FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   (Mark One)

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

                For the quarterly period ended September 30, 2002

                                       OR

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

             For the transition period from ________ to ___________

                         Commission file number: 0-23908


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.



                    California                                       33-0531301

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


              3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626

                                 (714) 662-5565


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

Yes           No      X
    ---------    ----------


Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in rule 12b-2 of the Exchange Act).

Yes           No      X
    ---------    ----------





<PAGE>


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                               INDEX TO FORM 10-Q

                    For the Quarter Ended September 30, 2002



PART I. FINANCIAL INFORMATION

         Item 1. Financial Statements

         Balance Sheets
              September 30, 2002 and March 31, 2002............................3

         Statements of Operations
              For the three and six months ended September 30, 2002 and 2001...4

         Statement of Partners' Equity (Deficit)
              For the six months ended September 30, 2002......................5

         Statements of Cash Flows
              For the six months ended September 30, 2002 and 2001.............6

         Notes to Financial Statements.........................................7

         Item 2. Management's Discussion and Analysis of Financial
              Condition and Results of Operations.............................12

         Item 3. Quantitative and Qualitative Disclosures about Market Risks..13

         Item 4. Controls and Procedures......................................13

PART II. OTHER INFORMATION

         Item 1. Legal Proceedings............................................14

         Item 4. Submission of Matters to a Vote of Security Holders..........14

         Item 5. Other Information............................................14

         Item 6. Exhibits and Reports on Form 8-K.............................14

         Signatures ..........................................................15

         Certifications.......................................................16

                                       2

<PAGE>


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>



                                                                  September 30, 2002                  March 31, 2002
                                                                -----------------------             -------------------
                                                                     (unaudited)
<S>                                                           <C>                                 <C>
ASSETS

Cash and cash equivalents                                     $                380,922            $            413,336
Investments in limited partnerships, net (Note 2)                            6,151,427                       6,455,167
                                                                -----------------------             -------------------

                                                              $              6,532,349            $          6,868,503
                                                                =======================             ===================


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
 Accrued fees and expenses due to
  General Partner and affiliates (Note 3)                     $              1,046,241            $            994,710

Commitments and contingencies

Partners' equity (deficit):
  General partner                                                             (115,270)                       (111,393)
  Limited partners (30,000 units authorized;
     18,000 units issued and outstanding)                                    5,601,378                       5,985,186
                                                                -----------------------             -------------------

        Total partners' equity                                               5,486,108                       5,873,793
                                                                -----------------------             -------------------

                                                              $              6,532,349            $          6,868,503
                                                                =======================             ===================
</TABLE>

                 See accompanying notes to financial statements
                                       3
<PAGE>


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF OPERATIONS

         For the Three and Six Months Ended September 30, 2002 and 2001
                                   (unaudited)
<TABLE>
<CAPTION>

                                              2002                  2002                  2001               2001
                                       -------------------    ------------------    -----------------   ----------------
                                          Three Months           Six months           Three Months        Six months
                                       -------------------    ------------------    -----------------   ----------------

<S>                                  <C>                    <C>                   <C>                 <C>
Interest income                      $              1,501   $             3,254   $            3,276  $           6,939
Distribution income                                 1,640                 1,640                    -                  -
                                       -------------------    ------------------    -----------------   ----------------

                                                    3,141                 4,894                3,276              6,939
                                       -------------------    ------------------    -----------------   ----------------

Operating expenses:
  Amortization (Note 2)                            15,116                30,232               14,718             29,436
  Asset management fees (Note 3)                   45,346                90,692               45,346             90,692
  Legal and accounting                              9,597                14,777               13,569             13,569
  Other                                               480                 3,712                3,450              4,250
                                       -------------------    ------------------    -----------------   ----------------

    Total operating expenses                       70,539               139,413               77,083            137,947
                                       -------------------    ------------------    -----------------   ----------------

Loss from operations                              (67,398)             (134,519)             (73,807)          (131,008)
                                       -------------------    ------------------    -----------------   ----------------

Equity in losses of
 limited partnerships (Note 2)                   (126,583)             (253,166)            (222,222)          (409,623)
                                       -------------------    ------------------    -----------------   ----------------

