United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

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

                 For the quarterly period ended June 30, 2002


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


             For the transition period from _________to _________

                         Commission file number 0-14187


               CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3
      (Exact name of small business issuer as specified in its charter)



              California                                        94-2940208
    (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                         Identification No.)

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

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

<PAGE>



                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS



               CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                                  BALANCE SHEET
                                   (Unaudited)
                       (in thousands, except unit data)

                                  June 30, 2002


Assets
   Cash and cash equivalents                                              $ 916
   Receivables and deposits                                                 820
   Restricted escrows                                                       421
   Other assets                                                           1,443
   Investment properties:
      Land                                               $ 8,641
      Buildings and related personal property              49,034
                                                           57,675
      Less accumulated depreciation                       (24,192)       33,483
                                                                       $ 37,083
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                        $ 97
   Tenant security deposit liabilities                                      299
   Accrued property taxes                                                   283
   Other liabilities                                                        747
   Mortgage notes payable                                                46,949

Partners' Deficit
   General partner                                        $ (954)
   Limited partners (383,033 units outstanding)           (10,338)      (11,292)
                                                                       $ 37,083


                See Accompanying Notes to Financial Statements
<PAGE>


               CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
                     (in thousands, except per unit data)

<TABLE>
<CAPTION>

                                            For the Three Months      For the Six Months
                                               Ended June 30,           Ended June 30,
                                             2002         2001         2002        2001
Revenues:
<S>                                         <C>          <C>         <C>          <C>
  Rental income                             $ 2,895      $ 3,202     $ 5,871      $ 6,453
  Other income                                  337          318         732          656
  Casualty gain                                  --           --         249           --
      Total revenues                          3,232        3,520       6,852        7,109

Expenses:
  Operating                                   1,208        1,215       2,332        2,399
  General and administrative                    147          206         300          365
  Depreciation                                  751          736       1,484        1,466
  Interest                                      890          547       1,776        1,075
  Property taxes                                203          198         382          399
  Loss on early extinguishment of debt           --          100          --          100
      Total expenses                          3,199        3,002       6,274        5,804

Net income                                   $ 33         $ 518       $ 578       $ 1,305

Net income allocated to general
  partner (1%)                               $ --          $ 5         $ 6         $ 13
Net income allocated to limited
  partners (99%)                                 33          513         572        1,292

                                             $ 33         $ 518       $ 578       $ 1,305

Net income per limited partnership
  unit                                      $ 0.09       $ 1.34       $ 1.49      $ 3.37

Distributions per limited
  partnership unit                          $ 0.98       $ 2.44       $ 0.98      $ 7.45

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

               CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                  STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                       (in thousands, except unit data)

<TABLE>
<CAPTION>


                                     Limited
                                    Partnership     General     Limited
                                       Units        Partner     Partners      Total

<S>                                   <C>             <C>       <C>         <C>
Original capital contributions        383,033         $ 1       $ 95,758    $ 95,759

Partners' deficit at
   December 31, 2001                  383,033       $ (956)     $(10,534)   $(11,490)

Distributions to partners                  --            (4)        (376)       (380)

Net income for the six months
   ended June 30, 2002                     --             6          572         578

Partners' deficit at
   June 30, 2002                      383,033       $ (954)     $(10,338)   $(11,292)

                See Accompanying Notes to Financial Statements
</TABLE>


<PAGE>


               CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                (in thousands)

<TABLE>
<CAPTION>
                                                                   Six Months Ended
                                                                        June 30,
                                                                   2002        2001
Cash flows from operating activities:
<S>                                                                <C>        <C>
  Net income                                                       $ 578      $ 1,305
  Adjustments to reconcile net income to net cash
   provided by operating activities:
      Casualty gain                                                  (249)         --
      Depreciation                                                  1,484       1,466
      Amortization of loan costs                                       58          53
      Loss on early extinguishment of debt                             --         100
      Change in accounts:
        Receivables and deposits                                     (160)       (901)
        Other assets                                                 (141)        (97)
        Accounts payable                                              (50)       (127)
        Tenant security deposit liabilities                           (16)         (7)
        Accrued property taxes                                         72         122
        Other liabilities                                             334         (82)
         Net cash provided by operating activities                  1,910       1,832

Cash flows from investing activities:
  Property improvements and replacements                           (1,261)       (682)
  Net receipts from restricted escrows                                 24          85
  Insurance proceeds received                                         535          --
         Net cash used in investing activities                       (702)       (597)

Cash flows from financing activities:
  Repayment of mortgage notes payable                                (422)    (12,900)
  Proceeds from mortgage notes payable                                 --      29,000
  Loan costs paid                                                      --        (589)
  Distributions to partners                                          (380)     (2,884)
         Net cash (used in) provided by financing activities         (802)     12,627

Net increase in cash and cash equivalents                             406      13,862

Cash and cash equivalents at beginning of period                      510       2,010

Cash and cash equivalents at end of period                         $ 916     $ 15,872

Supplemental disclosure of cash flow information:
  Cash paid for interest                                          $ 1,724     $ 1,101
Supplemental disclosure of non-cash activity:
  Loan costs in due to general partner                             $ --        $ 210

At  December  31,  2001,  approximately  $21,000 of  property  improvements  and
replacements  were  included in accounts  payable which are included in property
improvements and replacements during the six months ended June 30, 2002.

