UNITES STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

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

                For the quarterly period ended March 31, 2004


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


             For the transition period from _________to _________

                         Commission file number 0-14457


                 NATIONAL  HOUSING  PARTNERSHIP  REALTY  FUND III
             (Exact Name of Registrant as Specified in Its Charter)



           Maryland                                              52-1394972
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                         55 Beattie Place, P.O. Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                                 (864) 239-1000
                           (Issuer's telephone number)


                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS


                 NATIONAL HOUSING PARTNERSHIP REALTY FUND III

                                  Balance Sheet
                                   (Unaudited)
                        (in thousands, except unit data)

                                 March 31, 2004



ASSETS
   Cash and cash equivalents                                          $ 146

LIABILITIES AND PARTNERS' (DEFICIENCY) EQUITY
Liabilities
   Administrative and reporting fees payable to
    General Partner                                                    $ 1
   Accrued expenses                                                      11
                                                                         12

Partners' (deficiency) equity
   General Partner -- The National Housing
      Partnership (NHP)                                                 (83)
   Original Limited Partner -- 1133 Fifteenth
      Street Three Associates                                           (87)
   Other Limited Partners -- 11,179 investment units                    304
                                                                        134
                                                                      $ 146



                See Accompanying Notes to Financial Statements



<PAGE>



                 NATIONAL HOUSING PARTNERSHIP REALTY FUND III
                            Statements of Operations
                                   (Unaudited)
                      (in thousands, except per unit data)


<TABLE>
<CAPTION>

                                                              Three Months Ended
                                                                  March 31,
                                                              2004          2003
costs and expenses:
  Administrative and reporting fees to General Partner
<S>       <C>                                                 <C>           <C>
    (Note 3)                                                  $ 1           $ 1
  Other operating expenses                                       13            12
                                                                 14            13

Net loss                                                     $ (14)        $ (13)

Allocation of net loss:
  General Partner - NHP                                       $ --          $ --
  Original Limited Partner --
    1133 Fifteenth Street Three Associates                       --            --
  Other Limited Partners                                        (14)          (13)

                                                             $ (14)        $ (13)

Net loss per other limited partnership interest             $ (1.25)      $ (1.15)


                See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>



                 NATIONAL HOUSING PARTNERSHIP REALTY FUND III
            Statement of Changes in Partners' (Deficiency) Equity
                                   (Unaudited)
                        (in thousands, except unit data)


<TABLE>
<CAPTION>

                                 The National       1133
                                    Housing      Fifteenth       Other
                                  Partnership   Street Three    Limited
                                     (NHP)       Associates    Partners      Total

(Deficiency) equity at
<S>         <C> <C>                  <C>           <C>           <C>         <C>
   December 31, 2003                 $ (83)        $ (87)        $ 318       $ 148

Net loss for the three months
   ended March 31, 2004                 --             --          (14)         (14)

(Deficiency) equity at
   March 31, 2004                    $ (83)        $ (87)        $ 304       $ 134

Percentage interest at
   March 31, 2004                        1%            1%           98%        100%
                                        (A)           (B)           (C)


(A)   General Partner
(B)   Original Limited Partner
(C)   Consists  of  11,179  investment  units  at  March  31,  2004  and  11,199
      investment units at December 31, 2003. During the three months ended March
      31, 2004, 20 units were abandoned (Note 6).


                See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>



                 NATIONAL HOUSING PARTNERSHIP REALTY FUND III
                            Statements of Cash Flows
                                   (Unaudited)
                                 (in thousands)


<TABLE>
<CAPTION>


                                                                 Three Months Ended
                                                                       March 31,
                                                                     2004    2003
CASH FLOWS USED IN OPERATING ACTIVITIES:
<S>                                                               <C>         <C>
   Operating expenses paid                                        $ (2)       $ --

CASH FLOWS FROM FINANCING ACTIVITIES:
   Distributions returned to partnership                             21          --
   Withholding taxes paid for limited partners                       --          (1)
   Net cash provided by (used in) financing activities               21          (1)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                 19          (1)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                      127         647

CASH AND CASH EQUIVALENTS, END OF PERIOD                         $ 146        $ 646

RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
   ACTIVITIES:
     Net loss                                                    $ (14)       $ (13)