Net loss                             $           (193,981)  $          (387,685)  $         (296,029) $        (540,631)
                                       ===================    ==================    =================   ================

Net loss allocated to:
  General partner                    $             (1,940)  $            (3,877)  $           (2,960) $          (5,406)
                                       ===================    ==================    =================   ================

  Limited partners                   $           (192,041)  $          (383,808)  $         (293,069) $        (535,225)
                                       ===================    ==================    =================   ================

Net loss per limited
 partner unit                        $                (11)  $               (21)  $              (16) $             (30)
                                       ===================    ==================    =================   ================

Outstanding weighted limited
 partner units
                                                   18,000                18,000               18,000             18,000
                                       ===================    ==================    =================   ================
</TABLE>

                 See accompanying notes to financial statements
                                       4
PAGE>


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                     STATEMENT OF PARTNERS' EQUITY (DEFICIT)

                   For the Six Months Ended September 30, 2002
                                   (unaudited)
<TABLE>
<CAPTION>



                                                            General                Limited
                                                            Partner               Partners               Total
                                                        -----------------      ----------------     ----------------


<S>                                                   <C>                    <C>                  <C>
Partners' equity (deficit) at March 31, 2002          $        (111,393)     $       5,985,186    $       5,873,793


Net loss                                                         (3,877)              (383,808)            (387,685)
                                                        -----------------      ----------------     ----------------


Partners' equity (deficit) at September 30, 2002      $        (115,270)     $       5,601,378    $       5,486,108
                                                        =================      ================     ================
</TABLE>

                 See accompanying notes to financial statements
                                       5
<PAGE>


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF CASH FLOWS

              For the Six Months Ended September 30, 2002 and 2001
                                   (unaudited)
<TABLE>
<CAPTION>


                                                                              2002                      2001
                                                                        ------------------        ------------------
<S>                                                                   <C>                       <C>
Cash flows from operating activities:
  Net loss                                                            $          (387,685)      $          (540,631)
     Adjustments to reconcile net loss to
       cash used in operating activities:
       Amortization                                                                30,232                    29,436
       Equity in losses of limited partnerships                                   253,166                   409,623
        Change in accrued fees and expenses due to
               General Partner and affiliates                                      51,531                    55,169
                                                                        ------------------        ------------------

Net cash used in operating activities                                             (52,756)                  (46,403)
                                                                        ------------------        ------------------

Cash flows from investing activities:
    Distributions from limited partnerships                                        20,342                    27,892
                                                                        ------------------        ------------------

Net cash provided by investing activities                                          20,342                    27,892
                                                                        ------------------        ------------------

Net decrease in cash and cash equivalents                                         (32,414)                  (18,511)
                                                                        ------------------        ------------------

Cash and cash equivalents, beginning of period                                    413,336                   437,863
                                                                        ------------------        ------------------
Cash and cash equivalents, end of period                              $           380,922       $           419,352
                                                                        ==================        ==================

SUPPLEMENTAL DISCLOSURE
  OF CASH FLOW INFORMATION:

  Taxes paid                                                          $               800       $               800
                                                                        ==================        ==================
</TABLE>

                 See accompanying notes to financial statements
                                       6
<PAGE>


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                    For the Quarter Ended September 30, 2002
                                   (unaudited)



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

General
-------

The accompanying  condensed unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
for quarterly  reports under Section 13 or 15(d) of the Securities  Exchange Act
of 1934.  Accordingly,  they do not include all of the information and footnotes
required by  accounting  principles  generally  accepted in the United States of
America for complete  financial  statements.  In the opinion of management,  all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair  presentation  have been included.  Operating results for the three and six
months ended  September 30, 2002 are not  necessarily  indicative of the results
that may be  expected  for the fiscal year ending  March 31,  2003.  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 March 31,
2002.

Organization
------------

WNC California  Housing Tax Credits III, L.P. a California  Limited  Partnership
(the  "Partnership"),  was formed on October 5, 1992 under the laws of the state
of California and began  operations on July 19, 1993. The Partnership was formed
to  invest  primarily  in  other  limited   partnerships   (the  "Local  Limited
Partnerships")  which  own  and  operate  multi-family  housing  complexes  (the
"Housing Complex") that are eligible for low-income  housing credits.  The local
general   partners  (the  "Local  General   Partners")  of  each  Local  Limited
Partnership retain  responsibility  for maintaining,  operating and managing the
Housing Complex.

