreys                                  Sandra C. Humphreys
                                  Secretary and Treasurer

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EXHIBIT 31.1

CERTIFICATIONS*

I, Ron Diner, certify that:
1. I have reviewed this annual report on Form 10-K of Gateway Tax Credit Fund III, Ltd.;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information include in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: July 14, 2006               By:/s/ Ronald M. Diner                                  Ronald M. Diner
                                  President
                                  Raymond James Tax Credit Funds, Inc.
                                  (the Managing General Partner)

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EXHIBIT 31.2

CERTIFICATIONS*

I, Jonathan Oorlog, certify that:
1. I have reviewed this annual report on Form 10-K of Gateway Tax Credit Fund III, Ltd.;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information include in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: July 14, 2006               By:/s/ Jonathan Oorlog
                                  Jonathan Oorlog
                                  Vice President and Chief Financial Officer
                                  Raymond James Tax Credit Funds, Inc.
                                  (the Managing General Partner)

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EXHIBIT 32



CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

We, each hereby certify to the best of our knowledge that the Annual Report of Form 10-K of Gateway Tax Credit Fund III Ltd. for the year ended March 31, 2006 containing the financial statements fully complies with the requirements of Section 13(a) or 15(d)of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company./s/ Ronald M. DinerPresident
Raymond James Tax Credit Funds, Inc.
(the Managing General Partner)
July 14, 2006/s/ Jonathan OorlogVice President and Chief Financial Officer
Raymond James Tax Credit Funds, Inc.
(the Managing General Partner)
July 14, 2006