     Adjustments to reconcile net loss to net cash used in
      operating activities:
      Increase in administrative and reporting
        fees payable                                                  1           1
      Increase in accrued expenses                                   11          12

          Total adjustments                                          12          13

     Net cash used in operating activities                        $ (2)       $ --


                See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>

                 NATIONAL HOUSING PARTNERSHIP REALTY FUND III
                          Notes to Financial Statements
                                   (Unaudited)


(1)   ACCOUNTING POLICIES

Organization

National  Housing   Partnership  Realty  Fund  III  (the  "Partnership"  or  the
"Registrant")  is a limited  partnership  organized  under the Maryland  Revised
Uniform Limited  Partnership Act on May 10, 1985. The Partnership was formed for
the purpose of raising  capital by  offering  and  selling  limited  partnership
interests and then investing in Local Limited Partnerships, each of which either
owns and operates an existing  rental  housing  project or has acquired  limited
partnership  interests in partnerships which own and operate one or two existing
rental housing  projects.  All such rental housing  projects are financed and/or
operated  with one or more forms of rental  assistance  or financial  assistance
from the U.S.  Department of Housing and Urban Development  ("HUD"). On June 30,
1985, the  Partnership  began raising  capital and acquiring  interests in Local
Limited Partnerships.

The National Housing  Partnership,  a District of Columbia  limited  partnership
("NHP" or the  "General  Partner"),  was  authorized  to raise  capital  for the
Partnership by offering and selling to additional limited partners not more than
11,500  interests at a price of $1,000 per  interest.  During 1985,  the sale of
interests was  terminated  after the sale of 11,500  interests.  As of March 31,
2004, 11,179 limited partnership interests were outstanding.

On June 3, 1997,  Apartment Investment and Management Company, a publicly traded
real estate  investment  trust ("AIMCO" and,  together with its subsidiaries and
other controlled  entities,  the "AIMCO Group"),  acquired all of the issued and
outstanding  capital stock of NHP Partners,  Inc., a Delaware  corporation ("NHP
Partners"), and the AIMCO Group acquired all of the outstanding interests in NHP
Partners Two Limited Partnership,  a Delaware limited partnership ("NHP Partners
Two").  NHP Partners owns all of the  outstanding  capital stock of the National
Corporation  for  Housing  Partnerships,  a  District  of  Columbia  corporation
("NCHP"),  which is the general partner of The National Housing  Partnership,  a
District of  Columbia  limited  partnership  ("NHP" or the  "General  Partner").
Together,  NCHP  and NHP  Partners  Two own all of the  outstanding  partnership
interests in NHP. NHP is the general partner of the Partnership.  As a result of
these transactions,  the AIMCO Group has acquired control of the general partner
of the Partnership and, therefore, may be deemed to have acquired control of the
Partnership.

The Original  Limited Partner of the Partnership is 1133 Fifteenth  Street Three
Associates,  whose  limited  partners were key employees of NCHP at the time the
Partnership was formed and whose general partner is NHP.

Basis of Presentation

The accompanying  unaudited interim financial statements reflect all adjustments
which are, in the opinion of management,  necessary for a fair  presentation  of
the  financial  condition  and results of  operations  for the  interim  periods
presented.  All such adjustments are of a normal and recurring nature. Operating
results for the three months ended March 31, 2004 are not necessarily indicative
of the results that may be expected for the fiscal year ended December 31, 2004.

While the General Partner  believes that the disclosures  presented are adequate
to make the  information  not  misleading,  it is suggested that these financial
statements  be read in  conjunction  with the  financial  statements  and  notes
included in the  Partnership's  Annual  Report filed on Form 10-KSB for the year
ended December 31, 2003.