At December 31, 2001, approximately $237,000 of insurance proceeds were included
in accounts receivable which are included in casualty gain during the six months
ended June 30, 2002.

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

               CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The  accompanying   unaudited  financial   statements  of  Consolidated  Capital
Institutional   Properties/3  (the  "Partnership"  or  "Registrant")  have  been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-QSB and Item 310(b)
of Regulation S-B.  Accordingly,  they do not include all of the information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements.  In the opinion of ConCap  Equities,  Inc.  (the "General
Partner"),  which is wholly owned by Apartment Investment and Management Company
("AIMCO"),  a publicly  traded real estate  investment  trust,  all  adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been included.  Operating results for the three and six month
periods ended June 30, 2002, are not necessarily  indicative of the results that
may be expected  for the fiscal  year  ending  December  31,  2002.  For further
information, refer to the financial statements and footnotes thereto included in
the Partnership's  Annual Report on Form 10-K for the fiscal year ended December
31, 2001.

Effective  April  1,  2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards ("SFAS") No. 145, "Rescission of FASB Statements No. 4, 44
and 64". SFAS No. 4 "Reporting  Gains and Losses from  Extinguishment  of Debt,"
required  that all gains and losses from  extinguishment  of debt be  aggregated
and, if material,  classified as an  extraordinary  item.  SFAS No. 145 rescinds
SFAS No. 4, and accordingly, gains and losses from extinguishment of debt should
only be  classified  as  extraordinary  if they are  unusual in nature and occur
infrequently. Neither of these criteria applies to the Partnership. As a result,
the  accompanying  consolidated  statements of operations  have been restated to
reflect the loss on early extinguishment of debt at Tamarac and Lamplighter Park
Apartments (see "Note C") in operations rather than as an extraordinary item.

Note B - Related Party Transactions

The  Partnership has no employees and is dependent on the General Partner and/or
its  affiliates  for  the  management  and  administration  of  all  Partnership
activities. The limited partnership agreement ("Partnership Agreement") provides
for  payments  to  affiliates  for  property  management  services  based  on  a
percentage of revenue. The Partnership Agreement also provides for reimbursement
to the General  Partner and its affiliates for costs incurred in connection with
the administration of Partnership activities.

During the six months  ended June 30, 2002 and 2001,  affiliates  of the General
Partner  were  entitled  to  receive  5% of  gross  receipts  from  all  of  the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $347,000 and
$360,000  for  management  fees for the six months ended June 30, 2002 and 2001,
respectively, which is included in operating expenses.

Affiliates  of  the  General  Partner  received   reimbursement  of  accountable
administrative expenses amounting to approximately $319,000 and $254,000 for the
six months  ended June 30,  2002 and 2001,  respectively,  which is  included in
investment properties and general and administrative expenses. Included in these
amounts are fees  related to  construction  management  services  provided by an
affiliate of the Managing  General Partner of  approximately  $89,000 and $3,000
for the six months ended June 30, 2002 and 2001, respectively.  The construction
management fees are calculated  based on a percentage of additions to investment
properties.

In addition to  reimbursement  for services of  affiliates,  an affiliate of the
General  Partner earned  $290,000 for services  related to the  refinancings  of
Lamplighter Park and Tamarac Village Apartments during the six months ended June
30, 2001.  These costs were  capitalized and are included in other assets on the
balance sheet.

Beginning in 2001, the  Partnership  began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the General Partner. During the six months ended June 30, 2002
and 2001, the Partnership was charged by AIMCO and its affiliates  approximately
$125,000 and $158,000,  respectively, for insurance coverage and fees associated
with policy claims administration.

Note C - Refinancings of Mortgage Notes Payable

On June 27, 2001, the Partnership  refinanced the mortgage  encumbering  Tamarac
Village  Apartments.  The refinancing  replaced  indebtedness  of  approximately
$9,400,000 with a new mortgage of $21,000,000. The new mortgage carries a stated
interest  rate of  7.45%  as  compared  to the  7.33%  interest  rate on the old
mortgage.  Payments on the mortgage  loan are due monthly until the loan matures
on July 1, 2021 at which time the loan is  scheduled to be fully  amortized.  In
addition,  the  Partnership  was  required  to  establish  a  repair  escrow  of
approximately  $136,000 with the lender for certain capital replacements.  Total
capitalized  loan  costs  were  approximately  $564,000  at June 30,  2001.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately $66,000 due to the write-off of unamortized loan costs.