The general partner of the Partnership is WNC Tax Credit Partners III, L.P. (the
"General Partner"). WNC & Associates,  Inc. ("Associates") and Wilfred N. Cooper
Sr. are the general partners of the General Partner.  The chairman and president
own substantially  all of the outstanding  stock of Associates.  The business of
the Partnership is conducted primarily through Associates as the Partnership has
no employees of its own.

The Partnership shall continue to be in full force and effect until December 31,
2037 unless terminated prior to that date pursuant to the partnership agreement
or law.

The  Partnership  Agreement  authorized the sale of up to 30,000 units at $1,000
per Unit  ("Units").  The offering of Units concluded in July 1994 at which time
17,990 Units,  representing  subscriptions in the amount of $17,990,000 had been
accepted.  During 1995,  an additional  $10,000 was  collected on  subscriptions
accepted  for 10  additional  units and  previously  deemed  uncollectible.  The
General  Partner  has a 1%  interest in  operating  profits and losses,  taxable
income and losses,  cash available for distribution from the Partnership and tax
credits of the Partnership. The limited partners will be allocated the remaining
99% of these items in proportion to their respective investments.

After the limited  partners  have received  proceeds from a sale or  refinancing
equal to their capital  contributions and their return on investment (as defined
in the  Partnership  Agreement)  and the General  Partner has received  proceeds
equal to its capital  contribution  and a subordinated  disposition fee from the
remainder,  any additional sale or refinancing  proceeds will be distributed 90%
to the limited partners (in proportion to their respective  investments) and 10%
to the General Partner.



                                       7
<PAGE>


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                    For the Quarter Ended September 30, 2002
                                   (unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
--------------------------------------------------------------

Risks and Uncertainties
-----------------------

The Partnership's  investments in Local Limited  Partnerships are subject to the
risks incident to the management and ownership of low-income  housing and to the
management and ownership of multi-unit  residential  real estate.  Some of these
risks  are that the  low-income  housing  credit  could be  recaptured  and that
neither the  Partnership's  investments  nor the Housing  Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes  receive  government  financing  or operating  subsidies,  they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests;  limitations on
removal of Local Partners; limitations on subsidy programs; and possible changes
in  applicable  regulations.  The  Housing  Complexes  are or will be subject to
mortgage indebtedness. If a Local Limited Partnership does not make its mortgage
payments,  the lender could foreclose resulting in a loss of the Housing Complex
and  low-income  housing  credits.  As a limited  partner  of the Local  Limited
Partnerships,  the  Partnership  will have very  limited  rights with respect to
management of the Local Limited Partnerships, and will rely totally on the Local
General  Partners of the Local Limited  Partnerships for management of the Local
Limited Partnerships. The value of the Partnership's investments will be subject
to changes in national and local  economic  conditions,  including  unemployment
conditions, which could adversely impact vacancy levels, rental payment defaults
and operating expenses.  This, in turn, could substantially increase the risk of
operating  losses for the Housing  Complexes and the  Partnership.  In addition,
each Local Limited  Partnership  is subject to risks  relating to  environmental
hazards  and  natural  disasters,  which  might  be  uninsurable.   Because  the
Partnership's  operations  will  depend on these and other  factors  beyond  the
control of the General Partner and the Local General  Partners,  there can be no
assurance that the anticipated  low-income  housing credits will be available to
Limited Partners.

In addition,  Limited  Partners are subject to risks in that the rules governing
the  low-income  housing credit are  complicated,  and the use of credits can be
limited.  The only  material  benefit  from an  investment  in Units  may be the
low-income  housing credits.  There are limits on the  transferability of Units,
and it is  unlikely  that a  market  for  Units  will  develop.  All  management
decisions will be made by the General Partner.

 Method of Accounting for Investments in Limited Partnerships
 ------------------------------------------------------------

The Partnership  accounts for its investments in limited  partnerships using the
equity method of  accounting,  whereby the  Partnership  adjusts its  investment
balance for its share of the Local Limited  Partnership's  results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnerships are consistent with those of the Partnership. Costs incurred by the
Partnership  in  acquiring  the  investments  are  capitalized  as  part  of the
investment account and are being amortized over 30 years (see Note 2).