(2)   INVESTMENTS IN AND ADVANCES TO LOCAL LIMITED PARTNERSHIPS

At March 31, 2004, the Partnership  owned a 94.5% limited  partnership  interest
(98% with respect to  allocation  of losses) in one Local  Limited  Partnership,
Edmond  Estates  Limited  Partnership.  During the three  months ended March 31,
2004, Edmond Estates Limited Partnership sold its only investment property.  The
Partnership  previously  owned a 99% limited  partnership  interest in Meadowood
Townhouses III Limited  Partnership.  This Local Limited Partnership owned a 99%
limited  partnership  interest in an operating  limited  partnership  which held
title to one rental housing  property which was sold in 2001. The  Partnership's
effective interest in this operating limited  partnership was 98.01%.  Meadowood
Townhouses III Limited Partnership terminated in December 2003.

Since the Partnership does not exercise control over the activities of the Local
Limited  Partnerships  in  accordance  with  the  partnership  agreements,   the
Partnership's  investments are accounted for using the equity method.  Thus, the
investments  are  carried  at cost  plus the  Partnership's  share of the  Local
Limited  Partnerships'  profits less the Partnerships share of the Local Limited
Partnerships losses and distributions. However, since the Partnership is neither
legally  liable  for the  obligations  of the Local  Limited  Partnerships,  nor
otherwise committed to provide additional support to them, it does not recognize
losses  once  its  investment,   reduced  for  its  share  of  losses  and  cash
distributions,   reaches  zero  in  each  of  the   individual   Local   Limited
Partnerships.  As a result,  the  Partnership  did not  recognize  approximately
$626,000  of its share of  profits  and  approximately  $19,000  of its share of
losses from one and two Local Limited Partnerships during the three months ended
March 31, 2004 and 2003,  respectively.  With the sale of the property  owned by
Edmond Estates Limited Partnership during the three months ended March 31, 2004,
the  Partnership's  share of profits was not  sufficient  to recover  losses not
previously recognized.  As of March 31, 2004, the Partnership had not recognized
approximately $1,933,000 of its allocated share of cumulative losses from Edmond
Estates Limited Partnership in which its investment is zero.

Edmond Estates  Limited  Partnership  has a note which was executed by the Local
Limited  Partnership  with the seller as part of the acquisition of the property
by the Local Limited  Partnership.  The note is nonrecourse and was subordinated
to the  mortgage  note on the  property  for as long as HUD insured the mortgage
note. Neither the Local Limited Partnership nor any partner thereof,  present or
future,  assume any personal liability for the payment of the note. The note was
due in December 1999 for Edmond Estates Limited Partnership.  Interest continues
to be accrued  under the original  terms of the note  agreement.  The note is in
default and the Local Limited Partnership interest was subject to foreclosure.

On March 29, 2004, the Local Limited Partnership sold its underlying property to
an unrelated third party.  The proceeds from the sale were not sufficient to pay
the accrued interest and principal of the note in full.  Subsequent to March 31,
2004, the Local Limited  Partnership  made a payment of  approximately  $329,000
against the note using proceeds from the sale of the property.

Advances made by the Partnership to the Local Limited Partnership are considered
part of the  Partnership's  investment  in the Local Limited  Partnership.  When
advances are made, they are charged to operations as a loss on investment in the
Local Limited  Partnership using previously  unrecognized  cumulative losses. As
discussed  above,  due to the  cumulative  losses  incurred by the Local Limited
Partnership,  the  aggregate  balance of investment in and advances to the Local
Limited  Partnership has been reduced to zero at March 31, 2004.  These advances
are carried as a payable to the Partnership by the Local Limited Partnership and
at March 31, 2004 the balance is approximately  $31,000.  Interest is calculated
at the JP Morgan Chase prime rate plus 2% or 6.00% at March 31, 2004. Any future
repayment of advances or interest will be reflected as  partnership  income when
received.

During the three  months  ended March 31,  2004,  the General  Partner  advanced
approximately  $63,000  to the Local  Limited  Partnership.  There  were no such
advances  during the three months ended March 31, 2003.  The balance owed to the
General  Partner  by  the  Local  Limited  Partnership  at  March  31,  2004  is
approximately  $131,000.  Interest is charged at prime plus 2% or 6.00% at March
31, 2004. Subsequent to March 31, 2004, the Local Limited Partnership repaid the
advances from the General Partner using proceeds from the sale of its investment
property.