On  June  29,  2001,  the  Partnership   refinanced  the  mortgage   encumbering
Lamplighter  Park   Apartments.   The  refinancing   replaced   indebtedness  of
approximately  $3,500,000  with a new mortgage of  $8,000,000.  The new mortgage
carries a stated  interest rate of 7.48% as compared to the 7.33%  interest rate
on the old  mortgage.  Payments on the mortgage  loan are due monthly  until the
loan  matures  on July 1, 2021 at which time the loan is  scheduled  to be fully
amortized.  In  addition,  the  Partnership  was  required to establish a repair
escrow of approximately $2,000 with the lender for certain capital replacements.
Total capitalized loan costs were  approximately  $235,000 at June 30, 2001. The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately $34,000 due to the write-off of unamortized loan costs.

Note D - Casualty

In October 2001 a fire  occurred at  Lamplighter  Park  Apartments  which caused
damage to thirty  units of the  complex.  As a result,  the assets  and  related
accumulated  depreciation  with a net book value of approximately  $237,000 were
written off in 2001 and an  insurance  receivable  of $237,000  was  recorded at
December 31, 2001. During the six months ended June 30, 2002 insurance  proceeds
of  approximately  $535,000 were received and an additional  write-off of assets
and  related  accumulated  depreciation  with a net book value of  approximately
$49,000 was recorded. This resulted in a casualty gain of approximately $249,000
relating to this casualty being recognized  during the six months ended June 30,
2002.

On January 12,  2002,  a fire  occurred at  Sandpiper I and II  Apartments  with
expected property damage of approximately $47,000.  Negotiations concerning this
casualty are ongoing with the insurance carrier. No insurance proceeds have been
received as of June 30, 2002, and thus the financial  statement impact cannot be
practicably  determined at this time. The Partnership does not expect to realize
a loss from this event.

Note E - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its General Partner and several of
their  affiliated  partnerships and corporate  entities.  The action purports to
assert  claims on behalf of a class of  limited  partners  and  derivatively  on
behalf of a number of limited partnerships (including the Partnership) which are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia  Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia;  past
tender offers by the Insignia  affiliates to acquire limited  partnership units;
management of the  partnerships  by the Insignia  affiliates;  and the series of
transactions  which  closed on October 1, 1998 and  February  26,  1999  whereby
Insignia and Insignia  Properties Trust,  respectively,  were merged into AIMCO.
The plaintiffs seek monetary damages and equitable  relief,  including  judicial
dissolution of the  Partnership.  On June 25, 1998, the General  Partner filed a
motion seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs  filed an amended  complaint.  The General Partner filed demurrers to
the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December  14,  1999,  the General  Partner  and its  affiliates  terminated  the
proposed settlement.  In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement.  On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken  from the order on  October  5,  2000.  On
December 4, 2000, the Court  appointed the law firm of Lieff Cabraser  Heimann &
Bernstein  LLP as new  lead  counsel  for  plaintiffs  and the  putative  class.
Plaintiffs  filed a third  amended  complaint on January 19,  2001.  On March 2,
2001,  the  General  Partner  and its  affiliates  filed a demurrer to the third
amended  complaint.  On May 14, 2001,  the Court heard the demurrer to the third
amended  complaint.  On July 10,  2001,  the Court  issued  an order  sustaining
defendants'  demurrer on certain grounds.  On July 20, 2001,  Plaintiffs filed a
motion for  reconsideration  of the Court's July 10, 2001 order granting in part
and denying in part defendants' demurrer. On September 7, 2001, Plaintiffs filed
a fourth amended class and derivative action  complaint.  On September 12, 2001,
the Court denied Plaintiffs' motion for reconsideration. On October 5, 2001, the
General Partner and affiliated defendants filed a demurrer to the fourth amended
complaint,  which was heard on December 11, 2001. On February 2, 2002, the Court
served its order granting in part the demurrer.  The Court has dismissed without
leave  to amend  certain  of the  plaintiffs'  claims.  On  February  11,  2002,
plaintiffs  filed a motion seeking to certify a putative class  comprised of all
non-affiliated  persons  who own or have owned  units in the  partnerships.  The
General Partner and affiliated  defendants oppose the motion. On April 29, 2002,
the Court held a hearing on plaintiffs' motion for class  certification and took
the matter under submission after further briefing, as ordered by the court, was
submitted by the parties.  On July 10, 2002, the Court entered an order vacating
the  current  trial  date of  January  13,  2003 (as well as the  pre-trial  and
discovery cut-off dates) and stayed the case in its entirety through November 7,
2002 so that the parties can have an opportunity to discuss settlement.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the General Partner and affiliated defendants
moved to strike the first  amended  complaint in its entirety for  violating the
Court's  July 10, 2001 order  granting  in part and denying in part  defendants'
demurrer in the Nuanes action, or  alternatively,  to strike certain portions of
the  complaint  based on the statute of  limitations.  Other  defendants  in the
action demurred to the fourth amended complaint,  and,  alternatively,  moved to
strike the  complaint.  On December  11, 2001,  the court heard  argument on the
motions and took the matters under  submission.  On February 4, 2002,  the Court
served  notice of its order  granting  defendants'  motion to strike  the Heller
complaint  as a violation  of its July 10, 2001 order in the Nuanes  action.  On
March 27, 2002, the plaintiffs  filed a notice  appealing the order striking the
complaint. The parties are currently in the midst of briefing that appeal.