 Offering Expenses
 -----------------

Offering  expenses consist of underwriting  commissions,  legal fees,  printing,
filing and  recordation  fees,  and other costs  incurred  with selling  limited
partnership  interests in the  Partnership.  The General Partner is obligated to
pay all  offering  and  organization  costs in  excess of 15%  (including  sales
commissions) of the total offering proceeds.  Offering expenses are reflected as
a reduction of partners'  capital and amounted to  $2,366,564  at the end of all
periods presented.

 Use of Estimates
 ----------------

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

                                       8
<PAGE>


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                    For the Quarter Ended September 30, 2002
                                   (unaudited)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
--------------------------------------------------------------

Cash and Cash Equivalents
-------------------------

The Partnership considers highly liquid investments with remaining maturities of
three months or less when purchased to be cash equivalents.  The Partnership had
no cash equivalents at the end of all periods presented.

Concentration of Credit Risk
----------------------------

At September 30, 2002,  the  Partnership  maintained a cash balance at a certain
financial institution in excess of the maximum federally insured amounts.

Net Loss Per Limited Partner Unit
---------------------------------

Net loss per limited  partnership  unit is  calculated  pursuant to Statement of
Financial  Accounting  Standards No. 128,  Earnings Per Share. Net loss per unit
includes no dilution  and is computed  by  dividing  loss  available  to limited
partners by the weighted average number of units outstanding  during the period.
Calculation of diluted net income per unit is not required.

Reporting Comprehensive Income
------------------------------

The  Statement of Financial  Accounting  Standards  ("SFAS") No. 130,  Reporting
Comprehensive  Income  established  standards  for the  reporting and display of
comprehensive  income (loss) and its components in a full set of general-purpose
financial statements. The Partnership had no items of other comprehensive income
for all periods presented, as defined by SFAS No. 130.

New Accounting Pronouncement
----------------------------

In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144,  "Accounting  for the  Impairment or Disposal of Long-Lived  Assets" ("SFAS
144"), which addresses  accounting and financial reporting for the impairment or
disposal of long-lived assets.  SFAS 144 is effective for fiscal years beginning
after December 15, 2001, and generally, is to be applied prospectively. SFAS 144
is not  expected  to  have a  material  impact  on the  Partnership's  financial
position or results of operations.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with  Exit or  Disposal  Activities."  SFAS No.  146  addresses  accounting  and
reporting for costs  associated  with exit or disposal  activities and nullifies
Emerging  Issues Task Force Issue No. 94-3,  "Liability  Recognition for Certain
Employee  Termination  Benefits  and Other Costs to Exit an Activity  (Including
Certain  Costs  Incurred  in a  Restructuring)."  SFAS No. 146  requires  that a
liability for a cost associated with an exit or disposal  activity be recognized
and measured  initially at fair value when the  liability is incurred.  SFAS No.
146 is  effective  for exit or  disposal  activities  that are  initiated  after
December  31,  2002,  with early  application  encouraged.  The Company does not
expect the adoption of this statement to have a material effect on the Company's
financial statements.

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
--------------------------------------------

As of the periods  presented,  the Partnership had acquired limited  partnership
interests in eighteen Local Limited Partnerships, each of which owns one Housing
Complex  consisting  of an  aggregate of 635  apartment  units.  The  respective
general  partners  of the  Local  Limited  Partnerships  manage  the  day-to-day
operations of the entities.  Significant  Local Limited  Partnership's  business
decisions require approval from the Partnership.  The Partnership,  as a limited
partner,  is  generally  entitled  to 99%,  as  specified  in the Local  Limited
Partnership agreements,  of the operating profits and losses, taxable income and
losses and tax credits of the Limited Partnerships.







                                       9

<PAGE>


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                    For the Quarter Ended September 30, 2002
                                   (unaudited)


NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
-------------------------------------------------------

Equity  in  losses  of the  Local  Limited  Partnerships  is  recognized  in the
financial  statements until the related  investment account is reduced to a zero
balance. Losses incurred after the investment account is reduced to zero are not
recognized. If the Local Limited Partnerships report net income in future years,
the  Partnership  will resume applying the equity method only after its share of
such net  income  equals  the share of net  losses  not  recognized  during  the
period(s) the equity method was suspended.