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting  for  the  Impairment  or  Disposal  of  Long-Lived   Assets",   the
accompanying  combined  statement of operations for the three months ended March
31, 2003 has been restated to reflect the operations of Edmond  Estates  Limited
Partnership as loss from discontinued  operations due to its sale in March 2004.
In addition,  the operations of Meadowood III Limited  Partnership  are shown as
loss from discontinued operations due to its sale in 2001.

The following are combined  statements of operations  for the three months ended
March 31, 2004 and 2003,  respectively,  of the Local  Limited  Partnerships  in
which the Partnership has invested.

                        COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                              Three Months Ended
                                                                 March 31,
                                                           2004               2003
                                                                           (Restated)
                                                                (in thousands)

<S>                                                        <C>               <C>
Loss from discontinued operations                          $ (56)            $ (19)
Gain on sale of discontinued operations                       694                --
                                                           $ 638             $ (19)

National Housing Partnership Realty Fund III
   share of income (loss)                                  $ 626             $ (19)
</TABLE>

(3)   TRANSACTIONS WITH AFFILIATED PARTIES

During the three months ended March 31, 2004 and 2003, the  Partnership  accrued
administrative  and  reporting  fees to the  General  Partner  in the  amount of
approximately  $1,000 for services provided to the Partnership.  The Partnership
did not make a payment to the  General  Partner  for these fees during the three
months  ended  March 31,  2004 and 2003,  respectively.  The  amount  due to the
General  Partner by the Partnership  for  administrative  and reporting fees was
approximately $1,000 at March 31, 2004.

(4)   GOING CONCERN

The remaining Local Limited  Partnership's note payable was due during 1999 (see
Note 2). The note is in default.  The  financial  statements  do not include any
adjustments  which might result from the outcome of this  uncertainty.  On March
29, 2004,  the Local  Limited  Partnership  sold its  underlying  property to an
unrelated third party. The proceeds from the sale were not sufficient to pay the
accrued  interest  and  principal of the note in full.  Subsequent  to March 31,
2004, the Local Limited  Partnership  made a payment of  approximately  $329,000
against the note using proceeds from the sale of its investment property.

(5)   CONTINGENCIES

The  Partnership  is unaware of any pending or  outstanding  litigation  matters
involving it or its investments  that are not of a routine nature arising in the
ordinary course of business.

Pursuant to a formal order of investigation received by AIMCO on March 29, 2004,
the  Central  Regional  Office of the  United  States  Securities  and  Exchange
Commission is conducting an  investigation  relating to certain  matters.  AIMCO
believes the areas of investigation  include AIMCO's  miscalculated  monthly net
rental  income  figures in third  quarter 2003,  forecasted  guidance,  accounts
payable,  rent concessions,  vendor rebates,  and capitalization of expenses and
payroll.  AIMCO is cooperating  fully.  AIMCO does not believe that the ultimate
outcome  will  have a  material  adverse  effect on its  consolidated  financial
condition  or results of  operations  taken as a whole.  Similarly,  the General
Partner does not believe that the ultimate  outcome will have a material adverse
effect on the Partnership's  financial  condition or results of operations taken
as a whole.

(6) ABANDONMENT OF LIMITED PARTNERSHIP UNITS

During the three months ended March 31, 2004, the number of Limited  Partnership
Units decreased by 20 units due to limited  partners  abandoning their units. In
abandoning  his  or  her  Limited   Partnership   Unit(s),   a  limited  partner
relinquishes all right, title, and interest in the Partnership as of the date of
abandonment.  However,  the limited partner is allocated his or her share of net
income or loss for that year. The income or loss per Limited Partnership Unit in
the  accompanying  statements of operations is calculated based on the number of
units outstanding at the beginning of the year.


<PAGE>




ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

LIQUIDITY AND CAPITAL RESOURCES

Edmond Estates  Limited  Partnership  has a note which was executed by the Local
Limited  Partnership  with the seller as part of the acquisition of the property
by the Local Limited  Partnership.  The note is nonrecourse and was subordinated
to the  mortgage  note on the  property  for as long as HUD insured the mortgage
note.  Any payments due from project  income were payable from surplus  cash, as
defined by the HUD Regulatory  Agreement.  Neither the Local Limited Partnership
nor any partner thereof,  present or future,  assumed any personal liability for
the payment of the note. The note was due in December 1999.  Interest  continues
to be accrued  under the original  terms of the note  agreement.  The note is in
default and the Local Limited Partnership interest was subject to foreclosure.