The  General  Partner  does not  anticipate  that any  costs,  whether  legal or
settlement  costs,   associated  with  these  cases  will  be  material  to  the
Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.


<PAGE>




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

The  matters  discussed  in this Form  10-QSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained  in this  Form  10-QSB  and the  other  filings  with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the  Registrant's  business and results of  operations,  including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operations.  Accordingly,  actual  results  could differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

The  Partnership's  investment  properties  at June 30, 2002  consisted of seven
apartment complexes. The following table sets forth the average occupancy of the
properties for each of the six month periods ended June 30, 2002 and 2001:

                                                   Average Occupancy
      Property                                      2002       2001

      Cedar Rim                                     91%        88%
        New Castle, Washington
      Hidden Cove by the Lake                       96%        89%
        Belleville, Michigan
      Lamplighter Park                              77%        92%
        Bellevue, Washington
      Park Capital                                  94%        89%
        Salt Lake City, Utah
      Sandpiper I and II                            95%        96%
        St. Petersburg, Florida
      Tamarac Village I, II, III, IV                88%        95%
        Denver, Colorado
      Williamsburg Manor                            90%        96%
        Cary, North Carolina

The General Partner  attributes the decrease in occupancy at Lamplighter Park to
30 units  damaged by a fire in October  2001 and the ongoing  reconstruction  is
impacting  the rental of the  remaining  units.  The  decrease in  occupancy  at
Tamarac Village  Apartments is due to the slow economy in the local market.  The
decrease in occupancy at  Williamsburg  Manor  Apartments is due to more tenants
buying homes due to lower interest rates and increased competition. The increase
in occupancy at Hidden Cove is due to capital improvements at the property which
improved its curb appeal and reduced rental rates.  The increase in occupancy at
Cedar  Rim is due to  increased  advertising  and  reduced  rental  rates  to be
competitive in its marketplace. The increase in occupancy at Park Capital is due
to increased traffic due to the Winter Olympic Games in Salt Lake City.

Results of Operations

The  Partnership  had net income of  approximately  $578,000  for the six months
ended June 30, 2002  compared  to  approximately  $1,305,000  for the six months
ended June 30, 2001. The Partnership had net income of approximately $33,000 for
the three months ended June 30, 2002 compared to approximately  $518,000 for the
three months  ended June 30, 2001.  The decrease in net income for the three and
six month  periods  ended June 30, 2002 is due to an increase in total  expenses
and a decrease in total revenues.

Total expenses increased for the three and six month periods ended June 30, 2002
due primarily to increased  interest  expense  partially  offset by decreases in
operating  and  general  and  administrative  expenses  and the  loss  on  early
extinguishment  of debt in 2001 related to the  refinancing  of the mortgages at
Tamarac Village and  Lamplighter  Park Apartments as discussed in "Liquidity and
Capital  Resources".  Interest expense increased due to the refinancings  during
2001 of the mortgages  encumbering  Tamarac  Village,  Hidden Cove,  Lamplighter
Park, and Cedar Rim Apartments which increased the debt balance at each of these
properties.  Operating  expenses  decreased  primarily due to decreased  utility
expenses primarily at Tamarac Village, decreased commissions and bonus primarily
at Tamarac  Village and  Lamplighter  Park  Apartments  and reduced  maintenance
expenses  primarily at Tamarac Village,  Hidden Cove by the Lake and Lamplighter
Park Apartments  partially  offset by increased  payroll and related benefits at
Tamarac Village and Lamplighter Park Apartments and increased property insurance
expenses at all of the Partnership's properties.

General and administrative  expenses decreased primarily due to reduced printing
and  mailing  expenses,  tax  fees and  licenses  and  decreases  in the cost of
services included in the management  reimbursements  paid to the General Partner
as allowed  under the  Partnership  Agreement.  Also  included  in  general  and
administrative expenses at both June 30, 2002 and 2001 are costs associated with
the quarterly and annual  communications  with investors and regulatory agencies
and the annual audit required by the Partnership Agreement.

Total  revenues  decreased  for the six  months  ended  June  30,  2002 due to a
decrease in rental  income  partially  offset by increases in other income and a
casualty gain at Lamplighter Park Apartments in 2002.  Total revenues  decreased
for the three  months  ended June 30,  2002 due to a decrease  in rental  income
partially offset by an increase in other income. Rental income decreased for the
three and six month  periods  ended June 30, 2002 due to decreased  occupancy at
Williamsburg  Manor,  Tamarac Village,  Sandpiper I and II, and Lamplighter Park
Apartments and an increase in bad debt expense at Tamarac Village Apartments and
reduced  rental  rates  primarily  at  Hidden  Cove by the  Lake and  Cedar  Rim
Apartments  partially offset by insurance  proceeds received at Lamplighter Park
Apartments  for lost rents  associated  with the casualty,  as discussed  below.
Other income  increased  due to increases in utility  reimbursements  at Tamarac
Village and Sandpiper Apartments and late charges and lease cancellation fees at
Tamarac Village Apartments.