Distributions  received by limited  partners are accounted for as a reduction of
the investment balance.  Distributions received after the investment has reached
zero would be recognized as income.

The following is a summary of the equity method  activity of the  investments in
Local Limited Partnerships for the periods presented.
<TABLE>
<CAPTION>

                                                                         For the Six                 For the Year
                                                                         Months Ended                   Ended
                                                                      September 30, 2002            March 31, 2002
                                                                      -------------------         -------------------

<S>                                                                 <C>                         <C>
  Investments per balance sheet, beginning of period                $         6,455,167         $         7,329,890

  Distributions received                                                        (20,342)                    (17,048)
  Equity in losses of limited partnerships                                     (253,166)                   (798,807)
  Amortization of paid acquisition fees and costs                               (30,232)                    (58,868)
                                                                      -------------------         -------------------

  Investments per balance sheet, end of period                      $         6,151,427         $         6,455,167
                                                                      ===================         ===================
</TABLE>

Selected  financial  information for the six months ended September 30, 2002 and
2001 from the unaudited combined condensed  financial  statements of the limited
partnerships in which the Partnership has invested as follows:
<TABLE>
<CAPTION>


                             COMBINED CONDENSED STATEMENTS OF OPERATIONS
                                                              2002                      2001
                                                      ----------------------     --------------------

<S>                                                 <C>                        <C>
  Revenue                                           $             1,570,000    $           1,520,000
                                                      ----------------------     --------------------
  Expenses:
     Operating expenses                                           1,013,000                  946,000
     Interest expense                                               429,000                  433,000
     Depreciation and amortization                                  566,000                  577,000
                                                      ----------------------     --------------------

  Total expenses                                                  2,008,000                1,956,000
                                                      ----------------------     --------------------

  Net loss                                          $              (438,000)   $            (436,000)
                                                      ======================     ====================

  Net loss allocable to the Partnership             $              (434,000)   $            (431,000)
                                                      ======================     ====================

  Net loss recorded by the Partnership              $             ( 253,000)   $            (410,000)
                                                      ======================     ====================
</TABLE>

                                       10
<PAGE>




                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                    For the Quarter Ended September 30, 2002
                                   (unaudited)

NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIP, continued
-----------------------------------------------------

Certain Local Limited  Partnerships have incurred  significant  operating losses
and  have  working  capital  deficiencies.  In the  event  these  Local  Limited
Partnerships continue to incur significant operating losses,  additional capital
contributions  by the  Partnership  and/or  the  Local  General  Partner  may be
required to sustain operations of such Local Limited Partnerships. If additional
capital  contributions  are not made when they are required,  the  Partnership's
investment in certain of such Local Limited Partnerships could be impaired,  and
the loss and recapture of the related tax credits could occur.

NOTE 3 - RELATED PARTY TRANSACTIONS
-----------------------------------

The Partnership has no officers,  employees,  or directors.  However,  under the
terms of the  Partnership  Agreement the Partnership is obligated to the General
Partner or its  affiliates  during the current or future years for the following
fees:

(a)  Annual Asset  Management  Fee. An annual asset  management fee in an amount
     equal  to 0.5% of the  Invested  Assets  of the  Partnership,  as  defined.
     "Invested  Assets" means the sum of the  Partnership's  Investment in Local
     Limited Partnership Interests and the Partnership's  allocable share of the
     amount of the  mortgage  loans on and other  debts  related to, the Housing
     Complexes  owned by such Local Limited  Partnerships.  Fees of $90,692 were
     incurred  during each of the six months ended  September 30, 2002 and 2001.
     The Partnership paid the General Partner or its affiliates $37,500 of those
     fees during the six months ended  September 30, 2002 and $35,834 during the
     six months ended September 30, 2001.

(b)  Subordinated  Disposition Fee. A subordinated  disposition fee in an amount
     equal to 1% of the sales price of real estate sold.  Payment of this fee is
     subordinated to the limited  partners  receiving a preferred  return of 16%
     through September 30, 2003 and 6% thereafter (as defined in the Partnership
     Agreement)  and is payable  only if the General  Partner or its  affiliates
     render services in the sales effort.