On March 29, 2004, the Local Limited Partnership sold its underlying property to
an unrelated third party.  The proceeds from the sale were not sufficient to pay
the accrued interest and principal of the note in full.  Subsequent to March 31,
2004, the Local Limited  Partnership  made a payment of  approximately  $329,000
against the note using proceeds from the sale of the property.

The  Partnership's  liquidity  based on cash and cash  equivalents  increased to
approximately  $146,000 at March 31, 2004 compared to approximately  $127,000 at
December  31, 2003.  The  increase  was due to a return of an over  distribution
during  the  prior  year  to  the  general  partners  of  the  Partnership.  The
Partnership's existing cash is expected to adequately fund the operations of the
Partnership in the current year.

Advances made by the Partnership to the Local Limited Partnership are considered
part of the  Partnership's  investment  in the Local Limited  Partnership.  When
advances are made, they are charged to operations as a loss on investment in the
Local Limited  Partnership.  Due to the cumulative  losses incurred by the Local
Limited Partnership,  the aggregate balance of investment in and advances to the
Local  Limited  Partnership  has been reduced to zero at March 31,  2004.  These
advances  are  carried  as a payable  to the  Partnership  by the Local  Limited
Partnership and at March 31, 2004 the balance is approximately $31,000. Interest
is  calculated  at the JP Morgan Chase Bank prime rate plus 2% or 6.00% at March
31,  2004.  Any future  repayment  of advances or interest  will be reflected as
partnership income when received.


<PAGE>



During the three  months  ended March 31,  2004,  the General  Partner  advanced
approximately  $63,000  to the Local  Limited  Partnership.  There  were no such
advances  during the three months ended March 31, 2003.  The balance owed to the
General  Partner  by  the  Local  Limited  Partnership  at  March  31,  2004  is
approximately  $131,000.  Interest is charged at prime plus 2% or 6.00% at March
31, 2004. Subsequent to March 31, 2004, the Local Limited Partnership repaid the
advances from the General Partner using proceeds from the sale of its investment
property.

Distributions   received  from  the  Local  Limited  Partnership  represent  the
Partnership's  proportionate share of the excess cash available for distribution
from the Local Limited Partnership.  As a result of the use of the equity method
of  accounting  for the  Partnership's  investment,  as of March 31,  2004,  the
investment in the Local Limited  Partnership  had been reduced to zero. For this
investment,  cash distributions received are recorded in income as distributions
received in excess of investment in Local Limited Partnership.

The property in which the Local  Limited  Partnership  invested  received one or
more forms of assistance  from the Federal  Government.  As a result,  the Local
Limited  Partnership's  ability to transfer funds to the Partnership in the form
of cash  distributions,  loans or advances  was  generally  restricted  by these
government assistance programs. These restrictions, however, are not expected to
impact the Local Limited Partnership's ability to meet its cash obligations. The
Local Limited Partnership sold its only investment property on March 29, 2004.

RESULTS OF OPERATIONS

The Partnership  retains an investment as a limited partner in one Local Limited
Partnership that operated one rental housing property.  In prior years,  results
of  operations  of  the   Partnership   were   significantly   impacted  by  the
Partnership's share of the losses of the Local Limited Partnership. These losses
included  depreciation  and accrued  deferred  acquisition note interest expense
which are non-cash in nature.  Because the  investment in and advances to Edmond
Estates Limited Partnership has been reduced to zero, the Partnership's share of
the  operations of the Local Limited  Partnership  is no longer being  recorded.
With the sale of the property owned by Edmond Estates Limited Partnership during
the three months ended March 31, 2004,  the  Partnership's  share of profits was
not sufficient to recover losses not previously recognized.