In October 2001 a fire  occurred at  Lamplighter  Park  Apartments  which caused
damage to thirty  units of the  complex.  As a result,  the assets  and  related
accumulated  depreciation  with a net book value of approximately  $237,000 were
written off in 2001 and an  insurance  receivable  of $237,000  was  recorded at
December 31, 2001. During the six months ended June 30, 2002 insurance  proceeds
of  approximately  $535,000 were received and an additional  write-off of assets
and  related  accumulated  depreciation  with a net book value of  approximately
$49,000 was recorded. This resulted in a casualty gain of approximately $249,000
relating to this casualty being recognized  during the six months ended June 30,
2002.

As part of the ongoing  business plan of the  Partnership,  the General  Partner
monitors the rental market  environment of each of its investment  properties to
assess the feasibility of increasing rents,  maintaining or increasing occupancy
levels and protecting  the  Partnership  from increases in expenses.  As part of
this plan,  the General  Partner  attempts to protect the  Partnership  from the
burden of  inflation-related  increases  in  expenses  by  increasing  rents and
maintaining a high overall  occupancy  level.  However,  due to changing  market
conditions,  which  can  result  in the use of  rental  concessions  and  rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At  June  30,  2002,  the  Partnership   held  cash  and  cash   equivalents  of
approximately  $916,000 compared to approximately  $15,872,000 at June 30, 2001.
The  increase  in cash and cash  equivalents  for the six months  ended June 30,
2002,  from the  Partnership's  year ended December 31, 2001, was  approximately
$406,000.  This increase is due to approximately  $1,910,000 of cash provided by
operating  activities which was partially  offset by  approximately  $702,000 of
cash used in investing  activities  and  approximately  $802,000 of cash used in
financing  activities.  Cash used in investing  activities consisted of property
improvements and replacements  partially offset by insurance  proceeds  received
and net withdrawals from restricted escrows.  Cash used in financing  activities
consisted of principal  payments on mortgage notes payable and  distributions to
the partners.  The Partnership  invests its working capital reserves in interest
bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the  properties  to  adequately  maintain the physical
assets and other  operating  needs of the Registrant and to comply with Federal,
state, and local legal and regulatory requirements. Capital improvements planned
for each of the Registrant's properties are detailed below.

Cedar Rim

During  the  six  months  ended  June  30,  2002,  the   Partnership   completed
approximately  $60,000 of budgeted and unbudgeted  capital  improvements  at the
property, consisting primarily of balcony improvements,  structural improvements
and  floor  covering  replacements.  These  improvements  were  funded  from the
property's  operating  cash flow.  The  Partnership  has  evaluated  the capital
improvement  needs  of the  property  for  the  year.  The  amount  budgeted  is
approximately  $38,000,  consisting  primarily of floor  covering  replacements.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition  of the  property as well as  anticipated  cash flow  generated by the
property.

Hidden Cove by the Lake

During  the  six  months  ended  June  30,  2002,  the   Partnership   completed
approximately  $70,000 of capital  improvements,  consisting  primarily of floor
covering  replacements,  major  landscaping,  heating  upgrades  and  structural
improvements.  These improvements were funded from the property's operating cash
flow.  The  Partnership  has  evaluated  the  capital  improvement  needs of the
property for the year. The amount budgeted is approximately $130,000, consisting
primarily of structure improvements and floor covering replacements.  Additional
improvements may be considered and will depend on the physical  condition of the
property as well as anticipated cash flow generated by the property.

Lamplighter Park

During  the  six  months  ended  June  30,  2002,  the   Partnership   completed
approximately   $622,000  of  budgeted  and  unbudgeted  capital   improvements,
consisting  primarily of  construction in progress on units damaged in a fire in
October 2001, clubhouse renovations,  swimming pool upgrades, and floor covering
replacements.  These  improvements  were  funded  from  operating  cash flow and
insurance proceeds.  The Partnership has evaluated the capital improvement needs
of the property for the year.  The amount  budgeted is  approximately  $620,000,
consisting  primarily of parking area and swimming pool upgrades,  appliance and
floor  covering   replacements  and   reconstructing  the  fire  damaged  units.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition  of the  property as well as  anticipated  cash flow  generated by the
property.

Park Capital

During  the  six  months  ended  June  30,  2002,  the   Partnership   completed
approximately  $33,000 of capital  improvements,  consisting  primarily of major
landscaping and appliance and floor covering  replacements.  These  improvements
were funded from operating cash flow. The  Partnership has evaluated the capital
improvement  needs  of the  property  for  the  year.  The  amount  budgeted  is
approximately $65,000, consisting primarily of electrical upgrades and appliance
and floor covering replacements.  Additional  improvements may be considered and
will depend on the physical  condition  of the  property as well as  anticipated
cash flow generated by the property.