The accrued fees and expenses due to General  Partner and affiliates  consist of
the following:
<TABLE>
<CAPTION>

                                                                  September 30, 2002            March 31, 2002
                                                                 ----------------------      ----------------------

<S>                                                           <C>                         <C>
Reimbursement for expenses paid by the General
   Partners and affiliates                                    $                      -    $                  1,661
Asset management fee payable                                                 1,046,241                     993,049
                                                                 ----------------------      ----------------------
                                                              $              1,046,241    $                994,710
                                                                 ======================      ======================
</TABLE>


The General  Partner does not anticipate that these accrued fees will be paid in
full  until such time as capital  reserves  are in excess of future  foreseeable
working capital requirements of the Partnership.

NOTE 4 - INCOME TAXES
---------------------

No provision for income taxes has been recorded in the financial statements,  as
any  liability  for  income  taxes  is the  obligation  of the  partners  of the
Partnership.

                                       11

<PAGE>


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                    For the Quarter Ended September 30, 2002
                                   (unaudited)




NOTE 5 - COMMITMENTS AND CONTINGENCIES
--------------------------------------

TThe  Partnership has a 99% limited  partnership  investment in Colonial Village
Roseville,  a California Limited  Partnership,  ("Colonial Village  Roseville").
Colonial  Village  Roseville  is a  defendant  in a  lawsuit  filed by  previous
tenants.  Colonial Village Roseville carries general liability insurance and has
tendered the defense of the claim to the  insurance  company.  Discovery for the
lawsuit is just beginning,  and the management of Colonial Village Roseville and
WNC are unable to  determine  the  outcome  of this  lawsuit at this time or its
impact, if any, on the Partnership's financial statements


                                       12
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Forward-looking Statements

With  the  exception  of  the  discussion  regarding   historical   information,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  and  other   discussions   elsewhere  in  this  Form  10-Q  contain
forward-looking  statements.  Such statements are based on current  expectations
subject to uncertainties and other factors,  which may involve known and unknown
risks that could cause actual  results of operations to differ  materially  from
those, projected or implied.  Further,  certain  forward-looking  statements are
based upon assumptions about future events, which may not prove to be accurate.

Risks and uncertainties inherent in forward-looking  statements include, but are
not  limited  to,  our  future  cash  flows and  ability  to  obtain  sufficient
financing, level of operating expenses, conditions in the low-income housing tax
credit property market and the economy in general, as well as legal proceedings.
Historical  results are not necessarily  indicative of the operating results for
any future period.

Subsequent  written and oral  forward-looking  statements  attributable to us or
persons  acting on our behalf  are  expressly  qualified  in their  entirety  by
cautionary  statements  in this Form 10-Q and in other reports we filed with the
Securities and Exchange  Commission.  The following discussion should be read in
conjunction  with the  condensed  Financial  Statements  and the  Notes  thereto
included elsewhere in this filing.

The following discussion and analysis compares the results of operations for the
six months ended  September 30, 2002 and 2001, and should be read in conjunction
with the condensed  financial  statements and accompanying notes included within
this report.

Financial Condition

The Partnership's  assets at September 30, 2002 consisted  primarily of $381,000
in cash and aggregate  investments in the eighteen Local Limited Partnerships of
$6,151,000.  Liabilities at September 30, 2002 primarily consisted of $1,046,000
of accrued asset management fees due to the General Partner.

Results of Operations

Three Months Ended  September 30, 2002 Compared to Three Months Ended  September
30, 2001. The  Partnership's  net loss for the three months ended  September 30,
2002 was  $(194,000),  reflecting a decrease of $102,000 from the  $(296,000) of
net loss for the three months ended  September 30, 2001. The decline in net loss
is primarily  due to a decrease in equity in losses of limited  partnerships  of
$95,000  to  $(127,000)  for the three  months  ended  September  30,  2002 from
$(222,000) for the three months ended September 30, 2001. The decrease in equity
in losses of limited  partnerships  is due to the  Partnership  not  recognizing
certain losses of the Local Limited Partnerships.  The investments in such Local
Limited   Partnerships   had  reached  $0  at  September  30,  2002.  Since  the
Partnership's  liability with respect to its  investments is limited,  losses in
excess of investment  are not  recognized.  Along with the decrease in equity in
losses of limited  partnerships,  loss from  operations  decreased  by $7,000 to
$(67,000) for the three months ended  September 30, 2002 from  $(74,000) for the
three months ended  September 30, 2001,  due to a comparable  decrease in legal,
accounting and other operating expenses.