The  Partnership  had a net loss of  approximately  $14,000  and $13,000 for the
three months ended March 31, 2004 and 2003,  respectively.  The  Partnership did
not recognize  approximately  $626,000 of its share of profits and approximately
$19,000 of its share of losses from one and two Local Limited  Partnerships  for
the three months ended March 31, 2004 and 2003, respectively. At March 31, 2004,
the  Partnership  had not recognized  approximately  $1,933,000 of its allocated
share of cumulative  losses from Edmond  Estates Local  Limited  Partnership  in
which its investment is zero.

ITEM 3.     CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the General Partner,  who are the equivalent of the  Partnership's  principal
executive officer and principal financial officer,  respectively,  has evaluated
the  effectiveness of the Partnership's  disclosure  controls and procedures (as
such term is defined  in Rules  13a-15(e)  and  15d-15(e)  under the  Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and  principal  financial  officer of the General  Partner,  who are the
equivalent  of the  Partnership's  principal  executive  officer  and  principal
financial  officer,  respectively,  have  concluded  that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fiscal quarter to which this report relates that have  materially  affected,  or
are reasonably likely to materially affect,  the Partnership's  internal control
over financial reporting.


<PAGE>


                           PART II - OTHER INFORMATION


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a) Exhibits:

                  31.1  Certification  of equivalent of Chief Executive  Officer
                        pursuant    to    Securities    Exchange    Act    Rules
                        13a-14(a)/15d-14(a),  as Adopted Pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002.

                  31.2  Certification  of equivalent of Chief Financial  Officer
                        pursuant    to    Securities    Exchange    Act    Rules
                        13a-14(a)/15d-14(a),  as Adopted Pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002.

                  32.1  Certification  Pursuant to 18 U.S.C.  Section  1350,  as
                        Adopted  Pursuant to Section  906 of the  Sarbanes-Oxley
                        Act of 2002.

            b) Reports on Form 8-K:

                  None filed during the quarter ended March 31, 2004.


<PAGE>


                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



                                    NATIONAL HOUSING  PARTNERSHIP  REALTY FUND
                                       III

                                    By:   The National Housing Partnership,
                                          Its sole General Partner


                                    By:   National Corporation for Housing
                                          Partnerships, its sole General Partner

                                    By:   /s/David R. Robertson
                                          David R. Robertson
                                          President and Chief Executive Officer

                                    By:   /s/Thomas M. Herzog
                                          Thomas M. Herzog
                                          Senior Vice President
                                          and Chief Accounting Officer

                                    Date: May 14, 2004


<PAGE>


Exhibit 31.1


                                  CERTIFICATION


I, David R. Robertson, certify that:


1.    I have reviewed this quarterly  report on Form 10-QSB of National  Housing
      Partnership Realty Fund III;

2.    Based on my knowledge,  this 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
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  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 report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  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 report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and


(b) Any fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's  internal control over
financial reporting.


Date: May 14, 2004

                                    /s/David R. Robertson
                                    David R. Robertson
                                    President  and Chief  Executive  Officer  of
                                    National     Corporation     for     Housing
                                    Partnerships,   equivalent   of  the   chief
                                    executive officer of the Partnership

<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Thomas M. Herzog, certify that:


1.    I have reviewed this quarterly  report on Form 10-QSB of National  Housing
      Partnership Realty Fund III;

2.    Based on my knowledge,  this 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
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  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 report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  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 report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date: May 14, 2004

                                    /s/Thomas M. Herzog
                                    Thomas M. Herzog
                                    Senior Vice President and Chief
                                    Accounting Officer of National
                                    Corporation for Housing Partnerships,
                                    equivalent of the chief financial officer
                                    of the Partnership


<PAGE>


Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002



In  connection  with the  Quarterly  Report on Form 10-QSB of  National  Housing
Realty Fund III (the  "Partnership"),  for the quarterly  period ended March 31,
2004 as filed with the  Securities  and Exchange  Commission  on the date hereof
(the  "Report"),  David R.  Robertson,  as the equivalent of the chief executive
officer of the Partnership, and Thomas M. Herzog, as the equivalent of the chief
financial  officer of the  Partnership,  each hereby  certifies,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/David R. Robertson
                                    Name:  David R. Robertson
                                    Date:  May 14, 2004


                                           /s/Thomas M. Herzog
                                    Name:  Thomas M. Herzog
                                    Date:  May 14, 2004


This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.