Tamarac Village

During  the  six  months  ended  June  30,  2002,  the   Partnership   completed
approximately   $243,000  of  capital  improvements,   consisting  primarily  of
electrical  upgrades,  parking area  improvements,  structural  improvements and
appliance and floor covering  replacements.  These improvements were funded from
operating cash flow. The Partnership has evaluated the capital improvement needs
of the property for the year.  The amount  budgeted is  approximately  $364,000,
consisting  primarily of parking area and  electrical  upgrades,  floor covering
replacements,  interior  decoration,  structural  improvements,  window covering
replacements,  air  conditioning  unit  replacements,  appliances  and  elevator
upgrades.  Additional  improvements  may be  considered  and will  depend on the
physical condition of the property as well as anticipated cash flow generated by
the property.

Williamsburg Manor

During  the  six  months  ended  June  30,  2002,  the   Partnership   completed
approximately $100,000 of capital improvements, consisting primarily of plumbing
fixtures, land improvements, floor covering replacements, and water submetering.
These  expenditures  were  funded  from  operating  cash  flow  and  replacement
reserves.  The  Partnership has evaluated the capital  improvement  needs of the
property for the year. The amount budgeted is approximately $124,000, consisting
primarily of air  conditioning  unit,  cabinet and floor covering  replacements,
structural  improvements and water submetering.  Additional  improvements may be
considered and will depend on the physical  condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.

Sandpiper I and II

During  the  six  months  ended  June  30,  2002,  the   Partnership   completed
approximately   $112,000  of  budgeted  and  unbudgeted   capital   improvements
consisting  primarily  of floor  covering  and  appliance  replacements,  office
computers,  and structural  improvements.  These  improvements  were funded from
operating cash flow and replacement reserves.  The Partnership has evaluated the
capital  improvement  needs of the property for the year. The amount budgeted is
approximately  $106,000,  consisting primarily of plumbing fixture upgrades, air
conditioning  unit,  cabinet  and  floor  covering   replacements  and  signage.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.

The additional  capital  expenditures will be incurred only if cash is available
from operations or from Partnership  reserves.  To the extent that such budgeted
capital improvements are required, the Registrant's  distributable cash flow, if
any, may be adversely affected.

On June 27, 2001, the Partnership  refinanced the mortgage  encumbering  Tamarac
Village  Apartments.  The refinancing  replaced  indebtedness  of  approximately
$9,400,000 with a new mortgage of $21,000,000. The new mortgage carries a stated
interest  rate of  7.45%  as  compared  to the  7.33%  interest  rate on the old
mortgage.  Payments on the mortgage  loan are due monthly until the loan matures
on July 1, 2021 at which time the loan is  scheduled to be fully  amortized.  In
addition,  the  Partnership  was  required  to  establish  a  repair  escrow  of
approximately  $136,000 with the lender for certain capital replacements.  Total
capitalized  loan  costs  were  approximately  $564,000  at June 30,  2001.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately $66,000 due to the write-off of unamortized loan costs.

On  June  29,  2001,  the  Partnership   refinanced  the  mortgage   encumbering
Lamplighter  Park   Apartments.   The  refinancing   replaced   indebtedness  of
approximately  $3,500,000  with a new mortgage of  $8,000,000.  The new mortgage
carries a stated  interest rate of 7.48% as compared to the 7.33%  interest rate
on the old  mortgage.  Payments on the mortgage  loan are due monthly  until the
loan  matures  on July 1, 2021 at which time the loan is  scheduled  to be fully
amortized.  In  addition,  the  Partnership  was  required to establish a repair
escrow of approximately $2,000 with the lender for certain capital replacements.
Total capitalized loan costs were  approximately  $235,000 at June 30, 2001. The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately $34,000 due to the write-off of unamortized loan costs.

On July 23, 2001, the Partnership  refinanced the mortgage encumbering Cedar Rim
Apartments.  The refinancing replaced  indebtedness of approximately  $2,000,000
with a new mortgage of $5,000,000.  The new mortgage  carries a stated  interest
rate of  7.49% as  compared  to the  7.33%  interest  rate on the old  mortgage.
Payments on the mortgage  loan are due monthly  until the loan matures on August
1, 2021 at which time the loan is scheduled to be fully amortized.

On September  19, 2001,  the  Partnership  refinanced  the mortgage  encumbering
Hidden Cove Apartments.  The refinancing replaced  indebtedness of approximately
$2,200,000 with a new mortgage of $2,860,000.  The new mortgage carries a stated
interest  rate of  6.81%  as  compared  to the  7.33%  interest  rate on the old
mortgage.  Payments on the mortgage  loan are due monthly until the loan matures
on October 1, 2021 at which time the loan is scheduled to be fully amortized. In
addition,  the  Partnership  was  required  to  establish  a  repair  escrow  of
approximately $152,000 with the lender for certain capital replacements.