                                       13
<PAGE>


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations, continued

Six Months Ended  September 30, 2002 Compared to Six Months Ended  September 30,
2001. The Partnership's net loss for the six months ended September 30, 2002 was
$(388,000),  reflecting a decrease of $153,000  from the  $(541,000) of net loss
for the six  months  ended  September  30,  2001.  The  decline  in net  loss is
primarily  due to a  decrease  in equity in losses of  limited  partnerships  of
$157,000  to  $(253,000)  for the six  months  ended  September  30,  2002  from
$(410,000)  for the six months ended  September 30, 2001. The decrease in equity
in losses of limited  partnerships  is due to the  Partnership  not  recognizing
certain losses of the Local Limited Partnerships.  The investments in such Local
Limited   Partnerships   had  reached  $0  at  September  30,  2002.  Since  the
Partnership's  liability with respect to its  investments is limited,  losses in
excess of  investment  are not  recognized.  The decrease in equity in losses of
limited  partnerships  is  augmented by an increase in loss from  operations  of
$4,000 for the six months ended September 30, 2002 to $(135,000) from $(131,000)
for the six months  ended  September  30,  2001,  due to a decrease  in interest
income of  $2,000  and an  increase  in legal,  accounting  and other  operating
expenses of approximately $2,000.

Cash Flows

Six Months Ended  September 30, 2002 Compared to Six Months Ended  September 30,
2001. Net cash used during the six months ended September 30, 2002 was $(32,000)
compared  to net  cash  used in the  six  months  ended  September  30,  2001 of
$(18,000).   The  change  of  $14,000  was   primarily  due  to  a  decrease  in
distributions from limited partnerships of $(8,000) and an increase in operating
costs of $(6,000).


During the six months ended September 30, 2002 accrued  payables,  which consist
primarily  of  asset  management  fees to the  General  Partner  or  affiliates,
increased by $52,000. The General Partner does not anticipate that these accrued
fees will be paid in full until such time as capital  reserves  are in excess of
future foreseeable working capital requirements of the partnership.

The Partnership  expects its future cash flows,  together with its net available
assets at September 30, 2002, to be sufficient to meet all currently foreseeable
future cash requirements.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

         NONE

Item 4.  Controls and Procedures

Within the 90 days prior to the date of this report,  the Company carried out an
evaluation,  under the supervision and with the  participation  of the Company's
management,  including the Company's Chief Executive Officer and Chief Financial
Officer,  of the  effectiveness  of the design and  operation  of the  Company's
disclosure  controls and procedures pursuant to Exchange Act Rule 13a- 14. Based
upon that evaluation,  the Chief Executive  Officer and Chief Financial  Officer
concluded that the Company's  disclosure  controls and procedures are effective.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation.



                                      14
<PAGE>




Part II.  OTHER INFORMATION

Item 1.   Legal Proceedings

          Colonial Village Roseville,  a California Limited  Partnership and its
          general partner,  PROJECT GO, INC., a California corporation are being
          sued by  former  tenants  in Placer  County  Superior  Court,  Auburn,
          California.  The Complaint was filed September 6, 2002. The Plaintiffs
          are suing for  various  damages  alleging  that the  property  was not
          habitable and unsafe to occupy.


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

          The Consent  Solicitation  Statement dated September 1, 2002 was first
          sent to the Limited Partners on or about September 1, 2002.

          The  General   Partner  has  proposed  that  the   Partnership   cease
          reproduction and mailing of quarterly and annual financial  statements
          to the  Limited  Partners,  to reduce  the  expenses  incurred  by the
          Partnership.  The Partnership  will continue to prepare  quarterly and
          annual  financial  statements so long as it is required to do so under
          the Securities and Exchange  Commission Act of 1934 and submit them to
          the Securities and Exchange Commission.  All votes were to be returned
          to the General  Partner by August 1, 2002 to be counted.  The proposal
          was approved by the Limited  Partners and the results of the vote were
          11,075  for  the  proposal,   1,303  against  the  proposal,  and  215
          abstentions.