The Partnership's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness  of  approximately  $46,949,000  has  maturity  dates  ranging from
December  2005 to October  2021.  The  mortgage  indebtedness  of  approximately
$36,124,000 that was refinanced  during 2001 requires monthly payments until the
loans  mature  between  July 2021 and  October  2021 at which time the loans are
scheduled to be fully amortized.  The Partnership's other mortgage  indebtedness
of $10,825,000 requires interest only payments, matures in December 2005 and has
balloon payments due at maturity.  The General Partner will attempt to refinance
such  indebtedness  and/or sell the properties  prior to such maturity dates. If
the  properties  cannot  be  refinanced  or sold for a  sufficient  amount,  the
Registrant may risk losing such properties through foreclosure.

Pursuant to the Partnership Agreement,  the term of the Partnership is scheduled
to expire on December 31, 2015. Accordingly,  prior to such date the Partnership
will need to either  sell its  investment  properties  or extend the term of the
Partnership.

The Partnership  distributed  the following  amounts during the six months ended
June 30, 2002 and 2001 (in thousands, except per unit data):
<TABLE>
<CAPTION>

                     Three Months     Per Limited       Six Months      Per Limited
                        Ended         Partnership         Ended         Partnership
                    June 30, 2002         Unit        June 30, 2001         Unit

<S>                     <C>              <C>              <C>              <C>
Operations              $ 380            $ 0.98           $2,884           $ 7.45
</TABLE>

Future  cash  distributions  will  depend on the levels of cash  generated  from
operations, timing of debt maturities,  refinancings, and/or property sales, and
the  availability  of  cash  reserves.  The  Partnership's  cash  available  for
distribution is reviewed on a monthly basis. There can be no assurance, however,
that the  Partnership  will  generate  sufficient  funds from  operations  after
required capital expenditures to permit additional distributions to its partners
during the remainder of 2002 or subsequent periods.

Other

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,   AIMCO  and  its  affiliates   currently  own  203,053.50  limited
partnership  units in the  Partnership  representing  53.01% of the  outstanding
units.  A number of these units were acquired  pursuant to tender offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional units of limited  partnership  interest in the Partnership in
exchange  for  cash  or a  combination  of  cash  and  units  in  the  operating
partnership of AIMCO either through private  purchases or tender offers. In this
regard, on June 25, 2002, a tender offer by AIMCO  Properties,  L.P., to acquire
all of the units not owned by affiliates of AIMCO for a purchase price of $39.00
per unit expired.  Pursuant to this offer,  AIMCO acquired 4,756.70 units during
the quarter ended June 30, 2002.  Under the Partnership  Agreement,  unitholders
holding a majority of the units are  entitled  to take action with  respect to a
variety of matters,  which would  include  voting on certain  amendments  to the
Partnership  Agreement and voting to remove the General Partner.  As a result of
its  ownership  of 53.01% of the  outstanding  units,  AIMCO is in a position to
control  all voting  decisions  with  respect to the  Registrant.  Although  the
General  Partner  owes  fiduciary   duties  to  the  limited   partners  of  the
Partnership, the General Partner also owes fiduciary duties to AIMCO as its sole
Stockholder. As a result, the duties of the General Partner, as general partner,
to the  Partnership  and its limited  partners may come into  conflict  with the
duties of the General Partner to AIMCO, as its sole stockholder.

Critical Accounting Policies and Estimates

The financial  statements are prepared in accordance with accounting  principles
generally  accepted in the United States which require the  Partnership  to make
estimates and  assumptions.  The  Partnership  believes that of its  significant
accounting  policies,  the following may involve a higher degree of judgment and
complexity.

Impairment of Long-Lived Assets

Investment  properties  are  recorded at cost,  less  accumulated  depreciation,
unless  considered  impaired.  If  events  or  circumstances  indicate  that the
carrying  amount of a property may be  impaired,  the  Partnership  will make an
assessment of its  recoverability  by estimating  the  undiscounted  future cash
flows,  excluding  interest  charges,  of the property.  If the carrying  amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's  investment  properties.  These  factors  include  changes  in the
national,  regional and local economic  climate;  local  conditions,  such as an
oversupply  of  multifamily   properties;   competition   from  other  available
multifamily  property  owners and changes in market  rental  rates.  Any adverse
changes in these factors could cause an impairment in the Partnership's assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized monthly as it is earned. The
Partnership will offer rental concessions during  particularly slow months or in
response  to  heavy  competition  from  other  similar  complexes  in the  area.
Concessions are charged to income as incurred.



<PAGE>


                           PART II - OTHER INFORMATION



ITEM 1.     LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its General Partner and several of
their  affiliated  partnerships and corporate  entities.  The action purports to
assert  claims on behalf of a class of  limited  partners  and  derivatively  on
behalf of a number of limited partnerships (including the Partnership) which are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia  Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia;  past
tender offers by the Insignia  affiliates to acquire limited  partnership units;
management of the  partnerships  by the Insignia  affiliates;  and the series of
transactions  which  closed on October 1, 1998 and  February  26,  1999  whereby
Insignia and Insignia  Properties Trust,  respectively,  were merged into AIMCO.
The plaintiffs seek monetary damages and equitable  relief,  including  judicial
dissolution of the  Partnership.  On June 25, 1998, the General  Partner filed a
motion seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs  filed an amended  complaint.  The General Partner filed demurrers to
the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December  14,  1999,  the General  Partner  and its  affiliates  terminated  the
proposed settlement.  In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement.  On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken  from the order on  October  5,  2000.  On
December 4, 2000, the Court  appointed the law firm of Lieff Cabraser  Heimann &
Bernstein  LLP as new  lead  counsel  for  plaintiffs  and the  putative  class.
Plaintiffs  filed a third  amended  complaint on January 19,  2001.  On March 2,
2001,  the  General  Partner  and its  affiliates  filed a demurrer to the third
amended  complaint.  On May 14, 2001,  the Court heard the demurrer to the third
amended  complaint.  On July 10,  2001,  the Court  issued  an order  sustaining
defendants'  demurrer on certain grounds.  On July 20, 2001,  Plaintiffs filed a
motion for  reconsideration  of the Court's July 10, 2001 order granting in part
and denying in part defendants' demurrer. On September 7, 2001, Plaintiffs filed
a fourth amended class and derivative action  complaint.  On September 12, 2001,
the Court denied Plaintiffs' motion for reconsideration. On October 5, 2001, the
General Partner and affiliated defendants filed a demurrer to the fourth amended
complaint,  which was heard on December 11, 2001. On February 2, 2002, the Court
served its order granting in part the demurrer.  The Court has dismissed without
leave  to amend  certain  of the  plaintiffs'  claims.  On  February  11,  2002,
plaintiffs  filed a motion seeking to certify a putative class  comprised of all
non-affiliated  persons  who own or have owned  units in the  partnerships.  The
General Partner and affiliated  defendants oppose the motion. On April 29, 2002,
the Court held a hearing on plaintiffs' motion for class  certification and took
the matter under submission after further briefing, as ordered by the court, was
submitted by the parties.  On July 10, 2002, the Court entered an order vacating
the  current  trial  date of  January  13,  2003 (as well as the  pre-trial  and
discovery cut-off dates) and stayed the case in its entirety through November 7,
2002 so that the parties can have an opportunity to discuss settlement.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the General Partner and affiliated defendants
moved to strike the first  amended  complaint in its entirety for  violating the
Court's  July 10, 2001 order  granting  in part and denying in part  defendants'
demurrer in the Nuanes action, or  alternatively,  to strike certain portions of
the  complaint  based on the statute of  limitations.  Other  defendants  in the
action demurred to the fourth amended complaint,  and,  alternatively,  moved to
strike the  complaint.  On December  11, 2001,  the court heard  argument on the
motions and took the matters under  submission.  On February 4, 2002,  the Court
served  notice of its order  granting  defendants'  motion to strike  the Heller
complaint  as a violation  of its July 10, 2001 order in the Nuanes  action.  On
March 27, 2002, the plaintiffs  filed a notice  appealing the order striking the
complaint. The parties are currently in the midst of briefing that appeal.

The  General  Partner  does not  anticipate  that any  costs,  whether  legal or
settlement  costs,   associated  with  these  cases  will  be  material  to  the
Partnership's overall operations.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

      a)    Exhibits:

            Exhibit 3.1, Certificate of Limited Partnership,  as amended to date
            (Exhibit 3 to the  Registrant's  Annual  Report on Form 10-K for the
            year ended December 31, 2001, is incorporated herein by reference).

            Exhibit 3.2,  Agreement of Limited  Partnership,  incorporated  by
            reference   to  Exhibit  3  to  the   Partnership's   Registration
            Statement on Amendment 1 on Form S-11 (Reg. No.  2-97664) filed on
            July 17, 1985.

            Exhibit 99,  Certification  of Chief  Executive  Officer and Chief
            Financial Officer.

      b)    Reports on Form 8-K filed during the quarter ended June 30, 2002:

            None.


<PAGE>


                                   SIGNATURES



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



                                    CONSOLIDATED     CAPITAL     INSTITUTIONAL
                                    PROPERTIES/3


                                    By:   CONCAP EQUITIES, INC.
                                          Its General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


                                    By:   /s/Thomas C. Novosel
                                          Thomas C. Novosel
                                          Senior Vice President
                                          and Chief Accounting Officer


                                    Date: August 14, 2002


<PAGE>


Exhibit 99


                          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 Consolidated  Capital
Institutional  Properties/3 (the "Partnership"),  for the quarterly period ended
June 30, 2002 as filed with the Securities  and Exchange  Commission on the date
hereof (the "Report"), Patrick J. Foye, as the equivalent of the Chief Executive
Officer of the  Partnership,  and Paul J.  McAuliffe,  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/  Patrick J. Foye
                                    Name:  Patrick J. Foye
                                    Date:  August 14, 2002


                                    /s/  Paul J. McAuliffe
                                    Name:  Paul J. McAuliffe
                                    Date:  August 14, 2002


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