Item 5.   Other Information

          Wilfred N. Cooper, Jr. has assumed the role of Chief Executive Officer
          of WNC & Associates.  Wilfred N. Cooper,  Sr. who previously  held the
          role of Chief Executive Officer remains the Chairman of The Board.


Item 6.   Exhibits and Reports on Form 8-K

     (a)  Reports on Form 8-K.

     1.   NONE

     (b)  Exhibits.

     99.1 Certification  pursuant to 18 U.S.C.  Section 1350 as adapted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.



                                       15
<PAGE>



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.

By:  WNC California Tax Credit Partners III General Partner

By:  WNC & Associates, Inc.         General Partner





By: /s/  Wilfred N. Cooper, Jr.
    ---------------------------

Wilfred N. Cooper, Jr.
President and Chief Executive Officer of WNC & Associates, Inc.

Date:  November 14, 2002





By:  /s/ Thomas J. Riha
     ------------------

Thomas J. Riha
Vice-President - Chief Financial Officer of WNC & Associates, Inc.

Date:  November 14, 2002


                                       16
<PAGE>


                                 CERTIFICATIONS*

     I,   Wilfred N. Cooper, Jr., certify that:

     1.   I have reviewed this  quarterly  report on Form 10-Q of WNC CALIFORNIA
          HOUSING TAX CREDITS III, L.P.;

     2.   Based on my  knowledge,  this  quarterly  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 quarterly report;

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

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  registrant
          and we have:

          (a)  designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          (c)  presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent function):

          (a)  all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          (b)  any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

     6.   The  registrant's  other  certifying  officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

     Date: November 14, 2002

     /s/  Wilfred N. Cooper, Jr.
     ---------------------------
     [Signature]

     President and Chief Executive Officer of WNC & Associates, Inc.


                                       17
<PAGE>


                                 CERTIFICATIONS*

          I,   Thomas J. Riha, certify that:

          1.   I have  reviewed  this  quarterly  report  on  Form  10-Q  of WNC
               CALIFORNIA HOUSING TAX CREDITS III, L.P.;

          2.   Based on my knowledge, this quarterly 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 quarterly
               report;

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

          4.   The registrant's other certifying  officers and I are responsible
               for   establishing  and  maintaining   disclosure   controls  and
               procedures  (as defined in Exchange  Act Rules 13a-14 and 15d-14)
               for the registrant and we have:

          (d)  designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

               (e)  evaluated the  effectiveness of the registrant's  disclosure
                    controls and procedures as of a date within 90 days prior to
                    the filing date of this  quarterly  report (the  "Evaluation
                    Date"); and

               (f)  presented in this quarterly report our conclusions about the
                    effectiveness  of the  disclosure  controls  and  procedures
                    based on our evaluation as of the Evaluation Date;

               5.   The  registrant's  other  certifying  officers  and  I  have
                    disclosed,  based  on our  most  recent  evaluation,  to the
                    registrant's   auditors   and   the   audit   committee   of
                    registrant's  board of directors (or persons  performing the
                    equivalent function):

               (c)  all  significant  deficiencies in the design or operation of
                    internal   controls   which  could   adversely   affect  the
                    registrant's  ability  to  record,  process,  summarize  and
                    report   financial   data  and  have   identified   for  the
                    registrant's  auditors any material  weaknesses  in internal
                    controls; and

               (d)  any fraud, whether or not material, that involves management
                    or  other  employees  who  have a  significant  role  in the
                    registrant's internal controls; and

          6.   The registrant's  other certifying  officers and I have indicated
               in this quarterly  report  whether or not there were  significant
               changes  in  internal  controls  or in other  factors  that could
               significantly  affect internal controls subsequent to the date of
               our most recent evaluation, including any corrective actions with
               regard to significant deficiencies and material weaknesses.

          Date:  November 14, 2002

          /s/ Thomas J. Riha
          -------------------
          [Signature]

          Vice-President - Chief Financial Officer of WNC & Associates, Inc.


                                       18